Document:

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                                                                   EXHIBIT 10.12

                                                                         ANNEX A

                AMENDMENTS TO 1991 NONQUALIFIED STOCK OPTION PLAN

                           FOR NON-EMPLOYEE DIRECTORS

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                        AMENDMENT TO THE SOUTHDOWN, INC.
                       1991 NONQUALIFIED STOCK OPTION PLAN
                           FOR NON-EMPLOYEE DIRECTORS

                              W I T N E S S E T H:

     WHEREAS, Southdown, Inc. (the "Company") presently maintains the Southdown,
Inc. 1991 Nonqualified Stock Option Plan for Non-Employee Directors which became
effective on February 14, 1991 and was amended and restated as of November 21,
1996 (the "Plan"); and

     WHEREAS, the Company, pursuant to paragraph 15 of the Plan, has the right
to amend the Plan from time to time subject to certain limitations.

     NOW, THEREFORE, in order to increase the number of shares of Common Stock
(as defined in the Plan) which may be acquired under a Subsequent Option (as
defined in the Plan), and to make certain other amendments, the Plan is hereby
amended in the following manner:

     1. The first sentence of paragraph 3 of the Plan is hereby amended in its
entirety to read as follows:

     3. STOCK RESERVED FOR THE PLAN.

        Subject to adjustment as provided in paragraph 11, the shares subject
     to the Plan shall consist of 725,000 unissued shares of Common Stock or
     previously issued shares reacquired and held by the Company and such amount
     of shares shall be and is hereby reserved for issuance pursuant to this
     Plan.

     2. The first paragraph of paragraph 4 of the Plan is hereby amended in its
entirety to read as follows:

     4. GRANT OF OPTIONS.

        Each director of the Company who is not otherwise an employee of the
     Company or any of the Company's subsidiaries (as defined in Section 424(f)
     of the Internal Revenue Code of 1986) (hereinafter referred to as an
     "Eligible Director", which term shall include any transferee permitted
     pursuant to paragraph 9 below) shall be granted one option to acquire
     10,000 shares of Common Stock ("Initial Option"), in the case of an
     Eligible Director serving on the Board on the date of adoption of the Plan
     by the Board, on such date of adoption and in all other cases on the date
     of such director's first election to the Board. Beginning on the Annual
     Meeting of Shareholders held in 1999, and on the date of each Annual
     Meeting of Shareholders thereafter where an Eligible Director continues to
     serve as a Director of the Company after such meeting, (i) each Eligible
     Director who is neither a chairman of one of the committees of the Board
     nor the Chairman of the Board shall automatically be granted an additional
     option to acquire

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     7,500 shares of Common Stock, (ii) each Eligible Director who is a chairman
     of one of the committees of the Board, but is not Chairman of the Board,
     shall automatically be granted an additional option to acquire 8,000 shares
     of Common Stock, and (iii) the Chairman of the Board of Directors shall
     automatically be granted an additional option to acquire 26,000 shares of
     Common Stock (each annual grant under (i), (ii) and (iii) for an Eligible
     Director is referred to hereinafter as a "Subsequent Option"). The options
     granted to Eligible Directors shall be automatic, nondiscretionary, and
     subject to the following conditions and limitations in addition to those
     set forth elsewhere in this Plan: (x) the exercise price of each option
     shall be equal to the greater of the par value of the Common Stock or 100%
     of the fair market value of the Common Stock on the Date of Grant; (y) each
     option shall become exercisable six months after the Date of Grant; (z)
     notwithstanding clause (y) above, each option shall be fully exercisable
     upon the death or disability of the Eligible Director while serving as a
     Director of the Company or upon a Change in Control of the Company while
     serving as a Director of the Company.

     3. This Amendment shall be effective upon the date of its adoption by the
Board of Directors of the Company (the "Board"), provided that this Amendment is
approved within twelve months thereafter by a majority of the votes cast by the
stockholders of the Company on the proposal, as long as at least 50% of the
outstanding shares vote on the proposal.

     4. This Amendment to the Plan was approved by the Board on March 25, 1999.
Except as provided herein, the Plan remains unchanged and in full force and
effect.

Approved:                                    Date:
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                                       3<PAGE>   1
                                                                   EXHIBIT 10.13

                                                                       ANNEX "A"

                    AMENDMENT TO DIRECTORS' STOCK OPTION PLAN

         WHEREAS, the Company previously adopted the "Southdown, Inc. 1991
Nonqualified Stock Option Plan for Non-Employee Directors" (the "Plan"); and

         WHEREAS, the Company desires to amend the Plan to allow gifts of
options to certain persons or entities.

         NOW, THEREFORE, BE IT RESOLVED, that Section 9 of the Plan be and
hereby is amended and restated in its entirety to read as follows:

9.       Assignability.

         The options granted under this Plan shall be nontransferable by the
Eligible Director other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as that term is defined by the
Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement
Income Security Act, or the rules thereunder, or by gift to, or in trust for the
benefit of, the Eligible Director, or the Eligible Director's spouse, parent or
parents, any descendant or descendants, or any charitable organization described
in Internal Revenue Code Section 170(c). In case of any such transfer by gift,
the donee or donees shall receive and hold such options subject to the
restrictions on encumbrances and disposition set forth in the Plan and the Stock
Option Agreement; and further

         RESOLVED, that each executive officer of the Company be, and hereby is,
authorized in the name and on behalf of the Company to take any and all such
further actions and to make, execute and deliver any and all such documents,
agreements, instruments, certificates and undertakings as such officer may deem
necessary or advisable to carry into effect the purposes and intents of the
foregoing resolutions and the transactions contemplated thereby, and to perform
or cause to be performed the obligations of the Company under any agreement
related thereto.<PAGE>   1
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                     (As Amended Effective January 31, 2000)

                                    PREAMBLE

     Southdown, Inc. has adopted this Supplemental Executive Retirement Plan,
effective October 1, 1997, for a group of senior line and staff management
personnel to ensure that the overall effectiveness of the Company's executive
compensation program will attract, retain and motivate qualified senior
management personnel. The Plan has been amended effective January 31, 2000 to
modify certain plan provisions and provide enhanced benefits to designated
Participants upon a Change in Control.

                                    SECTION I

                                   DEFINITIONS

     When used herein, the following words shall have the meanings below unless
the context clearly indicates otherwise:

     1.1. "Beneficiary" means (1), subject to (2) below, with respect to the
Participant, the Participant's Spouse or Surviving Spouse as defined in Section
1.48 of the Pension Plan or, with respect to the Surviving Spouse, the
contingent annuitant as described in Section 1.10 of the Pension Plan, or (2)
any natural person or persons requested by the Participant and approved by the
Retirement Committee to be a Beneficiary with respect to the Participant's
benefit under this plan or to be a contingent annuitant (as described in Section
1.10 of the Pension Plan) with respect to the 10-years certain option described
in the Pension Plan.

     1.2. "Company" means Southdown, Inc. and any successor thereto.

     1.3. "Compensation" means, with respect to any Participant, the sum of (a)
the basic cash remuneration paid to a Participant by the Company for personal
services rendered during the Calendar year, (i) without regard to hours of work
or units produced, and is exclusive of any remuneration paid on account of
overtime, overtime premium, extended workweek, shift differentials, or other
penalties, or premium rates, or bonuses or all other forms of special pay, but
including (ii) any amount contributed by the Company pursuant to a salary
reduction agreement and which is not included in the gross income of the
Participant, pursuant to IRC Section 125, 402(a)(8), 402(h) or 403(b); and (b)
the incentive compensation received pursuant to the Company's Annual Incentive
Plan, whether paid in cash or another form of compensation (including restricted
stock). The total dollar amount of incentive compensation received within a
calendar year shall be allocated in equal amounts to each month of such calendar
year.

     1.4. "Early Retirement Supplemental Benefit" shall have the meaning set
forth in Section 3.3 hereof.

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     1.5. "Internal Revenue Code" or "IRC" means the Internal Revenue Code of
1986 as amended.

     1.6. "Late Retirement Supplemental Benefit" shall have the meaning set
forth in Section 3.4 hereof.

     1.7. "Normal Retirement Supplemental Benefit" shall have the meaning set
forth in Section 3.2 hereof.

     1.8. "Participant" means any employee of the Company who meets the
eligibility requirements of Section II.

     1.9. "Pension Plan" means the Southdown, Inc. Pension Plan, adopted May 19,
1994, as heretofore and hereafter amended from time to time or any successor
thereto.

     1.10. "Plan" means the Supplemental Executive Retirement Plan.

     1.11. "Plan Average Monthly Compensation" means monthly Compensation of a
Participant averaged over the five (5) consecutive calendar years from his date
of employment which produces the highest monthly average. If a Participant has
less than five (5) consecutive calendar years of employment at his date of
termination, his Plan Average Monthly Compensation will be based on his monthly
Compensation during his months of service from his date of employment to his
date of termination. Compensation subsequent to termination of participation
shall not be recognized.

     1.12. "Retirement Committee" means the Employee Compensation and Benefits
Committee of the Company's Board of Directors.

     1.13. "Supplemental Plan Benefit" means the monthly retirement benefit
payable in accordance with the Plan.

     1.14. As used herein, the terms "Accrued Benefit", "Actuarial Equivalent",
"Administrators", "Normal Retirement Date", "Early Retirement Date", "ERISA",
"Late Retirement Date", and "Vested" shall have the same meanings as provided in
the Pension Plan.

                                   SECTION II

                           ELIGIBILITY TO PARTICIPATE

     A senior management employee of the Company is eligible to become a
Participant in the Plan provided such employee is designated as a Participant by
the Retirement Committee in writing; and provided further that at the time of
such designation and approval the employee:

     a. Is a vested participant in the Pension Plan, and

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     b. Has Plan Average Monthly Compensation in excess of the limitations set
        forth in IRC Section 401(a)(17).

     Once an employee becomes a Participant, he shall remain a Participant until
his termination of employment with the Company and thereafter until all benefits
to which he or his Beneficiary is entitled under the Plan have been paid or
until such benefits are forfeited pursuant to Section 6.1.

                                   SECTION III

                     ELIGIBILITY FOR AND AMOUNT OF BENEFITS

     3.1. Benefit Eligibility. Each Participant is eligible to receive a
Supplemental Plan Benefit under the Plan beginning on one of the following
dates:

          a. Normal Retirement Date;
          b. Early Retirement Date; or
          c. Late Retirement Date.

     3.2. Normal Retirement Supplemental Benefit. The Normal Retirement
Supplemental Benefit of a Participant who attains his Normal Retirement Date
shall be equal to (i) the monthly retirement benefit such person would have
received under Section 5.1(a) of the Pension Plan if such Section 5.1(a) monthly
retirement benefit had been calculated on the basis of Plan Average Monthly
Compensation without regard to the limitations and rules set forth under Section
401(a)(17), 415 and 414(q)(6) of the Internal Revenue Code; less (ii) the
monthly retirement benefit payable to such person under the Pension Plan at his
Normal Retirement Date.

     3.3. Early Retirement Supplemental Benefit. The Early Retirement
Supplemental Benefit of a Participant who attains his Early Retirement Date
shall be equal to his Normal Retirement Supplemental Benefit reduced for early
commencement by the factors set forth in Section 5.1(b) of the Pension Plan.

     3.4. Late Retirement Supplemental Benefit. The Late Retirement Supplemental
Benefit of a Participant who delays retirement pursuant to Section 5.1(d) of the
Pension Plan shall be equal to (i) the monthly retirement benefit such person
would have received under Section 5.1(d) of the Pension Plan if such Section
5.1(d) monthly retirement benefit had been calculated on the basis of Plan
Average Monthly Compensation without regard to the limitations and rules set
forth under Section 401(a)(17), 415 and 414(q)(6) of the Internal Revenue Code;
less (ii) the monthly retirement benefit payable to such person under the
Pension Plan at his Late Retirement Date. In the determination of the Late
Retirement Supplemental Benefit, the definition of "Accrued Benefit" in Section
5.1(d) of the Pension Plan shall have the same meaning as provided in Section
1.1(f) of the Pension Plan, but substituting "Plan Average Monthly Compensation"
for "Average Monthly Compensation" in such Section 1.1(f).

     3.5. Pension Benefit Offset by Other Plans. In the event a monthly
retirement benefit payable to the Participant by the Pension Plan is subject to
reduction by monthly retirement

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     benefits provided by any other defined benefit plan to which the Company
     contributes on behalf of the Participant as provided in Section 1.1(b)(vii)
     of the Pension Plan, in the calculation of the benefit payable under this
     Plan the benefit payable under the Pension Plan will be determined as if
     such offsets under the Pension Plan do not exist, to preserve the effect of
     the offset in the Pension Plan.

          3.6. Re-employment. If a Participant's employment with the Company is
     terminated for any reason, and the Participant is re-employed and once
     again becomes a Participant, such renewed participation shall not result in
     duplication of benefits. Accordingly, if a Participant has received a
     distribution of any Supplemental Plan Benefit under the Plan, his
     Supplemental Plan Benefit upon any subsequent termination of employment
     shall be reduced by the Actuarial Equivalent of the present value of such
     distribution as of the date of distribution. If a former Participant who is
     receiving benefits payments from the Plan is re-employed by the Company,
     the payment of benefits will be suspended during his period of
     re-employment under the same terms and in the same manner as applies to
     benefits payable under the Pension Plan.

                                   SECTION IV

                        FORM AND COMMENCEMENT OF BENEFITS

          4.1. Form of Distribution of Benefits. Supplemental Plan Benefits
     payable to a Participant or Beneficiary pursuant to Section III will be
     payable in a lump sum amount or in any other form permitted by Section
     5.7(a) of the Pension Plan and shall be the Actuarial Equivalent of a
     single life annuity. The Participant may elect a permitted form of
     distribution of benefits at a time no later than 30 days after commencement
     of participation in the Plan. If the Participant fails to elect a permitted
     form of distribution of benefits, such benefits will be payable as a lump
     sum. The election of a form of distribution of Supplemental Plan Benefits
     shall not require spousal consent.

          4.2. Commencement of Benefits. A Supplemental Plan Benefit payable to
     a Participant pursuant to Plan Sections 3.2, 3.3 or 3.4 will commence on
     the same date of commencement of the benefit provided by the Pension Plan.
     A Supplemental Plan Benefit payable to a Beneficiary will commence on the
     first day of the month coincident with or next following the Participant's
     death. Payment of a Supplemental Plan Benefit to a Participant will
     terminate with the payment made on the first day of the month in which the
     Participant dies, unless the form of payment to the Participant provides
     for continuation of payments following his death, in which event payments
     will continue in accordance with such form. Payment of a Supplemental Plan
     Benefit to any Beneficiary will terminate with the payment made on the
     first day of the month in which such Beneficiary dies. After payment of the
     Supplemental Plan Benefit in a lump sum, the Plan shall have no further
     obligation to the Participant or to Participant's Beneficiaries.

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                                   SECTION V

                           AMENDMENT AND TERMINATION

     5.1. Amendment or Termination. The Company reserves the right to amend or
terminate the Plan when, in the sole opinion of the Company, such amendment or
termination is advisable. Any such amendment or termination shall be made
pursuant to a resolution of the Board of Directors of the Company and shall be
effective as of the date of such resolution or such later date as the resolution
may expressly state. No amendment or termination of the Plan shall directly or
indirectly deprive any Participant or Beneficiary of all or any portion of any
Supplemental Plan Benefit accrued to the effective date of the resolution
amending or terminating the Plan. If a Plan amendment has the effect of reducing
future accruals of a Supplemental Plan Benefit, the Company shall cause the
trust contemplated in Section 7.1 to be established, if not previously
established, and transfer a sufficient amount of assets to the trust in order
that trust assets immediately after such amendment equal the aggregate of
Supplemental Plan Benefits of all Participants.

     5.2. Termination Benefit. In the case of a Plan termination, each
Participant on the termination date shall become vested in his accrued
Supplemental Plan Benefit as of the termination date. Such accrued Supplemental
Plan Benefit shall be based on service and compensation factors as of the Plan
termination date. Upon Plan termination, the Company shall cause the trust
contemplated in Section 7.1 to be established, if not previously established,
and transfer a sufficient amount of assets to such trust in order that trust
assets immediately after termination equal the aggregate of Supplemental Plan
Benefits of all Participants.

     5.3. Corporate Successors. The Plan shall not be automatically terminated
by a transfer or sale of assets of the Company or by the merger or consolidation
of the Company into or with any other corporation or other entity, but the Plan
shall be continued after such sale, merger or consolidation. In the event the
Plan is not continued by the transferee, purchaser or successor entity, then the
Plan shall terminate subject to the provisions of Plan Sections 5.1 and 5.2.

                                   SECTION VI

                                  MISCELLANEOUS

     6.1. Forfeitures of Benefits. Notwithstanding any other provision of the
Plan, future payment of a Supplemental Plan Benefit hereunder to a Participant
or a Beneficiary will, at the sole discretion of the Retirement Committee, be
discontinued and forfeited, and the Company will have no further obligation
hereunder to such Participant or Beneficiary, if any of the following
circumstances occur:

          a. The Participant is discharged from employment with the Company for
             cause. For purposes of this Plan, cause shall mean: (A) the
             Participant's conviction (including a plea of guilty or nolo
             contendere) of a felony or any crime or theft, dishonesty or moral
             turpitude; or (B) the willful or grossly negligent contravention of
             (i) the standards of fiduciary responsibility attendant upon the
             Participant's service and office or (ii) the terms of the Company's
             Statement of Policy Concerning Corporate Ethics and Conflicts of
             Interest as amended from time to time; or

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          b. The Participant engages in competition with the Company, as
             determined by the Retirement Committee, within two years following
             his termination of employment with the Company and prior to
             attaining the age of 65 years, without written consent of the
             Company. "Competition" shall exist if the Participant directly or
             indirectly owns, operates, manages, controls or participates in the
             ownership, management, operation or control of or is employed by,
             or paid as a consultant or independent contractor by a business
             which competes or at any time did compete with the Company in a
             trade area served by the Company at the time distributions are
             being made or are to be made or within two years following his
             termination of employment with the Company and in which the
             Participant has represented the Company while employed by it, if
             the Participant continues to be so engaged 60 days after written
             notice has been given to him.

     The portion of the benefit subject to forfeiture under the conditions
described in this Section 6.1 are as follows:

          a. The total benefit, or if the Participant is in pay status, any
             benefit unpaid as of the date such Competition commenced, is
             subject to forfeiture, except as provided in b. below.

          b. In the case of a Participant who is retiring at his Mandatory
             Retirement Age, as defined in the Age Discrimination in Employment
             Act of 1967, as amended from time to time, the provisions of
             paragraph a. above shall not apply to that portion of the benefits
             computed under this Plan which, when added to the retirement
             payments under the Pension Plan (prior to any reduction for the
             cost of a survivor annuity) does not exceed the nonforfeitable
             retirement income requirement of ADEA Section 12(c)(i).

     6.2. No Effect on Employment Rights. Nothing contained herein will confer
upon any Participant the right to be retained in the service of the Company nor
limit the right of the Company to discharge or otherwise deal with the
Participant without regard to the existence of the Plan.

     6.3. Spendthrift Provision. No benefit under the Plan or any right or
interest in such benefit shall be assignable or subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge of any kind, including, but not limited to, pursuant to any domestic
relations order (within the meaning of ERISA Section 206(d)(3) and IRC Section
414(p)(1)(B)) or judgment or claims for alimony, support, separate maintenance,
and claims in bankruptcy proceedings, prior to actual receipt thereof by the
payee, and any attempt so to anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge prior to such receipt shall be void; and the Company
shall not be liable in any manner for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to any benefit under
the Plan.

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     6.4. Administration. The Retirement Committee shall be responsible for the
general operation and administration of the Plan and for carrying out the
provisions thereof. All provisions set forth in the Pension Plan with respect to
the administrative powers and duties of the Pension Plan's Administrators,
expenses of administration and procedures for filing claims shall also be
applicable with respect to the Plan. The Retirement Committee shall be entitled
to rely conclusively upon all tables, valuations, certificates, opinions and
reports furnished by any actuary, accountant, controller, counsel or other
person employed or engaged by the Company with respect to the Plan.

     6.5. Disclosure. Each Participant shall receive a copy of the Plan and the
Retirement Committee will make available for inspection by any Participant or
Beneficiary a copy of the rules and regulations used by the Retirement Committee
in administering the Plan.

     6.6. State Law. The Plan is established under and will be construed
according to the laws of the State of Texas, to the extent that such laws are
not preempted by the Employee Retirement Income Security Act and valid
regulations published thereunder.

     6.7. Incapacity of Recipient. In the event a Participant or Beneficiary is
declared incompetent and a conservator or other person legally charged with the
care of his person or of his estate is appointed, any benefits under the Plan to
which such Participant or Beneficiary is entitled shall be paid to such
conservator or other person legally charged with the care of his person or his
estate. Except as provided above in this Plan Section, when the Retirement
Committee in its sole discretion determines that a Participant or Beneficiary is
unable to manage his financial affairs, the Retirement Committee may direct the
Company to make distributions to any person for the benefit of such Participant
or Beneficiary.

     6.8. Unclaimed Benefit. If any payment to which a Participant or
Beneficiary is entitled is unclaimed, such payments shall be forfeited after a
period of two years from the date the first such payment was payable and shall
not escheat to any state or revert to any party; provided, however, that any
such payment or payments shall be restored if any person otherwise entitled to
such payment or payments makes a valid claim.

     6.9. Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, no individual acting as an employee or agent of the
Company or as a member of the Retirement Committee shall be liable to any
Participant, former Participant, Beneficiary or any other person solely by
reason of acting in such capacity.

     6.10. Termination of Employment. Upon termination of a Participant's
employment by the Company for any reason other than as set forth in Section 6.1,
the Company shall cause the trust contemplated in Section 7.1 to be established,
if not previously established, and transfer a sufficient amount of assets to
such trust in order that trust assets immediately after termination of
employment equal such Participant's Supplemental Plan Benefit and such amount so
transferred shall be reserved by the trust for the benefit of the Participant.

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                                   SECTION VII

                                SOURCE OF PAYMENT

     7.1. Source of Payments. Benefits arising under this Plan and all costs,
charges, and expenses relating thereto will be payable from the Company's
general assets. The Company may, however, establish a trust to pay such benefits
and related expenses, provided such trust does not cause the Plan to be "funded"
within the meaning of ERISA. Any trust so established shall conform to the terms
of the model trust set forth in Rev. Proc. 92-64. To the extent trust assets are
available, they may be used to pay benefits arising under this Plan and all
costs, charges, and expenses relating thereto. To the extent that the funds held
in the trust, if any, are insufficient to pay such benefits, costs, charges and
expenses, the Company shall pay such benefits, costs, charges, and expenses from
its general assets. In addition, the Company may, in its sole discretion,
purchase and distribute one or more commercial annuity contracts, or cause the
trustee of the trust to purchase and distribute one or more commercial annuity
contracts, to make benefit payments required under this Plan, provided, however,
that the purchase and distribution of any such annuity contracts shall be no
sooner than the expiration of any forfeiture provisions applicable under the
Company's non-competition guidelines. Such annuity contracts may be purchased
from a commercial insurer acceptable to the Retirement Committee. Further, the
Retirement Committee, in its sole discretion, may determine to pay additional
sums to the Participant, from the Company's general assets or from the trust, if
any, to reimburse the Participant for additional federal and state income taxes
estimated to be incurred by reason of the distribution of any such annuity
contracts. The Retirement Committee shall establish a methodology or
methodologies for determining the amount of such additional sums. The
methodology or methodologies selected shall be those that the Retirement
Committee, in its sole discretion, determines to be the most effective and
administratively feasible for the purpose of producing after-tax periodic
benefit payments that approximate the after-tax periodic benefit payments that
would have been received by the Participant in the absence of the distribution
of the annuity contract.

     7.2. Unfunded Status. The Plan at all times shall be entirely unfunded for
purposes of the IRC and ERISA and no provision shall at any time be made with
respect to segregating any assets of the Company for payment of any benefits
hereunder. Funds that may be invested through a trust described in Section 7.1
shall continue for all purposes to be part of the general assets of the Company.
The Plan constitutes a mere promise by the Company to make benefit payments
under this Plan in the future. No Participant shall have any interest in any
particular assets of the Company by reason of the right to receive a benefit
under the Plan and to the extent the Participant acquires a right to receive
benefits under this Plan, such right shall be no greater than the right of any
unsecured general creditor of the Company.

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                                  SECTION VIII

                          CHANGE IN CONTROL PROVISIONS

     8.1. Amount and Distribution of Benefit. Any provision of the Plan to the
contrary notwithstanding, with respect to any Participant who is accruing
benefits under the Plan on or after January 31, in the event of a Change in
Control (as defined below), any benefit accrued as of and through the Change of
Control, shall not be subject to forfeiture or suspension and shall be
distributed in a single lump sum (i) on the last day of the month following the
month in which the Change in Control occurred, for such Participants receiving
payments under the Plan on the date of such Change in Control, and (ii) on the
last day of the month following the month in which occurs the event giving rise
to the obligations of the Company to pay such benefit, for such Participants not
currently receiving payments under the Plan on the date of such Change in
Control. For this purpose, the accrued benefits shall be calculated based on the
provisions of the Plan in effect immediately prior to the Change of Control as
if the event giving rise to the obligation of the Company to pay such benefit
pursuant to the preceding sentence had occurred on the date of the Change of
Control and shall not be adversely affected because of any subsequent events,
including, without limitation, termination or amendment of the Plan or of the
Pension Plan, or lack of continued status. With respect to those Participants
designated by the Retirement Committee as being eligible for a benefit
enhancement in the event of a Change in Control, benefits payable hereunder
shall be in accordance with the written agreement between the Company and the
individual Participant regarding this Plan.

     A "Change in Control" shall be conclusively deemed to have occurred if
(and only if) any of the following shall have taken place: (i) a change in
control is reported by the Company in response to either item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), or Item 1 of Form 8-K promulgated
under the Exchange Act, or any similar reporting requirement hereafter
promulgated by the Securities and Exchange Commission; (ii) any person,
entity or group (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than any employee benefit plan sponsored by the Company,
is or becomes the beneficial owner (as defined in rule 13d-3 of the Exchange
Act), directly or indirectly, of securities of the Company representing forty
percent or more of the combined voting power of the Company's then outstanding
securities (as determined under paragraph (d) of Rule 13d-3 promulgated under
the Exchange Act, in the case of rights to acquire common stock); or (iii)
following the election or removal of directors, a majority of the Board consists
of individuals who were not members of the Board two years before such election
or removal, unless the election of each director who was not a director at the
beginning of such two-year period has been approved in advance by directors
representing at least a majority of the directors then in office who were
directors at the beginning of the two-year period.

     8.2. Certain Plan Provisions Modified. Any provision of the Plan to the
contrary notwithstanding, in the event of a Change in Control as defined above,
benefits under this Plan will be determined in accordance with the terms of the
Plan in effect immediately prior to such Change in Control, subject only to the
modifications set forth in this Section VIII. By way of illustration, but
without limitation, this provision shall mean (i) Section 6.1 regarding
forfeiture of benefits shall apply to limit competition only with respect to the
Company as such entity is identified prior to the Change in Control; and (ii)
all Plan terms shall have their meaning as such meaning existed immediately
prior to the Change in Control.

                                       9

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