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EXHIBIT 10.26

 
CAL DIVE INTERNATIONAL, INC.
DIRECTORS DEFERRED COMPENSATION PLAN

 
1. Purpose.  The purpose of the Cal Dive International, Inc. Directors Deferred
Compensation Plan (the “Plan”) is to aid the Company in attracting and retaining
experienced outside or non-employee directors by providing them with
tax-deferred savings opportunities.  The Plan is intended to comply with Code
Section 409A.
 
2. Definitions.  For the purposes of this Plan, the following words and phrases
shall have the meanings indicated, unless the context clearly indicates
otherwise:
 
“Account” means the bookkeeping account maintained by the Company for each
Participant pursuant to Section 4.
 
“Beneficiary” means the person, persons or entity designated by the Participant
to receive any benefits payable under the Plan pursuant to Section 6.
 
“Board” means the Board of Directors of the Company.
 
“Cash Compensation” means all compensation payable by the Company in cash to a
Non-Employee Director for his or her services as a member of the Board,
including, without limitation, any annual retainer, fees for attending meetings
of the Board or any committee thereof, fees for acting as chairperson of the
Board or any committee, and any other fees as may become payable to a
Non-Employee Director, including the additional retainer payable to the lead
independent director.  “Cash Compensation” does not include expense
reimbursements, any form of noncash compensation, stock-based plan awards, or
benefits.
 
“Change of Control” means:
 
(a)           the acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 30% of
the outstanding shares of the Common Stock; provided, however, that for purposes
of this section (a), the following events shall not constitute a Change of
Control:
 
(1)           any acquisition of Common Stock directly from the Company,
 
(2)           any acquisition of Common Stock by the Company,
 
(3)           any acquisition of Common Stock by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any entity controlled
by the Company, or
 
 

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(4)           any acquisition of Common Stock by any entity pursuant to a
transaction that complies with paragraphs (1), (2), and (3) of section (c) of
this definition; or
 
(b)           individuals who, as of January 1, 2011, constituted the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual who becomes a director subsequent
to such date through an election, or a nomination for election by the Company’s
stockholders, approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered a member of the Incumbent
Board, unless such individual’s initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Incumbent Board; or
 
(c)           consummation of a reorganization, merger or consolidation, or sale
or other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, following such Business
Combination:
 
(1)           Persons who were the beneficial owners of the Company’s
outstanding common stock and any other securities of the Company entitled to
vote generally in the election of directors immediately prior to such Business
Combination continue to have collectively the direct or indirect beneficial
ownership, respectively, of 50% or more of the then-outstanding shares of common
stock, and 50% or more of the Voting Power of the then-outstanding voting
securities of the corporation resulting from such Business Combination (which,
for purposes of this paragraph (1) and paragraphs (2) and (3), shall include a
corporation which as a result of such transaction controls the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries); and
 
(2)           except to the extent that such ownership in the Company existed
prior to the Business Combination, no Person (excluding, for the purpose of this
clause, any corporation resulting from such Business Combination or any employee
benefit plan or related trust of the Company or the corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 20% or
more of the then-outstanding shares of common stock of the corporation resulting
from such Business Combination or 20% or more of the combined Voting Power of
the then-outstanding voting securities of such corporation; and
 
(3)           at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement providing
for such Business Combination, or, in the absence of an agreement, of the action
taken by the Board approving such Business Combination; or
 
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(d)           approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
 
Notwithstanding any other provision of this definition of Change of Control, no
payment shall be made from this Plan as a result of a Change of Control unless
such event qualifies as a Change of Control under Section 409A.
 
“Change of Control Participant” has the meaning set forth in Section 8.2(a).
 
“Code” means the Internal Revenue Code of 1986, as amended, and including, for
each Code section referenced, the regulations and guidance issued
thereunder.  References to any provision of the Code or regulation (including a
proposed regulation) thereunder shall include any successor provisions or
regulations.
 
“Common Stock” means the Company’s common stock, $0.01 par value per share.
 
“Committee” means the Compensation Committee of the Board.
 
“Company” means Cal Dive International, Inc., a Delaware corporation, and its
successors and assigns, including but not limited to any corporation or entity
with or into which such company may merge or consolidate.
 
“Deferral Amount” has the meaning set forth in Section 3.3.
 
“Deferral Period” has the meaning set forth in Section 3.5.
 
“Designee” means any individual(s) to whom the Board or the Committee has
delegated the authority to take action under the Plan.  Wherever Board or
Compensation is referenced in the Plan, such reference shall be deemed to also
refer to such entity’s Designee.
 
“Disabled.”  A Participant shall be considered “Disabled” if the Committee
determines, in its discretion exercised in good faith, that:
 
(a)           the Participant has a mental or physical condition that would
entitle him, if he were an employee of the Company or its subsidiaries, to
disability income payments under the Company’s long-term disability insurance
policy or plan for employees then in effect, or
 
(b)           if the Company does not maintain a long-term disability insurance
policy or plan, the Participant has a permanent and total disability, as defined
in Code Section 22(e)(3).
 
A determination that a Participant is Disabled may be made by a physician
selected or approved by the Committee, and, in this respect, the Participant
shall submit to an examination by such physician upon request of the Committee.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
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“Non-Employee Director” means any member of the Board who is not employed by the
Company.
 
“Participant” means any Non-Employee Director who elects to participate by
filing a Participation Agreement as provided in Section 3, and any former
Non-Employee Director who has an Account balance under the Plan.
 
“Participation Agreement” means the form completed by a Participant in
accordance with Section 3.
 
“Person” means a natural person or entity, and shall also mean any partnership,
limited partnership, limited liability company, syndicate, or other group that
would be treated as a Person under Sections 13(d)(3) or 14(d)(2) of the Exchange
Act because it had been formed for the purpose of acquiring, holding, or
disposing of a security; provided that “Person” shall not include an underwriter
temporarily holding a security pursuant to an offering of the security.
 
“Plan Year” means a twelve-month period beginning January 1 and ending the
following December 31.
 
“Restricted Stock Units” means any grant of restricted stock units from the
Company to the Participant under a stockholder-approved equity incentive plan of
the Company.
 
“Separation from Service” means “separation from service” with the Company as
defined in Treasury Regulation Section 1.409A-1(h).  A Participant shall not be
considered to have incurred a Separation from Service until the Participant has
ceased to provide any services for the Company, its subsidiaries, and any other
entity that would be treated as a member of a controlled group that includes the
Company under Code Section 414(b) or (c) (as modified by substituting 50%
ownership for 80% for all purposes thereof), without any expectation of the
Participant being retained to provide future services as a director or
independent contractor.
 
“Unforeseeable Emergency” means a severe financial hardship of the Participant
or Beneficiary resulting from an illness or accident of the Participant or
Beneficiary, the Participant’s or Beneficiary’s spouse, or the Participant’s or
Beneficiary’s dependent (as defined in Code Section 152(a)); loss of the
Participant’s or Beneficiary’s property due to casualty (including the need to
rebuild a home following damage to a home not otherwise covered by insurance,
for example, not as a result of a natural disaster); or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant or Beneficiary.  In addition, the need to
pay for medical expenses, including non-refundable deductibles, as well as for
the costs of prescription drug medication, may constitute an Unforeseeable
Emergency.  Finally, the need to pay for the funeral expenses of a spouse or a
dependent (as defined in Code Section 152(a)) may also constitute an
Unforeseeable Emergency.  An Unforeseeable Emergency must satisfy the
requirements of Treasury Regulation Section 1.409A-3(i)(3) in order for a
payment to be made.  Whether a Participant is faced with an “Unforeseeable
Emergency” permitting distribution under this Plan is to be determined by the
Committee based on the relevant facts and circumstances of each case and in
accordance with Code Section 409A.
 
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“Valuation Date” means the last calendar date when the New York Stock Exchange
was open, or such other date as the Committee in its sole discretion may
determine.
 
“Voting Power” means the rights vested, by law or the Company’s Certificate of
Incorporation, in the stockholders, or in one or more classes of stockholders,
to vote with respect to the election of directors.
 
3. Participation and Participant Elections.
 
3.1 Participation.  Participation in the Plan shall be limited to those
individuals who (a) are Non-Employee Directors and (b) elect to participate in
this Plan by filing a Participation Agreement with the Committee or its
Designee.
 
3.2 Deferral of Cash Compensation.  Subject to the other terms and conditions of
this Plan, a Participant may elect to defer up to a total of 100% of his or her
Cash Compensation for a given Plan Year under the Plan (the “Deferral Amount”),
expressed as either a dollar amount or a percentage of the Participant’s Cash
Compensation for such Plan Year.
 
3.3 Deferral of Restricted Stock Units.
 
(a) Subject to the terms and conditions of this Section 3.3, if director equity
compensation is awarded to the Participants in the form of Restricted Stock
Units, a Participant may elect to defer, on a grant-by-grant basis, the receipt
of all or a portion of the shares of Common Stock that he or she is entitled to
receive in connection with the payout of those Restricted Stock Units
(including, if applicable, any related dividend equivalent amounts under Section
4.4).  Such deferral election must be made during the applicable Section 3.4
enrollment period for the Plan Year in which the Restricted Stock Units are
granted.
 
(b) A Participant’s deferred Restricted Stock Units shall be accounted for
separately from his or her Deferral Amounts, and shall be subject to all of the
provisions of this Plan except Sections 3.6, 4.1, and 4.2.
 
3.4 Election Timing and Effective Dates.
 
(a) A Participation Agreement must be filed prior to the December 31st
immediately preceding the Plan Year for which it is effective or by such earlier
deadline as the Committee may prescribe.
 
(b) Notwithstanding Section 3.4(a), a Participant who is newly eligible for the
Plan (as determined in accordance with Treas. Reg. Section 1.409A-2(a)(7)) and
who does not participate in any other account balance type nonqualified plan (as
determined by Treas. Reg. Section 1.409A-1(c)) of the Company may file a
Participation Agreement effective for the remainder of the initial Plan Year and
applicable to compensation earned in the remainder of such Plan Year, but only
if such election is made not more than 30 days after the Participant becomes
eligible for the Plan.
 
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3.5 Contents of Participation Agreement.  The Committee shall have the
discretion to specify the contents of Participation Agreements.  Subject to
Section 7, each Participation Agreement shall set forth: (a) the Deferral Amount
and, if Restricted Stock Units will be granted during the Plan Year, whether the
Participant is electing to defer payout of those Restricted Stock Units; (b) the
period after which payment of the Deferral Amount and, if applicable, either the
cash payout of, or the issuance of the Common Stock underlying, the deferred
Restricted Stock Units are to be made or begin to be made (the “Deferral
Period”); and (c) the form in which payments of the Deferral Amount and the
deferred Restricted Stock Units, if applicable, are to be made, which may be a
lump sum or in substantially equal annual installments of 2 to 5 years.  The
Deferral Period may be expressed as ending on a specified date, upon the
occurrence of an event (such as a Participant’s Separation from Service), or in
accordance with such other terms and options that may be set forth in the
Participation Agreement; provided, however, that the Deferral Period shall end
no later than the date of Participant’s Separation from Service.
 
3.6 Modification or Revocation of Election by Participant.
 
(a) A Participant may not change the Deferral Amount during a Plan
Year.  However, a Participant may discontinue participation if he or she
experiences an Unforeseeable Emergency, by completing such forms, and subject to
such limitations and restrictions, as the Committee may prescribe.  If approved
by the Committee, revocation shall take effect as of the next
regularly-scheduled date on which Cash Compensation is to be paid.  If a
Participant discontinues participation during a Plan Year, he or she will not be
permitted to participate again in the Plan until the later of six months from
the date of discontinuance or the commencement of the following Plan Year.
 
(b) A Participant may make an election to change the time or form of his or her
payment from the Plan as set forth in an existing Participation Agreement, but
in accordance with Treas. Reg. Section 1.409A-2(b), such a change must include
the lengthening of the Deferral Period by no less than five years from the
original payment date under the Participation Agreement (as in effect before
such amendment).  In addition, such amended Participation Agreement must be
filed with the Committee or its Designee at least 12 months prior to the date of
the first scheduled payment under the Participation Agreement (as in effect
before such amendment), and will not be effective for 12 months.  Under no
circumstances may a Participant’s Participation Agreement be retroactively
entered into, modified, or revoked.
 
3.7 Vesting of Account.  Subject to Section 9.1, each Participant shall be 100%
vested in his or her Account(s) at all times.
 
4. Maintenance, Crediting, and Investment of Accounts.
 
4.1 Maintenance of Accounts.
 
(a) The Deferral Amount of a Participant with respect to each Plan Year of
participation in the Plan shall be credited by the Committee to the
Participant’s Account as and when such Deferral Amount would otherwise have been
paid to the Participant.
 
(b) Separate Accounts shall be maintained for each Participant.  More than one
Account may be maintained for a Participant as necessary to reflect separate
Participation Agreements specifying different Deferral Periods, deferral
sources, and/or forms of payment.  A Participant’s Account(s) shall be utilized
solely as a device for the measurement and determination of the amounts to be
paid to the Participant pursuant to this Plan, and shall not constitute or be
treated as a trust fund of any kind.
 
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4.2 Crediting of Accounts.
 
(a) Each Participant’s Account shall accrue interest at a rate determined by
reference to Company’s cost of capital, with such accruals to begin as of the
date such Participant’s Deferral Amounts are credited to his or her Accounts.
 
(b) The Committee shall determine the balance of each Account, as of each
Valuation Date, by adjusting the balance of such Account as of the immediately
preceding Valuation Date to reflect changes in the value of the deemed
investments thereof, credits and debits pursuant to Section 4.1(a) and Section
4.2(a) and distributions pursuant to Section 5 with respect to such Account
since the preceding Valuation Date.
 
4.3 Statement of Accounts.  The Committee shall submit to each Participant
quarterly statements of his or her Account(s) in such form as the Committee
deems desirable, setting forth the balance to the credit of such Participant in
his or her Account(s) as of the end of the most recently-completed quarter.
 
4.4 Treatment of Dividend Equivalents on Deferred Restricted Stock Units.  If a
Participant elects to defer Restricted Stock Units that were granted with
dividend equivalent rights, the dividend equivalent rights will be accounted for
as provided in the applicable award agreement, but shall only be distributed to
the Participant in tandem with the related payout of cash or shares of Common
Stock underlying the Restricted Stock Units.
 
5. Distribution of Benefits.
 
5.1 Time and Form of Payment.  Unless otherwise stated in this Section 5, at the
end of the Deferral Period for each Account, the Company shall pay to the
Participant the balance of such Account at the time or times elected by the
Participant in the applicable Participation Agreement; provided that if the
Participant has elected to receive payments from an Account in a lump sum, the
Company shall pay the balance in such Account (determined as of the most recent
Valuation Date preceding or coinciding with the payment date) in a lump sum in
cash as soon as practicable after the end of the Deferral Period (no later than
90 days after the Deferral Period).  If the Participant has elected to receive
payments from an Account in installments, the Company shall make annual cash
payments from such Account, each of which shall consist of an amount equal to
(i) the balance of such Account as of the most recent Valuation Date preceding
or coinciding with the payment date times (ii) a fraction, the numerator of
which is one and the denominator of which is the number of remaining
installments (including the installment being paid).  The first such installment
shall be paid in January of the year specified in the Participation Agreement
(for specified date payments), in January of the year following Separation from
Service (for payments triggered by a Separation from Service) or as otherwise
specified in the Participation Agreement upon reaching the end of the Deferral
Period.  Each subsequent installment shall be paid in January of the following
years and shall be deemed to be made on a pro rata basis from each of the
different deemed investments of the Account (if there is more than one such
deemed investment).  If a Participant elects to defer an annual grant of
Restricted Stock Units, the cash payout or shares of Common Stock underlying
such grant (and any related dividend equivalent amounts under Section 4.4) shall
be distributed at the time or times elected by the Participant in the applicable
Participation Agreement, provided that if the Participant dies or becomes
Disabled prior to such date, the cash payout or shares of Common Stock shall be
distributed to in accordance with Section 5.2.
 
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5.2 Death or Disability.  Notwithstanding the provisions of Sections 5.1 hereof
and any Participation Agreement, if a Participant dies or becomes Disabled
(whether before or after Separation from Service) prior to receiving full
payment of his or her Account(s), the Company shall pay the remaining balance of
his or her Account (determined as of the most recent Valuation Date preceding or
coinciding with such event) to the Participant or, if the Participant is
deceased, in accordance with Section 6, in a lump sum in cash as soon as
practicable following the occurrence of such event (no later than 90 days after
the event occurs).
 
5.3 Hardship Withdrawals.  Notwithstanding the provisions of Section 5.1 and any
Participation Agreement, a Participant shall be entitled to early payment of all
or part of the balance in his or her Account(s) in the event of an Unforeseeable
Emergency, in accordance with this Section 5.3.  A distribution pursuant to this
Section 5.3 may only be made to the extent reasonably needed to satisfy the
Unforeseeable Emergency need, and may not be made if such need is or may be
relieved (a) through reimbursement or compensation by insurance or otherwise,
(b) by liquidation of the Participant’s assets to the extent such liquidation
would not itself cause severe financial hardship, or (c) by cessation of
deferrals under the Plan.  An application for an early payment under this
Section 5.3 shall be made to the Committee in such form and in accordance with
such procedures as the Committee shall determine from time to time.  The
determination of whether and in what amount and form a distribution will be
permitted pursuant to this Section 5.3 shall be made by the Committee.
 
5.4 Withholding of Taxes.  Notwithstanding any other provision of this Plan, the
Company shall withhold from payments made hereunder any amounts required to be
so withheld by any applicable law or regulation.
 
5.5 Acceleration of Payment.  A Participant shall have no right to compel any
accelerated payment of amounts due to a Participant.  The Company may accelerate
the payment of some or all of the amounts due to a Participant in a given year
only in accordance with Code Section 409A and the terms of this Plan.
 
(a) Domestic Relations Orders. The Committee may, in its sole and absolute
discretion, accelerate the time or schedule of a payment under the Plan to an
individual other than the Participant as may be necessary to fulfill a domestic
relations order (as defined in Code Section 414(p)(1)(B)).
 
(b) Conflicts of Interest.  The Committee may, in its sole and absolute
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan to the extent necessary for any federal officer or employee in
the executive branch to comply with an ethics agreement with the federal
government.  Additionally, the Committee may, in its sole discretion, provide
for the acceleration of the time or schedule of a payment under the Plan to the
extent reasonably necessary to avoid the violation of an applicable federal,
state, local, or foreign ethics law or conflicts of interest law (including
where such payment is reasonably necessary to permit the Participant to
participate in activities in the normal course of his or her position in which
the Participant would otherwise not be able to participate under an applicable
rule).
 
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(c) Limited Cash-Outs.  The Committee may, in its sole discretion, require a
mandatory lump sum payment of amounts deferred under the Plan that do not exceed
the applicable dollar amount under Code Section 402(g)(1)(B), provided that the
payment results in the termination and liquidation of the entirety of the
Participant’s interest under the Plan, including all agreements, methods,
programs, or other arrangements with respect to which deferrals of compensation
are treated as having been deferred under a single plan under Code Section 409A.
 
(d) Payment Upon Income Inclusion Under Section 409A.  The Committee may, in its
sole discretion, provide for the acceleration of the time or schedule of a
payment under the Plan if at any time the Plan fails to meet the requirements of
Code Section 409A.  The payment may not exceed the amount required to be
included in income as a result of the failure to comply with the requirements of
Code Section 409A.
 
(e) Payment of State, Local, or Foreign Taxes.  The Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan to reflect payment of state, local, or foreign tax obligations
arising from participation in the Plan that apply to an amount deferred under
the Plan before the amount is paid or made available to the participant (the
state, local, or foreign tax amount).  Such payment may not exceed the amount of
such taxes due as a result of participation in the Plan.  The payment may be
made in the form of withholding pursuant to provisions of applicable state,
local, or foreign law or by payment directly to the Participant.  Additionally,
the Committee may, in its sole discretion, provide for the acceleration of the
time or schedule of a payment under the Plan to pay the income tax at source on
wages imposed under Code Section 3401 as a result of such payment and to pay the
additional income tax at source on wages imposed under Code Section 3401
attributable to such additional wages and taxes.  However, the total payment
under this acceleration provision must not exceed the aggregate of the state,
local, and foreign tax amount, and the income tax withholding related to such
state, local, and foreign tax amount.
 
(f) Bona Fide Disputes as to a Right to a Payment.  The Committee may, in its
sole discretion, provide for the acceleration of the time or schedule of a
payment under the Plan where such payments occur as part of a settlement between
the Participant and the Company of an arm’s length, bona fide dispute as to the
Participant’s right to the deferred amount, if done in accordance with Treasury
Regulation Section 1.409A-3(j)(4)(xiv).
 
(g) Plan Terminations and Liquidations.  The Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan as provided in Section 8.2.
 
(h) Other Events and Conditions.  A payment may be accelerated upon such other
events and conditions as the Internal Revenue Service may prescribe in generally
applicable guidance published in the Internal Revenue Bulletin.
 
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5.6 Delay of Payment.  The Company may delay a payment otherwise due hereunder
to a date after the designated payment date under any of the following
circumstances:
 
(a) Delay Due to Financial Considerations. Any payment required to be made on a
date set forth under the terms of this Plan may be delayed if payment on the
originally scheduled date would jeopardize the ability of the Company to
continue as a going concern (in such case, payment will be made during the first
taxable year after such payment no longer would have such effect).
 
(b) Legal Compliance.  If the Company reasonably anticipates that the making of
the payment will violate applicable law, provided that the payment shall be made
at the earliest date at which the Company reasonably anticipates that the making
of the payment will not cause such violation.  (The making of a payment that
would cause inclusion in gross income or the application of any penalty
provision or other provision of the Code is not treated as a violation of
applicable law.)
 
(c) Other Events and Conditions.  Payment may also be delayed upon such other
events and conditions as the Commissioner of Internal Revenue may prescribe in
generally applicable guidance published in the Internal Revenue Bulletin, if a
Participant is subject to the requirements of Exchange Act Section 16(a), the
Participant’s balance in his or her Account(s) shall not be distributed on
account of a Change in Control prior to the date that is one year after the date
of the Change of Control, unless such balance is distributable pursuant to
another provision of the Plan.
 
6. Beneficiary Designation.
 
6.1 Right to Designate Beneficiary.  Each Participant shall have the right, at
any time, to designate any person, persons, or entity as his or her Beneficiary
or Beneficiaries.  A Beneficiary designation shall be made, and may be amended,
by the Participant by filing a written designation with the Committee, on such
form and in accordance with such procedures as the Committee shall establish
from time to time.
 
6.2 No Beneficiary Designation.  If a Participant fails to designate a
Beneficiary as provided above, or if all designated Beneficiaries predecease the
Participant, then the Participant shall be deemed to have designated the
surviving spouse of the Participant as the designated Beneficiary.  If the
Participant dies without a designated Beneficiary (or spouse as the deemed
designated Beneficiary), then the Participant’s Beneficiary shall be deemed to
be the Participant’s estate.
 
7. Administration.
 
7.1 Compensation Committee.  The Plan shall be administered by the Committee.  A
majority of the members of the Committee shall constitute a quorum.  All
resolutions or other action taken by the Committee shall be by a vote of a
majority of its members present at any meeting or, without a meeting, by an
instrument in writing signed by all its members.  Members of the Committee may
participate in a meeting of such committee by means of a conference telephone or
similar communications equipment that enables all persons participating in the
meeting to hear each other, and such participation in a meeting shall constitute
presence in person at the meeting and waiver of notice of such meeting.
 
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7.2 Committee Responsibilities.  The Committee shall be responsible for the
administration of this Plan and shall have all powers necessary to administer
this Plan, including discretionary authority to determine eligibility for
benefits and to decide claims under the terms of this Plan, except to the extent
that any such powers are vested in any other person.  The Committee may from
time to time establish rules for the administration of this Plan, and it shall
have the exclusive right to interpret this Plan and to decide any matters
arising in connection with the administration and operation of this Plan.  All
rules, interpretations, and decisions of the Committee shall be conclusive and
binding on the Company, Participants, and Beneficiaries.
 
7.3 Ability to Delegate Responsibilities.  The Committee’s responsibilities
shall include, but shall not be limited to, determining in the first instance
issues related to eligibility, distribution of Deferral Amounts, determination
of account balances, crediting of earnings and of distributions, in-service
withdrawals, deferral elections and any other duties concerning the day-to-day
operation of this Plan.  The Committee may designate one of its members as a
chairperson and may retain and supervise outside providers, third party
administrators, record keepers, and professionals (including in-house
professionals) to perform any or all of the duties delegated to it hereunder.
 
7.4 Limitation of Liability.  Neither a member of the Board nor any member of
the Committee shall be liable for any act or action hereunder, whether of
omission or commission, by any other member or employee or by any agent to whom
duties in connection with the administration of this Plan have been delegated or
for anything done or omitted to be done in connection with this Plan.  The
Committee shall keep records of all of its proceedings and shall keep records of
all payments made to Participants or Beneficiaries and payments made for
expenses or otherwise.
 
7.5 Recusal.  Any member of the Committee who is due a benefit under the Plan
shall recuse himself or herself from any Committee deliberations that concern
such member’s benefits, including deliberations concerning such member’s
eligibility for a benefit or his or her level of benefits.  The previous
sentence shall not apply to deliberations that apply to Participants generally
rather than the particular member at issue.
 
7.6 Recovery of Administration Expenses.  Any expense incurred by the Company or
the Committee relative to the administration of this Plan shall be paid by the
Company and/or may be deducted from the Accounts of the Participants, as
determined by the Committee.
 
8. Amendment and Termination of Plan.
 
8.1 Amendment.  The Committee or its Designee may at any time amend this Plan in
whole or in part, provided, however, that no amendment shall be effective to
decrease the balance in any Account as accrued at the time of such
amendment.  The Committee shall have authority to approve administrative and
technical amendments that do not materially increase the cost of the Plan.  The
Company may amend the Plan in any other manner that does not cause adverse
consequences under Code Section 409A or other guidance from the Treasury
Department or IRS, provided that no amendments shall divest otherwise vested
rights of Participants, or their Beneficiaries.
 
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8.2 Company’s Right to Terminate.  The Committee may terminate the Plan (or,
where allowed by Code Section 409A, a portion of the Plan) and accelerate any
payments due (or that may become due) under the Plan under the following
circumstances:
 
(a) Section 409A Change of Control.  The Plan termination occurs pursuant to an
irrevocable action of the Committee that is taken within the 30 days preceding
or the 12 months following a Section 409A Change of Control, and all other plans
sponsored by the Company that are required to be aggregated with this Plan under
Code Section 409A are also terminated with respect to each participant therein
who provided services to the Company that underwent the Section 409A Change of
Control (“Change of Control Participant”).  In the event of such a termination,
the Accounts, together with amounts due to each Change of Control Participant
under all aggregated plans, shall be paid at the time and pursuant to the
schedule specified by the Committee, so long as all payments are required to be
made no later than 12 months after the date that the Committee or its Designee
irrevocably approves the termination.
 
(b) Company’s Discretion.  In the discretion of the Committee, provided that:
(i) all arrangements sponsored by the Company that would be aggregated with the
Plan under Treasury Regulation Section 1.409A-1(c) if the same service provider
participated in all of the arrangements are terminated; (ii) no payments other
than payments that would be payable under the terms of the arrangements if the
termination had not occurred are made within 12 months of the termination of the
arrangements; (iii) all payments are made within 24 months of the termination of
the arrangements; and (iv) the Company does not adopt a new arrangement that
under Treasury Regulation Section 1.409A-1(c) that would be aggregated with the
Plan if the same service provider participated in both arrangements, at any time
within three years following the date of termination of the Plan.
 
(c) Dissolution or Bankruptcy Court Order.  Within 12 months of a corporate
dissolution of the Company taxed under Code Section 331, or with the approval of
a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), provided that the
amounts deferred under the Plan are included in the Participant’s gross income
in the latest of (i) the calendar year in which the termination occurs, (ii) the
calendar year in which the amount is no longer subject to a substantial risk of
forfeiture, or (iii) the first calendar year in which the payment is
administratively practicable.
 
(d) Other.  Due to such other events and conditions as the Commissioner of the
IRS may prescribe in generally applicable guidance published in the Internal
Revenue Bulletin.
 
9. Miscellaneous.
 
9.1 Unfunded Plan.  This Plan is intended to be an unfunded plan maintained
primarily for the purpose of providing deferred compensation for Non-Employee
Directors.  All payments pursuant to the Plan shall be made from the general
funds of the Company and no special or separate fund shall be established or
other segregation of assets made to assure payment.  No Participant or other
person shall have under any circumstances any interest in any particular
property or assets of the Company as a result of participating in the
Plan.  Notwithstanding the foregoing, the Company may (but shall not be
obligated to) create one or more grantor trusts, the assets of which are subject
to the claims of the Company’s creditors, to assist it in accumulating funds to
pay its obligations under the Plan.  Participants shall have no right to compel
the investment of any amounts deposited in any such trust(s).
 
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9.2 Nonassignability.  Except as specifically set forth in the Plan with respect
to the designation of Beneficiaries, neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage, or otherwise encumber, transfer, hypothecate, or convey in advance of
actual receipt the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are, expressly declared to be unassignable
and non-transferable.  No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts,
judgments, alimony, or separate maintenance owed by a Participant or any other
person, nor be transferable by operation of law in the event of a Participant’s
or any other person’s bankruptcy or insolvency.
 
9.3 Validity and Severability; Code Section 409A.  The invalidity or
unenforceability of any provision of this Plan shall not affect the validity or
enforceability of any other provision of this Plan, which shall remain in full
force and effect, and any prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.  If any provision of the Plan is capable of being interpreted in
more than one manner, to the extent feasible, the provision shall be interpreted
in a manner that does not result in an excise tax under Code Section 409A.
 
9.4 Governing Law.  The validity, interpretation, construction, and performance
of this Plan shall in all respects be governed by the laws of the State of
Texas, without reference to principles of conflict of law, except to the extent
preempted by federal law.
 
9.5 Status.  Nothing in this Plan or any instrument executed pursuant to this
Plan will confer upon any Participant any right to continue as a director of the
Company or affect the right of the Company to terminate the services of any
Participant.
 
9.6 Underlying Plans and Programs.  Nothing in this Plan shall prevent the
Company from modifying, amending or terminating the compensation or the plans
and programs pursuant to which compensation is earned and which is deferred
under this Plan.
 
* * * * * * * * * * * * *
 
As approved by the Compensation Committee and adopted by the Board of Directors
on December 6, 2011.
 
 
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