Unassociated Document


    EXHIBIT
      10-6

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    HALLIBURTON
      ANNUAL PERFORMANCE PAY PLAN

    AS
      AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2007

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    INDEX

                                                                                 Page
      No.

     

     

    ARTICLE I                
      PURPOSE
      .......................................................................................................................................................................................1

     

    ARTICLE
      II               
DEFINITIONS
      ...............................................................................................................................................................................1

    2.1           Definitions
      ..................................................................................................................................................................................................1

    2.2           Number
      .......................................................................................................................................................................................................
      4

    2.3           Headings
      .....................................................................................................................................................................................................4

     

    ARTICLE
      III              
PARTICIPATION
      ........................................................................................................................................................................4

    3.1           Participants .................................................................................................................................................................................................4

    3.2           Partial
      Plan Year
      Participation ..................................................................................................................................................................5

    3.3           No
      Right to
      Participate ..............................................................................................................................................................................5

    3.4           Plan
      Exclusive .............................................................................................................................................................................................5

    3.5           Consent
      to Dispute
      Resolution ...............................................................................................................................................................6

     

    ARTICLE
      IV               
ADMINISTRATION
      ..................................................................................................................................................................6

     

    ARTICLE
      V                 REWARD
      DETERMINATIONS
      ...............................................................................................................................................6

    5.1           Performance
      Measures .............................................................................................................................................................................6

    5.2           Performance
      Requirements ......................................................................................................................................................................6

    5.3           Reward
      Determinations ............................................................................................................................................................................7

    5.4           Reward
      Opportunities ..............................................................................................................................................................................7

    5.5           Discretionary
      Adjustments .....................................................................................................................................................................7

    5.6           Discretionary
      Bonuses ............................................................................................................................................................................7

     

    ARTICLE
      VI                
DISTRIBUTION OF REWARDS
      ............................................................................................................................................7

    6.1           Form
      and Timing of
      Payment .................................................................................................................................................................7

    6.2           Excess
      Remuneration ..............................................................................................................................................................................8

    6.3           Elective
      Deferral .......................................................................................................................................................................................8

    6.4           Tax
      Withholding ......................................................................................................................................................................................8

     

    ARTICLE
      VII               
TERMINATION OF EMPLOYMENT
      ...................................................................................................................................9

    7.1           Termination
      of Service During Plan
      Year .............................................................................................................................................9

    7.2           Termination
      of Service After End of Plan Year But Prior to the Payment
      Date ..............................................................................9

     

    ARTICLE
      VIII              
RIGHTS OF PARTICIPANTS AND
      BENEFICIARIES .......................................................................................................9

    8.1           Status
      as a Participant or
      Beneficiary ...................................................................................................................................................9

    8.2           Employment ..............................................................................................................................................................................................9

    8.3           Nontransferability ..................................................................................................................................................................................10

    8.4           Nature
      of
      Plan .........................................................................................................................................................................................10

     

    ARTICLE
      IX                
CORPORATE CHANGE
      ........................................................................................................................................................10

     

    ARTICLE
      X                 
AMENDMENT AND TERMINATION
      ...............................................................................................................................11


    
      
              

                                                                                                                                                 
    

        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
                                                                                   Page
        No.



    ARTICLE
      XI                  MISCELLANEOUS
      ...............................................................................................................................................................11

    11.1           Governing
      Law .....................................................................................................................................................................................11

    11.2           Severability ...........................................................................................................................................................................................11

    11.3           Successor ..............................................................................................................................................................................................11

    11.4           Effective
      Date .......................................................................................................................................................................................11

    


     


    
      
              

                                                                                                                                                  
    

        
        

      

      
        ii

        
          

        

      

      
        
        

      

    


    HALLIBURTON

    ANNUAL
      PERFORMANCE PAY PLAN

     

    The
      Compensation Committee of Directors of Halliburton Company, having heretofore
      established the Halliburton Annual Performance Pay Plan (formerly known as
      the
      Annual Reward Plan), pursuant to the provisions of Article X of said Plan,
      hereby amends and restates said Plan to be effective in accordance with the
      provisions of Section 11.4 hereof.

     

    ARTICLE
      I


     

    PURPOSE

     

    The
      purpose of the Halliburton Annual Performance Pay Plan (the “Plan”) is to reward
      management and other key employees of the Company and its Affiliates for
      improving financial results which drive the creation of value for shareholders
      of the Company and thereby, serve to attract, motivate, reward and retain high
      caliber employees required for the success of the Company.  The Plan
      provides a means to link total and individual cash compensation to Company
      performance, as measured by Cash Value Added (“CVA”), a demonstrated driver of
      shareholder value, and, where appropriate, additional performance measures
      which
      drive CVA.

     

    ARTICLE
      II


     

    DEFINITIONS

     

    2.1  Definitions.  Where
      the following words and phrases appear in the Plan, they shall have the
      respective meanings set forth below, unless their context clearly indicates
      to
      the contrary.

     

    “Administrative
      Committee” shall mean administrative committee appointed by the Compensation
      Committee to administer certain aspects of the Plan.

     

    “Affiliate”
      shall mean a Subsidiary of the Company or a division or designated group of
      the
      Company or a Subsidiary.

     

    “Base
      Salary” shall mean the annualized pay rate of a Participant as in effect on
      January 1 of a Plan Year, including base pay a Participant could have received
      in cash in lieu of (i) contributions made on such Participant’s behalf to a
      qualified Plan maintained by the Company or to any cafeteria plan under
      Section 125 of the Code maintained by the Company and (ii) deferrals
      of compensation made at the Participant’s election pursuant to a plan or
      arrangement of the Company or an Affiliate, but excluding any Rewards under
      this
      Plan and any other bonuses, incentive pay or special awards.

     

    “Beneficiary”
      shall mean the person, persons, trust or trusts entitled by Will or the laws
      of
      descent and distribution to receive the benefits specified under the Plan in
      the
      event of the Participant’s death prior to full payment of a Reward.

     

    “Board
      of
      Directors” shall mean the Board of Directors of the Company.

     


    
      
              

                         
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    “Business
      Unit CVA” shall mean the respective CVA of designated business units, each
      calculated on an aggregate basis for their respective operations.

     

    “Cause”
      shall mean (i) the conviction of the Participant of a felony under Federal
      law or the law of the state in which such action occurred, (ii) dishonesty
      in course of fulfilling the Participant’s employment duties or (iii) the
      disclosure by the Participant to any unauthorized person or competitor of any
      confidential information or confidential knowledge as to the business or affairs
      of the Company and its Affiliates.

     

    “CEO”
      shall mean the Chief Executive Officer of the Company.

     

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

     

    “Committee”
      shall mean the Compensation Committee of Directors of the Company, appointed
      by
      the Board of Directors from among its members, no member of which shall be
      an
      employee of the Company or a Subsidiary.

     

    “Common
      Stock” shall mean the common stock, par value $2.50 per share of Halliburton
      Company.

     

    “Company”
      shall mean Halliburton Company and its successors.

     

    “Company
      CVA” shall mean CVA calculated on a consolidated basis.

     

    “Corporate
      Change” shall mean one of the following events: (i) the merger,
      consolidation or other reorganization of the Company in which the outstanding
      Common Stock is converted into or exchanged for a different class of securities
      of the Company, a class of securities of any other issuer (except a direct
      or
      indirect wholly owned Subsidiary), cash or property; (ii) the sale, lease
      or exchange of all or substantially all of the assets of the Company to another
      corporation or entity (except a direct or indirect wholly owned Subsidiary);
      (iii) the adoption by the stockholders of the Company of a plan of
      liquidation and dissolution; (iv) the acquisition (other than any
      acquisition pursuant to any other clause of this definition) by any person
      or
      entity, including, without limitation, a “group” as contemplated by
      Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, of
      beneficial ownership, as contemplated by such Section, of more than twenty
      percent (based on voting power) of the Company’s outstanding capital stock; or
      (v) as a result of or in connection with a contested election of directors,
      the persons who were directors of the Company before such election shall cease
      to constitute a majority of the Board.

     

    “CVA”
      shall mean the difference between operating cash flow and a capital charge,
      calculated in accordance with the criteria and guidelines set forth in the
      Corporate Policy entitled “Cash Value Added (CVA),” as in effect at the time any
      such calculation is made.

     


    
      
              

                                                                                                                                                 
    

        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    “CVA
      Drivers” shall mean such additional performance measures (either objective or
      subjective) as may be approved by the CEO from time to time to reinforce key
      operating and strategic goals important to the Company and its business
      units.  Particular CVA Drivers may vary from business unit to business
      unit and from Participant to Participant within a particular business unit
      as
      deemed appropriate according to the needs of the applicable business
      unit.

     

    “Dispute
      Resolution Program” shall mean the Halliburton Dispute Resolution
      Plan.

     

    “ERISA”
      shall mean the Employee Retirement Income Security Act of 1974, as
      amended.

     

    “Group
      CVA” shall mean the respective CVA of the Halliburton Energy Services Group and
      the Engineering and Construction Group, each calculated on an aggregate basis
      for their respective operations.

     

    “Key
      Employees” shall mean regular, full-time employees of the Company or an
      Affiliate below the Officer level.

     

    “Officer”
      shall mean a full officer of the Company or an Affiliate.

     

    “Participant”
      shall mean any active employee of the Company or an Affiliate who participates
      in the Plan pursuant to the provisions of Article III hereof.  An
      employee shall not be eligible to participate in the Plan while on a leave
      of
      absence.

     

    “Participant
      Category” shall mean a grouping of Participants determined in accordance with
      the applicable provisions of Article III.

     

    “Payment
      Date” shall mean, with respect to a particular Plan Year, the date payment is
      actually made following the end of the applicable Plan Year but no later than
      the last business day of February of the year next following the end of such
      Plan Year, or as soon as administratively practicable thereafter if it is
      administratively impracticable to make payment by that date and such
      impracticability was not reasonably foreseeable at the end of the applicable
      Plan Year.

     

    “Performance
      Goals” shall mean, for a particular Plan Year, established levels of applicable
      Performance Measures.

     

    “Performance
      Measures” shall mean the criteria used in determining Performance Goals for
      particular Participant Categories, which may include one or more of the
      following: Company CVA, Group CVA, Business Unit CVA and CVA
      Drivers.

     

    “Plan”
      shall mean the Halliburton Annual Performance Pay Plan as amended and restated
      effective January 1, 2002, and as the same may thereafter be amended from time
      to time.

     


    
      
              

                                                                                                                                                 
    

        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    “Plan
      Year” shall mean the calendar year ending December 31, 1995 and each subsequent
      calendar year thereafter.

     

    “Reward”
      shall mean the dollar amount of incentive compensation payable to a Participant
      under the Plan for a Plan Year determined in accordance with
      Section 5.3.

     

    “Reward
      Opportunity” shall mean, with respect to each Participant Category, incentive
      reward payment amounts, expressed as a percentage of Base Salary, which
      corresponds to various levels of pre-established Performance Goals, determined
      pursuant to the Reward Schedule.

     

    “Reward
      Schedule” shall mean the schedule which aligns the level of achievement of
      applicable Performance Goals with Reward Opportunities for a particular Plan
      Year, such that the level of achievement of the pre-established Performance
      Goals at the end of such Plan Year will determine the actual
      Reward.

     

    “Senior
      Executive” shall have the meaning set forth in Corporate Policy 3-9002,
      Executive Compensation Administration, as such Policy may from time to time
      be
      amended.

     

    “Subsidiary”
      shall mean any corporation 50 percent or more of whose voting power is owned,
      directly or indirectly, by the Company.

     

    2.2  Number.  Wherever
      appropriate herein, words used in the singular shall be considered to include
      the plural and words used in the plural shall be considered to include the
      singular.

     

    2.3  Headings.  The
      headings of Articles and Sections herein are included solely for convenience,
      and if there is any conflict between headings and the text of the Plan, the
      text
      shall control.

     

    ARTICLE
      III


     

    PARTICIPATION

     

    3.1  Participants.  Active
      employees who are Senior Executives as of the beginning of each Plan Year shall
      be Participants for such Plan Year.  In addition, such other Officers
      and Key Employees as may be designated annually as Participants by the CEO
      prior
      to the last day of March each Plan Year shall be Participants for such Plan
      Year.

     


    
      
              

                                                                                                                                                 
    

        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    3.2  Partial
      Plan Year Participation.  If,
      after the beginning of a Plan Year, an employee who was not previously a
      Participant for such Plan Year (i) is newly appointed or elected as a
      Senior Executive or (ii) returns to active employment as a Senior Executive
      following a leave of absence, such employee shall become a Participant effective
      with such appointment or election or return to active service, as the case
      may
      be, for the balance of the Plan Year, on a prorated basis, unless the Committee
      shall determine, in its sole discretion, that the participation shall be delayed
      until the beginning of the next Plan Year.  If, after the beginning of
      the Plan Year, (i) a person is newly elected or appointed as an Officer
      (other than a Senior Executive) or is newly hired, promoted or transferred
      into
      a position in which he or she is a Key Employee, or (ii) an employee who
      was not previously a Participant for such Plan Year returns to active employment
      as an Officer (other than a Senior Executive) or a Key Employee following a
      leave of absence, the CEO, or his delegate, may designate such person as a
      Participant for the pro rata portion of such Plan Year beginning on the first
      day of the month following such designation.

     

    If
      an
      employee who has previously been designated as a Participant for a particular
      Plan Year takes a leave of absence during such Plan Year, all of such
      Participant’s rights to a Reward for such Plan Year shall be forfeited, unless
      the Committee (with respect to a Participant who is a Senior Executive) or
      the
      CEO (with respect to any other Participant) shall determine that such
      Participant’s Reward for such Plan Year shall be prorated based upon that
      portion of the Plan Year during which he or she was an active Participant,
      in
      which case the prorated portion of the Reward shall be paid in accordance with
      the provisions of Section 6.1.

     

    Each
      Participant shall be assigned to a Participant Category at the time he or she
      becomes a Participant for a particular Plan Year.  If a Participant
      thereafter incurs a change in status due to promotion, demotion, reassignment
      or
      transfer, (i) the Committee, in the case of the CEO or other Senior
      Executive, or (ii) the CEO, or his delegate, in the case of any other
      Participant, may approve such adjustment in such Participant’s Reward
      Opportunity as deemed appropriate under the circumstances (including termination
      of participation in the Plan for the remainder of the Plan Year), such
      adjustment to be made on a pro rata basis for the balance of the Plan Year
      effective with the first day of the month following such approval, unless some
      other effective date is specified.  All such approvals shall be
      documented in writing and filed with the Plan records for the applicable Plan
      Year.

     

    3.3  No
      Right to Participate.  Except
      as provided in Sections 3.1 and 3.2, no Participant or other employee of
      the Company or an Affiliate shall, at any time, have a right to participate
      in
      the Plan for any Plan Year, notwithstanding having previously participated
      in
      the Plan.

     

    3.4  Plan
      Exclusive.  No
      employee shall simultaneously participate in this Plan and in any other
      short-term incentive plan of the Company or an Affiliate unless such employee’s
      participation in such other plan is approved by the CEO, or his
      delegate.

     


    
      
              

                                                                                                                                            
    

        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    3.5  Consent
      to Dispute Resolution.  Participation
      in the Plan constitutes consent by the Participant to be bound by the terms
      and
      conditions of the Dispute Resolution Program which in substance requires that
      all disputes arising out of or in any way related to employment with the Company
      or its Affiliates, including any disputes concerning the Plan, be resolved
      exclusively through such program, which includes binding arbitration as the
      last
      step.

     

    ARTICLE
      IV


     

    ADMINISTRATION

     

    Each
      Plan
      Year, the Committee shall establish the basis for payments under the Plan in
      relation to given Performance Goals, as more fully described in Article V
      hereof, and, following the end of each Plan Year, determine the actual Reward
      payable for each Participant Category.  The Committee is authorized to
      construe and interpret the Plan, to prescribe, amend and rescind rules,
      regulations and procedures relating to its administration and to make all other
      determinations necessary or advisable for administration of the
      Plan.  The CEO shall have such authority as is expressly provided in
      the Plan.  In addition, as permitted by law, the Committee and the CEO
      may delegate such of their respective authority granted under the Plan as deemed
      appropriate; provided, however, that (i) the Committee may not delegate its
      authority with respect to matters relating to the CEO and other Senior
      Executives and (ii) the Committee and the CEO may not delegate their
      respective authority under Article V hereof.  Decisions of the
      Committee and the CEO, or their respective delegates, in accordance with the
      authority granted hereby or delegated pursuant hereto shall be conclusive and
      binding.  Subject only to compliance with the express provisions
      hereof, the Committee, the CEO and their respective delegates may act in their
      sole and absolute discretion with respect to matters within their authority
      under the Plan.

     

    ARTICLE
      V


     

    REWARD
      DETERMINATIONS

     

    5.1  Performance
      Measures.  CVA
      shall be the primary Performance Measure in determining Performance Goals for
      any Plan Year.  In addition, appropriate CVA Drivers applicable to
      particular Participants may also be used as Performance Measures.

     

    5.2  Performance
      Requirements.  Prior
      to the last day of February of each Plan Year, (i) the Committee shall
      approve the Company CVA, applicable Group CVA and applicable Business Unit
      CVA
      Performance Goals and the CEO shall approve appropriate CVA Drivers applicable
      to certain Participants and (ii) the Committee shall establish a Reward
      Schedule which aligns the level of achievement of applicable Performance Goals
      with Reward Opportunities, such that the level of achievement of the
      pre-established Performance Goals at the end of the Plan Year will determine
      the
      actual Reward.

     


    
      
              

                                                                                                                                      
    

        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    5.3  Reward
      Determinations.  After
      the end of each Plan Year, (i) the Committee shall determine the extent to
      which the Performance Goals (other than CVA Drivers) have been achieved and
      (ii) the CEO shall determine the extent to which the applicable CVA Drivers
      have been achieved, and the amount of the Reward shall be computed for each
      Participant in accordance with the Reward Schedule.

     

    5.4  Reward
      Opportunities.  The
      established Reward Opportunities may vary in relation to the Participant
      Categories and within the Participant Categories.  In the event a
      Participant changes Participant Categories during a Plan Year, the Participant’s
      Reward Opportunities shall be adjusted in accordance with the applicable
      provisions of Section 3.2.

     

    5.5  Discretionary
      Adjustments.  Once
      established, Performance Goals will not be changed during the Plan
      Year.  However, if the Committee, in its sole and absolute discretion,
      determines that there has been (i) a change in the business, operations,
      corporate or capital structure, (ii) a change in the manner in which
      business is conducted or (iii) any other material change or event which
      will impact one or more Performance Goals in a manner the Committee did not
      intend, then the Committee may, reasonably contemporaneously with such change
      or
      event, make such adjustments as it shall deem appropriate and equitable in
      the
      manner of computing the relevant Performance Measures applicable to such
      Performance Goal or Goals for the Plan Year; provided, however, that the CEO
      shall be authorized, subject to the review and oversight of the Committee,
      to
      make adjustments in the manner of computing one or more CVA Drivers if, when
      evaluated in accordance with the standards set forth in the preceding sentence,
      he shall deem such adjustments to be appropriate and equitable.

     

    5.6  Discretionary
      Bonuses.  Notwithstanding
      any other provision contained herein to the contrary, the Committee may, in
      its
      sole discretion, make such other or additional bonus payments to a Participant
      as it shall deem appropriate.

     

    ARTICLE
      VI


     

    DISTRIBUTION
      OF REWARDS

     

    6.1  Form
      and Timing of Payment.  Except
      as otherwise provided below, the amount of each Reward shall be paid in cash
      on
      the Payment Date.  In the event of termination of a Participant’s
      employment prior to the Payment Date for any reason other than death (in which
      case payment shall be made in accordance with the applicable provisions of
      Article VII), the amount of any Reward (or prorated portion thereof)
      payable pursuant to the provisions of Sections 7.1 or 7.2 shall be paid in
      cash on the Payment Date.

     


    
      
              

                                                                                                                                              
    

        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    6.2  Excess
      Remuneration.

     

    (a)           Notwithstanding
      the provisions of Section 6.1, to the extent that incentive compensation
      hereunder does not qualify as performance-based compensation pursuant to
      Section 162(m) of the Code, the Committee may, in its discretion, with
      respect to a Participant who is a “covered employee” for purposes of
      Section 162(m), determine that payment of that portion of a Reward which
      would otherwise cause such Participant’s compensation to exceed the limitation
      on the amount of compensation deductible by the Company in any taxable year
      pursuant to such Section 162(m), be deferred, as permitted by Section 409A
      of the Code and applicable regulations thereunder, until (i) the
      Participant’s first taxable year in which the Company reasonably anticipates
      that its deduction will not be barred by reason of Section 162(m) of the Code
      or
      (ii) the period beginning with the date of the Participant’s separation
      from service and ending on the later of the last day of the taxable year of
      the
      Company in which the Participant separates from service or the 15th day of the third month
      following the Participant’s separation from service.  In such case,
      interest shall be credited on the portion of the Reward deferred for the period
      of the deferral as provided pursuant to Article IV of the Halliburton
      Company Benefit Restoration Plan, as amended, or other applicable
      plan.

     

    (b)           Notwithstanding
      any provision of this Plan to the contrary, if a Participant is a “specified
      employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any
      payment deferred under Section 6.2(a) is paid as a result of the Participant’s
      separation from service with the Company (other than death), such amount shall
      not be payable before the earlier of (i) the date that is six months after
      the
      Participant’s termination, (ii) the date of the Participant’s death, or (iii)
      the date that otherwise complies with the requirements of Section 409A of the
      Code.  For purposes of determining the identity of “specified
      employees”, the Administrative Committee may establish procedures as it deems
      appropriate in accordance with Section 409A of the Code.

     

    6.3  Elective
      Deferral.  Nothing
      herein shall be deemed to preclude a Participant’s election to defer receipt of
      a percentage of his or her Reward beyond the time such amount would have been
      payable hereunder pursuant to the Halliburton Elective Deferral Plan or other
      similar plan.

     

    6.4  Tax
      Withholding.  The
      Company or employing entity through which payment of a Reward is to be made
      shall have the right to deduct from any payment hereunder any amounts that
      Federal, state, local or foreign tax laws require with respect to such
      payments.

     


    
      
              

                                                                                                                                                 
    

        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII


     

    TERMINATION
      OF EMPLOYMENT

     

    7.1  Termination
      of Service During Plan Year.  In
      the event a Participant’s employment is terminated prior to the last business
      day of a Plan Year for any reason other than death, normal retirement at or
      after age 65 or disability (as determined by the CEO or his delegate), all
      of
      such Participant’s rights to a Reward for such Plan Year shall be forfeited,
      unless the Committee (with respect to a Participant who was the CEO or other
      Senior Executive) or the CEO (with respect to any other Participant) shall
      determine that such Participant’s Reward for such Plan Year shall be prorated
      based upon that portion of the Plan Year during which he or she was a
      Participant, in which case the prorated portion of the Reward shall be paid
      in
      accordance with the provisions of Section 6.1.  In the case of
      death during the Plan Year, the prorated amount of such Participant’s Reward
      shall be paid to the Participant’s estate, or if there is no administration of
      the estate, to the heirs at law, on the Payment Date.  In the case of
      disability or normal retirement at or after age 65, the prorated amount of
      a
      Participant’s Reward shall be paid in accordance with the provisions of
      Section 6.1.

     

    7.2  Termination
      of Service After End of Plan Year But Prior to the Payment
      Date.  If
      a Participant’s employment is terminated after the end of the applicable Plan
      Year, but prior to the Payment Date, for any reason other than termination
      for
      Cause, the amount of any Reward applicable to such Plan Year shall be paid
      to
      the Participant in accordance with the provisions of Section 6.1, except in
      the case of death, in which case the amount of the Reward then unpaid shall
      be
      paid to such Participant’s estate, or if there is no administration of the
      estate, to the heirs at law, as soon as practicable.

     

    If
      a
      Participant’s employment is terminated for Cause, all of such Participant’s
      rights to a Reward applicable to such Plan Year shall be forfeited.

     

    ARTICLE
      VIII


     

    RIGHTS
      OF PARTICIPANTS AND BENEFICIARIES

     

    8.1  Status
      as a Participant or Beneficiary.  Neither
      status as a Participant or Beneficiary shall be construed as a commitment that
      any Reward will be paid or payable under the Plan.

     

    8.2  Employment.  Nothing
      contained in the Plan or in any document related to the Plan or to any Reward
      shall confer upon any Participant any right to continue as an employee or in
      the
      employ of the Company or an Affiliate or constitute any contract or agreement
      of
      employment for a specific term or interfere in any way with the right of the
      Company or an Affiliate to reduce such person’s compensation, to change the
      position held by such person or to terminate the employment of such person,
      with
      or without cause.

     


    
      
              

                                                                                                                                            
    

        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    8.3  Nontransferability.  No
      benefit payable under, or interest in, this Plan shall be subject in any manner
      to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
      or
      charge and any such attempted action shall be void and no such benefit or
      interest shall be, in any manner, liable for, or subject to, debts, contracts,
      liabilities or torts of any Participant or Beneficiary; provided, however,
      that,
      nothing in this Section 8.3 shall prevent transfer (i) by Will,
      (ii) by applicable laws of descent and distribution or (iii) pursuant to an
      order that satisfies the requirements for a “qualified domestic relations order”
as such term is defined in section 206(d)(3)(B) of ERISA and section
      414(p)(1)(A) of the Code, including an order that requires distributions to
      an
      alternate payee prior to a Participant’s “earliest retirement age” as such term
      is defined in section 206(d)(3)(E)(ii) of ERISA and section 414(p)(4)(B) of
      the
      Code.  Any attempt at transfer, assignment or other alienation
      prohibited by the preceding sentence shall be disregarded and all amounts
      payable hereunder shall be paid only in accordance with the provisions of the
      Plan.

     

    8.4  Nature
      of Plan.  No
      Participant, Beneficiary or other person shall have any right, title or interest
      in any fund or in any specific asset of the Company or any Affiliate by reason
      of any Reward hereunder.  There shall be no funding of any benefits
      which may become payable hereunder.  Nothing contained in the Plan (or
      in any document related thereto), nor the creation or adoption of the Plan,
      nor
      any action taken pursuant to the provisions of the Plan shall create, or be
      construed to create, a trust of any kind or a fiduciary relationship between
      the
      Company or an Affiliate and any Participant, Beneficiary or other
      person.  To the extent that a Participant, Beneficiary or other person
      acquires a right to receive payment with respect to a Reward hereunder, such
      right shall be no greater than the right of any unsecured general creditor
      of
      the Company or other employing entity, as applicable.  All amounts
      payable under the Plan shall be paid from the general assets of the Company
      or
      employing entity, as applicable, and no special or separate fund or deposit
      shall be established and no segregation of assets shall be made to assure
      payment of such amounts.  Nothing in the Plan shall be deemed to give
      any employee any right to participate in the Plan except in accordance
      herewith.

     

    ARTICLE
      IX


     

    CORPORATE
      CHANGE

     

    In
      the
      event of a Corporate Change, (i) with respect to a Participant’s Reward
      Opportunity for the Plan Year in which the Corporate Change occurred, such
      Participant shall be entitled to an immediate cash payment equal to the maximum
      amount of Reward he or she would have been entitled to receive for the Plan
      Year, prorated to the date of the Corporate Change; and (ii) with respect
      to a Corporate Change that occurs after the end of the Plan Year but prior
      to
      the Payment Date, a Participant shall be entitled to an immediate cash payment
      equal to the Reward earned for such Plan Year.

     


    
      
              

                                                                                                                                        
    

        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      X


     

    AMENDMENT
      AND TERMINATION

     

    Notwithstanding
      anything herein to the contrary, the Committee may, at any time, terminate
      or,
      from time to time amend, modify or suspend the Plan; provided, however, that,
      without the prior consent of the Participants affected, no such action may
      adversely affect any rights or obligations with respect to any Rewards
      theretofore earned for a particular Plan Year, whether or not the amounts of
      such Rewards have been computed and whether or not such Rewards are then
      payable.

     

    ARTICLE
      XI


     

    MISCELLANEOUS

     

    11.1  Governing
      Law.  The
      Plan and all related documents shall be governed by, and construed in accordance
      with, the laws of the State of Texas, without giving effect to the principles
      of
      conflicts of law thereof, except to the extent preempted by federal
      law.  The Federal Arbitration Act shall govern all matters with regard
      to arbitrability.

     

    11.2  Severability.  If
      any provision of the Plan shall be held illegal or invalid for any reason,
      said
      illegality or invalidity shall not affect the remaining provisions hereof;
      instead, each provision shall be fully severable and the Plan shall be construed
      and enforced as if said illegal or invalid provision had never been included
      herein.

     

    11.3  Successor.  All
      obligations of the Company under the Plan shall be binding upon and inure to
      the
      benefit of any successor to the Company, 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
      Company.

     

    11.4  Section
      409A of the Code.  It
      is intended that the provisions of this Plan satisfy the requirements of Section
      409A of the Code and that the Plan be operated in a manner consistent with
      such
      requirements to the extent applicable.  Therefore, the Committee may
      make adjustments to the Plan and may construe the provisions of the Plan in
      accordance with the requirements of Section 409A of the Code.

     

    11.5  Effective
      Date.  This
      amendment and restatement of the Plan shall be effective from and after January
      1, 2007, and shall remain in effect until such time as it may be terminated
      or
      amended pursuant to Article X.

     


    
       

      
        11