exh10-8.htm


    
      

      

    

     

    TEXAS
PETROCHEMICALS INC.

    2009
LONG-TERM INCENTIVE PLAN

    


     

    1.      Plan.  The Texas
Petrochemicals Inc. 2009 Long-Term Incentive Plan (the “Plan”) was adopted by
the Board of Directors of Texas Petrochemicals Inc., a Delaware corporation (the
“Company”), to reward certain officers, employees and directors of the Company
and its Subsidiaries by enabling them to acquire shares of Common Stock and by
providing for certain cash benefits.

     

    2.      Objectives.  The Plan is
designed to attract and retain officers, employees and directors of the Company
and its Subsidiaries, to encourage the sense of proprietorship of such officers,
employees and directors, to stimulate the active interest of such persons in the
development and financial success of the Company and its Subsidiaries and to
provide such persons with additional incentive and reward opportunities designed
to enhance the profitable growth of the Company an its
Subsidiaries.  These objectives are to be accomplished by making
Awards under this Plan and thereby aligning the interests of Participants and
the Company’s stockholders, motivating Participants to act in the long-term best
interests of the Company and its Subsidiaries and providing Participants with a
proprietary interest in the growth and performance of the Company and its
Subsidiaries.

     

    3.      Definitions.  As used herein,
the terms set forth below shall have the following respective
meanings:

     

    “Award”
means any Option, SAR, Stock Award, Restricted Stock Unit Award, Performance
Share Unit Award, Cash Award or Performance Award granted, whether singly, in
combination or in tandem, to a Participant pursuant to such applicable terms,
conditions and limitations (including treatment as a Performance Award) as the
Committee may establish in order to fulfill the objectives of the
Plan.

     

    “Award
Agreement” means a written agreement setting forth the terms, conditions and
limitations applicable to an Award, to the extent the Committee determines such
agreement is necessary.

     

    “Board”
means the Board of Directors of the Company.

     

    “Cash
Award” means an award denominated in cash.

     

    “Change
in Control” means and shall be deemed to have occurred on the date of the first
to occur of any of the following:  (i) any “person” (as such term
is defined in Section 3(a)(9) of the Exchange Act and is used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) or group of persons acting together
(within the meaning of Section 13(d)(3) of the Exchange Act) becomes the direct
or indirect beneficial owner of 50% or more of the Company’s voting stock; (ii)
an election of Directors not in accord with the recommendations of the majority
of the Directors who were in office before the pending election (the “Incumbent
Directors”), where such election results in the replacement of at least a
majority of the Incumbent Directors; (iii) the stockholders of the Company
approve an agreement to merge or consolidate, or otherwise reorganize, with or
into one or more entities, as a result of which outstanding securities with less
than 50% of the fair market value of the surviving or resulting entity are, or
are to be, owned by stockholders of the Company immediately prior to such
merger, consolidation or reorganization; or (iv) the sale of the Company’s
assets having a total gross fair market value of at least 50% of all of the
Company’s assets immediately before such sale.  The definition of
“Change in Control” is intended to comply with, and shall be interpreted in a
manner compliant with, a change in the ownership or effective control of a
corporation or a change in the ownership of a substantial portion of the assets
of a corporation under Section 409A of the Code and accompanying U.S. Treasury
regulations.

     

    “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.

     

    “Committee”
means such committee of two or more members of the Board as is designated by the
Board to administer the Plan, or the full Board if so designated.

     

    “Common
Stock” means the Common Stock, par value $0.01 per share, of the
Company.

     

    “Company”
has the meaning set forth in Section 1.

     

    “Director”
means a member of the Board of Directors of the Company.

     

    “Dividend
Equivalents” means, with respect to Restricted Stock Units, an amount equal to
all dividends and other distributions (or the economic equivalent thereof) that
are payable to stockholders of record during the Restriction Period on a like
number of shares of Common Stock granted in the Award.

     

    “Employee”
means an employee or officer of the Company or any of its
Subsidiaries.

     

    “Equity
Award” means any Option, SAR, Stock Award, or Non-Qualified Performance Award
(other than a Non-Qualified Performance Award denominated in cash) granted to a
Participant under the Plan.

     

    “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

     

    “Fair
Market Value” means, as of a particular date:  (i) if the shares of
Common Stock are listed on the New York Stock Exchange, then the final closing
sales price per share of Common Stock as reported on New York Stock
Exchange

     


    
      
         


      

      
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    Composite
Trading Listings, or a similar report selected by the Company, on that date, or,
if there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (ii) if the shares of
Common Stock are listed on a national securities exchange other than the New
York Stock Exchange, the mean between the highest and lowest sales price per
share of Common Stock on the primary such national securities exchange on that
date, or, if there shall have been no such sale so reported on that date, on the
last preceding date on which such a sale was so reported, (iii) if the shares of
Common Stock are not so listed but are quoted by the NASDAQ Stock Market, Inc.,
the mean between the highest and lowest sales price per share of Common Stock on
the consolidated transaction reporting system for The NASDAQ Stock Market, Inc.
on that date, or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was so reported, (iv) if
the Common Stock is not so listed or quoted, the mean between the closing bid
and asked price on that date, or, if there are no quotations available for such
date, on the last preceding date on which such quotations shall be available, as
reported by The NASDAQ Stock Market, Inc., or, if not reported by The NASDAQ
Stock Market, Inc., by the National Quotation Bureau, Inc., or (v) if none of
the above are applicable, the fair market value of a share of Common Stock as
determined in good faith by the Committee.

     

    “Grant
Date” means the date an Award is granted to a Participant pursuant to the
Plan.

     

    “Grant
Price” means the price at which a Participant may exercise his or her right to
receive cash or Common Stock, as applicable, under the terms of an
Award.

     

    “Incentive
Stock Option” means an Option that is intended to comply with the requirements
set forth in Section 422 of the Code.

     

    “Non-Qualified
Performance Award” means a Performance Award that is not intended qualify as
qualified performance-based compensation under Section 162(m) of the Code,
as described in Section 8(a)(vii)(A) of the Plan.

     

    “Non-Qualified
Stock Option” means an Option that is not an Incentive Stock
Option.

     

    “Option”
means a right to purchase a specified number of shares of Common Stock at a
specified Grant Price, which may be an Incentive Stock Option or a Non-Qualified
Stock Option.

     

    “Participant”
means an Employee or Director to whom an Award has been granted under this
Plan.

     

    “Performance
Award” means an Award made pursuant to this Plan that is subject to the
attainment of one or more performance goals.

     

    “Performance
Goal” means a standard established by the Committee to determine in whole or in
part whether a Qualified Performance Award shall be earned.

     

    “Performance
Share Unit” means a unit evidencing the right to receive in specified
circumstances one share of Common Stock.

     

    “Performance
Share Unit Award” means an Award of Performance Share Units that, upon
attainment of the performance goals, entitles the Participant to shares of
Common Stock.

     

    “Plan”
has the meaning set forth in Section 1.

     

    “Qualified
Performance Award” means a Performance Award made to a Participant who is an
Employee that is intended to qualify as qualified performance-based compensation
under Section 162(m) of the Code, as described in Section 8(a)(vii)(B)
of the Plan.

     

    “Restricted
Stock” means Common Stock that is restricted or subject to forfeiture
provisions.

     

    “Restricted
Stock Unit” means a unit evidencing the right to receive in specified
circumstances one share of Common Stock or equivalent value in cash that is
restricted or subject to forfeiture provisions.

     

    “Restricted
Stock Unit Award” means an Award in the form of Restricted Stock
Units.

     

    “Restriction
Period” means a period of time beginning as of the Grant Date of an Award of
Restricted Stock or Restricted Stock Units and ending as of the date upon which
the Common Stock subject to such Award is issued (if not previously issued), no
longer restricted or subject to forfeiture provisions.

     

    “Stock
Appreciation Right” or “SAR” means a right to receive a payment, in cash or
Common Stock, equal to the excess of the Fair Market Value or other specified
valuation of a specified number of shares of Common Stock on the date the right
is exercised over a specified Grant Price.

     

    “Stock
Award” means an Award in the form of, or denominated in, or by reference to,
shares of Common Stock, including an award of Restricted Stock.

     

    “Subsidiary”
means (i) with respect to any Awards other than Incentive Stock Options within
the meaning of Section 422 of the Code, any corporation, limited liability
company or similar entity of which the Company directly or indirectly owns
shares representing more than 50% of the voting power of all classes or series
of equity securities of such entity, which have the right to vote generally on
matters submitted to a vote of the holders of equity interests in such entity,
and (ii) with respect

     


    
      
         


      

      
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    to Awards
of Incentive Stock Options, any subsidiary within the meaning of Section 424(f)
of the Code or any successor provision.

     

    4.      Effective Date
and Duration

     

    a.      Effective
Date.  The Plan was approved and adopted by the Board on
October 10, 2008 and will be submitted to the Company’s stockholders on November
11, 2008.  If approved by the Company’s stockholders, the Plan shall
be effective on the date of stockholder approval (the “Effective
Date”).  If the stockholders of the Company should fail to so approve
this Plan at such meeting, this Plan shall terminate and cease to be of any
further force or effect, and all grants of Awards hereunder, if any, shall be
null and void.

     

    b.      Duration.  The
Plan will expire on the tenth anniversary of the Effective Date, and no Awards
may be granted on or after the tenth anniversary of the Effective Date; provided, however, that any Award
granted prior to such tenth anniversary shall remain outstanding in accordance
with its terms.

     

    5.      Administration

     

    a.      Authority
of the Committee.  This Plan shall be administered by the
Committee except as otherwise provided herein.  Subject to the
provisions hereof, the Committee shall have full and exclusive power and
authority to administer this Plan and to take all actions that are specifically
contemplated hereby or are necessary or appropriate in connection with the
administration hereof.  The Committee shall also have full and
exclusive power to interpret this Plan and to adopt such rules, regulations and
guidelines for carrying out this Plan as it may deem necessary or proper, all of
which powers shall be exercised in the best interests of the Company and in
keeping with the objectives of this Plan.  Subject to Section 5(d)
hereof, the Committee may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an
Award, eliminate or make less restrictive any restrictions contained in an
Award, waive any restriction or other provision of this Plan (insofar as such
provision relates to Awards) or an Award or otherwise amend or modify an Award
in any manner that is:  (i) not adverse to the Participant to whom
such Award was granted, (ii) consented to by such Participant or
(iii) authorized by Section 15(c) hereof; provided, however, that no
such action shall permit the term of any Option to be greater than 10 years from
the applicable Grant Date.  The Committee may correct any defect or
supply any omission or reconcile any inconsistency in this Plan or in any Award
in the manner and to the extent the Committee deems necessary or desirable to
further the Plan purposes.  Any decision of the Committee, with
respect to Awards, in the interpretation and administration of this Plan shall
lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned.

     

    b.      Indemnification.  No
member of the Committee or officer of the Company to whom the Committee has
delegated authority in accordance with the provisions of Section 5(e) of this
Plan shall be liable for anything done or omitted to be done by him or her, by
any member of the Committee or by any officer of the Company in connection with
the performance of any duties under this Plan, except for his or her own willful
misconduct or as expressly provided by statute.

     

    c.      Authority
of the Board.  The Board shall have the same powers, duties,
and authority to administer the Plan as the Committee.

     

    d.      Prohibition
on Repricing of Awards.  No Option or SAR may be repriced,
replaced, regranted through cancellation or modified without stockholder
approval (except in connection with a change in the Company’s capitalization),
if the effect would be to reduce the Grant Price for the shares underlying such
Award.

     

    e.      Delegation
of Authority.  The Committee may delegate to the President and
to other senior officers of the Company its duties under this Plan pursuant to
such conditions or limitations as the Committee may establish with respect to
Awards, except that the Committee may not delegate to any person the authority
to grant Awards to, or take other action with respect to, Participants who are
subject to Section 16 of the Exchange Act.  The Committee may
engage or authorize the engagement of a third party administrator to carry out
administrative functions under the Plan.

     

    6.      Eligibility.  All Employees
and Directors are eligible for Awards under this Plan.  The Committee
shall select the Participants in the Plan from time to time by the grant of
Awards under the Plan.

     

    7.      Common
Stock Available for Awards.  Subject to the
provisions of Section 15 hereof, no Award shall be granted if it shall result in
the aggregate number of shares of Common Stock issued under the Plan plus the
number of shares of Common Stock covered by or subject to Awards then
outstanding (after giving effect to the grant of the Award in question) to
exceed 1,250,000 shares of Common Stock.  The number of shares of
Common Stock that are the subject of Awards under this Plan that are forfeited,
terminated or expire unexercised shall again immediately become available for
Awards hereunder.  Notwithstanding the foregoing, the number of shares
of Common Stock reserved for issuance shall be reduced by the total number of
Options or SARs exercised, and the number of shares of Common Stock reserved for
issuance under the Plan shall not be increased by (i) any shares tendered or
Award surrendered in connection with the purchase of shares of Common Stock upon
the exercise of an Option as described in Section 11 or (ii) any shares of
Common Stock deducted from an Award payment in connection with the Company’s tax
withholding obligations as described in Section 12.  The
Committee may from time to time adopt and observe such procedures concerning the
counting of shares against the Plan maximum as it may deem
appropriate.  The Board and the appropriate officers of the Company
shall from time to time take whatever actions are

     


    
      
         


      

      
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    necessary
to file any required documents with governmental authorities, stock exchanges
and transaction reporting systems to ensure that shares of Common Stock are
available for issuance pursuant to Awards.

     

    8.      Awards.

     

    a.      The
Committee shall determine the type or types of Awards to be made under this Plan
and shall designate from time to time the individuals who are to be the
recipients of such Awards.  Each Award shall be evidenced in such
communications as the Committee deems appropriate, including in an Award
Agreement, and shall contain such terms, conditions and limitations as shall be
determined by the Committee in its sole discretion.  Awards may
consist of those listed in this Section 8(a) and may be granted singly, in
combination or in tandem.  Awards may also be granted in combination
or in tandem with, in replacement of, or as alternatives to, grants or rights
under this Plan or any other plan of the Company or any of its Subsidiaries,
including the plan of any acquired entity; provided, however, that,
except as contemplated in Section 15 hereof, no Option may be issued in exchange
for the cancellation of an Option with a higher Grant Price nor may the Grant
Price of any Option be reduced.  All or part of an Award may be
subject to conditions established by the Committee.  Upon the
termination of employment or service by a Participant, any unexercised,
deferred, unvested or unpaid Awards shall be treated as set forth in the
applicable Award Agreement or in any other agreement with the
Participant.

     

    (i)      Option.  An Award
may be in the form of an Option.  An Option awarded to an Employee
pursuant to this Plan may consist of either an Incentive Stock Option or a
Non-Qualified Stock Option.  An Option awarded to a Director may
consist of a Non-Qualified Stock Option.  On the Grant Date, the Grant
Price of an Option shall be not less than the Fair Market Value of the Common
Stock subject to such Option.  The term of the Option shall extend no
more than 10 years after the Grant Date.  Options may not include
provisions that “reload” the option upon exercise.  Subject to the
foregoing provisions, the terms, conditions and limitations applicable to any
Options awarded to Employees pursuant to this Plan, including the Grant Price,
the term of the Options, the number of shares subject to the Option and the date
or dates upon which they become exercisable, shall be determined by the
Committee.

     

    (ii)           Stock Appreciation
Rights.  An Award may be in the form of an SAR.  On
the Grant Date, the Grant Price of an SAR shall be not less than the Fair Market
Value of the Common Stock subject to such SAR.  The holder of a tandem
SAR may elect to exercise either the option or the SAR, but not
both.  The exercise period for an SAR shall extend no more than 10
years after the Grant Date.  SARs may not include provisions that
“reload” the SAR upon exercise.  Subject to the foregoing provisions,
the terms, conditions and limitations applicable to any SARs awarded to a
Participant pursuant to this Plan, including the Grant Price, the term of any
SARs and the date or dates upon which they become exercisable, shall be
determined by the Committee.

     

    (iii)           Stock Award.  An
Award may be in the form of a Stock Award.  The terms, conditions and
limitations applicable to any Stock Award, including, but not limited to,
vesting or other restrictions, shall be determined by the
Committee.

     

    (iv)           Restricted Stock Unit
Awards.  An Award may be in the form of a Restricted Stock Unit
Award.  The terms, conditions and limitations applicable to a
Restricted Stock Unit Award, including, but not limited to, the Restriction
Period and the right to Dividend Equivalents, shall be determined by the
Committee.

     

    (v)      Performance Share Unit
Awards.  An Award may be in the form of a Performance Share
Unit Award.  The terms, conditions and limitations applicable to any
Performance Share Unit Award, including, but not limited to, vesting or other
restrictions, shall be determined by the Committee.  Performance Share
Unit Awards shall be in the form of a Non-Qualified Performance Award or a
Qualified Performance Award and shall have a minimum performance period of one
year from the date of grant.

     

    (vi)           Cash Award.  An
Award may be in the form of a Cash Award.  The terms, conditions and
limitations applicable to any Cash Awards granted to Participants pursuant to
this Plan, including, but not limited to, vesting or other restrictions, shall
be determined by the Committee.

     

    (vii)           Performance
Award.  Without limiting the type or number of Awards that may
be made under the other provisions of this Plan, an Award may be in the form of
a Performance Award.  The terms, conditions and limitations applicable
to an Award that is a Performance Award shall be determined by the
Committee.  The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the value and/or amount of Performance Awards that will be paid out to the
Employee and/or the portion that may be exercised.

     

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

     

    (B)                 Qualified Performance
Awards.  Performance Awards granted to Employees under the Plan
that are intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code shall be paid, vested or otherwise deliverable solely
on account of the attainment of one or more pre-established, objective
Performance

     


    
      
         


      

      
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    Goals
established by the Committee prior to the earlier to occur of (x) 90 days after
the commencement of the period of service to which the Performance Goal relates
or (y) the lapse of 25% of the period of service (as scheduled in good faith at
the time the goal is established), and in any event while the outcome is
substantially uncertain.  A Performance Goal is objective if a third
party having knowledge of the relevant facts could determine whether the goal is
met.  Such a Performance Goal may be based on one or more business
criteria that apply to the Employee, one or more business segments, units, or
divisions of the Company, or the Company as a whole, and if so desired by the
Committee, by comparison with a peer group of companies.  A
Performance Goal may include one or more of the following:

     

    
      	
               
      

            	
              ·

            	
              Cash
      flow measures (including but not limited to before or after tax cash flow,
      cash flow per share, cash flow return on capital, net cash flow or
      attainment of working capital
levels);

            


    

     

    
      	
               
      

            	
              ·

            	
              Expense
      measures (including but not limited to overhead cost, general and
      administrative expense and improvement in or attainment of expense
      levels);

            


    

     

    
      	
               
      

            	
              ·

            	
              Income
      measures (including but not limited to net income and income before or
      after taxes);

            


    

     

    
      	
               
      

            	
              ·

            	
              Operating
      measures (including operating income, funds from operations, cash from
      operations, after-tax operating income, net operating profit after tax,
      operating efficiency, production volumes and production
      efficiency);

            


    

     

    
      	
               
      

            	
              ·

            	
              Return
      measures (including but not limited to return on capital employed, return
      on equity, return on investment and return on
  assets);

            


    

     

    
      	
               
      

            	
              ·

            	
              Stock
      price measures (including but not limited to price per share, growth
      measures and total stockholder
return);

            


    

     

    
      	
               
      

            	
              ·

            	
              Earnings
      per share (actual or targeted
growth);

            


    

     

    
      	
               
      

            	
              ·

            	
              Earnings
      before interest, taxes, depreciation, and amortization
      (“EBITDA”);

            


    

     

    
      	
               
      

            	
              ·

            	
              Net
      earnings;

            


    

     

    
      	
               
      

            	
              ·

            	
              Market
      share;

            


    

     

    
      	
               
      

            	
              ·

            	
              Debt
      to equity ratio;

            


    

     

    
      	
               
      

            	
              ·

            	
              Debt
      reduction;

            


    

     

    
      	
               
      

            	
              ·

            	
              Economic
      value added (or an equivalent
metric);

            


    

     

    
      	
               
      

            	
              ·

            	
              Cash
      available for distribution;

            


    

     

    
      	
               
      

            	
              ·

            	
              Cash
      available for distribution per
share;

            


    

     

    
      	
               
      

            	
              ·

            	
              Operating
      income;

            


    

     

    
      	
               
      

            	
              ·

            	
              Margins;

            


    

     

    
      	
               
      

            	
              ·

            	
              Implementing
      or completion of critical projects;

            


    

     

    
      	
               
      

            	
              ·

            	
              Revenue
      or sales;

            


    

     

    
      	
               
      

            	
              ·

            	
              Total
      market value;

            


    

     

    
      	
               
      

            	
              ·

            	
              Reliability;

            


    

     

    
      	
               
      

            	
              ·

            	
              Productivity;
      and

            


    

     

    
      	
               
      

            	
              ·

            	
              Corporate
      values measures (including but not limited to diversity commitment, ethics
      compliance, environmental and
safety).

            


    

     

    Unless
otherwise stated, such a Performance Goal need not be based upon an increase or
positive result under a particular business criterion and could include, for
example, maintaining the status quo or limiting economic losses (measured, in
each case, by reference to specific business criteria).  In
interpreting Plan provisions applicable to Performance Goals and Qualified
Performance Awards, it is the intent of the Plan to conform with the standards
of Section 162(m) of the Code and Treasury Regulation Section 1.162-27(e)(2)(i),
as to grants to those Employees whose compensation is, or is likely to be,
subject to Section 162(m) of the Code, and the Committee in establishing such
goals and interpreting the Plan shall be guided by such
provisions.  Prior to the payment of any compensation based on the
achievement of Performance Goals, the Committee must certify in writing that
applicable Performance Goals and any of the material terms thereof were, in
fact, satisfied.  Subject to

     


    
      
         


      

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

     

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

     

    (i)      no
Employee may be granted, during the term of the Plan, Awards consisting of,
relating to, or exercisable for more than 250,000 shares of Common Stock (the
limitation set forth in this clause (i) being hereinafter referred to as “Stock
Based Awards Limitations”) and

     

    (ii)           no
individual may be granted Cash Awards in respect of any one calendar year having
a value determined on the Grant Date in excess of $5,000,000.

     

    9.      Change
in Control.  Notwithstanding
the provisions of Section 8 hereof, unless otherwise expressly provided in the
applicable Award Agreement, or as otherwise specified in the terms of an Equity
Award, in the event of a Change in Control during a Participant’s employment
with the Company or one of its Subsidiaries, each Equity Award granted under
this Plan to the Participant shall become immediately vested and fully
exercisable, with Non-Qualified Performance Awards vesting at the target
level.

     

    10.           Payment
of Awards.

     

    a.      General.  Payment of Awards may be
made in the form of cash or Common Stock, or a combination thereof, and may
include such restrictions as the Committee shall determine, including, but not
limited to, in the case of Common Stock, restrictions on transfer and forfeiture
provisions.  For an Award of Restricted Stock, the certificates
evidencing the shares of such Restricted Stock (to the extent that such shares
are so evidenced) shall contain appropriate legends and restrictions that
describe the terms and conditions of the restrictions applicable
thereto.  For an Award of Restricted Stock Units or Performance Share
Units, the shares of Common Stock that may be issued at the end of the
Restriction Period shall be evidenced by book entry registration or in such
other manner as the Committee may determine.

     

    b.      Deferral.  With the
approval of the Committee, amounts payable in respect of Awards may be deferred
and paid either in the form of installments or as a lump-sum payment; provided, however, that if
deferral is permitted, such deferral shall be in compliance with the
requirements of Section 409A of the Code.  The Committee may permit
selected Participants to elect to defer payments of some or all types of Awards
in accordance with procedures established by the Committee.  Any
deferred payment pursuant to an Award, whether elected by the Participant or
specified by the Award Agreement or the terms of the Award or by the Committee,
may be forfeited if and to the extent that the Award Agreement or the terms of
the Award so provide.

     

    c.      Dividends and
Interest.  Rights to (i) dividends will be extended to and made
part of any Stock Award and (ii) Dividend Equivalents may be extended to and
made part of any Restricted Stock Unit, subject in each case to such terms,
conditions and restrictions as the Committee may establish.  The
Committee may also
establish rules and procedures for the crediting of interest on deferred cash
payments for Awards.

     

    11.           Option
Exercise.  The Grant Price
shall be paid in full at the time of exercise in cash or, if elected by the
Participant, the Participant may purchase such shares by means of tendering
Common Stock or surrendering another Award, including Restricted Stock, valued
at Fair Market Value on the date of exercise, or any combination
thereof.  The Committee shall determine acceptable methods for
Participants to tender Common Stock or other Awards.  The Committee
may provide for procedures to permit the exercise or purchase of such Awards by
use of the proceeds to be received from the sale of Common Stock issuable
pursuant to an Award (including “cashless exercise”).  Unless
otherwise provided in the applicable Award Agreement, in the event shares of
Restricted Stock are tendered as consideration for the exercise of an Option, a
number of the shares issued upon the exercise of the Option, equal to the number
of shares of Restricted Stock used as consideration thereof, shall be subject to
the same restrictions as the Restricted Stock so submitted as well as any
additional restrictions that may be imposed by the Committee.  The
Committee may adopt additional rules and procedures regarding the exercise of
Options from time to time, provided that such rules and procedures are not
inconsistent with the provisions of this Section.

     

    12.           Taxes.  The Company or
its designated third party administrator shall have the right to deduct
applicable taxes from any Award payment and withhold, at the time of delivery or
vesting of cash or shares of Common Stock under this Plan, an appropriate amount
of cash or number of shares of Common Stock or a combination thereof for payment
of taxes or other amounts required by law or to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes or other amounts.  The Committee may also
permit withholding to be satisfied by the transfer to the Company of shares of
Common Stock theretofore owned by the holder of the Award with respect to which
withholding is required.  If shares of Common Stock are used to
satisfy tax withholding, such shares shall be valued based on the Fair Market
Value when the tax withholding is required to be made.

     

    13.           Amendment,
Modification, Suspension or Termination of the Plan.  The Board may
amend, modify, suspend or terminate this Plan for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose permitted
by law, except that (i) no amendment or alteration that would adversely affect
the rights of any Participant under any Award previously granted to such
Participant shall be made without the consent of such Participant and
(ii) no amendment or alteration shall be effective prior to its approval by
the stockholders of the Company to the extent such

     


    
      
         


      

      
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    approval
is required by applicable legal requirements or the requirements of the
securities exchange on which the Common Stock is listed.

     

    14.           Assignability.  Except as
otherwise provided herein, no Award granted under this Plan shall be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated by a
Participant other than by will or the laws of descent and distribution, and
during the lifetime of a Participant, any Award shall be exercisable only by the
Participant, or, in the case of a Participant who is mentally incapacitated, the
Award shall be exercisable by the Participant’s guardian or legal
representative.  The Committee may prescribe and include in applicable
Award Agreements other restrictions on transfer.  Any attempted
assignment or transfer in violation of this Section 14 shall be null and
void.  Upon the Participant’s death, the personal representative or
other person entitled to succeed to the rights of the Participant (the
“Successor Participant”) may exercise such rights.  A Successor
Participant must furnish proof satisfactory to the Company of his or her right
to exercise the Award under the Participant’s will or under the applicable laws
of descent and distribution.

     

    Notwithstanding
any provision of the Plan to the contrary, the Committee may permit transfers of
Non-Qualified Stock Options, SARs, Stock Award, Restricted Stock Unit Award or
Cash Award to Family Members (including, without limitation, transfers affected
by a domestic relations order) subject to such terms and conditions as the
Committee shall determine.  “Family Members” means as to a
Participant, any (i) child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, mother-in-law, father-in-law, son-in-law or daughter-in-law
(including adoptive relationships), (ii) trusts for the exclusive benefit of one
or more such persons and/or the Participant and (iii) other entity owned solely
by one or more such persons and/or the Participant.

     

    15.           Adjustments.

     

    a.      The
existence of outstanding Awards shall not affect in any manner the right or
power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the capital
stock of the Company or its business or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference stock
(whether or not such issue is prior to, on a parity with or junior to the
existing Common Stock) or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding of any kind, whether or not of a character similar
to that of the acts or proceedings enumerated above.

     

    b.      In
the event of any subdivision or consolidation of outstanding shares of Common
Stock, declaration of a dividend payable in shares of Common Stock or other
stock split, then:  (i) the number of shares of Common Stock reserved
under this Plan, (ii) the number of shares of Common Stock covered by
outstanding Awards in the form of Common Stock or units denominated in Common
Stock, (iii) the Grant Price or other price in respect of such Awards, (iv) the
appropriate Fair Market Value and other price determinations for such Awards,
and (v) the Stock Based Awards Limitations shall each be proportionately
adjusted by the Board as appropriate to reflect such transaction.  In
the event of any other recapitalization or capital reorganization of the
Company, any consolidation or merger of the Company with another corporation or
entity, the adoption by the Company of any plan of exchange affecting Common
Stock or any distribution to holders of Common Stock of securities or property
(other than normal cash dividends or dividends payable in Common Stock), the
Board shall make appropriate adjustments to (i) the number of shares of Common
Stock covered by Awards in the form of Common Stock or units denominated in
Common Stock, (ii) the Grant Price or other price in respect of such Awards,
(iii) the appropriate Fair Market Value and other price determinations for such
Awards, and (iv) the Stock Based Awards Limitations to reflect such
transaction; provided that such adjustments shall only be such as are necessary
to maintain the proportionate interest of the holders of the Awards and
preserve, without increasing, the value of such Awards.

     

    c.      In
the event of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the Board may make such
adjustments to Awards or other provisions for the disposition of Awards as it
deems equitable, and shall be authorized, in its discretion: (1) to provide for
the substitution of a new Award or other arrangement (which, if applicable, may
be exercisable for such property or stock as the Board determines) for an Award
or the assumption of the Award, regardless of whether in a transaction to which
Section 424(a) of the Code applies, (2) to provide, prior to the
transaction, for the acceleration of the vesting and exercisability of, or lapse
of restrictions with respect to, the Award and, if the transaction is a cash
merger, provide for the termination of any portion of the Award that remains
unexercised at the time of such transaction, or (3) to cancel any such
Awards and to deliver to the Participants cash in an amount that the Board shall
determine in its sole discretion is equal to the fair market value of such
Awards on the date of such event, which in the case of Options or SARs shall be
the excess of the Fair Market Value of Common Stock on such date over the Grant
Price of such Award.

     

    d.      No
adjustment or substitution pursuant to this Section 15 shall be made in a manner
that results in noncompliance with the requirements of Section 409A of the Code,
to the extent applicable.

     

    16.           Restrictions.  No Common Stock
or other form of payment shall be issued with respect to any Award unless the
Company shall be satisfied based on the advice of its counsel that such issuance
will be in compliance with applicable federal and state securities
laws.  Certificates evidencing shares of Common Stock delivered under
this Plan (to the extent that such shares are so evidenced) may be subject to
such stop transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, any securities exchange or transaction reporting system
upon which the Common Stock is then listed or to which it is admitted for
quotation

     


    
      
         


      

      
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    and any
applicable federal or state securities law.  The Committee may cause a
legend or legends to be placed upon such certificates (if any) to make
appropriate reference to such restrictions.

     

    17.           Unfunded
Plan.  Insofar as it
provides for Awards of cash, Common Stock or rights thereto, this Plan shall be
unfunded.  Although bookkeeping accounts may be established with
respect to Participants who are entitled to cash, Common Stock or rights thereto
under this Plan, any such accounts shall be used merely as a bookkeeping
convenience.  The Company shall not be required to segregate any
assets that may at any time be represented by cash, Common Stock or rights
thereto, nor shall this Plan be construed as providing for such segregation, nor
shall the Company, the Board or the Committee be deemed to be a trustee of any
cash, Common Stock or rights thereto to be granted under this
Plan.  Any liability or obligation of the Company to any Participant
with respect to an Award of cash, Common Stock or rights thereto under this Plan
shall be based solely upon any contractual obligations that may be created by
this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company.  Neither the Company nor the Board nor the
Committee shall be required to give any security or bond for the performance of
any obligation that may be created by this Plan.

     

    18.           Section
409A of the Code.  It is intended that any Awards under the
Plan satisfy the requirements of Section 409A of the Code, and any ambiguous
provision will be construed in a manner that is compliant with or exempt from
the application of Section 409A of the Code.

     

    19.           Parachute
Payment Limitation.  Notwithstanding any contrary provision of
the Plan, the Committee may provide in the Award Agreement or in any other
agreement with the Participant for a limitation on the acceleration of vesting
and exercisability of unmatured Awards to the extent necessary to avoid or
mitigate the impact of the golden parachute excise tax under Section 4999 of the
Code on the Participant or may provide for a supplemental payment to be made to
the Participant as necessary to offset or mitigate the impact of the golden
parachute excise tax on the Participant.  In the event the Award
Agreement or other agreement with the Participant does not contain any contrary
provision regarding the method of avoiding or mitigating the impact of the
golden parachute excise tax under Section 4999 of the Code on the Participant,
then notwithstanding any contrary provision of this Plan, the aggregate present
value of all parachute payments payable to or for the benefit of a Participant,
whether payable pursuant to this Plan or otherwise, shall be limited to three
times the Participant’s base amount less one dollar and, to the extent
necessary, the exercisability of an unmatured Award shall be reduced in order
that this limitation not be exceeded, with the order of reduction applied first
against the Award with the latest vesting date and continuing, as necessary, to
those Awards with earlier vesting dates.  For purposes of this Section
19, the terms “parachute payment,” “base amount” and “present value” shall
have the meanings assigned thereto under Section 280G of the Code.  It
is the intention of this Section 19 to avoid excise taxes on the Participant
under Section 4999 of the Code or the disallowance of a deduction to the Company
pursuant to Section 280G of the Code.

     

    20.           Right
to Employment.  Nothing in the
Plan or an Award Agreement shall interfere with or limit in any way the right of
the Company to terminate any Participant’s employment or other service
relationship at any time, nor confer upon any Participant any right to continue
in the capacity in which he or she is employed or otherwise serves the
Company.

     

    21.           Successors.  All obligations
of the Company under the Plan with respect to Awards granted hereunder shall be
binding on 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.

     

    22.           Governing
Law.  This Plan and
all determinations made and actions taken pursuant hereto, to the extent not
otherwise governed by mandatory provisions of the Code or the securities laws of
the United States, shall be governed by and construed in accordance with the
laws of the State of Texas.

     

     

    
      
         


      

      
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