nfx8k-11062008ex10171.htm


    


    Exhibit
10.17.1

     

    


     

    


     

    


     

    NEWFIELD
EXPLORATION COMPANY

     

    


     

    DEFERRED
COMPENSATION PLAN

     

    


     

    AS
AMENDED AND RESTATED AS OF

     

    


     

    NOVEMBER
6, 2008

     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


    
      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    


    


     

    


     

    


     

    NEWFIELD
EXPLORATION COMPANY

     

    DEFERRED
COMPENSATION PLAN

     

    AS
AMENDED AND RESTATED AS OF NOVEMBER 6, 2008

     

    W I T N E
S S E T H:

     

    WHEREAS, NEWFIELD EXPLORATION COMPANY,
adopted the NEWFIELD
EXPLORATION COMPANY DEFERRED COMPENSATION PLAN (the “Plan”)
first effective as of April 1, 1997 and last amended and restated effective as
of July 26, 2007;

     

    WHEREAS, the Compensation
Committee (as hereinafter defined) has reserved to itself in Section 10.4 the
power to amend the Plan; and

     

    WHEREAS, the Compensation
Committee desires to amend the Plan to allow Members to select company stock as
one of the hypothetical investment options under the Plan and to make certain
additional amendments to the Plan to provide transitional relief in accordance
with Section 409A of the Internal Revenue Code of 1986, as amended.

     

    NOW THEREFORE, the Plan hereby
is amended and restated effective as of November 6, 2008, to read as
follows:

     

    


     

    


     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    TABLE
OF CONTENTS

     

    
      	 
      	 
      	
              Page

            
	
              I.

            	
              Definitions
      and Construction

            	
              1

            
	
              1.1

            	
              Definitions

            	
              1

            
	
              1.2

            	
              Number
      and Gender

            	
              3

            
	
              1.3

            	
              Headings

            	
              3

            
	
              II.

            	
              Participation

            	
              3

            
	
              2.1

            	
              Participation

            	
              3

            
	
              2.2

            	
              Cessation
      of Active Participation

            	
              3

            
	
              III.

            	
              Account
      Credits

            	
              4

            
	
              3.1

            	
              Base
      Salary Deferrals

            	
              4

            
	
              3.2

            	
              Bonus
      Compensation Deferrals

            	
              4

            
	
              3.3

            	
              Special
      Rule for Performance-Based Compensation Bonus

            	
              5

            
	
              3.4

            	
              Effect
      of 401(k) Plan Hardship Withdrawal

            	
              5

            
	
              3.5

            	
              Company
      Deferrals

            	
              6

            
	
              3.6

            	
              Earnings
      Credits

            	
              6

            
	
              IV.

            	
              Vesting
      and In-Service Distributions

            	
              7

            
	
              4.1

            	
              Vesting

            	
              7

            
	
              4.2

            	
              In-Service
      Distributions

            	
              7

            
	
              V.

            	
              Payment
      of Benefits

            	
              8

            
	
              5.1

            	
              Payment
      Election Generally

            	
              8

            
	
              5.2

            	
              Special
      Rule for 409A Transition Period Elections

            	
              8

            
	
              5.3

            	
              Time
      of Benefit Payment

            	
              8

            
	
              5.4

            	
              Form
      of Benefit Payment

            	
              9

            
	
              5.5

            	
              Failure
      to Elect Form of Payment

            	
              9

            
	
              5.6

            	
              Death

            	
              9

            
	
              5.7

            	
              Acceleration
      of Payment

            	
              10

            
	
              5.8

            	
              Designation
      of Beneficiaries.

            	
              10

            
	
              5.9

            	
              Unclaimed
      Benefits

            	
              11

            
	
              5.10

            	
              Delay
      of Payments Under Certain Circumstances

            	
              11

            
	
              VI.

            	
              Administration
      of the Plan

            	
              11

            
	
              6.1

            	
              Plan
      Committee Powers and Duties

            	
              11

            
	
              6.2

            	
              Self-Interest
      of Members

            	
              12

            
	
              6.3

            	
              Claims
      Review

            	
              12

            
	
              6.4

            	
              Company
      to Supply Information

            	
              13

            
	
              6.5

            	
              Indemnity

            	
              13

            
	
              VII.

            	
              Administration
      of Funds

            	
              13

            
	
              7.1

            	
              Payment
      of Expenses

            	
              13

            
	
              7.2

            	
              Trust
      Fund Property

            	
              14

            
	
              VIII.

            	
              Nature
      of the Plan

            	
              14

            
	
              IX.

            	
              Participating
      Employers

            	
              15

            
	
              X.

            	
              Miscellaneous

            	
              15

            
	
              10.1

            	
              Not
      Contract of Employment

            	
              15

            
	
              10.2

            	
              Alienation
      of Interest Forbidden

            	
              15

            
	
              10.3

            	
              Withholding

            	
              15

            
	
              10.4

            	
              Amendment
      and Termination

            	
              15

            
	
              10.5

            	
              Severability

            	
              16

            
	
              10.6

            	
              Governing
      Laws

            	
              16

            
	
              10.7

            	
              Change
      of Control

            	
              16

            
	
              10.8

            	
              Compliance
      with Section 409A

            	
              16

            


    

    


    


    
      
        
           


        

        
          i 


          
            

          

        

        
           


        

      

    

    


    I.

     

    Definitions and
Construction

     

    1.1 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.

     

    Account:  A
memorandum bookkeeping account, excluding a Stock Account, established on the
records of the Company for a Member that is credited with amounts determined in
accordance with Article III of the Plan.  As of any determination
date, a Member’s benefit under the Plan shall be equal to the amount credited to
his Account as of such date.  A Member shall have a 100%
nonforfeitable interest in his Account at all times.

     

    Board:  The
Board of Directors of the Company.

     

    Base
Salary:  The base rate of cash compensation paid by the Company
to or for the benefit of a Member for services rendered or labor performed while
a Member including base pay a Member could have received in cash in lieu of
(A) deferrals pursuant to Section 3.1 and (B) contributions made
on his behalf to any qualified plan maintained by the Company or to any
cafeteria plan under Section 125 of the Code maintained by the
Company.

     

    Bonus
Compensation:  With respect to any Member for a Plan Year, an
amount awarded under the Newfield Employee 1993 Incentive Compensation Plan or
the Newfield Exploration Company 2003 Incentive Compensation Plan.

     

    Change
of Control:  The occurrence of any of the
following:

     

    (1)           the
Company is not the surviving Person (as such term is defined below in this
definition) in any merger, consolidation or other reorganization (or survives
only as a subsidiary of another Person);

     

    (2)           
the consummation of a merger or consolidation of the Company with another Person
pursuant to which less than 50% of the outstanding voting securities of the
surviving or resulting corporation are issued in respect of the capital stock of
the Company;

     

    (3)           the
Company sells, leases or exchanges all or substantially all of its assets to any
other Person;

     

    (4)           the
Company is to be dissolved and liquidated;

     

    (5)           any
Person, including a “group” as contemplated by Section13(d)(3) of the Securities
Exchange Act of 1934, acquires or gains ownership or control (including the
power to vote) of more than 50% of the outstanding shares of the Company’s
voting stock (based upon voting power); or

     

    (6)           as
a result of or in connection with a contested election of directors, the Persons
who were directors of the Company before such election cease to constitute a
majority of the Board.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    Notwithstanding
the foregoing, the definition of “Change of Control” shall not include (A) any
merger, consolidation, reorganization, sale, lease, exchange, or similar
transaction involving solely the Company and one or more Persons that were
wholly owned, directly or indirectly, by the Company immediately prior to such
event or (B) any event that is not a “change in control” for purposes of Section
409A.  For purposes of this definition, “Person” shall mean any
individual, partnership, corporation, limited liability company, trust,
incorporated or unincorporated organization or association or other legal entity
of any kind.

     

    Code:  The
Internal Revenue Code of 1986, as amended.

     

    Compensation
Committee:  The Compensation & Management Development
Committee of the Board.

     

    Company:  Newfield
Exploration Company.

     

    Company
Deferrals:  Deferrals made by the Company on a Member’s behalf
pursuant to Section 3.5.

     

    Company
Stock:  The common stock of Newfield Exploration
Company.

     

    Effective
Date:  April 1, 1997.

     

    Member:  Each
individual who is a Member pursuant to Article II.

     

    Plan:  The
Newfield Exploration Company Deferred Compensation Plan.

     

    Plan
Committee:  The individual or committee that is authorized by
the Compensation Committee to administer the Plan.  The Plan Committee
may delegate pursuant to a written authorization (including, by way of
illustration, through a contract, memorandum, or other written delegation
document) any or all if its responsibilities set forth in the Plan to one or
more individuals, committees or service providers.  In any case where
the Plan refers to the Plan Committee, such reference is deemed to be a
reference to any delegate of the Plan Committee appointed for such
purpose.

     

    Plan
Year:  The twelve-consecutive month period commencing
January 1 of each year; provided, however, that the first Plan Year began
on April 1, 1997 and ended on December 31, 1997.

     

    Section
409A:  Section 409A of the Code and any applicable regulations
or rulings thereunder.

     

    Separation
from Service:   A “separation from service” within the
meaning of Section 409A(a)(2)(a)(i) of the Code.

     

    Specified
Employee:  On any date in the
applicable period, any employee of the Company or any affiliate of the Company
that would be considered a single employer with the Company under Section 414(a)
and (b) of the Code who was a “key employee” within the meaning of Section
416(i) of the Code (without regard to paragraph (5) thereof) at any time during
the 12-month period ending on the identification date.   For the
period beginning January 1, 2005 and ending March 31, 2006, the identification
date is December 31, 2004.  Thereafter, the applicable period is each
12-month period beginning on April 1, 2006 and each subsequent April 1
and  the identification date for each such period is the immediately
preceding December 31.  For example, for the period beginning April 1,
2006, the identification date is December 31, 2005.  Specified
Employees shall be determined in accordance with Section 409A.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Stock
Account:  The bookkeeping account specifically established for
a Member that includes amounts determined in accordance with Section
3.6(b).

     

    Trust:  The
trust, if any, established under the Trust Agreement.

     

    Trust
Agreement:  The agreement, if any, entered into between the
Company and the Trustee pursuant to Article VIII.

     

    Trust
Fund:  The funds and properties, if any, held pursuant to the
provisions of the Trust Agreement, together with all income, profits and
increments thereto.

     

    Trustee:  The
trustee or trustees appointed by the Plan Committee who are qualified and acting
under the Trust Agreement at any time.

     

    1.2 Number and
Gender.  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.  The masculine gender, where appearing in the Plan, shall be
deemed to include the feminine gender.

     

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

     

    II.

     

    Participation

     

    2.1 Participation.  Prior
to January 1, 2007, Members are those employees of the Company, whose Base
Salary exceeds an amount equal to (i) the limitation on elective deferrals
provided in Code Section 402(g) ($9,500 for 1997) with such amount to be
adjusted automatically to reflect any cost of living adjustment authorized by
Section 402(g)(5) of the Code, divided by (ii) the decimal
0.08.  However, for periods on or after January 1, 2007, Members are
those employees of the Company who are designated by the Compensation Committee
as eligible to participate in the Plan.  The Plan Committee shall
notify each employee who is a Member.

     

    2.2 Cessation of Active
Participation.  Notwithstanding
any provision herein to the contrary, an employee who is a Member shall cease to
be entitled to defer Base Salary and/or Bonus Compensation hereunder or receive
an allocation of Company Deferrals effective for payroll periods commencing
after the first date the employee ceases to be a Member.  Any such
Compensation Committee action shall be communicated to the affected individual
prior to the effective date of such action.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    III.

     

    Account
Credits

     

    3.1 Base Salary
Deferrals.  Any
Member may elect to defer receipt of an integral percentage of from 1% to 90% of
his Base Salary for services to be performed during any Plan Year.  A
Member’s election to defer receipt of a percentage of his Base Salary for any
Plan Year shall be made on or before the last day of the preceding Plan Year;
provided, however, a Member’s election to defer receipt of a percentage of his
Base Salary for the Plan Year beginning April 1, 1997 shall be made on or
before March 31, 1997.  Notwithstanding the foregoing, if any
individual initially becomes a Member other than on the first day of a Plan
Year, and, after December 31, 2004, who is treated under Section 409A as first
becoming eligible to participate in an “account balance” plan maintained by the
Company, such individual may elect to defer receipt of a percentage of his Base
Salary for such Plan Year no later than 30 days after he first becomes a
Member.  Such election shall apply only to a pro rata portion of his
Base Salary for such Plan Year based upon the number of days remaining in such
Plan Year after the date of the election divided by 365 (or 366 if a leap
year).  Any such election after December 31, 2004 shall be effective
for payroll periods commencing after the date of the
election.   Base Salary for a Plan Year not deferred by a Member
pursuant to this Section 3.1 shall be received by such Member in cash except as
provided by any other plan maintained by the Company.  Deferrals of
Base Salary under the Plan shall be made before elective deferrals or
contributions of Base Salary under any other plan maintained by the
Company.  Deferrals of Base Salary made by a Member for a Plan Year
shall be credited to such Member’s Account as of the date the Base Salary
deferrals would have been received by such Member in cash had no deferrals been
made pursuant to this Section 3.1.  Except as provided in Section 3.4,
deferral elections of Base Salary for a Plan Year pursuant to this Section 3.1
shall be irrevocable through the end of the Plan Year for which they are
made.

     

    3.2 Bonus Compensation
Deferrals.  Any
Member may elect to defer receipt of an integral percentage of from 1% to 100%
of his Bonus Compensation for any Plan Year.  Such election may apply
to the Member’s current award or deferred award under the Newfield Employee 1993
Incentive Compensation Plan or the Newfield Exploration Company 2003 Incentive
Compensation Plan for a Plan Year.  A separate election may be made
with respect to each type of Bonus Compensation (current or deferred) that
otherwise would be paid in cash.  A Member’s election to defer receipt
of a percentage of his Bonus Compensation for any Plan Year shall be made on or
before the last day of the preceding Plan Year.  For Bonus
Compensation earned with respect to services performed after December 31, 2004,
the election to defer Bonus Compensation must be made in the Plan Year preceding
the Plan Year in which the bonus period begins.  For example,
if  Bonus Compensation for 2007 is paid in 2008, the election to defer
the 2007 Bonus Compensation must be made in 2006.  Notwithstanding the
foregoing, (1) a Member’s election to defer receipt of a percentage of his Bonus
Compensation for the Plan Year beginning April 1, 1997, may be made on or
before March 31, 1997 and (2) if any individual initially becomes a
Member other than on the first day of a Plan Year, and, after December 31, 2004,
such individual is treated under Section 409A as first becoming eligible to
participate in an “account balance” plan maintained by the Company, such
Member’s election to defer receipt of a percentage of his Bonus Compensation for
such Plan Year may be made no later than 30 days after he becomes a Member,
but such election shall apply only to a pro rata portion of his Bonus
Compensation for such Plan Year based upon the number of complete months
remaining in such Plan Year divided by twelve in the case of Bonus Compensation
deferred before 2006 and for Bonus Compensation deferred in 2006 and thereafter,
based on the number of days remaining in the Plan Year divided by
365.  Deferrals of Bonus Compensation under the Plan shall be made
before elective deferrals or contributions of Bonus Compensation under any other
plan maintained by the Company.  Bonus Compensation deferrals made by
a Member shall be credited to such Member’s Account as of the date the Bonus
Compensation deferral would have been received by such Member had no deferral
been made pursuant to this Section 3.2.  Except as provided in
Section 3.4, deferral elections of Bonus Compensation for a Plan Year pursuant
to this Section 3.2 shall be irrevocable.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3.3 Special Rule for
Performance-Based Compensation Bonus.  In the event
that the Company offers bonus compensation that constitutes “performanced-based
compensation” within the meaning of Section 409A, a Member may elect at least 6
months before the end of a performance period to defer an integral percentage of
from 1% to 100% of his performance-based compensation bonus for services
performed during a performance period; provided that (i) the performance period
must be at least 12 months; (ii) performance criteria are established in writing
not later than 90 days after commencement of the performance period;
(iii) the Member must be a Member continuously from the date upon which the
performance criteria for the particular performance period were established
through the date of his election; and (iv) at the time of the election, the
performance-based compensation bonus is not substantially certain to be paid or
is not readily ascertainable.  Deferrals of performance-based
compensation under the Plan shall be made before elective deferrals or
contributions of performance-based compensation under any other plan maintained
by the Company.  Performance-based compensation deferrals made by a
Member shall be credited to such Member’s Account as of the date the
performance-based compensation would have been received by such Member had no
deferral been made pursuant to this Section 3.3.  Except as
provided in Section 3.4, deferral elections of performance-based compensation
for a Plan Year pursuant to this Section 3.3 shall be irrevocable.

     

          
3.4 Effect of 401(k) Plan
Hardship Withdrawal or Unforseeable
Emergency.           

          
(a)           Effect of 401(k) Plan
Hardship Withdrawal.  Effective January 1, 2007, the deferral
election of a Member who has taken a hardship withdrawal pursuant to the
Company’s 401(k) plan shall automatically be cancelled effective immediately
upon such withdrawal and for the remainder of the Plan Year in which the
withdrawal is made and any subsequent Plan Year in which deferrals under the
401(k) plan are suspended.  Such Member may recommence participation
in the Plan only during an annual enrollment period and his election shall not
become effective until the beginning of the Plan Year following the annual
enrollment period.

     

    (b)           Effect of Unforeseeable
Emergency.   Effective January 1, 2007, a Member’s
deferral election shall be cancelled if, in the determination of the Plan
Committee, such Member has experienced a severe financial hardship resulting
from an illness or accident of the Member, the spouse of the Member or a
dependent (as defined in Section 152(a) of the Code) of the Member, loss of the
Member’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Member.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    3.5 Company
Deferrals.  For
each Plan Year during which a Member has made the maximum elective contributions
under the Newfield Exploration Company 401(k) Plan pursuant to
Section 402(g) of the Code, the Company shall credit a Member’s Account
with an amount equal to 100% of the compensation deferrals made by such Member
pursuant to Sections 3.1, 3.2 or 3.3 (as modified by Section 3.4) of the
Plan, with such amounts being limited to 8% of a Member’s Base Salary for such
Plan Year and reduced by the amount of Company matching contributions made for
the account of the Member under the Newfield Exploration Company 401(k) Plan for
such Plan Year or such lesser amount as may be credited consistent with Section
409A.  Company Deferrals made on a Member’s behalf shall be credited
to his Account in accordance with the procedures established from time to time
by the Plan Committee.

     

    3.6 Earnings
Credits.           

    (a)           Member’s
Account.  As of the last day of each calendar quarter, a
Member’s Account shall be credited with an amount of earnings based upon the
balance of such Member’s Account for each day during such calendar quarter and
utilizing an interest rate equal to for periods before 2003, the prime-based
borrowing rate option established in the Company’s  revolving credit
facility (or in the absence thereof the prime rate of interest of The Chase
Manhattan Bank, N.A. or its successor) and for periods after 2002 and before
2007 the highest coupon rate paid on the Company’s public
debt.  Interest shall be computed as the average on a daily basis
using a 365 or 366 day year as the case may be, and the actual days elapsed
(including the first day but excluding the last day) occurring in the calendar
quarter for which such interest is payable.  So long as there is any
balance in a Member’s Account, such Account shall continue to receive earnings
credits pursuant to this Section 3.6(a).  Beginning January 1, 2007,
the Plan Committee from time to time shall select one or more investment funds
that will serve as hypothetical investment options for a Member’s Account
(“phantom investment funds”).  The Plan Committee may establish limits
on the portion of an Account that may be hypothetically invested in any phantom
investment fund or in any combination of phantom investment
funds.  Each Member shall elect pursuant to procedures established by
the Plan Committee to treat the amounts credited to his Account as if they were
invested in one or more phantom investment funds (a “phantom investment
election”).  A Member may change his phantom investment election in
accordance with the Plan Committee’s procedures.  Any phantom
investment election shall be effective only if made in accordance with the Plan
Committee’s procedures.  The Plan Committee shall cause the Member’s
Account to be adjusted for any earnings and losses as if it were invested in
accordance with the Member’s phantom investment election.  Such
adjustments shall be made until his Account is distributed in full.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (b)           Member’s Stock
Account.  Effective November 6, 2008, in lieu of having amounts
credited with the phantom investment funds in accordance with Section 3.6(a), a
Member may elect to have all or part of the Member’s deferred amounts (in whole
percentage increments) credited in the form of Company Stock to his Stock
Account.  Each Member shall elect pursuant to procedures established
by the Plan Committee to have deferred amounts credited to his Stock
Account.  A Member may change such an election in accordance with the
Plan Committee’s procedures.  In addition, any amounts credited to a
Member’s Account in accordance with Section 3.6(a) may be transferred for
hypothetical investment tracking purposes to the Member’s Stock
Account.  In all events, once amounts are credited to a Member’s Stock
Account, no subsequent election may cause amounts credited to a Member’s Stock
Account to be transferred for hypothetical investment tracking purposes to any
other phantom investment fund.  All distributions of amounts credited
to a Member’s Stock Account may only be distributed in whole shares of Company
Stock (with cash for fractional shares).  A Member’s Stock Account
will be credited at such times as the Plan Committee determines with respect to
all other deferred amounts under the Plan, with the number of shares of Company
Stock (in whole shares and fractional shares, as determined by the Plan
Committee) determined by dividing the portion of the Member’s deferred amounts
to be credited in the Stock Account by the price for shares of Company Stock,
determined by the Plan Committee, as of  the day such deferred amounts
are credited to the Member’s Stock Account.

     

               If
the Company enters into transactions involving stock splits, stock dividends,
reverse splits or any other recapitalization transactions, the number of shares
of Company Stock credited to a Member’s Account will be adjusted (in whole
shares and fractional shares, as determined by the Plan Committee) so that the
Member’s Stock Account reflects the same equity percentage interest in the
Company after the recapitalization as was the case before such
transaction.  If at least a majority of the Company’s stock is sold or
exchanged by its stockholders pursuant to an integrated plan for cash or
property (including stock of another corporation) or if substantially all of the
assets of the Company are disposed of and, as a consequence thereof, cash or
property is distributed to the Company’s stockholders, each Member’s Stock
Account will be, to the extent not already so credited, with the amount of cash
or property receivable by a stockholder directly holding the same number of
shares of Company Stock as is credited to such Member’s Stock Account and
debited by that number of shares of Company Stock surrendered by such equivalent
Company stockholder.  Each time the Company declares a dividend on
Company Stock, each Member’s Stock Account will be credited with an amount equal
to that number of shares of Company Stock (in whole shares and fractional
shares, as determined by the Plan Committee) determined by dividing (i) the
amount that would have been paid (or the fair market value thereof, if the
dividend  is not paid in cash) to the Member on the total number of
shares of Company Stock credited to the Member’s Stock Account had that number
of shares of Company Stock been held by such Participant by (ii) the price for
shares of Company Stock, determined by the Plan Committee, as of the dividend
payment date.

     

    Notwithstanding anything is this
Section 3.6(b) to the contrary, the Plan Committee may at any time alter the
effective date and/or take any other action that it deems necessary with respect
to amounts that are to be credited to a Member’s Stock Account so as to
assure  compliance with any policy of the Company respecting insider
trading as may be in effect from time to time.  The Company may also
impose blackout periods pursuant to the requirements of the Sarbanes-Oxley Act
of 2002 whenever the Company determines that circumstances warrant and during
which time, Members may not effect transactions, directly or indirectly, in
Company equity securities.

     

     

    IV.

     

    Vesting and In-Service
Distributions

     

    4.1 Vesting.  A
Member shall be 100% vested in his Account at all times.

     

    4.2 In-Service
Distributions.  Except
in the case of hardship as described in this Section 4.2, in-service
distribution shall not be permitted under the Plan, and Members shall not be
permitted to make withdrawals from the Plan prior to Separation from Service
from the Company.  Effective January 1, 2007, a Member may request
that the Plan Committee distribute all, or a part of, his Account  (or
Stock Account, if any) balance to him if he experiences severe financial
hardship resulting from an illness or accident of the Member, the spouse of the
Member or a dependent (as defined in Section 152(a) of the Code) of the Member,
loss of the Member’s property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control
of the Member.  The Plan Committee shall have the sole discretion to
determine whether to grant a Member’s withdrawal request under this Section 4.2
and the amount to distribute to the Member; provided, however, that no hardship
distribution shall be made to a Member under this Section 4.2 to the extent that
such hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of the Member’s
assets, to the extent the liquidation of the Member’s assets would not itself
cause severe financial hardship, or (iii) by cessation of deferral elections
under the Plan.  The amount of any distributions pursuant to this
Section 4.2 shall be limited to the amount necessary to meet the hardship, plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution.  Distribution shall be made on the first regularly
scheduled pay date that coincides with or immediately follows the first day of
the calendar month following the determination by the Plan Committee that a
hardship withdrawal will be permitted.  Members shall not, at any
time, be permitted to borrow from the Plan.

     

    
      
        
        

      

      
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    V.

     

    Payment of
Benefits

     

    5.1 Payment Election
Generally.  In
conjunction with the compensation deferral elections made by a Member pursuant
to Sections 3.1, 3.2 or 3.3 (as modified by Section 3.4), such Member shall
elect the form of payment with respect to such compensation deferral, the
Company Deferrals attributable thereto, and the earnings credited
thereto.  Any such election shall be irrevocable once
made.

     

    5.2 Special Rule for 409A
Transition Period Elections.  Notwithstanding
the provisions of Section 5.1, during a period in 2006 specified by the Plan
Committee, Members shall have a one-time opportunity to change their payment
elections in accordance with applicable Section 409A transition guidance;
provided that a Member cannot in 2006 defer payments that the member otherwise
would receive in 2006 or cause payments that otherwise would be made in a
subsequent year to be made in 2006.  Additionally, in accordance with
Section 409A and any guidance issued thereunder, a Member  may make an
election to change the time and manner of payment of amounts subject to Section
409A on or before December 31, 2008, provided that if any such election is made
during the calendar year ending on December 31, 2008, the change in election (i)
is for amounts not otherwise payable in 2008, and (ii) does not cause an amount
to be paid from a Participant’s Account in 2008.

     

    5.3 Time of
Benefit Payment.  Each Member shall commence payment of his
Account (or Stock Account, if any), including all compensation deferrals, the
Company Deferrals attributable thereto, and the earnings credited thereto, on
the 30th day following the date of the Member’s Separation from Service or, if
such date is not a business day, on the first business day that is at least 30
days after the date of the Member’s Separation from Service; provided, however,
that if the Member is a Specified Employee, such payment shall be made on the
date that is 6 months after the date of the Member’s Separation from Service or
on the next business day if such date is not a business day.

     

    
      
        
        

      

      
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    5.4 Form of Benefit
Payment.  With
respect to each compensation deferral election made by a Member pursuant to
Sections 3.1, 3.2 or 3.3 (as modified by Section 3.4), such Member shall
elect the form of payment with respect to such compensation deferral, the
Company Deferrals attributable thereto and the earnings credited thereto from
one of the following forms:

     

    (a) A lump
sum; or

     

    (b) Installment
payments for a period not less than one year and not more than 10
years.

     

    All
payments shall be made in cash; provided, however, to the extent distributable
amounts are credited to the Member’s Stock Account, such payments shall be made
in shares of Company Stock (with any fractional share interest therein paid in
cash to the extent of the then fair market value thereof).

     

    Installment
payments shall be paid monthly commencing on the date specified in Section
5.3.  The amount of each installment payment shall be determined by
multiplying the amount of the compensation
deferrals made by a Member pursuant to Sections 3.1, 3.2 or 3.3 (as modified by
Section 3.4) which are subject to such
installment form, the Company Deferrals attributable thereto, and the
earnings credited thereto at the time of payment by a fraction, the numerator of
which is one and the denominator of which is the number of remaining installment
payments to be made to the Member.  In the event the total amount
credited to a Member’s Account does not exceed the limit in Section 402(g)(1)(B)
of the Code (which is $15,500 for 2007), the Account shall be paid in a lump
sum.  Notwithstanding the foregoing, in the event that payments under
the Plan are required to be aggregated with payments under any other “account
balance” plan maintained by the Company in order to comply with the requirements
of Section 409A, all payments under the Plan shall be made in a lump
sum.

     

    5.5 Failure to Elect Form of
Payment.  If
a Member fails to elect the form of payment of a compensation deferral, such
compensation deferral, the Company Deferrals attributable thereto and the
earnings credited thereto shall be paid in a cash lump sum, except to the extent
distributable amounts are credited to a Member’s Stock Account, in which case
the payment shall be made in shares of Company Stock (with any fractional share
interest therein paid in cash to the extent of the then fair market value
thereof).

     

    5.6 Death.  In
the event of a Member’s death at a time when amounts are credited to such
Member’s Account (or Stock Account, if any), such amounts shall be paid to such
Member’s designated beneficiary or beneficiaries at the time set forth in
Section 5.3 and in the form elected by the Member pursuant to Section 5.4,
or if no election has been made, pursuant to
Section 5.5.  However, the Member’s designated beneficiary or
beneficiaries may request a cash lump sum payment (except to the extent
distributable amounts are credited to a Member’s Stock Account, in which case
the payment shall be made in shares of Company Stock (with any fractional share
interest therein paid in cash to the extent of the then fair market value
thereof)), to the extent the beneficiary experiences a severe financial hardship
resulting from an illness or accident, loss of the property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the beneficiary.  The Plan Committee
shall have the sole discretion to determine whether to grant a beneficiary’s
withdrawal request and the amount to distribute to the beneficiary; provided,
however, that no hardship distribution shall be made to a beneficiary to the
extent that such hardship is or may be relieved (i) through reimbursement
or compensation by insurance or otherwise, or (ii) by liquidation of the
beneficiary’s assets, to the extent the liquidation of the beneficiary’s assets
would not itself cause severe financial hardship.  The amount of any
distribution shall be limited to the amount necessary to meet the hardship, plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution.

     

    
      
        
        

      

      
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    5.7 Acceleration of
Payment.  The
Plan Committee, in its sole discretion, may accelerate the payment of Member’s
Account (or Stock Account, if any) balance to the Member, or his designated
beneficiary in the event of his death, in a lump sum cash payment (except to the
extent distributable amounts are credited to a Member’s Stock Account, in which
case the payment shall be made in shares of Company Stock (with any fractional
share interest therein paid in cash to the extent of the then fair market value
thereof)) as soon as administratively practicable after the Plan Committee
determines that such acceleration is necessary under one or more of the
following:

    


    (a) to
fulfill a domestic relations order (as defined in Code Section 414(p)(1)(B))
requirement to pay an individual other than the Member;

     

    (b) as
necessary to comply with a certificate of divestiture (as defined in Code
Section 1043(b)(2)) related to a conflict of interest exception under Section
409A;

     

    (c) to pay
the Federal Insurance Contributions Act (FICA) tax imposed under Code Sections
3101 and 3121(a) and (v) on compensation deferred under the Plan (the “FICA
Amount”) and the income tax at source on wages imposed under Code Section 3401
or the corresponding withholding provisions of applicable state, local or
foreign tax laws as a result of the payment of the FICA Amount and the
additional income tax at source on wages attributable to the pyramiding of Code
Section 3401 wages and taxes; provided, however, that the acceleration permitted
under this paragraph (c) shall not exceed the aggregate of the FICA Amount and
the income tax withholding related to such FICA Amount;

     

    (d) to the
extent that the Plan Committee determines that the Plan fails to satisfy the
requirements of Section 409A; provided, however, that such distribution shall
not exceed the amount required to be included in income as a result of the
failure to comply; and

     

    (e) upon
termination of the Plan, but only to the extent then permitted under Section
409A.

     

    5.8 Designation
of Beneficiaries.  Each
Member shall have the right to designate the beneficiary or beneficiaries to
receive distribution of his Account (or Stock Account, if any) in the event of
his death.  Each such designation shall be made by executing the
beneficiary designation form prescribed by the Plan Committee and filing it with
the Plan Committee.  Any such designation may be changed at any time
by execution of a new designation in accordance with this Section
5.8.

     

    
      
        
        

      

      
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    If no such designation is on file with
the Plan Committee at the time of the death of the Member or such designation is
not effective for any reason as determined by the Plan Committee, then the
designated beneficiary or beneficiaries to receive the distribution shall be as
follows:

     

    (a)           If
a Member leaves a surviving spouse, his distribution shall be paid to such
surviving spouse; or

     

    (b)           If
a Member leaves no surviving spouse, his distribution shall be paid to such
Member’s executor or administrator, or to his heirs at law if there is no
administration of such Member’s estate.

     

    5.9 Unclaimed
Benefits.  If
the Plan Committee is unable to locate a Member or beneficiary entitled to a
distribution hereunder, upon the Plan Committee’s determination thereof, such
Member’s or beneficiary’s Account (or Stock Account, if any) shall be forfeited
to the Company.  Notwithstanding the foregoing, if subsequent to any
such forfeiture the Member or beneficiary to whom such distribution is payable
makes a valid claim for such distribution, such forfeited Account (or Stock
Account, if any) shall be restored, without the crediting of interest subsequent
to the forfeiture, and the balance of such Account (or Stock Account, if any)
shall be distributed to such Member or beneficiary as soon as administratively
practicable.

     

    5.10 Delay of Payments Under
Certain Circumstances.  To the extent
permitted by Section 409A, the Plan Committee, in its discretion, may delay
payment to a date after the payment date designated in such paragraphs under the
following circumstances:

     

    (a) Payments Made As Soon As
Practicable After the Specified Date.  Payments will be made as
soon as practicable after the date specified in Section 5.3 and in any event
within the same calendar year or, if later, by the fifteenth day of the third
calendar month following the date specified in Section 5.3.

     

    (b) Payments that Would Violate
Federal Securities Laws or Other Applicable Law.  Payment will
be delayed where the Plan Committee reasonably anticipates that the making of
the payment will violate federal securities laws or other applicable law;
provided that the delayed payment is made at the earliest date at which the Plan
Committee reasonably anticipates that the making of the payment will not cause
such violation.

     

    VI.

     

    Administration of the
Plan

     

    6.1 Plan Committee Powers and
Duties.  The
general administration of the Plan shall be vested in the Plan
Committee.  The Plan Committee shall supervise the administration and
enforcement of the Plan according to the terms and provisions hereof and shall
have all powers necessary to accomplish these purposes, including, but not by
way of limitation, the right, power, authority, and duty:

     

    
      
        
        

      

      
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    (a) To make
rules, regulations, and bylaws for the administration of the Plan that are not
inconsistent with the terms and provisions hereof, and to enforce the terms of
the Plan and the rules and regulations promulgated thereunder by the Plan
Committee;

     

    (b) To
construe in its discretion all terms, provisions, conditions, and limitations of
the Plan;

     

    (c) To
correct any defect or to supply any omission or to reconcile any inconsistency
that may appear in the Plan in such manner and to such extent as it shall deem
in its discretion expedient to effectuate the purposes of the Plan;

     

    (d) To employ
and compensate such accountants, attorneys, investment advisors, and other
agents, employees, and independent contractors as the Plan Committee may deem
necessary or advisable for the proper and efficient administration of the
Plan;

     

    (e) To
determine in its discretion all questions relating to eligibility;

     

    (f) To
determine whether and when a Member has had a Separation from Service with the
Company, and the reason for such Separation from Service;

     

    (g) To make a
determination in its discretion as to the right of any person to a benefit under
the Plan and to prescribe procedures to be followed by distributees in obtaining
benefits hereunder; and

     

    (h) To
receive and review reports from the Trustee as to the financial condition of the
Trust Fund, if any, including its receipts and disbursements.

     

    6.2 Self-Interest of
Members.  No
member of the Plan Committee shall have any right to vote or decide upon any
matter relating solely to himself under the Plan or to vote in any case in which
his individual right to claim any benefit under the Plan is particularly
involved.  In any case in which a Plan Committee member is so
disqualified to act and the remaining members cannot agree, the remaining
members of the Plan Committee shall appoint a temporary substitute member to
exercise all the powers of the disqualified member concerning the matter in
which he is disqualified.

     

    6.3 Claims
Review.  Claims
for Plan benefits and reviews of Plan benefit claims which have been denied or
modified will be processed in accordance with the written Plan claims procedures
established by the Plan Committee, which procedures are hereby incorporated by
reference as a part of the Plan.

     

    (a) State the
specific reason or reasons for the denial or modification;

     

    (b) Provide
specific reference to pertinent Plan provisions on which the denial or
modification is based;

     

    (c) Provide a
description of any additional material or information necessary for the Member,
his beneficiary, or representative to perfect the claim and an explanation of
why such material or information is necessary; and

     

    
      
        
        

      

      
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    (d) Explain
the Plan’s claim review procedure as contained herein.

     

    In the event a claim for Plan benefits
is denied or modified, if the Member, his beneficiary, or a representative of
such Member or beneficiary desires to have such denial or modification reviewed,
he must, within sixty days following receipt of the notice of such denial or
modification, submit a written request for review by the Plan Committee of its
initial decision.  In connection with such request, the Member, his
beneficiary, or the representative of such Member or beneficiary may review any
pertinent documents upon which such denial or modification was based and may
submit issues and comments in writing.  Within sixty days following
such request for review the Plan Committee shall, after providing a full and
fair review, render its final decision in writing to the Member, his beneficiary
or the representative of such Member or beneficiary stating specific reasons for
such decision and making specific references to pertinent Plan provisions upon
which the decision is based.  If special circumstances require an
extension of such sixty-day period, the Plan Committee’s decision shall be
rendered as soon as possible, but not later than 120 days after receipt of the
request for review.  If an extension of time for review is required,
written notice of the extension shall be furnished to the Member, beneficiary,
or the representative of such Member or beneficiary prior to the commencement of
the extension period.

     

    6.4 Company to Supply
Information.  The
Company shall supply full and timely information to the Plan Committee and/or
Compensation Committee, including, but not limited to, information relating to
each Member’s compensation, age, retirement, death, or other cause of
termination of employment and such other pertinent facts as the Plan Committee
may require.  The Company shall advise the Trustee, if any, of such of
the foregoing facts as are deemed necessary for the Trustee to carry out the
Trustee’s duties under the Plan and the Trust Agreement.  When making
a determination in connection with the Plan, the Plan Committee and Compensation
Committee shall be entitled to rely upon the aforesaid information furnished by
the Company.

     

    6.5 Indemnity.  The
Company shall indemnify and hold harmless each member of both the Plan Committee
and the Compensation Committee against any and all expenses and liabilities
arising out of his administrative functions or fiduciary responsibilities,
including any expenses and liabilities that are caused by or result from an act
or omission constituting the negligence of such member in the performance of
such functions or responsibilities, but excluding expenses and liabilities that
are caused by or result from such member’s own gross negligence or willful
misconduct.  Expenses against which such member shall be indemnified
hereunder shall include, without limitation, the amounts of any settlement or
judgment, costs, counsel fees, and related charges reasonably incurred in
connection with a claim asserted or a proceeding brought or settlement
thereof.

     

    VII.

     

    Administration of
Funds

     

    7.1 Payment of
Expenses.  All
expenses incident to the administration of the Plan and Trust, including but not
limited to, legal, accounting, Trustee fees, and expenses of the Plan Committee
and the Compensation Committee, may be paid by the Company and, if not paid by
the Company, shall be paid by the Trustee from the Trust Fund, if
any.

     

    
      
        
        

      

      
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    7.2 Trust Fund
Property.  All
income, profits, recoveries, contributions, forfeitures and any and all moneys,
securities and properties of any kind at any time received or held by the
Trustee, if any, shall be held for investment purposes as a commingled Trust
Fund pursuant to the terms of the Trust Agreement.  The Plan Committee
shall maintain one or more accounts in the name of each Member, but the
maintenance of an account designated as the Account (or Stock Account, if any)
of a Member shall not mean that such Member shall have a greater or lesser
interest than that due him by operation of the Plan and shall not be considered
as segregating any funds or property from any other funds or property contained
in the commingled fund.  No Member shall have any title to any
specific asset in the Trust Fund, if any.

     

    VIII.

     

    Nature of the
Plan

     

    The
Company intends and desires by the adoption of the Plan to recognize the value
to the Company of the past and present services of employees covered by the Plan
and to encourage and assure their continued service with the Company by making
more adequate provision for their future retirement security.  The
Plan is intended to constitute an unfunded, unsecured plan of deferred
compensation for a select group of management or highly compensated employees of
the Company.  Plan benefits herein provided are to be paid out of the
Company’s general assets.  The Plan constitutes a mere promise by the
Company to make benefit payments in the future and Members have the status of
general unsecured creditors of the Company.  Nevertheless, subject to
the terms hereof and of the Trust Agreement, if any, the Company may transfer
money or other property to the Trustee and the Trustee shall pay Plan benefits
to Members and their beneficiaries out of the Trust Fund.

     

    The Plan
Committee, in its sole discretion, may establish the Trust and direct the
Company to enter into the Trust Agreement and adopt the Trust for purposes of
the Plan.  In such event, the Company shall remain the owner of all
assets in the Trust Fund and the assets shall be subject to the claims of the
Company’s creditors if the Company ever becomes insolvent.  For
purposes hereof, the Company shall be considered “insolvent” if (a) the Company
is unable to pay its debts as they become due, or (b) the Company is subject to
a pending proceeding as a debtor under the United Sates Bankruptcy Code (or any
successor federal statute).  The chief executive officer of the
Company and its Board shall have the duty to inform the Trustee in writing if
the Company becomes insolvent.  Such notice given under the preceding
sentence by any party shall satisfy all of the parties’ duty to give
notice.  When so informed, the Trustee shall suspend payments to the
Members and hold the assets for the benefit of the Company’s general
creditors.  If the Trustee receives a written allegation that the
Company is insolvent, the Trustee shall suspend payments to the Members and hold
the Trust Fund for the benefit of the Company’s general creditors, and shall
determine within the period specified in the Trust Agreement whether the Company
is insolvent.  If the Trustee determines that the Company is not
insolvent, the Trustee shall resume payments to the Members.  No
Member or beneficiary shall have any preferred claim to, or any beneficial
ownership interest in, any assets of the Trust Fund.

     

    
      
        
        

      

      
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    IX.

     

    Participating
Employers

     

    The
Compensation Committee may designate any entity or organization eligible by law
to participate in the Plan as an Employer by written instrument delivered to the
Secretary of the Company and the designated Employer.  Such written
instrument shall specify the effective date of such designated participation,
may incorporate specific provisions relating to the operation of the Plan which
apply to the designated Employer only and shall become, as to such designated
Employer and its employees, a part of the Plan.  Each designated
Employer shall be conclusively presumed to have consented to its designation and
to have agreed to be bound by the terms of the Plan and any and all amendments
thereto upon its submission of information to the Compensation Committee
required by the terms of or with respect to the Plan; provided, however, that
the terms of the Plan may be modified so as to increase the obligations of an
Employer only with the consent of such Employer, which consent shall be
conclusively presumed to have been given by such Employer upon its submission of
any information to the Compensation Committee required by the terms of or with
respect to the Plan.  Except as modified by the Compensation Committee
in its written instrument, the provisions of the Plan shall be applicable with
respect to each Employer separately, and amounts payable hereunder shall be paid
by the Employer which employs the particular Member, if not paid from the Trust
Fund.

     

    X.

     

    Miscellaneous

     

    10.1 Not Contract of
Employment.  The
adoption and maintenance of the Plan shall not be deemed to be a contract
between the Company and any person or to be consideration for the employment of
any person.  Nothing herein contained shall be deemed to give any
person the right to be retained in the employ of the Company or to restrict the
right of the Company to discharge any person at any time nor shall the Plan be
deemed to give the Company the right to require any person to remain in the
employ of the Company or to restrict any person’s right to terminate his
employment at any time.

     

    10.2 Alienation of Interest
Forbidden.  The
interest of a Member or his beneficiary or beneficiaries hereunder may not be
sold, transferred, assigned, or encumbered in any manner, either voluntarily or
involuntarily, and any attempt so to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be null and void; neither
shall the benefits hereunder be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person to whom such benefits or funds
are payable, nor shall they be an asset in bankruptcy or subject to garnishment,
attachment or other legal or equitable proceedings.

     

    10.3 Withholding.  All
deferrals and payments provided for hereunder shall be subject to applicable
withholding and other deductions as shall be required of the Company under any
applicable local, state or federal law.

     

    10.4 Amendment and
Termination.  The
Compensation Committee may from time to time, in its discretion, amend, in whole
or in part, any or all of the provisions of the Plan; provided, however, that no
amendment may be made that would impair the rights of a Member with respect to
amounts already allocated to his Account (or Stock Account, if any) except that
an amendment to change phantom investment options or an amendment that the
Compensation Committee determines is necessary or desirable to comply with
Section 409A shall not require the consent of any Member.  The
Compensation Committee may terminate the Plan at any time.  Any such
amendment to or termination of the Plan shall be in writing and signed by a
member of the Compensation Committee.

     

    
      
        
        

      

      
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    10.5 Voting Company
Stock.  Each
Member who has a Stock Account shall be entitled to provide directions to the
Plan Committee to cause the Plan Committee to similarly direct the Trustee of
the Trust to vote, on any matter presented for a vote to the stockholders of the
Company, that number of whole shares of Company Stock held by the Trust
equivalent to the number of whole shares of Company Stock credited to the
Member’s Stock Account.  The Plan Committee shall arrange for
distribution to all such Members in a timely manner all communications directed
generally to the stockholders of the Company as to which their votes are
solicited.  If the Trust ever holds fewer shares of Company Stock than
there are shares allocated to Stock Accounts under the Plan as to which timely
and proper directions have been received from the applicable Members, the Plan
Committee will direct the Trustee to vote all shares held in the Trust in the
same proportion as the total shares covered by timely and proper directions that
have been directed to be voted.

     

    10.6 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.

     

    10.7 Governing
Laws.  All
provisions of the Plan shall be construed in accordance with the laws of Texas
except to the extent preempted by federal law.

     

    10.8 Change of
Control.  Notwithstanding
any provision of the Plan to the contrary, the Company, by resolution of the
Compensation Committee, shall have the full discretion and power to terminate
the Plan within 30 days preceding or 12 months after a Change of Control of the
Company and, in the event of such termination, the Company shall distribute each
Member’s account within 12 months of the date of such termination.

     

    10.9 Compliance with Section
409A.  The Company
intends that the Plan by its terms and in operation meet the requirements of
Section 409A so that compensation deferred under the Plan (and applicable
investment earnings) shall not be included in income under Section
409A.  Any ambiguities in the Plan shall be construed to effect this
intent.  If any provision of the Plan is found to be in violation of
Section 409A, then such provision shall be deemed to be modified or restricted
to the extent and in the manner necessary to render such provision in conformity
with Section 409A, or shall be deemed excised from the Plan, and the Plan shall
be construed and enforced to the maximum extent permitted by the Section 409A as
if such provision had been originally incorporated in the Plan as so modified or
restricted, or as if such provision had not been originally incorporated in the
Plan, as the case may be.

     

     

     

     

    
16