Document:

Exhibit 10.1

EMPLOYMENT AGREEMENT

          THIS AGREEMENT dated March 22, 2006 is entered into by Newpark Resources, Inc.  (the “Company”), a Delaware corporation, and Paul L. Howes (the “Executive”) and is intended to incorporate and accurately reflect all prior negotiations, discussions, or agreements between the parties. 

          WHEREAS, the Company desires to employ a Chief Executive Officer to enhance shareholder value and grow the Company to its maximum potential, and as Executive has represented himself as qualified to achieve these objectives, and as the parties mutually desire and agree to enter into an employment relationship by means of this Employment Agreement.

          NOW, THEREFORE in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is mutually covenanted and agreed by and between the parties as follows:

1. Employment of Executive Officer.

          1.1 Employment Term.  The Company hereby offers to employ Executive, and Executive hereby accepts employment by the Company, as its Chief Executive Officer (“CEO”) on the terms and conditions set forth in this Agreement.

          (a)          The Executive’s Employment Term under this Agreement shall commence on March 22, 2006 (“Employment Date”), and shall continue for a period of three (3) years and nine (9) days thereafter, i.e. March 31, 2009, and shall automatically be renewed for successive one (1) year periods thereafter ending on each succeeding March 31, unless Executive’s employment is terminated by either party giving written notice to the other party at least sixty (60) days in advance of the expiration of the initial or any successive Employment Term.  Termination by sixty (60) days written notice pursuant to this Section 1.1(a) shall be treated as a termination by Executive under Section 2.2 if given by Executive or as a termination without Cause under Section 2.3 if given by the Company.  The period during which Executive is
employed hereunder shall be referred to as the “Employment Term.”

          1.2 Compensation and Benefits.

          (a)          Base Salary.  During the Employment Term, the Company will pay Executive a base monthly salary at an annualized rate of at least Four Hundred Thousand Dollars ($400,000) per twelve month year (“Base Salary”).  The Board of Directors will review annually Executive’s Base Salary and, at its reasonable discretion, may increase such Base Salary as it deems appropriate, provided Executive’s Base Salary for any subsequent twelve month year shall not be less than the preceding twelve month year except with Executive’s prior written agreement.  Board approved adjustments in Base Salary shall be automatically incorporated herein by reference and be contractual obligations of Company.  Such Base Salary shall be paid in accordance with the Company’s standard payroll practice for its executive
officers.

          (b)          Incentive Compensation.  In addition to the Base Salary, during the Employment Period Executive shall be eligible for participation in the 2003 Executive Incentive Plan (“EICP”) and the 2003 Long Term Incentive Plan (“LTIP”), subject to any amendments made at Board’s discretion as provided herein, in each of the years ending December 31, 2006, 2007, and 2008.  Performance measures and goals will be set by the Compensation Committee of the Board.  The Target Award is equal to seventy (70%) percent of Base Salary with a maximum limitation of one hundred forty percent (140%) of Executive’s annual Base Salary during the relevant Employment Period.  Any payout for 2006 performance shall be based on the Company performance prorated for the eligible period.  Payout under the EICP for a
particular year will be made in cash by March 31 of the next year, e.g. payout for 2006 will occur prior to March 31, 2007.  The EICP and LTIP as in effect as of March 22, 2006, are incorporated herein by reference as if set forth in their entirety within this document.  Actual awards in accordance with the Board approved plan, and any amendments, are at the discretion of the Compensation Committee, provided that Company represents and warrants to Executive that the terms of the EICP and LTIP will not be amended, modified, changed, or interpreted or applied to make them less generous than they are on March 22, 2006, without prior written notice.

          (c)          Stock Options and Share Awards.  In addition, Executive shall receive such number of stock options and performance restricted share awards as are granted by the Compensation Committee in accordance with the Board approved plans (all such plans being referred to as the “Plans”).  Vesting shall be  as provided in these existing plans, and subject to any amendments.  In accordance with the Employment Offer Term Sheet dated February 15, 2006, that Company provided to Executive, under Company’s Long Term Incentive Award Guidelines the annual stock award for Executive would consist of 80,000 fair market value options and a performance restricted share award of 50,000 shares.   When used in this Agreement “stock” and “shares” mean the Company’s publicly traded
common stock, $.01 par value.  Further, throughout this Agreement, the words “stock options, awards, and grants” are used separately or in various combinations to describe awards of shares or the right to acquire shares of Company stock under various benefit plans or this Agreement, or both.

          (d)          Employment Inducement Awards.  As an incentive to accepting employment with Company and entering into this Agreement, Executive will be awarded upon execution of this Agreement and the Board will take any and all necessary action to make such award at no cost to Executive: (i) three hundred seventy-five thousand (375,000) fair market value options at the market price on the day this Agreement is dated which will vest ratably over three (3) years with the first year being the anniversary of this Employment Agreement and (ii) two hundred fifty thousand (200,000) time restricted shares, which shares shall vest ratably over five (5) years with the first year being the anniversary of this Employment Agreement.

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          (e)          Benefit Plans and Vacation.  Subject to the terms of such Plans, throughout his employment under this Agreement, Executive shall be entitled to participate in any and all employee benefits plans or programs of the Company to the extent that he is otherwise eligible to participate under the terms of those plans, including participation in any welfare benefit programs provided by the Company (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance programs), and fringe benefits and perquisites available generally to other executives of the Company, including rights to indemnification, advance of litigation expenses, exculpation and Directors and Officers liability insurance (“D&O insurance”) provided to directors and officers of
the Company, including special arrangement provisions that may be applicable to other senior executives.  The Company shall not be obligated to institute, maintain, or refrain from changing, amending, or discontinuing any benefit plan, or perquisite, so long as such changes are similarly applicable to similarly-situated employees generally, provided however, Company shall at all times defend, indemnify, and hold harmless Executive to the maximum extent permitted by law from any actual cost, loss, damages, attorneys fees, or liability suffered or incurred by Executive for Executive’s service as Chief Executive Officer of Company and participation in the management of Company and shall at all times provide at Company’s sole cost D&O insurance coverage in amounts adequate to fully satisfy its obligations to Executive.  The Company shall also provide Executive with D&O insurance tail coverage for 6 years (or the maximum time period permitted by law) in the same amount following
the termination of Executive’s employment.  

          Executive shall be entitled to an annual medical examination at the Cleveland Clinic, or other like medical facility in New Orleans or Houston at Company’s cost.  

          During the Employment Term, Executive shall be entitled to four (4) weeks paid vacation each calendar year, including 2006, in accordance with the Company’s policies in effect from time to time, provided the four (4) of weeks of vacation provided in this paragraph shall not be reduced under such policies.  

          When Executive travels in connection with his duties and as otherwise appropriate, Company will provide Executive with travel life insurance in the minimum amount of $2,000,000, medical evacuation insurance that provides for transport to the city in which Executive is then living, and other appropriate security precautions available to Company executives during international travel.

          (f)          Expense Reimbursement.  The Company will reimburse Executive in full for all reasonable and necessary business, entertainment and travel expenses incurred or expended by Executive in the performance of the duties hereunder in accordance with the Company’s customary practices applicable to its executive officers. 

          (g)          Other Benefits.  Company shall assist Executive with a country club membership at a club of his choice when the location of the Company’s corporate headquarters is determined.  The Company shall pay one-half of the Club initiation fee.  Company shall also pay Executive an annual stipend of $20,000 to be used by Executive in his discretion for monthly club dues, automobile costs and the like

          (h)          Schedule of Compensation and Benefit Plans.  Attached to this Agreement is a schedule of the compensation and benefit plans by name or description that the Company and Executive understand and intend to cover Executive.  The terms and provisions of the items listed on the Schedule, as modified by this Agreement, are incorporated herein by reference (whether or not the actual plan documents are attached as exhibits) and are contractual by and between Company and Executive

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          (i)          Relocation, Commuting and Temporary Housing Expenses.   There has been some question as to whether the office of the Chief Executive Officer of the Company and all or part of Company’s corporate headquarters that are now located in Metairie, Louisiana should remain there or relocate to Houston, Texas.  Executive will have the responsibility of assessing the pros and cons of each location and in his business judgment deciding by the end of 2006 what action should be taken.  Therefore, in the interim, Company will assist Executive with finding temporary housing and with the reasonable cost of such housing in the New Orleans area, and reimburse reasonable commercial transportation expenses for Executive or his wife between New Orleans and their home in and St. Louis or Michigan weekly, if necessary and
appropriate.  Upon a final decision on the location of the headquarters, Executive will be reimbursed for the reasonable relocation expenses of his household. 

          In connection with Executive’s transition from St. Louis to undertake employment with Company as CEO, the Executive’s family may not relocate from St. Louis until a final determination is made regarding the location of the Company’s headquarters.  The Company desires and agrees to take such actions as may be necessary and appropriate to maintain medical insurance coverage for Executive and his family in the St. Louis, Missouri area, including reimbursing Executive for medical insurance premium payments to continue the same coverage for him and his family that he had prior to commencing employment with Company. 

          All expenses related to temporary housing, commuting, relocation, etc will be grossed up. For the purposes of determining the amount of the Gross-Up Payment, the Executive will be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

          1.3 Extent of Services; Conflicts of Interest.  

          (a)          Executive shall devote substantially all of his working time, attention and energies to the business of the Company, and its affiliated entities, from the Company’s headquarters.  Executive may be involved in charitable and professional activities, trade and industry associations and the like, and, with the prior written consent of the Chairman of the Board of the Company, serve on boards of other entities, provided such activities do not interfere with the performance of his duties hereunder or any provision of this Agreement. 

          (b)          During the term of his employment under this Agreement, Executive shall not, directly or indirectly, without the prior consent of a majority of the members of the Company’s Board of Directors, render any services to any other person or entity or acquire any interests of any type in any other entity, that might be deemed in competition with the Company or any of its subsidiaries or affiliates or in conflict with his position as Chief Executive Officer of Newpark, provided, however, that the foregoing shall not be deemed to prohibit Executive from (a) acquiring, solely as an investment, any securities of a partnership, trust, limited liability company, corporation or other entity (i) so long as he remains a passive investor in such entity, (ii) so long as he does not become part of any control group thereof, and (iii) so long as such
entity is not, directly or indirectly, in competition with the Company or any of its subsidiaries or affiliates, or (b) serving as a consultant, advisor or director of any corporation which has a class of outstanding equity securities registered under Sections 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and which is not in competition with the Company or any of its subsidiaries or affiliates.

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2.  Termination of Employment.

          2.1 Termination.  Executive’s employment by the Company shall be terminated (1) automatically, upon the death or disability (as defined below), of Executive, or (2) at the election of Executive upon 30 days written notice to the Company by Executive for Good Reason (as defined below) or his voluntary resignation at his election and without Good Reason, (3) by the Company for Cause (as defined below), (4) by the Company without Cause, or (5) pursuant to Section 1.1(a).  

          2.2 Early Termination.  If Executive’s employment is terminated by Executive at any time before March 31, 2009 for any reason other than for Good Reason, Executive shall be entitled to receive only (i) his Base Salary and other earned compensation through the date of termination and (ii) such stock options, share awards, and grants as shall have fully vested before the date of termination.

          2.3 Termination by Executive for Good Reason or by Company without Cause.  If Executive’s employment is terminated by Executive for Good Reason or by the Company without Cause, then Executive shall be entitled to receive:  (i)  in a lump sum payment within thirty (30) days of the date of termination, an amount equal to two (2) times the amount of his annual Base Salary at the time of termination; (ii) an amount equal to two times (2X) the Target Bonus applicable in the year in which termination occurs; (iii) full vesting of all time related Restricted Shares and Options awarded at commencement of employment, provided however, there will be no vesting of annual stock awards in the post-employment exercise period in accordance with the Plans; (iv) the Company will pay the COBRA premium to continue the same coverage under the Company’s group medical insurance program for
a period of up to eighteen (18) months; and (v) reimbursement by the Company for the costs of outplacement services obtained by the Executive within the two (2) year period after termination, not to exceed $20,000.

          2.4 Termination for Cause.  If Executive’s employment is terminated at any time before March 31, 2009, or March 31 of any successive Employment Period by the Company for Cause (as defined herein), then Executive shall be entitled to receive only (i) his Base Salary through the date of termination and (ii) such stock options, awards, and grants as shall have fully vested before the date of termination.  In any such event, Executive shall be ineligible for and shall forfeit all rights with respect to options and grants that have not vested as of the time of termination for Cause. 

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          2.5 Termination as a Result of Death.  If Executive dies during the Employment Term, the Company shall pay to Executive’s surviving spouse or such other person or estate as the Executive may from time to time designate by written notice to the Company, or such other person as may be required by law, the Company will pay the following amounts:  (i) any unpaid Base Salary or other compensation for services rendered to the date of death, and any unpaid expenses required to be reimbursed under this Agreement, and any earned but unpaid bonuses for any prior period; (ii) as of the date of termination by reason of Executive’s death, stock options previously awarded to Executive that have vested as of the date of death in keeping with the governing Plans.  No awards or grants contemplated by this Agreement, but not yet awarded to Executive as of the time of his death shall be
granted

          2.6 Termination as a Result of Disability.  The Company may terminate Executive’s employment hereunder upon Executive becoming “Totally Disabled.”  For purposes of this Agreement, Executive shall be considered “Totally Disabled” if Executive has been physically or mentally incapacitated so as to render Executive incapable of performing the essential functions of Executive’s position with or without reasonable accommodation.  Executive’s receipt of disability benefits for total disability under the Company’s long-term disability plan or receipt of Social Security total disability benefits shall be deemed conclusive evidence of Total Disability for purposes of this Agreement; provided, however, that in the absence of Executive’s receipt of such long-term disability benefits or Social Security benefits, or due to the needs of the
business or the unacceptable unavailability of Executive which is expected to last for a continuous period of not less than six (6) months, as determined by it in good faith by a majority of the eligible members of the Board.  In the event of such disability, Executive will continue to receive his Base Salary for six (6) months or until benefits become payable to the Executive under the terms of the Company’s disability policy, whichever first occurs.  Once benefits commence under the  Company’s disability policy, the Company shall pay Executive the difference between benefits under the long term disability plan and 50% of his Base Salary that was effective at the time he became disabled for a period of one (1) year for each year of service up to five (5) years or age 65, whichever occurs first.

          2.7 Early Termination of Contract; After Change in Control: Base Salary in Lump Sum. (a) Notwithstanding anything to the contrary in this Agreement, if at any time during an Employment Period, or within twenty-four (24) months following a Change in Control, the Company (or the successor entity) terminates the Executive’s employment without Cause or the Executive terminates his employment with Good Reason, in addition to all other amounts due to Executive (1) the Company shall, within ten (10) days of such termination of employment pay to the Executive a lump sum amount equal to three times (3X) the sum of the Executive’s current annual Base Salary as provided herein and an amount equal to three times (3X)  the highest bonus, but not less than the minimum target of seventy percent (70%) as defined in Section 1.2(b),  received by Executive prior to such date, (2)
all previously awarded stock options, awards, grants, restricted stock, and the like, shall be fully vested.  Additionally, Executive will also continue to participate in group benefit plans, including 401(k), medical, and life insurance during the remaining eligibility period, as long as it is available and not in contravention of the respective plan’s provisions in existence at that time.  The Company will pay or reimburse Executive for medical insurance premiums for three (3) years following termination for continued participation in the Company plan under COBRA or in an equivalent plan. The Employer shall, at its sole expense as incurred, provide the Executive with outplacement services the scope and provider of which shall be selected by the Executive in his sole reasonable discretion.  However, reimbursement by the Company for the cost of such outplacement services obtained by the Executive shall not exceed Twenty Thousand and 00/100 dollars ($20,000.00).

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          2.8 No Setoff and Disputed Amounts.   The Company’s obligation to make payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right, or action which Company may have against the Executive or others.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable, or benefits to be provided to the Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Executive obtains or seeks to obtain other employment.   In the event the Company disputes Executive’s entitlement to or the Company’s obligation to pay, or the calculation of any payment to Executive, the Company will pay any undisputed amounts at the
time specified by this Agreement (or 30 days from demand or from Executive’s termination of employment if no date is specified) and will withhold only those payments or parts of payments that are disputed until the dispute can be resolved in accordance with the procedures in this Agreement.  The Company shall immediately notify Executive in writing not more than sixty (60) days from the date of termination, how much it is disputing and the reason therefore in sufficient detail that Executive may evaluate the reason for the dispute.

3.        Miscellaneous Matters.

          3.1 Exclusive
Dispute Resolution Procedure.  In the event either party contends the
other has not complied with a provision of this Agreement or asserts any claims
under ERISA, other than the Non-Compete Agreements (which are specifically
excluded from this procedure), prior to seeking arbitration as provided for
below, the party claiming a violation of this Agreement, shall advise the other
party, in writing, of the specifics of the claim, including the specific
provision alleged to have been violated, as well as provide the other party with
any supporting documentation the party desires to produce at that time.  If
the Company is disputing amounts that Executive contends are due to him, the
Company shall provide a complete statement of the amount it is disputing, the
reason it is disputing it, and supporting documentation upon request by
Executive.  The parties will thereafter meet and attempt to resolve their
differences in a period not to exceed thirty (30) days, unless the parties agree
in writing to mutually extend the time for one additional thirty (30) day
period.  Following such attempts to resolve any such dispute, either party
may require arbitration of the other.  In order to do so, the request must
be timely made, in writing, and delivered to the other party (Executive or the
Board Chair) within thirty (30) days following the end of the resolution period
(or any valid extension thereof) referenced herein above.  The parties
hereto agree that any controversy or claim arising out of or relating to this
Agreement, or any dispute arising out of the interpretation or application of
this Agreement, which the parties hereto are unable to resolve as provided for
above, shall be finally resolved and settled exclusively by arbitration in the
city where the Company’s headquarters are then located or such other
location as the parties may agree, by a single arbitrator in accordance with the
substantive laws of the State of Louisiana to the extent not preempted by the
Employee Retirement Income Security Act, which shall govern all applicable
benefits issues, in keeping with the above required procedure.  If the
parties cannot agree upon an arbitrator, then each party shall choose its own
independent representative, and those independent representatives shall choose
the single arbitrator within thirty (30) days of the date of the selection of
the first independent representative.  The legal expenses of each party
shall be borne by them respectively.  However, the cost and expenses of the
arbitrator in any such action shall be borne equally by the parties.  The
arbitrator’s decision, judgment and award shall be final, binding and
conclusive upon the parties and may be entered in the highest court, state or
federal, having jurisdiction.  The arbitrator to which any such dispute
shall be submitted in accordance with the provision of this Article shall only
have jurisdiction and authority to interpret, apply or determine compliance with
the provisions of this Agreement, but shall not have jurisdiction or authority
to add to, subtract from, or alter in any way the provisions of this
Agreement.

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          3.2 Headings.  Section and other headings contained in this Agreement are for reference only and shall not affect in any way the meaning or interpretation of this Agreement. 

          3.3 Notices.  Any notice, communication, request, reply or advice (here severally and collectively called “Notice”) required or permitted to be given under this Agreement must be in writing and is effectively given by deposit in the same in the United States mail, postage pre-paid and registered or certified with return receipt requested, by national commercial courier for next day delivery, or by delivering in person the same to the address of the person or entity to be notified.  Notice deposited in the mail in the manner herein above described shall be effective 48 hours after such deposit, Notice sent by national commercial courier for next day delivery shall be effective on the date delivered, and Notice delivered in person shall be effective at the time of delivery.  For purposes of Notice, the address of the parties shall, until changed as hereinafter
provided, be as follows:

	
  
 
  	
  
(a)
  	
  
If to the Company:
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
Newpark   Resources, Inc.
  
	
  
 
  	
  
 
  	
  
3850   Causeway Blvd., Suite 5770
  
	
  
 
  	
  
 
  	
  
Metairie, LA   70002-1752
  
	
  
 
  	
  
 
  	
  
Attention:        Chairman of the   Board
  

or at such address as the Company may have advised Executive in writing; and

	
  
 
  	
  
(b)
  	
  
If to Executive:
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
Paul L.   Howes
  
	
  
 
  	
  
 
  	
  
456 Shetland   Valley Court
  
	
  
 
  	
  
 
  	
  
Chesterfield,   Missouri   63005
  

or at such other address as Executive may have advised the Company in writing.

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          3.4 Waiver.  The failure by any party to enforce any of its rights under this Agreement shall not be deemed to be a waiver of such rights, unless such waiver is an express written waiver which has been signed by the waiving party, and in the case of the Company, expressly approved by its Board of Directors.  Waiver of any one breach shall not be deemed to be a waiver of and other breach of the same or any other provision of this Agreement. 

          3.5 Choice of Law.  The validity of the agreement, the construction of its terms and the determination of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of Louisiana without regard to choice of law principles. 

          3.6 Invalidity of Provisions.  If any provision of this Agreement is adjudicated to be invalid, illegal or unenforceable under applicable law, the validity or enforceability of the remaining provisions shall be unaffected.  To the extent that any provision of this Agreement is adjudicated to be invalid, illegal or unenforceable because it is overbroad, that provision shall not be void but rather shall be limited only to the extent required by applicable law and enforced as so limited.

          3.7 Entire Agreement; Written Modifications.  This Agreement, the Non-Compete Agreements, and the specific documents referred to and incorporated herein by reference (whether or not copies thereof are attached to this Agreement)  together contain the entire agreement between the parties and supersedes all prior or contemporaneous representations, promises, understandings and agreements between Executive and the Company.

          3.8 No Assignments; Assumption by Successor.  This Agreement is personal to the Company and the Executive and may not be assigned by either party without the prior written consent of the other.  The Company will require any successor (whether direct or indirect by purchase, merger, consolidation  or otherwise) to all or substantially all of the business and/or assets of Company to (i) expressly assume and agree to perform this Agreement in the same manner and the same extent the Company would be required to perform it as if no such succession had taken place; and (ii) notify the Executive of the assumption of this Agreement within ten days of such assumption.  Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a loss of employment event under the Change of Control provisions of this Agreement.  As
used in this Agreement, Company shall mean Newpark Resources, Inc., and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this agreement by operation of law or otherwise.  However, this agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators’ successors, heirs, and distributes, devisees, and legatees.

          3.9 Attorney’s Fees.  The prevailing party in any action brought to enforce this Agreement shall be entitled, in addition to such other relief that may be granted, to a reasonable sum for attorney’s fees and costs incurred by such party in enforcing or defending against an action to enforce this Agreement.

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          3.10 Definitions.  In this Agreement:

          (a) “Cause” when used with reference to termination of the employment of Executive by the Company for “Cause”, shall mean:

	
  
 
  	
  
(1)
  	
  
Executive’s   conviction by a court of competent jurisdiction of, or entry of a plea of   guilty or nolo contendere for an act on the Executive’s part constituting a   felony; or
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(2)
  	
  
dishonesty;   willful misconduct or gross neglect by Executive of his obligations under   this Agreement that results in material injury to the Company;
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
(3)
  	
  
appropriation   (or an overt act attempting appropriation) by Executive of a material   business opportunity of the Company;
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(4)
  	
  
theft,   embezzlement or other similar misappropriation of funds or property of the   Company by Executive; or
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(5)
  	
  
the failure   of Executive to follow the reasonable and lawful written instructions or   policy of the Company with respect to the services to be rendered and the   manner of rendering such services by Executive provided Executive has been   given reasonable and specific written notice of such failure and opportunity   to cure and no cure has been effected or initiated within a reasonable time,   but not less than 90 days, after such notice.
  

          (b)  “Employment Term” means the actual term of Executive’s employment under this Agreement.

          (c)  “Good Reason” means any of the following:

	
  
 
  	
  
(1)
  	
  
the Company   unreasonably interferes in a demonstrably willful and deliberate manner with   Executive’s performance of his duties;
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(2)
  	
  
the Company   adversely changes Executive’s title or changes in any material respect the   responsibilities, authority or status of Executive without prior notice and   acceptance;
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(3)
  	
  
the   substantial or material failure of the Company to comply with its obligations   under this Agreement or any other agreement that may be in effect that is not   remedied within a reasonable time after specific written notice thereof by   Executive to the Company;
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(4)
  	
  
the   diminution of the Executive’s salary and or a material diminution of the   Executive’s benefits without prior notice and acceptance;
  

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(5)
  	
  
the failure   or refusal of the Company’s Board for any reason to approve Executive’s   business plan to move the Company’s corporate headquarters in whole or in   part, to the Houston, Texas area
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(6)
  	
  
the failure   of the Company to obtain the assumption of this Agreement by any successor or   assignee of the Company
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(7)
  	
  
Requiring   Executive to relocate more than 50 miles from the then headquarters of the   Company (excluding the possible relocation from Metairie, Louisiana to   Houston, Texas as referred to in this Agreement).
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(8)
  	
  
provided   that in any of the above situations, Executive has given reasonable and   specific written notice to the Chair of the Board of such failure and the   Company has been given a reasonable opportunity to cure and no cure has been   effected or initiated within a reasonable time after such notice.
  

          Executed as of the date first written above.

	
  Witnesses:
  	
  
 
  	
  
NEWPARK RESOURCES, INC.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
/s/ Edah   Keating
  	
  
 
  	
  
By:
  	
  
/s/ David   Hunt
  
	
  

  	
  
 
  	
  
 
  	
  

  
	
  
Edah Keating
  	
  
 
  	
  
 
  	
  
David Hunt,   Board Chairman
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  /s/ Del Lancaster
  	
  
 
  	
  
 
  	
  
 
  
	
  

  	
  
 
  	
  
 
  	
  
 
  
	
  
Del   Lancaster
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
Witnesses:
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  /s/ Edah   Keating
  	
  
 
  	
  
 
  	
  
/s/ Paul L.   Howes
  
	
  

  	
  
 
  	
  
 
  	
  

  
	
  
Edah Keating
  	
  
 
  	
  
 
  	
  
Paul L.   Howes
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
/s/ Del   Lancaster
  	
  
 
  	
  
 
  	
  
 
  
	
  

  	
  
 
  	
  
 
  	
  
 
  
	
  Del   Lancaster
  	
  
 
  	
  
 
  	
  
 
  

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APPENDIX A

ANCILLARY LOUISIANA UNFAIR COMPETITION, CONFIDENTIALITY AND
 NON-COMPETITION AGREEMENT

          THIS LOUISIANA UNFAIR COMPETITION, CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (this “Ancillary Agreement”) dated and effective as of March 22, 2006 is made by Paul L. Howes (“Executive”) and Newpark Resources, Inc.  (the “Company”).

RECITALS:

          WHEREAS, Executive and the Company have entered into an Agreement dated this date (the “Employment Agreement”), to which this Agreement is ancillary and incorporated by reference, pursuant to which, among other things, the Company agrees to make certain payments to Executive; and

          WHEREAS, pursuant to the Employment Agreement, the Company and Executive have agreed to enter into this Ancillary Agreement; and

          NOW, THEREFORE, in consideration of Executive’s Employment Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Executive and the Company hereby covenant and agree as follows:

          1.          Definitions.  Each capitalized term not defined herein shall have the meaning assigned to that term in the Employment Agreement.

          2.          Confidentiality.  Executive acknowledges that in the course of his relationship with the Company and its related entities Newpark Drilling Fluids, Newpark Environmental Services, SOLOCO, Newpark Canada, and Newpark Water (the “Related Entities” or referred to collectively with Newpark Resources as the “Company”) he has in the past received, and may in the future receive, certain trade secrets, programs, lists of customers and other confidential or proprietary information and knowledge concerning the business of the Company and its Related Entities (hereinafter collective referred to as “Confidential Information”) which the Company desires to protect.  Executive understands that the information is confidential and he agrees not to reveal the Confidential
Information to anyone outside the Company so long as the confidential or secret nature of the Confidential Information shall continue, other than such disclosure as authorized by the Company or is made to a person transacting business with the Company who has reasonable need for such Confidential Information.  Executive further agrees that he will at no time use the Confidential Information for or on behalf of any person other than the Company for any purpose.  Executive further agrees to comply with the confidentiality and other provisions set forth in this Agreement, the terms of which are supplemental to any statutory or fiduciary or other obligations relating to these matters.  On the termination of employment or his Employment Agreement, Executive shall surrender to the Company all papers, documents, writings and other property produced by him or coming into his possession by or through his relationship with the Company or relating to the Confidential Information and Executive
agrees that all such materials will at all times remain the property of the Company.

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          3.          Specific Covenants.

                      (a)        This Agreement.  The terms of this Agreement constitute Confidential Information, which Executive shall not disclose to anyone other than his spouse, attorney, accountant, or as may be required by the Company or by law.

                     (b)         Company Property.  All written materials, customer or other lists or data bases, records, data, and other documents prepared or possessed by you during your employment with the Company are the Company’s property.  All information, ideas, concepts, improvements, discoveries, and inventions that are conceived, made, developed, or acquired by you individually or in conjunction with others during your employment (whether during business hours and whether on the Company’s premises or otherwise) which relate to the Company’s business, products, or services are the Company’s sole and exclusive property.  All memoranda, notes, records, files, correspondence, drawings, manuals, models, specifications, computer programs, maps, and all other documents, data,
or materials of any type embodying such information, ideas, concepts, recipes, inventory, prices, improvements, discoveries, and inventions are the Company’s property.  At the termination of Executive’s employment with the Company for any reason, Executive shall return all of the Company’s documents, data, or other Company Property to the Company.  Included in the above are all such data that Executive had access to, over, or possessed.  The Company desires by this Agreement to protect its economic investment in its current and future operations and business.

                      (c)         Confidential
Information; Non-Disclosure.  Executive acknowledges and stipulates
that the business of the Company is highly competitive, cost and price
sensitive, and that he in connection with his work and job have had access to
Confidential Information relating to the Company’s businesses and their
methods and operations.  For purposes of this Agreement,
“Confidential Information” means and includes the
Company’s confidential and/or proprietary information and/or trade secrets
that have been developed or used and/or will be developed and that cannot be
obtained readily by third parties from outside sources.  Confidential
Information includes, by way of example and without limitation, the following
information regarding customers, employees, contractors, its operations and its
markets and the industry not generally known to the public; strategies, methods,
books, records, and documents; recipes, technical information concerning
products, equipment, services, and processes; procurement procedures and pricing
techniques; the names of and other information concerning customers and those
being solicited to be customers, investors, and business relations (such as
contact name, service provided, pricing for that customer, type and amount of
product used, credit and financial data, and/or other information relating to
the Company’s relationship with that customer); pricing strategies and
price curves; positions, plans, and strategies for expansion or acquisitions;
budgets; customer lists; research; financial and sales data; raw materials
purchasing or trading methodologies and terms; evaluations, opinions, and
interpretations of information and data; marketing and merchandising 

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techniques; prospective customers’ names and locations; grids and maps;
electronic databases; models; specifications; computer programs; internal
business records; contracts benefiting or obligating the Company; bids or
proposals submitted to any third party; technologies and methods; training
methods and training processes; organizational structure; personnel information,
including salaries of personnel; labor or employee relations or agreements;
payment amounts or rates paid to consultants or other service providers; and
other such confidential or proprietary information.  Information need not
qualify as a trade secret to be protected as Confidential Information under this
Agreement, and the authorized and controlled disclosure of Confidential
Information to authorized parties by Company in the pursuit of its business will
not cause the information to lose its protected status under this
Agreement.  Executive acknowledges and stipulates that this Confidential
Information constitutes a valuable, special, and unique asset used by the
Company in its businesses to obtain a competitive advantage over its
competitors.  Executive further acknowledges that protection of such
Confidential Information against unauthorized disclosure and use is of critical
importance to the Company in maintaining its competitive position and economic
investment, as well as work for its employees.

                      (d)          Unfair Competition Restrictions.  Executive agrees that for a period of twenty- four (24) months following the date of his termination (“Restricted Term”), he will not, directly or indirectly, for himself or for others, anywhere in those areas where the Company currently (including the City of New Orleans and its surrounding parishes, and in those cities or parishes listed in Attachment “A-1” attached hereto) (the “Restricted Area”) conducts or is seeking to conduct business of the same nature as the Company, including the Related Entities, do any of the following, unless expressly authorized by the Board of the Company: Engage in, or assist any person, entity, or business engaged in, the selling or providing of
products or services that would displace the products or services that (i) the Company is currently in the business of providing and was in the business of providing, or is planning to be in the business of providing, at the time of the execution of this Agreement, or (ii) that Executive had involvement in, access to, or received Confidential Information about in the course of employment.  The foregoing is expressly understood to include, without limitation, the business of the manufacturing, selling and/or providing products or services of the same type offered and/or sold by the Company.

          4.          Prohibition on Circumvention.  It is further agreed that during the Restricted Term, Executive cannot circumvent these covenants by alternative means or engage in any of the enumerated prohibited activities in the Restricted Area by means of telephone, telecommunications, satellite communications, correspondence, or other contact from outside the Restricted Area.  Executive further understands that the foregoing restrictions may limit his ability to engage in certain businesses during the Restricted Term, but acknowledge that these restrictions are necessary to protect the Confidential Information and business interests of the Company.

          5.          Proviso.  It is agreed that these covenants do not prevent Executive from using and offering the general management or other skills that he possessed prior to receiving access to Confidential Information and knowledge from the Company.  This Agreement creates an advance approval process, and nothing herein is intended, or will be construed as, a general restriction against Executive’s pursuit of lawful employment in violation of any controlling state or federal laws.  Executive is permitted to engage in activities that would otherwise be prohibited by this covenant if such activities are determined in the sole discretion of the Board of the Company, and authorized in writing, to be of no material threat to the legitimate business interests of the Company.

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          6.          Non-Solicitation of Customers.  For a period of twenty-four (24) months following Executive’s termination of employment or employment agreement, Executive agrees not to call on, service, or solicit competing business from customers of the Company, in the Restricted Area, whom he, within the previous twenty-four (24) months, (i) had or made contact with, or (ii) had access to information and files about; or, induce or encourage any such customer or other source of ongoing business to stop doing business with the Company.  This provision does not prohibit Executive from managing or providing other services or products that are not a product or services currently offered by the Company.

          7.          Non-Solicitation of Employees.  For a period of twenty-four (24) months following the date of Executive’s termination of employment or employment agreement, Executive will not, either directly or indirectly, call on, solicit, encourage, or induce any other employee or officer of the Company, whom he had contact with, knowledge of, or association within the course of employment with the Company to discontinue his or her employment, and will not assist any other person or entity in such a solicitation.

          8.          Non-Disparagement.  Executive covenants and agrees he will not engage in any pattern of conduct that involves the making or publishing of written or oral statements or remarks (including, without limitation, the repetition or distribution of derogatory rumors, allegations, negative reports or comments) which are disparaging, deleterious or damaging to the integrity, reputation or good will of the Company or its respective management or products and services.

          9.          Separability of Covenants.  The covenants contained in Section 3 herein constitute a series of separate but ancillary covenants, one for each applicable parish in the State of Louisiana set forth in this Agreement or Attachment “A-1” hereto.  If in any judicial proceeding, a court shall hold that any of the covenants set forth in Section 3 exceed the time, geographic, or occupational limitations permitted by applicable law, Executive and the Company agree that such provisions shall and are hereby reformed to the maximum time, geographic, or occupational limitations permitted by such laws, Further, in the event a court shall hold unenforceable any of the separate covenants deemed included herein, then such unenforceable covenant or covenants shall be deemed eliminated from the provisions of this Agreement for the
purpose of such proceeding to the extent necessary to permit the remaining separate covenants to be enforced in such proceeding.  Executive and the Company further agree that the covenants in Section 3 shall each be construed as a separate agreement independent of any other provisions of this Agreement, and the existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement, his Employment Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of the covenants of Section 3.

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          10.         Consideration.  Executive acknowledges and agrees that no other consideration for Executive’s covenants in this Agreement, other than that specifically referred to in Section 1 of the Employment Agreement, has or will be paid or furnished to him by the Company or the Related Entities.

          11.         Return of Items.  Upon termination and/or retirement, Executive will return any computer related hardware or software, cell phone, keys, or other data or company property in his possession or control, including all customer list(s), pricing documents, etc., to the Company, except as may be specifically provided for to the contrary in the Employment Agreement.

          12.         Meaning of Certain Terms.  All non-capitalized terms in Sections 3 and 4 are intended to and shall have the same meanings that those terms (to the extent they appear therein) have in La.  R.  S.  23:921.C.  Subject to and only to the extent not consistent with the foregoing sentence, the parties understand the following phrases to have the following meanings:

                       (a)          The phrase “carrying on or engaging in a business similar to the business of the Company” includes engaging, as principal, executive, employee, agent, trustee, advisor, consultant or through the agency of any corporation, partnership, association or agent or agency, in any business which conducts business in competition with the Company (including its Related Entities) or being the owner of more than 1% of the outstanding capital stock of any corporation, or an officer, director, or employee of any corporation or other entity, (other than the Company or a corporation or other entity, affiliated with the Company) or a member or employee or any partnership, or an owner or employee of any other business, which conducts a business or provides a
service in the Restricted Area in competition with the Company or any affiliated corporation or other entity.  Moreover, the term also includes (i) directly or indirectly inducing any current customers of the Company, or any affiliated corporation or other entity, to patronize any product or service business in competition with the Company or any affiliated corporation or other entity, (ii) canvassing, soliciting, or accepting any product or service business of the type conducted by the Company or any affiliated corporation or other entity (iii) directly or indirectly requesting or advising any current customers of the Company or any affiliated corporation or other entity, to withdraw, curtail or cancel such customer’s business with the Company or any affiliated corporation or other entity; or (iv) directly or indirectly disclosing to any other person, firm, corporation or entity, the names or addresses of any of the current customers of the Company or any affiliated corporation or other
entity or the rates or other terms on which the Company provides services to its customers.  In addition, the term includes directly or indirectly, through any person, firm, association, corporation or other entity with which Executive is now or may hereafter become associated, causing or inducing any present employee of the Company or any affiliated corporation or other entity to leave the employ of the Company or any affiliated corporation or other entity to accept employment with Executive or with such person, firm, association, corporation, or other entity.

                    (b)          The phrase “a business similar to the business of the Company” means environmental services to the exploration, production and maritime industries, mat sales and rentals, drilling fluids, and water treatment and related technology; and, heavy oil and air treatment.

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                    (c)          The phrase “carries on a like business” includes, without limitation, actions taken by or through a wholly-owned subsidiary or other affiliated corporation or entity.

                    (d)          All references to the Company shall also be deemed to refer to and include the Related Entities.

          13.         Reasonable Restrictions.  Executive represents to the Company that the enforcement of the restrictions contained in this Agreement would not be unduly burdensome to Executive and acknowledges that Executive is willing and able, subject to the Restricted Area as defined herein, to compete in other geographical areas not prohibited by this Agreement.  The parties to this Agreement hereby agree that the covenants contained in this Agreement are reasonable.

          14.         Entire Agreement.  Except with respect to the Employment Agreement executed concurrently herewith, and with respect to certain matters included in a separate Agreement being entered into between Executive and the Company on the date of this Agreement (“Appendix B and B-1”), this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter of this Agreement and supersedes and is in full substitution for any and all prior agreements and understandings whether written or oral between said parties relating to the subject matter of this Agreement.  This Agreement shall not supersede or substitute for, nor be superseded or substituted by, the Employment Agreement, but shall have full force and effect concurrently therewith.

          15.         Amendment.  This Agreement may not be amended or modified in any respect except by an agreement in writing executed by the parties in the same manner as this Agreement except as provided in Section 18 of this Agreement.

          16.         Assignment.  This Agreement (including, without limitation, Executive’s obligations under Sections 3 and 4) may not be assigned by the Company in a manner inconsistent with 3.8 of Executive’s Employment Agreement without the consent of Executive in connection with the sale, transfer or other assignment of all or substantially all of the capital stock or assets of, or the merger of, the Company, provided that the party acquiring such capital stock or assets or into which the company merges assumes in writing the obligations of the Company hereunder and provided further that no such assignment shall release the Company from its obligations hereunder.  This Agreement (including, without limitation, Executive’s obligations under Sections 3 and 4) may not be assigned or encumbered in any way by Executive without the
written consent of the Company.

          17.         Successors.  This Agreement (including, without limitation, Executive’s obligations under Sections 3 and 4) shall be binding upon and shall inure to the benefit of and be enforceable by each of the parties and their respective successors and assigns.

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          18.         Unenforceable Provisions.  If, and to the extent that, any section, paragraph, part, term and/or provision of this Agreement would otherwise be found null, void, or unenforceable under applicable law by any court of competent jurisdiction, that section, paragraph, part, term and/or provision shall automatically not constitute part of this Agreement.  Each section, paragraph, part, term and/or provision of this Agreement is intended to be and is severable from the remainder of this Agreement.  If, for any reason, any section, paragraph, part, term and/or provision herein is determined not to constitute part of this Agreement or to be null, void, or unenforceable under applicable law by any court of competent jurisdiction, the operation of the other sections, paragraphs, parts, terms and/or provisions of this Agreement as may
remain otherwise intelligible shall not be impaired or otherwise affected and shall continue to have full force and effect and bind the parties hereto.

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          19.          Remedies.

                        (a)          Executive agrees that a breach or violation of Section 3 or 4 of this Agreement by Executive shall entitle the Company as a matter of right, to an injunction, without necessity of posting bond, issued by any court of competent jurisdiction, restraining any further or continued breach or violation of such provisions.  Such right to an injunction shall be cumulative and in addition, and not in lieu of, any other remedies to which the Company may show themselves justly entitled, including, but not limited to, specific performance and damages.  The parties specifically agree that the remedy of damages alone is inadequate.

                         (b)          In the event that Executive knowingly and intentionally fails in any material respect to perform any of his material obligations under this Agreement, the Company may elect (i) to cease any payments under the Employment Agreement and recover all payments made to Executive under the Employment Agreement on or subsequent to the date of the failure, (ii) obtain an injunction and/or (iii) exercise any and all other remedies available by law.

                         (c)          Notwithstanding the foregoing subsection (b), Executive  will have no liability or responsibility for: (i) inadvertent disclosure or use of the Information if (x) he uses the same degree of care in safeguarding the Information that the Company uses to safeguard information of like importance and (y) upon discovery of such inadvertent disclosure or use of such material, Executive immediately uses his best efforts, including the commencement of litigation, if necessary, to prevent any use thereof by the person or persons to whom it has been disclosed and to prevent any further incidental disclosure thereof; and (ii) , disclosure of Information (x) that is required by law, (y) that is made pursuant to a proper subpoena from a court or administrative agency
of competent jurisdiction from a court or administrative agency of competent jurisdiction or (z) that is made upon written demand of an official involved in regulating you if before disclosure is made, Executive immediately notifies the Company of the requested disclosure by the most immediate means of communication available and confirms in writing such notification within one business day thereafter.

          20.         Notice.  All notices, consents, requests, approvals or other communications in connection with this Agreement and all legal process in regard hereto shall be in writing and shall be deemed validly delivered, if delivered personally or sent by certified mail, postage prepaid.  Unless changed by written notice pursuant hereto, the address of each party for the purposes hereof is as follows:

	
  
 
  	
  
If to Executive:
  	
  
If to the Company:
  
	
  
 
  	
  
 
  	
  
3850   Causeway Blvd., Suite 1770
  
	
  
 
  	
  
 
  	
  
Metairie, LA   70002-1752
  
	
  
 
  	
  
 
  	
  
Attn:   Chairman of Board
  

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Notice given by mail as set out above shall be deemed delivered only when actually received.

          21.          Descriptive Headings.  The descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

          22.          Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Louisiana without regard to conflicts of law principles.

          IN WITNESS WHEREOF, the parties have duly executed this Louisiana Unfair Competition, Confidentiality and Non-competition Agreement as of the date first above written.

	
  
 
  	
  
Executive
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
/s/ Paul L.   Howes
  
	
   
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Paul L.   Howes
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
Newpark Resources, Inc.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ David   Hunt
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
David Hunt,   Board Chairman
  

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ATTACHMENT A-1 (Restricted Areas)
 States and areas in which Newpark Resources, Inc. currently does business:

	
  
1.
  	
  
Louisiana
  	
  
5
  	
  
Montana
  
	
  
2.
  	
  
Texas
  	
  
6.
  	
  
Colorado
  
	
  
3.
  	
  
Nevada
  	
  
7.
  	
  
South Dakota
  
	
  
4.
  	
  
Wyoming
  	
  
8.
  	
  
Oklahoma
  

Other areas:

	
  
9.
  	
  
The Gulf of Mexico, off   what is commonly the “Gulf Coast.”
  
	
  
 
  	
  
 
  
	
  
10.
  	
  
Western Canada
  

Louisiana Parishes in which Newpark Resources, Inc currently does business:

	
  
1.
  	
  
Acadia
  	
  
17.
  	
  
Lafayette
  
	
  
2.
  	
  
Allen
  	
  
18.
  	
  
Lafourche
  
	
  3.
  	
  
Assumption
  	
  
19.
  	
  
Livingston
  
	
  
4.
  	
  
Avoyelles
  	
  
20.
  	
  
Plaquemine
  
	
  
5.
  	
  
Beauregard
  	
  
21.
  	
  
Pointe   Coupee
  
	
  
6.
  	
  
Bossier
  	
  
22.
  	
  
Rapides
  
	
  
7.
  	
  
Calcasieu
  	
  
23.
  	
  
Richland
  
	
  
8.
  	
  
Cameron
  	
  
24.
  	
  
St.  Charles
  
	
  9.
  	
  
East   Ascension
  	
  
25.
  	
  
St.  James
  
	
  
10.
  	
  
East Baton   Rouge
  	
  
26.
  	
  
St.  Landry
  
	
  
11.
  	
  
Evangeline
  	
  
27.
  	
  
St.  Martin
  
	
  
12.
  	
  
Grant
  	
  
28.
  	
  
St.  Mary
  
	
  
13.
  	
  
Iberia
  	
  
29.
  	
  
St.  Tammany
  
	
  
14.
  	
  
Iberville
  	
  
30.
  	
  
Terrebonne
  
	
  15.
  	
  
Jeff Davis
  	
  
31.
  	
  
Vermilion
  
	
  
16.
  	
  
Jefferson
  	
  
32.
  	
  
Washington
  

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APPENDIX B

TEXAS AND NON-LOUISIANA UNFAIR COMPETITION, CONFIDENTIALITY AND
 NON-COMPETITION AGREEMENT

          THIS UNFAIR COMPETITION, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT (this “Ancillary Agreement”) dated and effective as of March 22, 2006 is made by Paul L. Howes (“Executive”) and Newpark Resources, Inc.  (the “Company”).

RECITALS:

          WHEREAS, Executive and the Company have entered into an Agreement dated this date (the “Employment Agreement”), to which this Agreement is ancillary and incorporated by reference, pursuant to which, among other things, the Company agrees to make certain payments to Executive; and

          WHEREAS, pursuant to the Employment and Settlement Agreement, the Company and Executive have agreed to enter into this Ancillary Agreement; and

          NOW, THEREFORE, in consideration of Executive’s Employment Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Executive and the Company hereby covenant and agree as follows:

          1.          Definitions.  Each capitalized term not defined herein shall have the meaning assigned to that term in the Employment Agreement.

          2.          Confidentiality.  Executive acknowledges that in the course of his relationship with the Company and its related entities Newpark Drilling Fluids, Newpark Environmental Services, SOLOCO, Newpark Canada, and Newpark Water (the “Related Entities” or referred to collectively with Newpark Resources as the “Company”) he has in the past received, and may in the future receive, certain trade secrets, programs, lists of customers and other confidential or proprietary information and knowledge concerning the business of the Company and its Related Entities (hereinafter collective referred to as “Confidential Information”) which the Company desires to protect.  Executive understands that the information is confidential and he agrees not to reveal the
Confidential Information to anyone outside the Company so long as the confidential or secret nature of the Confidential Information shall continue, other than such disclosure as authorized by the Company or is made to a person transacting business with the Company who has reasonable need for such Confidential Information.  Executive further agrees that he will at no time use the Confidential Information for or on behalf of any person other than the Company for any purpose.  Executive further agrees to comply with the confidentiality and other provisions set forth in this Agreement, the terms of which are supplemental to any statutory or fiduciary or other obligations relating to these matters.  On the termination of employment or his Employment Agreement, Executive shall surrender to the Company all papers, documents, writings and other property produced by him or coming into his possession by or through his relationship with the Company or relating to the Confidential Information and
Executive agrees that all such materials will at all times remain the property of the Company.

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          3.          Specific Covenants.

                        (a)          This Agreement.  The terms of this Agreement constitute Confidential Information, which Executive shall not disclose to anyone other than his spouse, attorney, accountant, or as may be required by the Company or by law.

                        (b)          Company Property.  All written materials, customer or other lists or data bases, records, data, and other documents prepared or possessed by you during your employment with the Company are the Company’s property.  All information, ideas, concepts, improvements, discoveries, and inventions that are conceived, made, developed, or acquired by you individually or in conjunction with others during your employment (whether during business hours and whether on the Company’s premises or otherwise) which relate to the Company’s business, products, or services are the Company’s sole and exclusive property.  All memoranda, notes, records, files, correspondence, drawings, manuals, models, specifications, computer programs, maps, and all
other documents, data, or materials of any type embodying such information, ideas, concepts, recipes, inventory, prices, improvements, discoveries, and inventions are the Company’s property.  At the termination of Executive’s employment with the Company for any reason, Executive shall return all of the Company’s documents, data, or other Company Property to the Company.  Included in the above are all such data that Executive had access to, over, or possessed.  The Company desires by this Agreement to protect its economic investment in its current and future operations and business.

                        (c)          Confidential Information; Non-Disclosure.  Executive acknowledges and stipulates that the business of the Company is highly competitive, cost and price sensitive, and that he in connection with his work and job have had access to Confidential Information relating to the Company Resource’s businesses and their methods and operations.  For purposes of this Agreement, “Confidential Information” means and includes the Company’s confidential and/or proprietary information and/or trade secrets that have been developed or used and/or will be developed and that cannot be obtained readily by third parties from outside sources.  Confidential Information includes, by way of example and without limitation, the following
information regarding customers, employees, contractors, its operations and its markets and the industry not generally known to the public; strategies, methods, books, records, and documents; recipes, technical information concerning products, equipment, services, and processes; procurement procedures and pricing techniques; the names of and other information concerning customers and those being solicited to be customers, investors, and business relations (such as contact name, service provided, pricing for that customer, type and amount of product used, credit and financial data, and/or other information relating to the Company’s relationship with that customer); pricing strategies and price curves; positions, plans, and strategies for expansion or acquisitions; budgets; customer lists; research; financial and sales data; raw materials purchasing or trading methodologies and terms; evaluations, opinions, and interpretations of information and data; marketing and merchandising techniques;
prospective customers’ names and locations; grids and 

23

maps; electronic databases; models; specifications; computer programs; internal business records; contracts benefiting or obligating the Company; bids or proposals submitted to any third party; technologies and methods; training methods and training processes; organizational structure; personnel information, including salaries of personnel; labor or employee relations or agreements; payment amounts or rates paid to consultants or other service providers; and other such confidential or proprietary information.  Information need not qualify as a trade secret to be protected as Confidential Information under this Agreement, and the authorized and controlled disclosure of Confidential Information to authorized parties by Company in the pursuit of its business will not cause the information to lose its protected status under this Agreement.  Executive acknowledges and stipulates that this Confidential Information constitutes a valuable, special, and unique
asset used by the Company in its businesses to obtain a competitive advantage over its competitors.  Executive further acknowledges that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to the Company in maintaining its competitive position and economic investment, as well as work for its employees.

                        (d)             Unfair Competition Restrictions.  Executive agrees that for a period of twenty-four (24) months following the date of his termination or such lesser period of time as is the maximum amount permitted by law (“Restricted Term”), he will not, directly or indirectly, for himself or for others, anywhere in those areas where the Company currently (including the City of Houston and its surrounding counties, and in those cities or counties or states listed in Attachment “B-1” attached hereto) (the “Restricted Area”) conducts or is seeking to conduct business of the same nature as Newpark Resources and its Related Entities, do any of the following, unless expressly authorized by the Board
of the Company: Engage in, or assist any person, entity, or business engaged in, the selling or providing of products or services that would displace the products or services that (i) the Company is currently in the business of providing and was in the business of providing, or is planning to be in the business of providing, at the time of the execution of this Agreement, or (ii) that Executive had involvement in, access to, or received Confidential Information about in the course of employment.  The foregoing is expressly understood to include, without limitation, the business of the manufacturing, selling and/or providing products or services of the same type offered and/or sold by the Company.

          4.          Prohibition on Circumvention.  It is further agreed that during the Restricted Term, Executive cannot circumvent these covenants by alternative means or engage in any of the enumerated prohibited activities in the Restricted Area by means of telephone, telecommunications, satellite communications, correspondence, or other contact from outside the Restricted Area.  Executive further understands that the foregoing restrictions may limit his ability to engage in certain businesses during the Restricted Term, but acknowledge that these restrictions are necessary to protect the Confidential Information and business interests of the Company.

          5.          Proviso.  It is agreed that these covenants do not prevent Executive from using and offering the general management or other skills that he possessed prior to receiving access to Confidential Information and knowledge from the Company.  This Agreement creates an advance approval process, and nothing herein is intended, or will be construed as, a general restriction against Executive’s pursuit of lawful employment in violation of any controlling state or federal laws.  Executive is permitted to engage in activities that would otherwise be prohibited by this covenant if such activities are determined in the sole discretion of the Board of the Company, and authorized in writing, to be of no material threat to the legitimate business interests of the Company.

24

          6.          Non-Solicitation of Customers.  For a period of twenty-four (24) months following Executive’s termination of employment or employment agreement, Executive agrees not to call on, service, or solicit competing business from customers of the Company, in the Restricted Area, whom he, within the previous twenty-four (24) months, (i) had or made contact with, or (ii) had access to information and files about; or, induce or encourage any such customer or other source of ongoing business to stop doing business with the Company.  This provision does not prohibit Executive from managing or providing other services or products that are not a product or services currently offered by the Company.

          7.          Non-Solicitation of Employees.  For a period of twenty-four (24) months following the date of Executive’s termination of employment or employment agreement, Executive will not, either directly or indirectly, call on, solicit, encourage, or induce any other employee or officer of the Company, whom he had contact with, knowledge of, or association within the course of employment with the Company to discontinue his or her employment, and will not assist any other person or entity in such a solicitation.

          8.          Non-Disparagement.  Executive covenants and agrees he will not engage in any pattern of conduct that involves the making or publishing of written or oral statements or remarks (including, without limitation, the repetition or distribution of derogatory rumors, allegations, negative reports or comments) which are disparaging, deleterious or damaging to the integrity, reputation or good will of the Company or its respective management or products and services.

          9.          Separability of Covenants.  The covenants contained in Section 3 herein constitute a series of separate but ancillary covenants, one for each applicable county in the State of Texas and/or each area of operation in each state, county, and area as set forth in this Agreement or Attachment “B- 1” hereto.  If in any judicial proceeding, a court shall hold that any of the covenants set forth in Section 3 exceed the time, geographic, or occupational limitations permitted by applicable law, Executive and the Company agree that such provisions shall and are hereby reformed to the maximum time, geographic, or occupational limitations permitted by such laws.  Further, in the event a court shall hold unenforceable any of the separate covenants deemed included herein, then such unenforceable covenant or covenants shall be
deemed eliminated from the provisions of this Agreement for the purpose of such proceeding to the extent necessary to permit the remaining separate covenants to be enforced in such proceeding.  Executive and the Company further agree that the covenants in Section 3 shall each be construed as a separate agreement independent of any other provisions of this Agreement, and the existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement or Employment Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of the covenants of Section 3.

25

          10.          Consideration.  Executive acknowledges and agrees that no other consideration for Executive’s covenants in this Agreement, other than that specifically referred to in Section 1 of the Employment Agreement, has or will be paid or furnished to him by the Company or the Related Entities.

          11.          Return of Items.  Upon termination and/or retirement, Executive will return any computer related hardware or software, cell phone, keys, or other data or company property in his possession or control, including all customer list(s), pricing documents, etc., to the Company, except as may be specifically provided for to the contrary in Executive’s Employment Agreement.

          12.          Meaning of Certain Terms.  The parties understand the following phrases to have the following meanings:

                         (a)          The phrase “carrying on or engaging in a business similar to the business of the Company” includes engaging, as principal, executive, employee, agent, trustee, advisor, consultant or through the agency of any corporation, partnership, association or agent or agency, in any business which conducts business in competition with the Company (including its Related Entities) or being the owner of more than 1% of the outstanding capital stock of any corporation, or an officer, director, or employee of any corporation or other entity, (other than the Company or a corporation or other entity, affiliated with the Company) or a member or employee or any partnership, or an owner or employee of any other business, which conducts a business or
provides a service in the Restricted Area in competition with the Company or any affiliated corporation or other entity.  Moreover, the term also includes (i) directly or indirectly inducing any current customers of the Company, or any affiliated corporation or other entity, to patronize any product or service business in competition with the Company or any affiliated corporation or other entity, (ii) canvassing, soliciting, or accepting any product or service business of the type conducted by the Company or any affiliated corporation or other entity (iii) directly or indirectly requesting or advising any current customers of the Company or any affiliated corporation or other entity, to withdraw, curtail or cancel such customer’s business with the Company or any affiliated corporation or other entity; or (iv) directly or indirectly disclosing to any other person, firm, corporation or entity, the names or addresses of any of the current customers of the Company or any affiliated corporation
or other entity or the rates or other terms on which the Company provides services to its customers.  In addition, the term includes directly or indirectly, through any person, firm, association, corporation or other entity with which Executive is now or may hereafter become associated, causing or inducing any present employee of the Company or any affiliated corporation or other entity to leave the employ of the Company or any affiliated corporation or other entity to accept employment with Executive or with such person, firm, association, corporation, or other entity.

                       (b)          The phrase “a business similar to the business of the Company” means environmental services to the exploration, production and maritime industries, mat sales and rentals, drilling fluids, and water treatment and related technology; and, heavy oil and air treatment.

26

                       (c)          The phrase “carries on a like business” includes, without limitation, actions taken by or through a wholly-owned subsidiary or other affiliated corporation or entity.

                        (d)          All references to the Company shall also be deemed to refer to and include

          13.          Reasonable Restrictions.  Executive represents to the Company that the enforcement of the restrictions contained in this Agreement would not be unduly burdensome to Executive and acknowledges that Executive is willing and able, subject to the Restricted Area as defined herein, to compete in other geographical areas not prohibited by this Agreement.  The parties to this Agreement hereby agree that the covenants contained in this Agreement are reasonable.

          14.          Entire Agreement.  Except with respect to the Employment Agreement executed concurrently herewith, and with respect to certain matters included in a separate Agreement being entered into between Executive and the Company on the date of this Agreement (“Appendix B and B-1”), this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter of this Agreement and supersedes and is in full substitution for any and all prior agreements and understandings whether written or oral between said parties relating to the subject matter of this Agreement.  This Agreement shall not supersede or substitute for, nor be superseded or substituted by, the Employment Agreement, but shall have full force and effect concurrently therewith.

          15.          Amendment.  This Agreement may not be amended or modified in any respect except by an agreement in writing executed by the parties in the same manner as this Agreement except as provided in Section 18 of this Agreement.

          16.          Assignment.  This Agreement (including, without limitation, Executive’s obligations under Sections 3 and 4) may not be assigned by the Company in a manner inconsistent with 3.8 of Executive’s Employment Agreement without the consent of Executive in connection with the sale, transfer or other assignment of all or substantially all of the capital stock or assets of, or the merger of, the Company, provided that the party acquiring such capital stock or assets or into which the company merges assumes in writing the obligations of the Company hereunder and provided further that no such assignment shall release the Company from its obligations hereunder.  This Agreement (including, without limitation, Executive’s obligations under Sections 3 and 4) may not be assigned or encumbered in any way by Executive without the
written consent of the Company.

          17.          Successors.  This Agreement (including, without limitation, Executive’s obligations under Sections 3 and 4) shall be binding upon and shall inure to the benefit of and be enforceable by each of the parties and their respective successors and assigns.

27

          18.          Unenforceable Provisions.  If, and to the extent that, any section, paragraph, part, term and/or provision of this Agreement would otherwise be found null, void, or unenforceable under applicable law by any court of competent jurisdiction, that section, paragraph, part, term and/or provision shall automatically not constitute part of this Agreement.  Each section, paragraph, part, term and/or provision of this Agreement is intended to be and is severable from the remainder of this Agreement.  If, for any reason, any section, paragraph, part, term and/or provision herein is determined not to constitute part of this Agreement or to be null, void, or unenforceable under applicable law by any court of competent jurisdiction, the operation of the other sections, paragraphs, parts, terms and/or provisions of this Agreement as
may remain otherwise intelligible shall not be impaired or otherwise affected and shall continue to have full force and effect and bind the parties hereto.

28

          19.          Remedies.

                         (a)          Executive agrees that a breach or violation of Section 3 or 4 of this Agreement by Executive shall entitle the Company as a matter of right, to an injunction, without necessity of posting bond, issued by any court of competent jurisdiction, restraining any further or continued breach or violation of such provisions.  Such right to an injunction shall be cumulative and in addition, and not in lieu of, any other remedies to which the Company may show themselves justly entitled, including, but not limited to, specific performance and damages.  The parties specifically agree that the remedy of damages alone is inadequate.

                          (b)          In the event that Executive knowingly and intentionally fails in any material respect to perform any of his material obligations under this Agreement, the Company may elect (i) to cease any payments due under the Employment Agreement and recover all payments made to Executive under the Employment Agreement on or subsequent to the date of the failure, (ii) obtain an injunction and/or (iii) exercise any and all other remedies available by law.

Notwithstanding the foregoing subsection (b), Executive  will have no liability or responsibility for: (i) inadvertent disclosure or use of the Information if (x) he uses the same degree of care in safeguarding the Information that the Company uses to safeguard information of like importance and (y) upon discovery of such inadvertent disclosure or use of such material, Executive immediately uses his best efforts, including the commencement of litigation, if necessary, to prevent any use thereof by the person or persons to whom it has been disclosed and to prevent any further incidental disclosure thereof; and (ii) , disclosure of Information (x) that is required by law, (y) that is made pursuant to a proper subpoena from a court or administrative agency of competent jurisdiction from a court or administrative agency of competent jurisdiction or (z) that is made upon written demand of an official involved in regulating you if before disclosure is made,
Executive immediately notifies the Company of the requested disclosure by the most immediate means of communication available and confirms in writing such notification within one business day thereafter.

          20.          Notice.  All notices, consents, requests, approvals or other communications in connection with this Agreement and all legal process in regard hereto shall be in writing and shall be deemed validly delivered, if delivered personally or sent by certified mail, postage prepaid.  Unless changed by written notice pursuant hereto, the address of each party for the purposes hereof is as follows:

	
  
 
  	
  
If to Executive:
  	
  
If to the Company:
  
	
  
 
  	
  
Mr. Paul L.   Howes
  	
  
3850   Causeway Blvd., Suite 1770
  
	
  
 
  	
  
 
  	
  
Metairie, LA   70002-1752
  
	
  
 
  	
  
 
  	
  
Attn:   Chairman of Board
  

29

Notice given by mail as set out above shall be deemed delivered only when actually received.

          21.          Descriptive Headings.  The descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

          22.          Governing Law.  This Appendix B shall be governed by and construed and enforced in accordance with the laws of the State of Texas (other than the choice of law principles thereof).

          IN WITNESS WHEREOF, the parties have duly executed this Unfair Competition, Confidentiality and Non-competition Agreement as of the date first above written.

	
  
 
  	
  
Executive:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
/s/ Paul L.   Howes
  
	
   
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Paul L.   Howes
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
Newpark Resources, Inc.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ David   Hunt
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
David Hunt,   Board Chairman
  

30

ATTACHMENT B-1 (Restricted Areas)
Areas in which Newpark Resources, Inc. currently does business:

	
  
1.
  	
  
Louisiana
  	
  
5.
  	
  
Wyoming
  
	
  
2.
  	
  
Texas
  	
  
6.
  	
  
Utah
  
	
  
3.
  	
  
Oklahoma
  	
  
7.
  	
  
Nevada
  
	
  
4.
  	
  
Colorado
  	
  
8.
  	
  
Montana
  

Other states or areas in which Newpark Resources, Inc currently does business:

	
  
9.
  	
  
Western   Canada
  
	
  
 
  	
  
 
  
	
  
10.
  	
  
Gulf of   Mexico (off the “Gulf Coast”)
  

Texas Counties in which Newpark Resources, Inc currently does business:

	
  
1.
  	
  
Andrews
  	
  
21.
  	
  
Ector
  	
  
41.
  	
  
Karnes
  	
  
61.
  	
  
Pecos
  	
  
81.
  	
  
Val Verde
  
	
  2.
  	
  
Aransas
  	
  
22.
  	
  
Fayette
  	
  
42.
  	
  
Kenedy
  	
  
62.
  	
  
Polk
  	
  
82.
  	
  
Victoria
  
	
  
3.
  	
  
Austin
  	
  
23.
  	
  
Fort Bend
  	
  
43.
  	
  
Kleberg
  	
  
63.
  	
  
Reagan
  	
  
83.
  	
  
Waller
  
	
  
4.
  	
  
Bee
  	
  
24.
  	
  
Freestone
  	
  
44.
  	
  
Lavaca
  	
  
64.
  	
  
Reeves
  	
  
84.
  	
  
Washington
  
	
  5.
  	
  
Bienville
  	
  
25.
  	
  
Gaines
  	
  
45.
  	
  
Leon
  	
  
65.
  	
  
Robertson
  	
  
85.
  	
  
Webb
  
	
  
6.
  	
  
Borden
  	
  
26.
  	
  
Galveston
  	
  
46.
  	
  
Liberty
  	
  
66.
  	
  
Roosevelt
  	
  
86.
  	
  
Wharton
  
	
  
7.
  	
  
Brazoria
  	
  
27.
  	
  
Glasscock
  	
  
47.
  	
  
Limestone
  	
  
67.
  	
  
Rusk
  	
  
87.
  	
  
Winkler
  
	
  8.
  	
  
Brazos
  	
  
28.
  	
  
Goliad
  	
  
48.
  	
  
Live Oak
  	
  
68.
  	
  
San Patricio
  	
  
88.
  	
  
Yoakum
  
	
  
9.
  	
  
Brooks
  	
  
29.
  	
  
Gregg
  	
  
49.
  	
  
Loving
  	
  
69.
  	
  
Schleicher
  	
  
89.
  	
  
Zapata
  
	
  
10.
  	
  
Burleson
  	
  
30.
  	
  
Hardin
  	
  
50.
  	
  
Lubbock
  	
  
70.
  	
  
Scurry
  	
  
 
  	
  
 
  
	
  11.
  	
  
Calhoun
  	
  
31.
  	
  
Harris
  	
  
51.
  	
  
Marion
  	
  
71.
  	
  
Shelby
  	
  
 
  	
  
 
  
	
  
12.
  	
  
Cameron
  	
  
32.
  	
  
Harrison
  	
  
52.
  	
  
Matagorda
  	
  
72.
  	
  
Snyder
  	
  
 
  	
  
 
  
	
  
13.
  	
  
Chambers
  	
  
33.
  	
  
Hidalgo
  	
  
53.
  	
  
McMullen
  	
  
73.
  	
  
Starr
  	
  
 
  	
  
 
  
	
  14.
  	
  
Cochran
  	
  
34.
  	
  
Hockley
  	
  
54.
  	
  
Motley
  	
  
74.
  	
  
Sterling
  	
  
 
  	
  
 
  
	
  
15.
  	
  
Colorado
  	
  
35.
  	
  
Houston
  	
  
55.
  	
  
Nacogdoches
  	
  
75.
  	
  
Terrell
  	
  
 
  	
  
 
  
	
  
16.
  	
  
Crane
  	
  
36.
  	
  
Howard
  	
  
56.
  	
  
Navarro
  	
  
76.
  	
  
Terry
  	
  
 
  	
  
 
  
	
  17.
  	
  
Crockett
  	
  
37.
  	
  
Jackson
  	
  
57.
  	
  
Newton
  	
  
77.
  	
  
Titus
  	
  
 
  	
  
 
  
	
  
18.
  	
  
Culberson
  	
  
38.
  	
  
Jefferson
  	
  
58.
  	
  
Nueces
  	
  
78.
  	
  
Tom Green
  	
  
 
  	
  
 
  
	
  
19.
  	
  
Dewitt
  	
  
39.
  	
  
Jim Hogg
  	
  
59.
  	
  
Orange
  	
  
79.
  	
  
Upshur
  	
  
 
  	
  
 
  
	
  20.
  	
  Duval
  	
  40.
  	
  Jim Wells
  	
  60.
  	
  Panola
  	
  80.
  	
  Upton
  	
   
  	
   
  

31EX-10.1

METHODE ELECTRONICS, INC.

DEFERRED COMPENSATION PLAN

Effective May 1, 2006

Copyright © 2006

By Clark Consulting, Inc.

1

All Rights Reserved

TABLE OF CONTENTS

	 	 	 
	 	 	Page
	ARTICLE 1

ARTICLE 2

2.1

2.2

ARTICLE 3

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

3.10

ARTICLE 4

4.1

4.2

4.3

4.4

ARTICLE 5

5.1

5.2

ARTICLE 6

6.1

6.2

ARTICLE 7

7.1

7.2

ARTICLE 8

8.1

8.2

ARTICLE 9

9.1

9.2

ARTICLE 10

10.1

10.2

10.3

10.4

10.5

10.6

ARTICLE 11

11.1

11.2

11.3

	 	Definitions

Selection, Enrollment, Eligibility

Selection by Committee

Enrollment and Eligibility Requirements; Commencement of Participation

Deferral Commitments/Company Contribution Amounts/Company Restoration Matching Amounts /Vesting/Crediting/Taxes

Minimum Deferrals

Maximum Deferral

Election to Defer; Effect of Election Form

Withholding and Crediting of Annual Deferral Amounts

Company Contribution Amount

Company Restoration Matching Amount

Crediting of Amounts after Benefit Distribution

Vesting

Crediting/Debiting of Account Balances

FICA and Other Taxes

Scheduled Distribution; Unforeseeable Emergencies

Scheduled Distribution

Postponing Scheduled Distributions

Other Benefits Take Precedence Over Scheduled Distributions

Unforeseeable Emergencies

Change In Control Benefit

Change in Control Benefit

Payment of Change in Control Benefit

Retirement Benefit

Retirement Benefit

Payment of Retirement Benefit

Termination Benefit

Termination Benefit

Payment of Termination Benefit

Disability Benefit

Disability Benefit

Payment of Disability Benefit

Death Benefit

Death Benefit

Payment of Death Benefit

Beneficiary Designation

Beneficiary

Beneficiary Designation; Change; Spousal Consent

Acknowledgement

No Beneficiary Designation

Doubt as to Beneficiary

Discharge of Obligations

Leave of Absence

Paid Leave of Absence

Unpaid Leave of Absence

Leaves Resulting in Separation from Service
	
 
	 	 
	ARTICLE 12

12.1

12.2

12.3

12.4

ARTICLE 13

13.1

13.2

13.3

13.4

13.5

13.6

ARTICLE 14

14.1

ARTICLE 15

15.1

15.2

15.3

15.4

15.5

ARTICLE 16

16.1

16.2

16.3

ARTICLE 17

17.1

17.2

17.3

17.4

17.5

17.6

17.7

17.8

17.9

17.10

17.11

17.12

17.13

17.14

17.15

17.16

17.17

17.18

	 	Termination of Plan, Amendment or Modification

Termination of Plan

Amendment

Plan Agreement

Effect of Payment

Administration

Committee Duties

Administration Upon Change In Control

Agents

Binding Effect of Decisions

Indemnity of Committee

Employer Information

Other Benefits and Agreements

Coordination with Other Benefits

Claims Procedures

Presentation of Claim

Notification of Decision

Review of a Denied Claim

Decision on Review

Legal Action

Trust

Establishment of the Trust

Interrelationship of the Plan and the Trust

Distributions From the Trust

Miscellaneous

Status of Plan

Unsecured General Creditor

Employer’s Liability

Nonassignability

Not a Contract of Employment

Furnishing Information

Terms

Captions

Governing Law

Notice

Successors

Spouse’s Interest

Validity

Incompetent

Court Order

Distribution in the Event of Income Inclusion Under 409A

Deduction Limitation on Benefit Payments

Insurance

2

METHODE ELECTRONICS, INC.

DEFERRED COMPENSATION PLAN

Effective May 1, 2006

Purpose

The purpose of this Plan is to provide specified benefits to a select group of management or
highly compensated Employees who contribute materially to the continued growth, development and
future business success of Methode Electronics, Inc., a Delaware corporation, and its subsidiaries,
if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for purposes of
Title I of ERISA.

ARTICLE 1

Definitions

For the purposes of this Plan, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:

	1.1	 	“Account Balance” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to the sum of the Participant’s Annual Accounts. The Account Balance shall be
a bookkeeping entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her designated
Beneficiary, pursuant to this Plan.

	1.2	 	“Annual Account” shall mean, with respect to a Participant, an entry on the records of the
Employer equal to the following amount: (i) the sum of the Participant’s Annual Deferral
Amount, Company Contribution Amount and Company Restoration Matching Amount for any one Plan
Year, plus (ii) amounts credited or debited to such amounts pursuant to this Plan, less (iii)
all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that
relate to the Annual Account for such Plan Year. The Annual Account shall be a bookkeeping
entry only and shall be utilized solely as a device for the measurement and determination of
the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to
this Plan.

	1.3	 	“Annual Deferral Amount” shall mean that portion of a Participant’s Base Salary, Bonus and
LTIP Amounts that a Participant defers in accordance with Article 3 for any one Plan Year,
without regard to whether such amounts are withheld and credited during such Plan Year. In
the event of a Participant’s Retirement, Disability, death or Termination of Employment prior
to the end of a Plan Year, such year’s Annual Deferral Amount shall be the actual amount
withheld prior to such event.

	1.4	 	“Annual Installment Method” shall be an annual installment payment over the number of years
selected by the Participant in accordance with this Plan, calculated as follows: (i) for the
first annual installment, the vested portion of each Annual Account shall be calculated as of
the close of business on or around the Participant’s Benefit Distribution Date, as determined
by the Committee in its sole discretion, and (ii) for remaining annual installments, the
vested portion of each applicable Annual Account shall be calculated on every anniversary of
such calculation date, as applicable. Each annual installment shall be calculated by
multiplying this balance by a fraction, the numerator of which is one and the denominator of
which is the remaining number of annual payments due to the Participant. By way of example,
if the Participant elects a ten (10) year Annual Installment Method as the form of Retirement
Benefit for an Annual Account, the first payment shall be 1/10 of the vested balance of such
Annual Account, calculated as described in this definition. The following year, the payment
shall be 1/9 of the vested balance of such Annual Account, calculated as described in this
definition.

	1.5	 	“Base Salary” shall mean the annual cash compensation relating to services performed during
any calendar year, excluding distributions from nonqualified deferred compensation plans,
bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive
payments, non-monetary awards, director fees and other fees, and automobile and other
allowances paid to a Participant for employment services rendered (whether or not such
allowances are included in the Employee’s gross income). Base Salary shall be calculated
before reduction for compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to
include amounts not otherwise included in the Participant’s gross income under Code Sections
125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided,
however, that all such amounts will be included in compensation only to the extent that had
there been no such plan, the amount would have been payable in cash to the Employee.

	1.6	 	“Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated
in accordance with Article 10, that are entitled to receive benefits under this Plan upon the
death of a Participant.

	1.7	 	“Beneficiary Designation Form” shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee to designate one or
more Beneficiaries.

	1.8	 	“Benefit Distribution Date” shall mean a date that triggers distribution of a Participant’s
vested benefits. A Benefit Distribution Date for a Participant shall be determined upon the
occurrence of any one of the following:

	 	(a)	 	If the Participant Retires, the Benefit Distribution Date for his or her vested
Account Balance shall be the last day of the six-month period immediately following the
date on which the Participant Retires; provided, however, in the event the
Participant changes the Retirement Benefit election for one or more Annual Accounts in
accordance with Section 6.2(b), the Benefit Distribution Date for such Annual
Account(s) shall be postponed in accordance with such section 6.2(b); or

	 	(b)	 	If the Participant experiences a Termination of Employment, the Benefit
Distribution Date for his or her vested Account Balance shall be the last day of the
six-month period immediately following the date on which the Participant experiences a
Termination of Employment; or

	 	(c)	 	If the Participant dies prior to the complete distribution of his or her vested
Account Balance, the Participant’s Benefit Distribution Date shall be the date on which
the Committee is provided with proof that is satisfactory to the Committee of the
Participant’s death; or

	 	(d)	 	If the Participant becomes Disabled, the Participant’s Benefit Distribution
Date shall be the date on which the Participant becomes Disabled; or

	 	(e)	 	If (i) a Change in Control occurs prior to the Participant’s Termination of
Employment, Retirement, death or Disability, and (ii) the Participant has elected to
receive a Change in Control Benefit, as set forth in Section 5.1 below, the
Participant’s Benefit Distribution Date shall be the date on which the Company
experiences a Change in Control, as determined by the Committee in its sole discretion.

	1.9	 	“Board” shall mean the board of directors of the Company.

	1.10	 	“Bonus” shall mean any compensation, in addition to Base Salary and LTIP Amounts, earned by a
Participant for services rendered during a Plan Year, under any Employer’s annual bonus,
quarterly bonus, cash incentive plan or other arrangement designated by the Committee, as
further specified on an Election Form.

	1.11	 	“Change in Control” shall mean any “change in control event” as defined in accordance with
Code Section 409A and related Treasury guidance and Regulations, unless such event would not
constitute a “change in control” under the Participant’s Employment Security Agreement.

	1.12	 	“Change in Control Benefit” shall have the meaning set forth in Article 5.

	1.13	 	“Claimant” shall have the meaning set forth in Section 15.1.

	1.14	 	“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

	1.15	 	“Committee” shall mean the committee described in Article 13.

	1.16	 	“Company” shall mean Methode Electronics, Inc., a Delaware corporation, and any successor to
all or substantially all of the Company’s assets or business.

	1.17	 	“Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in
accordance with Section 3.5.

	1.18	 	“Company Restoration Matching Amount” shall mean, for any one Plan Year, the amount
determined in accordance with Section 3.6.

	1.19	 	“Death Benefit” shall mean the benefit set forth in Article 9.

	1.20	 	“Disability” or “Disabled” shall mean that a Participant is (i) unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income replacement benefits
for a period of not less than 3 months under an accident or health plan covering employees of
the Participant’s Employer. For purposes of this Plan, a Participant shall be deemed Disabled
if determined to be totally disabled by the Social Security Administration, or if determined
to be disabled in accordance with the applicable disability insurance program of such
Participant’s Employer, provided that the definition of “disability” applied under such
disability insurance program complies with the requirements in the preceding sentence.

	1.21	 	“Disability Benefit” shall mean the benefit set forth in Article 8.

	1.22	 	“Election Form” shall mean the form, which may be in electronic format, established from time
to time by the Committee that a Participant completes, signs and returns to the Committee to
make an election under the Plan.

	1.23	 	“Employee” shall mean a person who is an employee of any Employer.

	1.24	 	“Employer(s)” shall mean the Company and/or any of its subsidiaries (now in existence or
hereafter formed or acquired) that have been selected by the Board to participate in the Plan
and have adopted the Plan as a sponsor.

	1.25	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended
from time to time.

	1.26	 	“First Plan Year” shall mean the period beginning May 1, 2006 and ending December 31, 2006.

	1.27	 	“401(k) Plan” shall mean, with respect to an Employer, a plan qualified under Code Section
401(a) that contains a cash or deferral arrangement described in Code Section 401(k), adopted
by the Employer, as it may be amended from time to time, or any successor thereto.

	1.28	 	“LTIP Amounts” shall mean any portion of the cash compensation attributable to a Plan Year
that is earned by a Participant as an Employee under any Employer’s long-term incentive plan
or any other long-term incentive arrangement designated by the Committee, as further specified
on an Election Form.

	1.29	 	“Participant” shall mean any Employee (i) who is selected to participate in the Plan,
(ii) who submits an executed Plan Agreement, Election Form and Beneficiary Designation Form,
which are accepted by the Committee, and (iii) whose Plan Agreement has not terminated.

	1.30	 	“Plan” shall mean the Methode Electronics, Inc. Deferred Compensation Plan, which shall be
evidenced by this instrument and by each Plan Agreement, as they may be amended from time to
time.

	1.31	 	“Plan Agreement” shall mean a written agreement, as may be amended from time to time, which
is entered into by and between an Employer and a Participant. Each Plan Agreement executed by
a Participant and the Participant’s Employer shall provide for the entire benefit to which
such Participant is entitled under the Plan; should there be more than one Plan Agreement, the
Plan Agreement bearing the latest date of acceptance by the Employer shall supersede all
previous Plan Agreements in their entirety and shall govern such entitlement. The terms of
any Plan Agreement may be different for any Participant, and any Plan Agreement may provide
additional benefits not set forth in the Plan or limit the benefits otherwise provided under
the Plan; provided, however, that any such additional benefits or benefit limitations must be
agreed to by both the Employer and the Participant.

	1.32	 	“Plan Year” shall, except for the First Plan Year, mean a period beginning on January 1 of
each calendar year and continuing through December 31 of such calendar year.

	1.33	 	“Retirement”, “Retire(s)” or “Retired” shall mean the separation from service with all
Employers for any reason other than death or Disability, as determined in accordance with Code
Section 409A and related Treasury guidance and Regulations, on or after the earlier of the
attainment of (a) age sixty-five (65) or (b) age fifty-five (55) with five (5) Years of
Service.

	1.34	 	“Retirement Benefit” shall mean the benefit set forth in Article 6.

	1.35	 	“Scheduled Distribution” shall mean the distribution set forth in Section 4.1.

	1.36	 	“Terminate the Plan”, “Termination of the Plan” shall mean a determination by an Employer’s
board of directors that (i) all of its Participants shall no longer be eligible to
participate in the Plan, (ii) no new deferral elections for such Participants shall be
permitted, and (iii) such Participants shall no longer be eligible to receive company
contributions under this Plan.

	1.37	 	“Termination Benefit” shall mean the benefit set forth in Article 7.

	1.38	 	“Termination of Employment” shall mean the separation from service with all Employers,
voluntarily or involuntarily, for any reason other than Retirement, Disability or death, as
determined in accordance with Code Section 409A and related Treasury guidance and Regulations.

	1.39	 	“Trust” shall mean one or more trusts established by the Company in accordance with Article
16.

	1.40	 	“Unforeseeable Emergency” shall mean a severe financial hardship of the Participant or his or
her Beneficiary resulting from (i) an illness or accident of the Participant or Beneficiary,
the Participant’s or Beneficiary’s spouse, or the Participant’s or Beneficiary’s dependent (as
defined in Code Section 152(a)), (ii) a loss of the Participant’s or Beneficiary’s property
due to casualty, or (iii) such other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant or the Participant’s
Beneficiary, all as determined in the sole discretion of the Committee.

	1.41	 	“Years of Service” shall mean the total number of full years in which a Participant has been
employed by one or more Employers. For purposes of this definition, a year of employment
shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first
year of employment, commences on the Employee’s date of hiring and that, for any subsequent
year, commences on an anniversary of that hiring date. The Committee shall make a
determination as to whether any partial year of employment shall be counted as a Year of
Service.

ARTICLE 2

Selection, Enrollment, Eligibility

	2.1	 	Selection by Committee. Participation in the Plan shall be limited to a select group
of management or highly compensated Employees. From that group, the Committee shall select,
in its sole discretion, those individuals who may actually participate in this Plan.

	2.2	 	Enrollment and Eligibility Requirements; Commencement of Participation.

	 	(a)	 	As a condition to participation, each selected Employee who is eligible to
participate in the Plan effective as of the first day of a Plan Year shall complete,
execute and return to the Committee a Plan Agreement, an Election Form and a
Beneficiary Designation Form, prior to the first day of such Plan Year, or such other
earlier deadline as may be established by the Committee in its sole discretion. In
addition, the Committee shall establish from time to time such other enrollment
requirements as it determines, in its sole discretion, are necessary. With respect to
the First Plan Year, each selected Employee must complete these requirements within
thirty (30) days of the date on which such Employee becomes eligible to participate in
the Plan. Except as provided in Section 2.2(b) below, with respect to any Plan Year
after the First Plan Year, each selected Employee must complete these requirements
prior to the first day of such Plan Year, or such other earlier deadline as may be
established by the Committee in its sole discretion.

	 	(b)	 	A selected Employee who first becomes eligible to participate in this Plan
after the first day of a Plan Year must complete, execute and return to the Committee a
Plan Agreement, an Election Form, and a Beneficiary Designation Form within thirty (30)
days after he or she first becomes eligible to participate in the Plan, or within such
other earlier deadline as may be established by the Committee, in its sole discretion,
in order to participate for that Plan Year. In such event, such person’s participation
in this Plan shall not commence earlier than the date determined by the Committee
pursuant to Section 2.2(c) and such person shall not be permitted to defer under this
Plan any portion of his or her Base Salary, Bonus and/or LTIP Amounts that are paid
with respect to services performed prior to his or her participation commencement date,
except to the extent permissible under Code Section 409A and related Treasury guidance
or Regulations.

	 	(c)	 	Each selected Employee who is eligible to participate in the Plan shall
commence participation in the Plan on the date that the Committee determines, in its
sole discretion, that the Employee has met all enrollment requirements set forth in
this Plan and required by the Committee, including returning all required documents to
the Committee within the specified time period. Notwithstanding the foregoing, the
Committee shall process such Participant’s deferral election as soon as
administratively practicable after such deferral election is submitted to and accepted
by the Committee.

	 	(d)	 	If an Employee fails to meet all requirements contained in this Section 2.2
within the period required, that Employee shall not be eligible to participate in the
Plan during such Plan Year.

ARTICLE 3

Deferral Commitments/Company Contribution Amounts/

Company Restoration Matching Amounts/ Vesting/Crediting/Taxes

	3.1	 	Minimum Deferrals.

	 	(a)	 	Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, Base Salary, Bonus and/or LTIP Amounts in
the following minimum amounts for each deferral elected:

	 	 	 

3

	 	 	 
	 
	 	 
	Deferral

	 	Minimum Amount
	 

	 	 
	 
	 	 
	Base Salary, Bonus and/or LTIP Amounts

	 	$3,000 aggregate
	 

	 	 

If the Committee determines, in its sole discretion, prior to the beginning of a Plan
Year that a Participant has made an election for less than the stated minimum
amounts, or if no election is made, the amount deferred shall be zero. If the
Committee determines, in its sole discretion, at any time after the beginning of a
Plan Year that a Participant has deferred less than the stated minimum amounts for
that Plan Year, any amount credited to the Participant’s applicable Annual Account as
the Annual Deferral Amount for that Plan Year shall be distributed to the Participant
within sixty (60) days after the last day of the Plan Year in which the Committee
determination was made.

	 	(b)	 	Short Plan Year. Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, or in the case of the First
Plan Year of the Plan itself, the minimum Annual Deferral Amount shall be an amount
equal to the minimum set forth above, multiplied by a fraction, the numerator of which
is the number of complete months remaining in the Plan Year and the denominator of
which is 12.

	3.2	 	Maximum Deferral.

	 	(a)	 	Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, Base Salary, Bonus and/or LTIP Amounts up
to the following maximum percentages for each deferral elected

	 	 	 	 	 
	Deferral	 	Maximum Percentage
	Base Salary
	 	 	75	%
	 
	 	 	 	 
	Bonus
	 	 	100	%
	 
	 	 	 	 
	LTIP Amounts
	 	 	100	%
	 
	 	 	 	 

	 	(b)	 	Short Plan Year. Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, or in the case of the First
Plan Year of the Plan itself, the maximum Annual Deferral Amount shall be limited to
the amount of compensation not yet earned by the Participant as of the date the
Participant submits a Plan Agreement and Election Form to the Committee for acceptance,
except to the extent permissible under Code Section 409A and related Treasury guidance
or Regulations. For compensation that is earned based upon a specified performance
period, the Participant’s deferral election will apply to the portion of such
compensation that is equal to (i) the total amount of compensation for the performance
period, multiplied by (ii) a fraction, the numerator of which is the number of days
remaining in the service period after the Participant’s deferral election is made, and
the denominator of which is the total number of days in the performance period.

	3.3	 	Election to Defer; Effect of Election Form.

	 	(a)	 	First Plan Year. In connection with a Participant’s commencement of
participation in the Plan, the Participant shall make an irrevocable deferral election
for the Plan Year in which the Participant commences participation in the Plan, along
with such other elections as the Committee deems necessary or desirable under the Plan.
For these elections to be valid, the Election Form must be completed and signed by the
Participant, timely delivered to the Committee (in accordance with Section 2.2 above)
and accepted by the Committee.

	 	(b)	 	Subsequent Plan Years. For each succeeding Plan Year, a Participant
may elect to defer Base Salary, Bonus and LTIP Amounts, and make such other elections
as the Committee deems necessary or desirable under the Plan by timely delivering a new
Election Form to the Committee, in accordance with its rules and procedures, before the
December 31st preceding the Plan Year in which such compensation is earned,
or before such other deadline established by the Committee in accordance with the
requirements of Code Section 409A and related Treasury guidance or Regulations. For
compensation which is earned over one or more consecutive fiscal years of an Employer
that is not payable during the service period, the Committee may determine that a
Participant may defer such compensation by making an election before the last day of
the fiscal year preceding the first fiscal year in which the services are performed.

Any deferral election(s) made in accordance with this Section 3.3(b) shall be
irrevocable; provided, however, that if the Committee requires Participants to make a
deferral election for “performance-based compensation” by the deadline(s) described
above, it may, in its sole discretion, and in accordance with Code Section 409A and
related Treasury guidance or Regulations, permit a Participant to subsequently change
his or her deferral election for such compensation by submitting an Election Form to
the Committee no later than the deadline established by the Committee pursuant to
Section 3.3(c) below.

	 	(c)	 	Performance-Based Compensation. Notwithstanding the foregoing, the
Committee may, in its sole discretion, determine that an irrevocable deferral election
pertaining to “performance-based compensation” based on services performed over a
period of at least twelve (12) months, may be made by timely delivering an Election
Form to the Committee, in accordance with its rules and procedures, no later than six
(6) months before the end of the performance service period. “Performance-based
compensation” shall be compensation, the payment or amount of which is contingent on
pre-established organizational or individual performance criteria, which satisfies the
requirements of Code Section 409A and related Treasury guidance or Regulations In
order to be eligible to make a deferral election for performance-based compensation, a
Participant must perform services continuously from a date no later than the date upon
which the performance criteria for such compensation are established through the date
upon which the Participant makes a deferral election for such compensation. In no
event shall an election to defer performance-based compensation be permitted after such
compensation has become both substantially certain to be paid and readily
ascertainable.

	 	(d)	 	Compensation Subject to Risk of Forfeiture. With respect to
compensation (i) to which a Participant has a legally binding right to payment in a
subsequent year, and (ii) that is subject to a forfeiture condition requiring the
Participant’s continued services for a period of at least twelve (12) months from the
date the Participant obtains the legally binding right, the Committee may, in its sole
discretion, determine that an irrevocable deferral election for such compensation may
be made by timely delivering an Election Form to the Committee in accordance with its
rules and procedures, no later than the 30th day after the Participant
obtains the legally binding right to the compensation, provided that the election is
made at least twelve (12) months in advance of the earliest date at which the
forfeiture condition could lapse.

	3.4	 	Withholding and Crediting of Annual Deferral Amounts. For each Plan Year, the Base
Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled
Base Salary payroll in equal amounts, as adjusted from time to time for increases and
decreases in Base Salary. The Bonus and/or LTIP Amounts portion of the Annual Deferral Amount
shall be withheld at the time the Bonus or LTIP Amounts are or otherwise would be paid to the
Participant, whether or not this occurs during the Plan Year itself. Annual Deferral Amounts
shall be credited to the Participant’s Annual Account for such Plan Year at the time such
amounts would otherwise have been paid to the Participant.

	3.5	 	Company Contribution Amount.

	 	(a)	 	For each Plan Year, an Employer may be required to credit amounts to a
Participant’s Annual Account in accordance with employment or other agreements entered
into between the Participant and the Employer, which amounts shall be part of the
Participant’s Company Contribution Amount for that Plan Year. Such amounts shall be
credited to the Participant’s Annual Account for the applicable Plan Year on the date
or dates prescribed by such agreements.

	 	(b)	 	For each Plan Year, an Employer, in its sole discretion, may, but is not
required to, credit any amount it desires to any Participant’s Annual Account under
this Plan, which amount shall be part of the Participant’s Company Contribution Amount
for that Plan Year. The amount so credited to a Participant may be smaller or larger
than the amount credited to any other Participant, and the amount credited to any
Participant for a Plan Year may be zero, even though one or more other Participants
receive a Company Contribution Amount for that Plan Year. The Company Contribution
Amount described in this Section 3.5(b), if any, shall be credited to the Participant’s
Annual Account for the applicable Plan Year on a date or dates to be determined by the
Committee, in its sole discretion.

	3.6	 	Company Restoration Matching Amount. A Participant’s Company Restoration Matching
Amount for any Plan Year shall be an amount determined by the Committee, in its sole
discretion, to make up for certain limits applicable to the 401(k) Plan or other qualified
plan for such Plan Year, as identified by the Committee, or for such other purposes as
determined by the Committee in its sole discretion. The amount so credited to a Participant
under this Plan for any Plan Year (i) may be smaller or larger than the amount credited to any
other Participant, and (ii) may differ from the amount credited to such Participant in the
preceding Plan Year. The Participant’s Company Restoration Matching Amount, if any, shall be
credited to the Participant’s Annual Account for the applicable Plan Year on a date or dates
to be determined by the Committee, in its sole discretion.

	3.7	 	Crediting of Amounts after Benefit Distribution. Notwithstanding any provision in
this Plan to the contrary, should the complete distribution of a Participant’s vested Account
Balance occur prior to the date on which any portion of (i) the Annual Deferral Amount that a
Participant has elected to defer in accordance with Section 3.3, (ii) the Company Contribution
Amount, or (iii) the Company Restoration Matching Amount, would otherwise be credited to the
Participant’s Account Balance, such amounts shall not be credited to the Participant’s Account
Balance, but shall be paid to the Participant in a manner determined by the Committee, in its
sole discretion.

	3.8	 	Vesting.

	 	(a)	 	A Participant shall at all times be 100% vested in his or her deferrals of Base
Salary, Bonus and LTIP Amounts.

	 	(b)	 	A Participant shall be vested in the portion of his or her Account Balance
attributable to any Company Contribution Amounts, plus amounts credited or debited on
such amounts (pursuant to Section 3.9), in accordance with the vesting schedule(s) set
forth in his or her Plan Agreement, employment agreement or any other agreement entered
into between the Participant and his or her Employer. If not addressed in such
agreements, a Participant shall vest in such Company Contribution Amounts in accordance
with the vesting schedule declared by the Committee in its sole discretion.

	 	(c)	 	A Participant shall be vested in the portion of his or her Account Balance
attributable to any Company Restoration Matching Amounts, plus amounts credited or
debited on such amounts (pursuant to Section 3.9), only to the extent that the
Participant would be vested in such amounts under the provisions of the 401(k) Plan, as
determined by the Committee in its sole discretion.

	 	(d)	 	Notwithstanding anything to the contrary contained in this Section 3.8, in the
event of a Change in Control, or upon a Participant’s Retirement, death while employed
by an Employer, or Disability, any amounts that are not vested in accordance with
Sections 3.8(b) or 3.8(c) above, shall immediately become 100% vested (if it is not
already vested in accordance with the above vesting schedules).

	 	(e)	 	Notwithstanding subsection 3.8(d) above, the vesting schedules described in
Sections 3.8(b) and 3.8(c) shall not be accelerated upon a Change in Control to the
extent that the Committee determines that such acceleration would cause the deduction
limitations of Section 280G of the Code to become effective. In the event of such a
determination, the Participant may request independent verification of the Committee’s
calculations with respect to the application of Section 280G.

	3.9	 	Crediting/Debiting of Account Balances. In accordance with, and subject to, the
rules and procedures that are established from time to time by the Committee, in its sole
discretion, amounts shall be credited or debited to a Participant’s Account Balance in
accordance with the following rules:

	 	(a)	 	Measurement Funds. The Participant may elect one or more of the
measurement funds selected by the Committee, in its sole discretion, which are based on
certain mutual funds (the “Measurement Funds”), for the purpose of crediting or
debiting additional amounts to his or her Account Balance. As necessary, the Committee
may, in its sole discretion, discontinue, substitute or add a Measurement Fund. Each
such action will take effect as of the first day of the first calendar quarter that
begins at least thirty (30) days after the day on which the Committee gives
Participants advance written notice of such change.

	 	(b)	 	Election of Measurement Funds. A Participant, in connection with his
or her initial deferral election in accordance with Section 3.3(a) above, shall elect,
on the Election Form, one or more Measurement Fund(s) (as described in Section 3.9(a)
above) to be used to determine the amounts to be credited or debited to his or her
Account Balance. If a Participant does not elect any of the Measurement Funds as
described in the previous sentence, the Participant’s Account Balance shall
automatically be allocated into the lowest-risk Measurement Fund, as determined by the
Committee, in its sole discretion. The Participant may (but is not required to) elect,
by submitting an Election Form to the Committee that is accepted by the Committee, to
add or delete one or more Measurement Fund(s) to be used to determine the amounts to be
credited or debited to his or her Account Balance, or to change the portion of his or
her Account Balance allocated to each previously or newly elected Measurement Fund. If
an election is made in accordance with the previous sentence, it shall apply as of the
first business day deemed reasonably practicable by the Committee, in its sole
discretion, and shall continue thereafter for each subsequent day in which the
Participant participates in the Plan, unless changed in accordance with the previous
sentence. Notwithstanding the foregoing, the Committee, in its sole discretion, may
impose limitations on the frequency with which one or more of the Measurement Funds
elected in accordance with this Section 3.9(b) may be added or deleted by such
Participant; furthermore, the Committee, in its sole discretion, may impose limitations
on the frequency with which the Participant may change the portion of his or her
Account Balance allocated to each previously or newly elected Measurement Fund.

	 	(c)	 	Proportionate Allocation. In making any election described in Section
3.9(b) above, the Participant shall specify on the Election Form, in increments of one
percent (1%), the percentage of his or her Account Balance or Measurement Fund, as
applicable, to be allocated/reallocated.

	 	(d)	 	Crediting or Debiting Method. The performance of each Measurement Fund
(either positive or negative) will be determined on a daily basis based on the manner
in which such Participant’s Account Balance has been hypothetically allocated among the
Measurement Funds by the Participant.

	 	(e)	 	No Actual Investment. Notwithstanding any other provision of this Plan
that may be interpreted to the contrary, the Measurement Funds are to be used for
measurement purposes only, and a Participant’s election of any such Measurement Fund,
the allocation of his or her Account Balance thereto, the calculation of additional
amounts and the crediting or debiting of such amounts to a Participant’s Account
Balance shall not be considered or construed in any manner as an actual
investment of his or her Account Balance in any such Measurement Fund. In the event
that the Company or the Trustee (as that term is defined in the Trust), in its own
discretion, decides to invest funds in any or all of the investments on which the
Measurement Funds are based, no Participant shall have any rights in or to such
investments themselves. Without limiting the foregoing, a Participant’s Account
Balance shall at all times be a bookkeeping entry only and shall not represent any
investment made on his or her behalf by the Company or the Trust; the Participant shall
at all times remain an unsecured creditor of the Company.

	3.10	 	FICA and Other Taxes.

	 	(a)	 	Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant’s Employer(s)
shall withhold from that portion of the Participant’s Base Salary, Bonus LTIP Amounts
that is not being deferred, in a manner determined by the Employer(s), the
Participant’s share of FICA and other employment taxes on such Annual Deferral Amount.
If necessary, the Committee may reduce the Annual Deferral Amount in order to comply
with this Section 3.10.

	 	(b)	 	Company Restoration Matching Amounts and Company Contribution Amounts.
When a Participant becomes vested in a portion of his or her Account Balance
attributable to any Company Restoration Matching Amounts and/or Company Contribution
Amounts, the Participant’s Employer(s) shall withhold from that portion of the
Participant’s Base Salary, Bonus and/or LTIP Amounts that is not deferred, in a manner
determined by the Employer(s), the Participant’s share of FICA and other employment
taxes on such amounts. If necessary, the Committee may reduce the vested portion of
the Participant’s Company Restoration Matching Amount or Company Contribution Amount,
as applicable, in order to comply with this Section 3.10.

	 	(c)	 	Distributions. The Participant’s Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under this Plan all
federal, state and local income, employment and other taxes required to be withheld by
the Employer(s), or the trustee of the Trust, in connection with such payments, in
amounts and in a manner to be determined in the sole discretion of the Employer(s) and
the trustee of the Trust.

ARTICLE 4

Scheduled Distribution; Unforeseeable Emergencies 

	4.1	 	Scheduled Distribution. In connection with each election to defer an Annual Deferral
Amount, a Participant may irrevocably elect to receive a Scheduled Distribution, in the form
of a lump sum payment, from the Plan with respect to all or a portion of the Annual Deferral
Amount. The Scheduled Distribution shall be a lump sum payment in an amount that is equal to
the portion of the Annual Deferral Amount the Participant elected to have distributed as a
Scheduled Distribution, plus amounts credited or debited in the manner provided in Section 3.9
above on that amount, calculated as of the close of business on or around the date on which
the Scheduled Distribution becomes payable, as determined by the Committee in its sole
discretion. Subject to the other terms and conditions of this Plan, each Scheduled
Distribution elected shall be paid out during a sixty (60) day period commencing immediately
after the first day of any Plan Year designated by the Participant (the “Scheduled
Distribution Date”). The Plan Year designated by the Participant must be at least three (3)
Plan Years after the end of the Plan Year to which the Participant’s deferral election
described in Section 3.3 relates, unless otherwise provided on an Election Form approved by
the Committee in its sole discretion. By way of example, if a Scheduled Distribution is
elected for Annual Deferral Amounts that are earned in the Plan Year commencing January 1,
2007, the earliest Scheduled Distribution Date that may be designated by a Participant would
be January 1, 2011, and the Scheduled Distribution would become payable during the sixty (60)
day period commencing immediately after such Scheduled Distribution Date.

	4.2	 	Postponing Scheduled Distributions. A Participant may elect to postpone a Scheduled
Distribution described in Section 4.1 above, and have such amount paid out during a sixty (60)
day period commencing immediately after an allowable alternative distribution date designated
by the Participant in accordance with this Section 4.2. In order to make this election, the
Participant must submit a new Scheduled Distribution Election Form to the Committee in
accordance with the following criteria:

	 	(a)	 	Such Scheduled Distribution Election Form must be submitted to and accepted by
the Committee in its sole discretion at least twelve (12) months prior to the
Participant’s previously designated Scheduled Distribution Date;

	 	(b)	 	The new Scheduled Distribution Date selected by the Participant must be the
first day of a Plan Year, and must be at least five years after the previously
designated Scheduled Distribution Date; and

	 	(c)	 	The election of the new Scheduled Distribution Date shall have no effect until
at least twelve (12) months after the date on which the election is made.

	4.3	 	Other Benefits Take Precedence Over Scheduled Distributions. Should a Benefit
Distribution Date occur that triggers a benefit under Articles 5, 6, 7, 8, or 9, any Annual
Deferral Amount that is subject to a Scheduled Distribution election under Section 4.1 shall
not be paid in accordance with Section 4.1, but shall be paid in accordance with the other
applicable Article. Notwithstanding the foregoing, the Committee shall interpret this Section
4.3 in a manner that is consistent with Code Section 409A and related Treasury guidance and
Regulations.

	4.4	 	Unforeseeable Emergencies.

	 	(a)	 	If the Participant experiences an Unforeseeable Emergency, the Participant may
petition the Committee to receive a partial or full payout from the Plan, subject to
the provisions set forth below.

	 	(b)	 	The payout, if any, from the Plan shall not exceed the lesser of (i) the
Participant’s vested Account Balance, calculated as of the close of business on or
around the date on which the amount becomes payable, as determined by the Committee in
its sole discretion, or (ii) the amount necessary to satisfy the Unforeseeable
Emergency, plus amounts necessary to pay Federal, state, or local income taxes or
penalties reasonably anticipated as a result of the distribution. Notwithstanding the
foregoing, a Participant may not receive a payout from the Plan to the extent that the
Unforeseeable Emergency is or may be relieved (A) through reimbursement or compensation
by insurance or otherwise, (B) by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not itself cause severe financial hardship
or (C) by cessation of deferrals under this Plan.

	 	(c)	 	If the Committee, in its sole discretion, approves a Participant’s petition for
payout from the Plan, the Participant shall receive the payout from the Plan within
sixty (60) days of the date of such approval, and the Participant’s deferrals under the
Plan shall be terminated as of the date of such approval.

	 	(d)	 	In addition, a Participant’s deferral elections under this Plan shall be
terminated to the extent the Committee determines, in its sole discretion, that
termination of such Participant’s deferral elections is required pursuant to Treas.
Reg. §1.401(k)-1(d)(3) for the Participant to obtain a hardship distribution from an
Employer’s 401(k) Plan. If the Committee determines, in its sole discretion, that a
termination of the Participant’s deferrals is required in accordance with the preceding
sentence, the Participant’s deferrals shall be terminated as soon as administratively
practicable following the date on which such determination is made.

	 	(e)	 	Notwithstanding the foregoing, the Committee shall interpret all provisions
relating to payout and/or termination of deferrals under this Section 4.4 in a manner
that is consistent with Code Section 409A and related Treasury guidance and
Regulations.

ARTICLE 5

Change in Control Benefit 

	5.1	 	Change in Control Benefit. A Participant, in connection with his or her commencement
of participation in the Plan, shall irrevocably elect on an Election Form whether to (i)
receive a Change in Control Benefit upon the occurrence of a Change in Control, which shall be
equal to the Participant’s vested Account Balance, calculated as of the close of business on
or around the Participant’s Benefit Distribution Date, as determined by the Committee in its
sole discretion, or (ii) to have his or her Account Balance remain in the Plan upon the
occurrence of a Change in Control and to have his or her Account Balance remain subject to the
terms and conditions of the Plan. If a Participant does not make any election with respect to
the payment of the Change in Control Benefit, then such Participant’s Account Balance shall
remain in the Plan upon a Change in Control and shall be subject to the terms and conditions
of the Plan.

	5.2	 	Payment of Change in Control Benefit. The Change in Control Benefit, if any, shall
be paid to the Participant in a lump sum no later than sixty (60) days after the Participant’s
Benefit Distribution Date. Notwithstanding the foregoing, the Committee shall interpret all
provisions in this Plan relating to a Change in Control Benefit in a manner that is consistent
with Code Section 409A and related Treasury guidance and Regulations.

4

ARTICLE 6

Retirement Benefit

	6.1	 	Retirement Benefit. A Participant who Retires shall receive, as a Retirement
Benefit, his or her vested Account Balance, calculated as of the close of business on or
around the Participant’s Benefit Distribution Date, as determined by the Committee in its sole
discretion.

	6.2	 	Payment of Retirement Benefit.

	 	(a)	 	In connection with a Participant’s election to defer an Annual Deferral Amount,
the Participant shall elect the form in which his or her Annual Account for such Plan
Year will be paid. The Participant may elect to receive each Annual Account in the
form of a lump sum or pursuant to an Annual Installment Method of up to fifteen (15)
years. If a Participant does not make any election with respect to the payment of an
Annual Account, then the Participant shall be deemed to have elected to receive such
Annual Account as a lump sum.

	 	(b)	 	A Participant may change the form of payment for an Annual Account by
submitting an Election Form to the Committee in accordance with the following criteria:

	 	(i)	 	The election to modify the form of payment for such Annual
Account shall have no effect until at least twelve (12) months after the date on
which the election is made; and

	 	(ii)	 	The commencement of payments related to such Annual Account shall
be delayed at least five (5) years from the originally scheduled Benefit
Distribution Date for such Annual Account, as described in Section 1.8(a).

For purposes of applying the requirements above, the right to receive an Annual
Account in installment payments shall be treated as the entitlement to a single
payment. The Committee shall interpret all provisions relating to an election
described in this Section 6.2 in a manner that is consistent with Code Section 409A
and related Treasury guidance or Regulations.

The Election Form most recently accepted by the Committee that has become effective
shall govern the payout of the applicable Annual Account.

	 	(c)	 	The lump sum payment shall be made, or installment payments shall commence, no
later than sixty (60) days after the Benefit Distribution Date. Remaining
installments, if any, shall continue in accordance with the Participant’s election for
each Annual Account and shall be paid no later than sixty (60) days after each
anniversary of the Benefit Distribution Date.

ARTICLE 7

Termination Benefit

	7.1	 	Termination Benefit. A Participant who experiences a Termination of Employment shall
receive, as a Termination Benefit, his or her vested Account Balance, calculated as of the
close of business on or around the Participant’s Benefit Distribution Date, as determined by
the Committee in its sole discretion.

	7.2	 	Payment of Termination Benefit. The Termination Benefit shall be paid to the
Participant in a lump sum payment no later than sixty (60) days after the Participant’s
Benefit Distribution Date.

ARTICLE 8

Disability Benefit

	8.1	 	Disability Benefit. Upon a Participant’s Disability, the Participant shall receive a
Disability Benefit, which shall be equal to the Participant’s vested Account Balance,
calculated as of the close of business on or around the Participant’s Benefit Distribution
Date, as selected by the Committee in its sole discretion.

	8.2	 	Payment of Disability Benefit. The Disability Benefit shall be paid to the
Participant in a lump sum payment no later than sixty (60) days after the Participant’s
Benefit Distribution Date.

ARTICLE 9

Death Benefit

	9.1	 	Death Benefit. The Participant’s Beneficiary(ies) shall receive a Death Benefit upon
the Participant’s death which will be equal to the Participant’s vested Account Balance,
calculated as of the close of business on or around the Participant’s Benefit Distribution
Date, as selected by the Committee in its sole discretion.

	9.2	 	Payment of Death Benefit. The Death Benefit shall be paid to the Participant’s
Beneficiary(ies) in a lump sum payment no later than sixty (60) days after the Participant’s
Benefit Distribution Date.

ARTICLE 10

Beneficiary Designation

	10.1	 	Beneficiary. Each Participant shall have the right, at any time, to designate his or
her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable
under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary designation under any
other plan of an Employer in which the Participant participates.

	10.2	 	Beneficiary Designation; Change; Spousal Consent. A Participant shall designate his
or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning
it to the Committee or its designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary
Designation Form and the Committee’s rules and procedures, as in effect from time to time. If
the Participant names someone other than his or her spouse as a Beneficiary, the Committee
may, in its sole discretion, determine that spousal consent is required to be provided in a
form designated by the Committee, executed by such Participant’s spouse and returned to the
Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The Committee shall be entitled
to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the
Committee prior to his or her death.

	10.3	 	Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received and acknowledged in writing by the Committee or its designated agent.

	10.4	 	No Beneficiary Designation. If a Participant fails to designate a Beneficiary as
provided in Sections 10.1, 10.2 and 10.3 above or, if all designated Beneficiaries predecease
the Participant or die prior to complete distribution of the Participant’s benefits, then the
Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If
the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the Participant’s
estate.

	10.5	 	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary
to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in
its discretion, to cause the Participant’s Employer to withhold such payments until this
matter is resolved to the Committee’s satisfaction.

	10.6	 	Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary
shall fully and completely discharge all Employers and the Committee from all further
obligations under this Plan with respect to the Participant, and that Participant’s Plan
Agreement shall terminate upon such full payment of benefits.

ARTICLE 11

Leave of Absence

	11.1	 	Paid Leave of Absence. If a Participant is authorized by the Participant’s Employer
to take a paid leave of absence from the employment of the Employer, and such leave of absence
does not constitute a separation from service, as determined by the Committee in accordance
with Code Section 409A and related Treasury guidance and Regulations, (i) the Participant
shall continue to be considered eligible for the benefits provided in Articles 4, 5, 6, 7, 8,
or 9 in accordance with the provisions of those Articles, and (ii) the Annual Deferral Amount
shall continue to be withheld during such paid leave of absence in accordance with
Section 3.3.

	11.2	 	Unpaid Leave of Absence. If a Participant is authorized by the Participant’s
Employer to take an unpaid leave of absence from the employment of the Employer for any
reason, and such leave of absence does not constitute a separation from service, as determined
by the Committee in accordance with Code Section 409A and related Treasury guidance and
Regulations, such Participant shall continue to be eligible for the benefits provided in
Articles 4, 5, 6, 7, 8, or 9 in accordance with the provisions of those Articles. However, the
Participant shall be excused from fulfilling his or her Annual Deferral Amount commitment that
would otherwise have been withheld during the remainder of the Plan Year in which the unpaid
leave of absence is taken. During the unpaid leave of absence, the Participant shall not be
allowed to make any additional deferral elections. However, if the Participant returns to
employment, the Participant may elect to defer an Annual Deferral Amount for the Plan Year
following his or her return to employment and for every Plan Year thereafter while a
Participant in the Plan, provided such deferral elections are otherwise allowed and an
Election Form is delivered to and accepted by the Committee for each such election in
accordance with Section 3.3 above.

	11.3	 	Leaves Resulting in Separation from Service. In the event that a Participant’s leave
of absence from his or her Employer does constitute a separation from service, as determined
by the Committee in accordance with Code Section 409A and related Treasury guidance and
Regulations, the Participant’s vested Account Balance shall be distributed to the Participant
in accordance with Article 6 or 7 of this Plan, as applicable.

ARTICLE 12

Termination of Plan, Amendment or Modification

	12.1	 	Termination of Plan. Although each Employer anticipates that it will continue the
Plan for an indefinite period of time, there is no guarantee that any Employer will continue
the Plan or will not terminate the Plan at any time in the future. Accordingly, each Employer
reserves the right to Terminate the Plan. In the event of a Termination of the Plan, the
Measurement Funds available to Participants following the Termination of the Plan shall be
comparable in number and type to those Measurement Funds available to Participants in the Plan
Year preceding the Plan Year in which the Termination of the Plan is effective. Following a
Termination of the Plan, Participant Account Balances shall remain in the Plan until the
Participant becomes eligible for the benefits provided in Articles 4, 5, 6, 7, 8 or 9 in
accordance with the provisions of those Articles. The Termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become entitled to the payment of any
benefits under the Plan as of the date of termination. Notwithstanding the foregoing, to the
extent permissible under Code Section 409A and related Treasury guidance or Regulations,
during the thirty (30) days preceding or within twelve (12) months following a Change in
Control, an Employer shall be permitted to (i) terminate the Plan by action of its board of
directors, and (ii) distribute the vested Account Balances to Participants in a lump sum no
later than twelve (12) months after the Change in Control, provided that all other
substantially similar arrangements sponsored by such Employer are also terminated and all
balances in such arrangements are distributed within twelve (12) months of the termination of
such arrangements.

	12.2	 	Amendment.

	 	(a)	 	Any Employer may, at any time, amend or modify the Plan in whole or in part
with respect to that Employer. Notwithstanding the foregoing, (i) no amendment or
modification shall be effective to decrease the value of a Participant’s vested Account
Balance in existence at the time the amendment or modification is made, and (ii) no
amendment or modification of this Section 12.2 or Section 13.2 of the Plan shall be
effective.

	 	(b)	 	Notwithstanding any provision of the Plan to the contrary, in the event that
the Company determines that any provision of the Plan may cause amounts deferred under
the Plan to become immediately taxable to any Participant under Code Section 409A and
related Treasury guidance or Regulations, the Company may (i) adopt such amendments to
the Plan and appropriate policies and procedures, including amendments and policies
with retroactive effect, that the Company determines necessary or appropriate to
preserve the intended tax treatment of the Plan benefits provided by the Plan and/or
(ii) take such other actions as the Company determines necessary or appropriate to
comply with the requirements of Code Section 409A and related Treasury guidance or
Regulations.

	12.3	 	Plan Agreement. Despite the provisions of Sections 12.1 and 12.2 above, if a
Participant’s Plan Agreement contains benefits or limitations that are not in this Plan
document, the Employer may only amend or terminate such provisions with the written consent of
the Participant.

	12.4	 	Effect of Payment. The full payment of the Participant’s vested Account Balance
under Articles 4, 5, 6, 7, 8, or 9 of the Plan shall completely discharge all obligations to a
Participant and his or her designated Beneficiaries under this Plan, and the Participant’s
Plan Agreement shall terminate.

ARTICLE 13

Administration

	13.1	 	Committee Duties. Except as otherwise provided in this Article 13, this Plan shall
be administered by a Committee, which shall consist of the Board, or such committee as the
Board shall appoint. Members of the Committee may be Participants under this Plan. The
Committee shall also have the discretion and authority to (i) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of this Plan, and
(ii) decide or resolve any and all questions, including benefit entitlement determinations and
interpretations of this Plan, as may arise in connection with the Plan. Any individual
serving on the Committee who is a Participant shall not vote or act on any matter relating
solely to himself or herself. When making a determination or calculation, the Committee shall
be entitled to rely on information furnished by a Participant or the Company.

	13.2	 	Administration Upon Change In Control. Within one hundred and twenty (120) days
following a Change in Control, the individuals who comprised the Committee immediately prior
to the Change in Control (whether or not such individuals are members of the Committee
following the Change in Control) may, by written consent of the majority of such individuals,
appoint an independent third party administrator (the “Administrator”) to perform any or all
of the Committee’s duties described in Section 13.1 above, including without limitation, the
power to determine any questions arising in connection with the administration or
interpretation of the Plan, and the power to make benefit entitlement determinations. Upon
and after the effective date of such appointment, (i) the Company must pay all reasonable
administrative expenses and fees of the Administrator, and (ii) the Administrator may only be
terminated with the written consent of the majority of Participants with an Account Balance in
the Plan as of the date of such proposed termination.

	13.3	 	Agents. In the administration of this Plan, the Committee or the Administrator, as
applicable, may, from time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed representative) and may from
time to time consult with counsel.

	13.4	 	Binding Effect of Decisions. The decision or action of the Committee or
Administrator, as applicable, with respect to any question arising out of or in connection
with the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

	13.5	 	Indemnity of Committee. All Employers shall indemnify and hold harmless the members
of the Committee, any Employee to whom the duties of the Committee may be delegated, and the
Administrator against any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, any of its members, any such Employee or the Administrator.

	13.6	 	Employer Information. To enable the Committee and/or Administrator to perform its
functions, the Company and each Employer shall supply full and timely information to the
Committee and/or Administrator, as the case may be, on all matters relating to the Plan, the
Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the
compensation of its Participants, the date and circumstances of the Retirement, Disability,
death or Termination of Employment of its Participants, and such other pertinent information
as the Committee or Administrator may reasonably require.

ARTICLE 14

Other Benefits and Agreements

	14.1	 	Coordination with Other Benefits. The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits available to
such Participant under any other plan or program for employees of the Participant’s Employer.
The Plan shall supplement and shall not supersede, modify or amend any other such plan or
program except as may otherwise be expressly provided.

ARTICLE 15

Claims Procedures

	15.1	 	Presentation of Claim. Any Participant or Beneficiary of a deceased Participant
(such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the
Committee a written claim for a determination with respect to the amounts distributable to
such Claimant from the Plan. If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within sixty (60) days after such notice was received by
the Claimant. All other claims must be made within 180 days of the date on which the event
that caused the claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.

	15.2	 	Notification of Decision. The Committee shall consider a Claimant’s claim within a
reasonable time, but no later than ninety (90) days after receiving the claim. If the
Committee determines that special circumstances require an extension of time for processing
the claim, written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period. In no event shall such extension exceed a
period of ninety (90) days from the end of the initial period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination. The Committee shall notify the
Claimant in writing:

	 	(a)	 	that the Claimant’s requested determination has been made, and that the claim
has been allowed in full; or

	 	(b)	 	that the Committee has reached a conclusion contrary, in whole or in part, to
the Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

	 	(i)	 	the specific reason(s) for the denial of the claim, or any part
of it;

	 	(ii)	 	specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;

	 	(iii)	 	a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary;

	 	(iv)	 	an explanation of the claim review procedure set forth in
Section 15.3 below; and

	 	(v)	 	a statement of the Claimant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

	15.3	 	Review of a Denied Claim. On or before sixty (60) days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s
duly authorized representative) may file with the Committee a written request for a review of
the denial of the claim. The Claimant (or the Claimant’s duly authorized representative):

	 	(a)	 	may, upon request and free of charge, have reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claim for benefits;

	 	(b)	 	may submit written comments or other documents; and/or

	 	(c)	 	may request a hearing, which the Committee, in its sole discretion, may grant.

	15.4	 	Decision on Review. The Committee shall render its decision on review promptly, and
no later than sixty (60) days after the Committee receives the Claimant’s written request for
a review of the denial of the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice of the extension shall
be furnished to the Claimant prior to the termination of the initial sixty (60) day period.
In no event shall such extension exceed a period of sixty (60) days from the end of the
initial period. The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Committee expects to render the benefit
determination. In rendering its decision, the Committee shall take into account all comments,
documents, records and other information submitted by the Claimant relating to the claim,
without regard to whether such information was submitted or considered in the initial benefit
determination. The decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:

	 	(a)	 	specific reasons for the decision;

	 	(b)	 	specific reference(s) to the pertinent Plan provisions upon which the decision
was based;

	 	(c)	 	a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the Claimant’s
claim for benefits; and

	 	(d)	 	a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

	15.5	 	Legal Action. A Claimant’s compliance with the foregoing provisions of this
Article 15 is a mandatory prerequisite to a Claimant’s right to commence any legal action with
respect to any claim for benefits under this Plan. 

ARTICLE 16

Trust

	16.1	 	Establishment of the Trust. In order to provide assets from which to fulfill the
obligations to the Participants and their beneficiaries under the Plan, the Company may
establish a trust by a trust agreement with a third party, the trustee, to which each Employer
may, in its discretion, contribute cash or other property, including securities issued by the
Company, to provide for the benefit payments under the Plan, (the “Trust”).

	16.2	 	Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan
Agreement shall govern the rights of a Participant to receive distributions pursuant to the
Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and
the creditors of the Employers to the assets transferred to the Trust. Each Employer shall at
all times remain liable to carry out its obligations under the Plan.

	16.3	 	Distributions From the Trust. Each Employer’s obligations under the Plan may be
satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such
distribution shall reduce the Employer’s obligations under this Plan.

ARTICLE 17

Miscellaneous

	17.1	 	Status of Plan. The Plan is intended to be a plan that is not qualified within the
meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group of management
or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted (i) to the extent possible in a
manner consistent with the intent described in the preceding sentence, and (ii) in accordance
with Code Section 409A and related Treasury guidance and Regulations.

	17.2	 	Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights, interests or claims in any property or
assets of an Employer. For purposes of the payment of benefits under this Plan, any and all
of an Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of
the Employer. An Employer’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

	17.3	 	Employer’s Liability. An Employer’s liability for the payment of benefits shall be
defined only by the Plan and the Plan Agreement, as entered into between the Employer and a
Participant. An Employer shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.

	17.4	 	Nonassignability. Neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.

	17.5	 	Not a Contract of Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between any Employer and the Participant. Such
employment is hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written employment agreement. Nothing in this
Plan shall be deemed to give a Participant the right to be retained in the service of any
Employer, or to interfere with the right of any Employer to discipline or discharge the
Participant at any time.

	17.6	 	Furnishing Information. A Participant or his or her Beneficiary will cooperate with
the Committee by furnishing any and all information requested by the Committee and take such
other actions as may be requested in order to facilitate the administration of the Plan and
the payments of benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.

	17.7	 	Terms. Whenever any words are used herein in the masculine, they shall be construed
as though they were in the feminine in all cases where they would so apply; and whenever any
words are used herein in the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases where they would so
apply.

	17.8	 	Captions. The captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of any of its
provisions.

	17.9	 	Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and
interpreted according to the internal laws of the State of Delaware without regard to its
conflicts of laws principles.

	17.10	 	Notice. Any notice or filing required or permitted to be given to the Committee
under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or
certified mail, to the address below:

	 
	 

	Methode Electronics, Inc.

	 

	 

	Attn: Chief Financial Officer

	 

	 

	7401 West Wilson Avenue

	 

	 

	Chicago, Illinois 60706

	 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to a Participant under this Plan
shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Participant.

	17.11	 	Successors. The provisions of this Plan shall bind and inure to the benefit of the
Participant’s Employer and its successors and assigns and the Participant and the
Participant’s designated Beneficiaries.

	17.12	 	Spouse’s Interest. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass to the Participant
and shall not be transferable by such spouse in any manner, including but not limited to such
spouse’s will, nor shall such interest pass under the laws of intestate succession.

	17.13	 	Validity. In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal or invalid provision had never been
inserted herein.

	17.14	 	Incompetent. If the Committee determines in its discretion that a benefit under
this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of
handling the disposition of that person’s property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. The Committee may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the Participant
and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of
any liability under the Plan for such payment amount.

	17.15	 	Court Order. The Committee is authorized to comply with any court order in any
action in which the Plan or the Committee has been named as a party, including any action
involving a determination of the rights or interests in a Participant’s benefits under the
Plan. Notwithstanding the foregoing, the Committee shall interpret this provision in a manner
that is consistent with Code Section 409A and other applicable tax law. In addition, if
necessary to comply with a qualified domestic relations order, as defined in Code Section
414(p)(1)(B), pursuant to which a court has determined that a spouse or former spouse of a
Participant has an interest in the Participant’s benefits under the Plan, the Committee, in
its sole discretion, shall have the right to immediately distribute the spouse’s or former
spouse’s interest in the Participant’s benefits under the Plan to such spouse or former
spouse.

	17.16	 	Distribution in the Event of Income Inclusion Under 409A. If any portion of a
Participant’s Account Balance under this Plan is required to be included in income by the
Participant prior to receipt due to a failure of this Plan to meet the requirement of Code
Section 409A and related Treasury guidance or Regulations, the Participant may petition the
Committee or Administrator, as applicable, for a distribution of that portion of his or her
Account Balance that is required to be included in his or her income. Upon the grant of such
a petition, which grant shall not be unreasonably withheld, the Participant’s Employer shall
distribute to the Participant an amount equal to the portion of his or her Account Balance
required to be included in income as a result of the failure of the Plan to meet the
requirements of Code Section 409A and related Treasury guidance or Regulations, which amount
shall not exceed the Participant’s unpaid vested Account Balance under the Plan. If the
petition is granted, such distribution shall be made within ninety (90) days of the date when
the Participant’s petition is granted. Such a distribution shall affect and reduce the
Participant’s benefits to be paid under this Plan.

	17.17	 	Deduction Limitation on Benefit Payments. If an Employer reasonably anticipates
that the Employer’s deduction with respect to any distribution from this Plan would be limited
or eliminated by application of Code Section 162(m), then to the extent deemed necessary by
the Employer to ensure that the entire amount of any distribution from this Plan is
deductible, the Employer may delay payment of any amount that would otherwise be distributed
from this Plan. Any amounts for which distribution is delayed pursuant to this Section shall
continue to be credited/debited with additional amounts in accordance with Section 3.9 above.
The delayed amounts (and any amounts credited thereon) shall be distributed to the Participant
(or his or her Beneficiary in the event of the Participant’s death) at the earliest date the
Employer reasonably anticipates that the deduction of the payment of the amount will not be
limited or eliminated by application of Code Section 162(m).

	17.18	 	Insurance. The Employers, on their own behalf or on behalf of the trustee of the
Trust, and, in their sole discretion, may apply for and procure insurance on the life of the
Participant, in such amounts and in such forms as the Trust may choose. The Employers or the
trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such
insurance. The Participant shall have no interest whatsoever in any such policy or policies,
and at the request of the Employers shall submit to medical examinations and supply such
information and execute such documents as may be required by the insurance company or
companies to whom the Employers have applied for insurance.

IN WITNESS WHEREOF, the Company has signed this Plan document as of March 16, 2006.

“Company”

Methode Electronics, Inc.,

a Delaware corporation

By:   /s/ Douglas A. Koman             

Title:   Chief Financial Officer 

5

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