Document:

exv10w9

 

Exhibit 10.9

FIFTH AMENDMENT TO RESTATED

CREDIT AND SECURITY AGREEMENT

     THIS FIFTH AMENDMENT TO RESTATED CREDIT AND SECURITY AGREEMENT (the “Fifth Amendment”) by and
between EDUCATIONAL DEVELOPMENT CORPORATION, a Delaware corporation, as borrower (the “Company”),
and ARVEST BANK, as lender (the “Bank”), is entered into effective as of the 30th day of June,
2004.

     WITNESSETH:

     WHEREAS, pursuant to the Restated Credit and Security Agreement dated as of June 30, 1999, as
amended by the First Amendment thereto dated as of June 30, 2000, as further amended by the Second
Amendment thereto dated as of June 30, 2001, as further amended by the Third Amendment thereto
dated as of June 30, 2002, and as further amended by the Fourth Amendment thereto dated as of June
30, 2003 (collectively the “Restated Credit Agreement”), the Bank extended a Three Million Five
Hundred Thousand and No/100 Dollars ($3,500,000.00) revolving line of credit (the “Revolving Credit
Loan”) to the Company upon the terms and conditions therein set forth, the Revolving Credit Loan
being secured by the Collateral defined and described in Section 7.1 of the Restated Credit
Agreement and in the Security Agreement more particularly described and defined therein; and

     WHEREAS, the Company has requested the Bank to extend and renew the revolving credit facility
for one (1) year until June 30, 2005, in the maximum principal amount of $3,500,000.00; and

     WHEREAS, subject to the terms, provisions and conditions hereinafter set forth, the Bank is
willing to so extend, amend and modify the Revolving Credit Loan facility established pursuant to
the Restated Credit Agreement in the maximum principal amount of $3,500,000.00 until June 30, 2005;

     NOW, THEREFORE, for good and valuable consideration and for the extension and amendment of the
Restated Credit Agreement, the Company and the Bank hereby agree as follows:

     1. The maturity date of the Revolving Credit Loan shall be extended from June 30, 2004, to
June 30, 2005, and Revolving Credit Loan advances shall be evidenced by that certain replacement
Revolving Credit Note of even date herewith in the original principal amount of Three Million Five
Hundred Thousand and No/100 Dollars ($3,500,000.00) payable to the order of the Bank and bearing
interest at a variable annual rate equal from day to day to Prime Rate (as therein defined) minus
one-quarter of one percentage point (0.25%). A true and correct copy of the replacement Revolving
Credit Note is annexed hereto as Exhibit A and made a part hereof (the “Replacement Note”).

 

 

     2. The remaining terms, provisions and conditions set forth in the Restated Credit Agreement
shall remain in full force and effect for all purposes. The Company restates, confirms and
ratifies the warranties, covenants and representations set forth therein and further represents to
the Bank that no defaults or Events of Default exist under the Restated Credit Agreement as of the
date hereof. The Company further confirms, ratifies, continues, grants and re-grants to and in
favor of the Bank, as secured party, a continuous and continuing first and prior security interest
in all of the items and types of Collateral more particularly described in Section 7.1 of the
Restated Credit Agreement and in Section 2 of the Security Agreement described therein without any
interruption thereof, all of which such terms and provisions are incorporated herein by reference
with the same force and effect as if set forth and restated herein verbatim.

     3. The Company represents and warrants to the Bank that it is a corporation duly organized and
validly existing and in good standing under the laws of the State of Delaware and that the Company
is duly licensed, qualified and in good standing under the laws of the State of Oklahoma as a
foreign corporation. The Company will not change the jurisdiction or state of its incorporation or
otherwise re-incorporate without prior notification thereof to the Bank, including authorization to
the Bank to file amended or supplemental financing statements and execution by the Company of such
supplemental or amended security agreements and/or financing statements as deemed appropriate by
the Bank.

     4. The Company agrees to pay the Bank’s legal fees incurred in connection with the
negotiation, preparation and closing of this Fifth Amendment.

     IN WITNESS WHEREOF, this Fifth Amendment is executed and delivered to the Bank in Tulsa,
Oklahoma, by the undersigned duly authorized corporate officer of the Company, which officer has
full power and authority to do so on behalf and in the name of the Company by virtue of all
necessary corporate action of the Board of Directors of the Company, effective as of the 30th day
of June, 2004.

	 	 	 	 	 
	 	 	EDUCATIONAL DEVELOPMENT CORPORATION
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	 
	

	 	 	 	          Randall White

          President
	 
	 	 	 	 
	

	 	 	 	                    “Company”
	 
	 	 	 	 
	 	 	ARVEST BANK
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	 
	

	 	 	 	          Dennis Colvard

          Senior Vice President
	 
	 	 	 	 
	

	 	 	 	                    “Bank”

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REVOLVING CREDIT NOTE

			
	$3,500,000.00
	 	Tulsa, Oklahoma

June 30, 2004

     FOR VALUE RECEIVED, the undersigned (the “Maker”) promises to pay to the order of ARVEST BANK
(the “Payee”), at the Payee’s main banking office in Tulsa, Oklahoma, the principal sum of THREE
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000.00), or so much thereof as shall have
been advanced by Payee to Maker and remains unpaid, on June 30, 2005, together with interest
thereon from the date funds are advanced hereon on the unpaid balances of principal from time to
time outstanding, at the variable annual rate of interest hereinafter specified, which interest is
payable in monthly installments due and payable on the last day of each calendar month, commencing
July 31, 2004, and at final maturity on June 30, 2005.

     The rate of interest payable upon the indebtedness evidenced by this note shall be a variable
annual rate of interest equal from day to day to Prime Rate, as hereinafter defined, minus
one-quarter of one percentage point (0.25%). Prime Rate of interest shall be effective with
respect to this note as of the date upon which any change in such rate of interest shall occur.
Interest shall be computed on the basis of a year of 360 days but assessed only for the actual
number of days elapsed.

     For the purposes of this note, Prime Rate shall mean, as of the date upon which such rate of
interest is to be determined, the prime rate of interest published in the Money Rates column of The
Wall Street Journal (Southwest Edition) or a similar rate as determined by Payee if such rate
ceases to be published.

     All parties (maker, endorsers, sureties, guarantors and all others now or hereafter liable for
payment of the indebtedness evidenced by this note) waive presentment and diligence in collection
and agree that without notice to, and without discharging the liability of any party, this note may
be extended or renewed from time to time and for any term or terms by agreement between the holder
of this note and any of such parties and all parties shall remain liable on each such extension or
renewal.

     If the principal or any installment of interest due upon this note is not paid as and when the
same becomes due and payable (whether by extension, acceleration or otherwise), or any party now or
hereafter liable (directly or indirectly) for payment of this note makes an assignment for benefit
of creditors, becomes insolvent, has an order for relief under the United States Bankruptcy Code,
as amended, entered against it, or any receiver, trustee, custodian or like officer is appointed to
take custody, possession or control of any property of any such party, the holder hereof may,
without notice, declare all of the unpaid balance hereof to be immediately due and payable. Such
right of acceleration is cumulative and in addition to any other right or rights of acceleration
under the Restated Credit and Security Agreement between the Maker and

 

 

the Payee dated as of June 30, 1999, as amended by the First Amendment thereto dated as of June 30,
2000, as further amended by the Second Amendment thereto dated as of June 30, 2001, as further
amended by the Third Amendment thereto dated as of June 30, 2002, as further amended by the Fourth
Amendment thereto dated as of June 30, 2003, and as further amended by the Fifth Amendment thereto
dated as of even date herewith (collectively the “Credit Agreement”) and any other writing now or
hereafter evidencing or securing payment of any of the indebtedness evidenced hereby. After
maturity, whether by acceleration, extension or otherwise, this note shall bear interest at a
variable annual rate equal to Prime Rate plus four percentage points (4.0%). Maker and all other
parties liable hereon shall pay all reasonable attorney fees and all court costs and other costs
and expenses of collection incurred by the holder hereof.

     This is the Revolving Credit Note defined in the Credit Agreement and constitutes an extension
and renewal of that certain $3,500,000.00 Revolving Credit Note dated as of June 30, 2003.
Reference is made to the Credit Agreement and to the Security Agreement and Assignment dated as of
June 10, 1996, for the provisions with respect to acceleration, description of collateral securing
payment of the indebtedness evidenced hereby, rights and remedies in respect thereof and other
matters.

     This note is executed and delivered to the order of the Payee in Tulsa, Oklahoma, by the
undersigned duly authorized corporate officer of the Maker pursuant to all necessary corporate
action and shall be governed by and construed in accordance with the laws of the State of Oklahoma.

	 	 	 	 	 
	 	 	EDUCATIONAL DEVELOPMENT

CORPORATION, a Delaware corporation
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	 
	

	 	 	 	Randall White

President
	 	 	“Maker"

	 
	 	 	 	 
	Due: June 30, 2005
	 	 	 	 

2exv10w3

 

Exhibit 10.3

EAGLE MATERIALS INC.

INCENTIVE PLAN

     1. Plan. This Eagle Materials Inc. Incentive Plan (the “Plan”) constitutes an amendment and
restatement in its entirety of the Centex Construction Products, Inc. Incentive Plan originally
effective January 8, 2004, as thereafter amended (the “Existing Plan”). The Existing Plan was a
combined amendment and restatement of the Centex Construction Products, Inc. Amended and Restated
Stock Option Plan and the Centex Construction Products, Inc. 2000 Stock Option Plan (the “Prior
Plans”) which were adopted by the Corporation to reward certain key Employees of the Corporation
and its Affiliates and Nonemployee Directors of the Corporation by enabling them to acquire shares
of Common Stock of the Corporation.

     2. Objectives. The purpose of this Plan is to further the interests of the Corporation and
its shareholders by providing incentives in the form of Awards to key Employees and Nonemployee
Directors who can contribute materially to the success and profitability of the Corporation and its
Affiliates. Such Awards will recognize and reward outstanding performances and individual
contributions and give Participants in the Plan an interest in the Corporation parallel to that of
the shareholders, thus enhancing the proprietary and personal interest of such Participants in the
Corporation’s continued success and progress. This Plan will also enable the Corporation and its
Affiliates to attract and retain such Employees and Nonemployee Directors.

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

          “Affiliate” means a Subsidiary or Joint Venture.

          “Authorized Officer” means the Chief Executive Officer of the Corporation (or any other senior
officer of the Corporation to whom he or she shall delegate the authority to execute any Award
Agreement, where applicable).

          “Award” means an Employee Award or a Director Award.

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

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

          “Cash Award” means an award denominated in cash.

          “Class A Common Stock” means the Class A Common Stock, par value $.01 per share, of Eagle
Materials Inc.

          “Class B Common Stock” means the Class B Common Stock, par value $.01 per share, of Eagle
Materials Inc.

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

 

 

          “Committee” means the independent Compensation Committee of the Board as is designated by the
Board to administer the Plan.

          “Common Stock” means Class A Common Stock and/or Class B Common Stock, as appropriate.

          “Corporation” means Eagle Materials Inc., a Delaware corporation, formerly known as Centex
Construction Products, Inc., or any successor thereto.

          “Director” means an individual who is a member of the Board.

          “Director Award” means any Nonqualified Options or Stock Award granted, whether singly, in
combination or in tandem, to a Participant who is a Nonemployee Director pursuant to such
applicable terms, conditions and limitations as the Committee may establish in order to fulfill the
objectives of the Plan.

          “Disability” means a disability that renders the Participant unable to engage in any
occupation in accordance with the terms of the Long Term Disability Plan of Eagle Materials Inc.

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

          “Employee” means an employee of the Corporation or any of its Affiliates and an individual who
has agreed to become an Employee of the Corporation or any of its Affiliates and actually becomes
such an Employee within the following six months.

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

          “Employee Director” means an individual serving as a member of the Board who is an Employee of
the Corporation or any of its Affiliates.

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

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

          “Fair Market Value” of a share of Common Stock means, as of a particular date, (i) (A) if
Common Stock is listed on a national securities exchange, the mean between the highest and lowest
sales price per share of the Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are listed on that date, or,
if there shall have been no such sale so reported on that date, on

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the last preceding date on which such a sale was so reported, or, at the discretion of the
Committee, the price prevailing on the exchange at the time of exercise, (B) the mean between the
highest and lowest sales price per share of such Common Stock reported on the consolidated
transaction reporting system for The Nasdaq Stock Market, Inc. or, if there shall have been no such
sale so reported on that date, on the last preceding date on which such a sale was reported, (C) if
Common Stock is not so listed or quoted, the mean between the closing bid and asked price on that
date, or, if there are no quotations available for such date, on the last preceding date on which
such quotations shall be available, as reported by The Nasdaq Stock Market, Inc., or, if not
reported by The Nasdaq Stock Market, Inc., by the National Quotation Bureau Incorporated or (D) if
Common Stock is not publicly traded, the most recent value determined by an independent appraiser
appointed by the Corporation for such purpose, or (ii) if applicable, the price per share as
determined in accordance with the procedures of a third party administrator retained by the
Corporation to administer the Plan.

          “Grant Date” means the date an Award is granted to a Participant pursuant to the Plan. The
Grant Date for a substituted award is the Grant Date of the original award.

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

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

          “Joint Venture” means any joint venture or partnership in which the Corporation has at least
50% ownership, voting, capital or profit interests (in whatever form) and which is a subsidiary of
the Corporation within the meaning of the Securities Act of 1933, as amended.

          “Nonemployee Director” means an individual serving as a member of the Board who is not an
Employee of the Corporation or any of its Affiliates.

          “Nonqualified Stock Option” means an Option that is not an Incentive Stock Option.

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

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

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

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

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

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

          “Restriction Period” means a period of time beginning as of the Grant Date of an Award of
Restricted Stock and ending as of the date upon which the Common Stock subject to such Award is no
longer restricted or subject to forfeiture provisions.

          “Stock Appreciation Right” or “SAR” means a right to receive a payment, in cash, Common Stock
or a combination of cash and Common Stock, equal to the excess of the Fair Market Value or other
specified valuation of a specified number of shares of that class of Common Stock on the date the
right is exercised over a specified Grant Price, in each case, as determined by the Committee.

          “Stock Award” means an Award in the form of shares of Common Stock or Stock Units, including
an award of Restricted Stock.

          “Stock Unit” means a unit evidencing the right to receive in specified circumstances one share
of Common Stock (as determined by the Committee) granted to either an Employee or a Nonemployee
Director.

          “Subsidiary” means any corporation, partnership, limited liability company or other business
venture or entity of which the Corporation directly or indirectly owns 50% or more of the ownership
interest in such entity, as determined by the Committee in its sole and absolute discretion (such
determination by the Committee to be conclusively established by the grant of an Award by the
Committee to an officer or employee of such an entity).

     4. Eligibility.

     (a) Employees. Employees eligible for the grant of Employee Awards under this Plan are
those Employee Directors and Employees who hold positions of responsibility and whose
performance, in the judgment of the Committee, can have a significant effect on the success
of the Corporation and its Affiliates.

     (b) Directors. Members of the Board eligible for the grant of Director Awards under
this Plan are those who are Nonemployee Directors.

     5. Common Stock Available for Awards. Subject to the provisions of paragraph 16 hereof, there
shall be available for Awards under this Plan granted or payable wholly or partly in Common Stock
(including rights or Options that may be exercised for or settled in Common Stock) an aggregate of
1,875,000 shares (which includes shares of Common Stock subject to awards outstanding under the
Existing Plans) less those shares issued after the date of Board approval of the Plan and before
shareholder approval of the Plan pursuant to outstanding grants. All of the shares authorized for
issuance may be issued pursuant to Incentive Options,

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Nonqualified Stock Options or any combination thereof. All shares are available for issuance
pursuant to Stock Awards (including Stock Awards that are granted as Performance Awards).

          The number of shares of Common Stock that are the subject of Awards under this Plan that are
forfeited or terminated, expire unexercised, are settled in cash in lieu of Common Stock or
otherwise in a manner such that all or some of the shares covered by an Award are not issued to a
Participant or are exchanged for Awards that do not involve Common Stock, shall not be counted
against the aggregate plan maximum or any sublimit set forth above and shall again immediately
become available for Awards hereunder. If the tax withholding obligation resulting from the
settlement of any Award is satisfied by withholding shares of Common Stock, only the number of
shares of Common Stock issued net of the shares of Common Stock withheld shall be deemed delivered
for purposes of determining usage of shares against the maximum number of shares of Common Stock
available for delivery under the Plan or any sublimit set forth above. Shares of Common Stock
delivered under the Plan as an Award or in settlement of an Award issued or made (a) upon the
assumption, substitution, conversion or replacement of outstanding awards under a plan or
arrangement of an entity acquired in a merger or other acquisition or (b) as a post-transaction
grant under such a plan or arrangement of an acquired entity shall not reduce or be counted against
the maximum number of shares of Common Stock available for delivery under the Plan, to the extent
that the exemption for transactions in connection with mergers acquisitions from the shareholder
approval requirements of the New York Stock Exchange for equity compensation plans applies. The
Committee may from time to time adopt and observe such rules and procedures concerning the counting
of shares against the Plan maximum or any sublimit as it may deem appropriate, including rules more
restrictive than those set forth above to the extent necessary to satisfy the requirements of any
national stock exchange on which the Common Stock is listed or any applicable regulatory
requirement. The Board and the appropriate officers of the Corporation are authorized to take from
time to time whatever actions are necessary, and to file any required documents with governmental
authorities, stock exchanges and transaction reporting systems to ensure that shares of Common
Stock are available for issuance pursuant to Awards.

     6. Administration.

     (a) This Plan shall be administered by the Committee except as otherwise provided
herein.

     (b) Subject to the provisions hereof, the Committee shall have full and exclusive power
and authority to administer this Plan and to take all actions that are specifically
contemplated hereby or are necessary or appropriate in connection with the administration
hereof. The Committee shall also have full and exclusive power to interpret this Plan and
to adopt such rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or proper, all of which powers shall be exercised in the best interests of the
Corporation and in keeping with the objectives of this Plan. The Committee may, in its
discretion, provide for the extension of the exercisability of an Award, accelerate the
vesting or exercisability of an Award, eliminate or make less restrictive any restrictions
applicable to an Award, waive any restriction or other provision of this Plan (insofar as
such provision relates to Awards) or an Award or otherwise amend or modify an Award in any
manner that is either (i) not adverse to the

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Participant to whom such Award was granted or (ii) consented to by such Participant.
Notwithstanding anything herein to the contrary, without the prior approval of the
Corporation’s stockholders, Options issued under the Plan will not be repriced, replaced or
regranted through cancellation or by decreasing the exercise price of a previously granted
Option. The Committee may make an Award to an individual who it expects to become an
Employee of the Corporation or any of its Affiliates within the next six months, with such
award being subject to the individual’s actually becoming an Employee within such time
period, and subject to such other terms and conditions as may be established by the
Committee. The Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to the extent the Committee
deems necessary or desirable to further the Plan purposes. Any decision of the Committee,
with respect to Awards, in the interpretation and administration of this Plan shall lie
within its sole and absolute discretion and shall be final, conclusive and binding on all
parties concerned.

     (c) No member of the Committee or officer of the Corporation to whom the Committee has
delegated authority in accordance with the provisions of paragraph 7 of this Plan shall be
liable for anything done or omitted to be done by him or her, by any member of the Committee
or by any officer of the Corporation in connection with the performance of any duties under
this Plan, except for his or her own willful misconduct or as expressly provided by statute.

     7. Delegation of Authority. Following the authorization of a pool of cash or shares of Common
Stock to be available for Awards, the Committee may authorize the Chief Executive Officer of the
Corporation or a committee consisting solely of members of the Board to grant individual Employee
Awards from such pool pursuant to such conditions or limitations as the Committee may establish.
The Committee may also delegate to the Chief Executive Officer and to other executive officers of
the Corporation its administrative duties under this Plan (excluding its granting authority)
pursuant to such conditions or limitations as the Committee may establish. The Committee may
engage or authorize the engagement of a third party administrator to carry out administrative
functions under the Plan.

8. Awards.

     (a) The Committee shall determine the type or types of Awards to be made under this
Plan and shall designate from time to time the Participants who are to be the recipients of
such Awards. Each Award may, in the discretion of the Committee, be embodied in an Award
Agreement, which shall contain such terms, conditions and limitations as shall be determined
by the Committee in its sole discretion and, if required by the Committee, shall be signed
by the Participant to whom the Award is granted and by an Authorized Officer for and on
behalf of the Corporation. Awards may consist of those listed in this paragraph 8(a) and
may be granted singly, in combination or in tandem. Awards may also be granted in
combination or in tandem with, in replacement of (subject to paragraph 14), or as
alternatives to, grants or rights under this Plan or any other plan of the Corporation or
any of its Affiliates, including the plan of any acquired entity. An Award may provide for
the grant or issuance of additional, replacement or alternative Awards upon the occurrence
of specified events. All or part of an Award may

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be subject to conditions established by the Committee, which may include, but are not
limited to, continuous service with the Corporation and its Affiliates, achievement of
specific business objectives, increases in specified indices, attainment of specified growth
rates, as referenced in clause (v) below, and other comparable measurements of performance.
Upon the termination of employment by a Participant who is an Employee, any unexercised,
deferred, unvested or unpaid Employee Awards shall be treated as set forth in the applicable
Award Agreement or as otherwise specified by the Committee.

     (i) Option. An Employee Award or Director Award may be in the form of an
Option; provided that Options granted as Director Awards are not Incentive Stock
Options. The Grant Price of an Option shall be not less than the Fair Market Value
of that class of Common Stock subject to such Option on the Grant Date.
Notwithstanding anything contrary contained in this Plan, in no event shall the term
of the Option extend more than ten (10) years after the Grant Date. Options may not
include provisions that “reload” the option upon exercise. Subject to the foregoing
provisions, the terms, conditions and limitations applicable to any Options awarded
to Participants pursuant to this Plan, including the Grant Price, the term of the
Options, the number of shares subject to the Option and the date or dates upon which
they become exercisable, shall be determined by the Committee.

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

     (iii) Stock Award. An Employee Award or Director Award may be in the form of a
Stock Award. The terms, conditions and limitations applicable to any Stock Awards
granted to Participants pursuant to this Plan shall be determined by the Committee;
provided that any Stock Award granted as an Employee Award which is not a
Performance Award shall have a minimum Restriction Period of three years from the
Grant Date, provided that (i) the Committee may provide for earlier vesting upon the
occurrence of certain events as set forth in the applicable Award Agreement or as
otherwise specified by the Committee, (ii) such three-year minimum Restriction
Period shall not apply to a Stock Award that is granted in lieu of salary or bonus,
and (iii) vesting of a Stock Award may occur incrementally over the three-year
minimum Restricted Period.

     (iv) Cash Award. An Employee Award may be in the form of a Cash Award. The
terms, conditions and limitations applicable to any Cash Awards granted pursuant to
this Plan shall be determined by the Committee.

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     (v) Performance Award. Without limiting the type or number of Employee Awards
or Director Awards that may be made under the other provisions of this Plan, an
Employee Award or Director Award may be in the form of a Performance Award. The
terms, conditions and limitations applicable to any Performance Awards granted to
Participants pursuant to this Plan shall be determined by the Committee; provided
that any Stock Award granted as an Employee Award which is a Performance Award shall
have a minimum Restriction Period of one year from the Grant Date, provided that the
Committee may provide for earlier vesting upon the occurrence of certain events as
set forth in the applicable Award Agreement or as otherwise specified by the
Committee. The Committee shall set Performance Goals in its discretion which,
depending on the extent to which they are met, will determine the value and/or
amount of Performance Awards that will be paid out to the Participant and/or the
portion of an Award that may be exercised.

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

     (B) Qualified Performance Awards. Performance Awards granted to
Employees under the Plan that are intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code shall be
paid, vested or otherwise deliverable solely on account of the attainment of
one or more pre-established, objective Performance Goals established by the
Committee prior to the earlier to occur of (x) 90 days after the
commencement of the period of service to which the Performance Goal relates
and (y) the lapse of 25% of the period of service (as scheduled in good
faith at the time the goal is established), and in any event while the
outcome is substantially uncertain. A Performance Goal is objective if a
third party having knowledge of the relevant facts could determine whether
the goal is met. Such a Performance Goal may be based on one or more
business criteria that apply to the Employee, one or more business units,
divisions, or sectors of the Corporation, or the Corporation as a whole, and
if so desired by the Committee, by comparison with a peer group of
companies. A Performance Goal may include one or more of the following:
Stock price measures (including but not limited to growth measures and total
shareholder return); Earnings per share (actual or targeted growth);
Earnings before interest, taxes, depreciation, and amortization (“EBITDA”);
Economic value added (“EVA”); Net income measures (including but not limited
to income after capital costs and income before or after taxes); Operating
income; Cash flow measures; Return measures (including but not limited to
return on average assets, risk-adjusted return on capital, and return on
average equity); Operating measures (including sales volumes, production
volumes

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and production efficiency); Expense measures (including but not limited
to overhead cost and general and administrative expense); Margins; and
corporate values measures (including ethics compliance, environmental, and
safety).

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

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

     (i) no Participant may be granted, during any fiscal year, Employee Awards
consisting of Options or SARs (including Options or SARs that are granted as
Performance Awards) that are exercisable for more than 200,000 shares of Common
Stock;

     (ii) no Participant may be granted, during any fiscal year, Employee Awards
consisting of Stock Awards (including Stock Awards that are granted as Performance
Awards) covering or relating to more than 100,000 shares of Common Stock (the
limitation set forth in this clause (ii), together with the limitation set forth in
clause (i) above and (c)(i) and (ii) below, being hereinafter collectively referred
to as the “Stock Based Awards Limitations”); and

     (iii) no Participant may be granted Employee Awards under this Plan consisting
of cash (including Awards that are granted as Performance Awards) in respect of any
fiscal year having a value determined on the Grant Date in excess of $3,000,000.

     (c) Notwithstanding anything to the contrary contained in this Plan the following
limitations shall apply to any Director Awards made hereunder:

9

 

     (i) no Participant may be granted, during any fiscal year, Director Awards
consisting of Options that are exercisable for more than 25,000 shares of Common
Stock and

     (ii) no Participant may be granted, during any fiscal year, Director Awards
consisting of Stock Awards covering or relating to more than 15,000 shares of Common
Stock.

     (d)
Prior to the effective date of this amendment and restatement, certain awards on shares of Common Stock (the “Prior Awards”) had been granted under the Prior Plans as in
effect from time to time. As of the effective date of the Existing Plan, each Prior Award
continued to be outstanding and the shares of Common Stock that are the subject of such
Prior Awards shall be subject to adjustment in accordance with Section 16 and to the other
provisions of the Plan.

     9. Change in Control Under Prior Plans. Unless otherwise expressly provided in the applicable
award agreement, the change in control provisions under the Prior Plans shall govern the awards
previously granted thereunder.

     10. Non-United States Participants. The Committee may grant awards to persons outside the
United States under such terms and conditions as may, in the judgment of the Committee, be
necessary or advisable to comply with the laws of the applicable foreign jurisdictions and, to that
end, may establish sub-plans, modified option exercise procedures and other terms and procedures.
Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be
granted, that would violate the Exchange Act, the Code, any securities law, any governing statute,
or any other applicable law.

     11. Payment of Awards.

     (a) General. Payment made to a Participant pursuant to an Award may be made in the
form of cash or Common Stock, or a combination thereof, and may include such restrictions as
the Committee shall determine, including, in the case of Common Stock, restrictions on
transfer and forfeiture provisions. If such payment is made in the form of Restricted
Stock, the Committee shall specify whether the underlying shares are to be issued at the
beginning or end of the Restriction Period. In the event that shares of Restricted Stock
are to be issued at the beginning of the Restriction Period, the certificates evidencing
such shares (to the extent that such shares are so evidenced) shall contain appropriate
legends and restrictions that describe the terms and conditions of the restrictions
applicable thereto. In the event that shares of Restricted Stock are to be issued at the
end of the Restricted Period, the right to receive such shares shall be evidenced by book
entry registration or in such other manner as the Committee may determine.

     (b) Deferral. With the approval of the Committee, amounts payable in respect of Awards
may be deferred and paid either in the form of installments or as a lump-sum payment. The
Committee may permit selected Participants to elect to defer payments of some or all types
of Awards or any other compensation otherwise payable by the

10

 

Corporation in accordance with procedures established by the Committee and may provide
that such deferred compensation may be payable in shares of Common Stock. Any deferred
payment pursuant to an Award, whether elected by the Participant or specified by the Award
Agreement or the terms of the Award or by the Committee, may be forfeited if and to the
extent that the Award Agreement or the terms of the Award so provide.

     (c) Dividends, Earnings and Interest. Rights to dividends or Dividend Equivalents may
be extended to and made part of any Stock Award, subject to such terms, conditions and
restrictions as the Committee may establish. The Committee may also establish rules and
procedures for the crediting of interest or other earnings on deferred cash payments and
Dividend Equivalents for Stock Awards.

     (d) Substitution of Awards. Subject to paragraphs 14 and 16, at the discretion of the
Committee, a Participant who is an Employee may be offered an election to substitute an
Employee Award for another Employee Award or Employee Awards of the same or different type.

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

     An optionee desiring to pay the Grant Price of an Option by tendering Common Stock using the
method of attestation may, subject to any such conditions and in compliance with any such
procedures as the Committee may adopt, do so by attesting to the ownership of Common Stock of the
requisite value in which case the Corporation shall issue or otherwise deliver to the optionee upon
such exercise a number of shares of Common Stock subject to the Option equal to the result obtained
by dividing (a) the excess of the aggregate Fair Market Value of the shares of Common Stock subject
to the Option for which the Option (or portion thereof) is being exercised over the Grant Price
payable in respect of such exercise by (b) the Fair Market Value per share of Common Stock subject
to the Option, and the optionee may retain the shares of Common Stock the ownership of which is
attested.

11

 

     13. Taxes. The Corporation or its designated third party administrator shall have the right
to deduct applicable taxes from any Employee Award payment and withhold, at the time of delivery or
vesting of cash or shares of Common Stock under this Plan, an appropriate amount of cash or number
of shares of Common Stock or a combination thereof for payment of taxes or other amounts required
by law or to take such other action as may be necessary in the opinion of the Corporation to
satisfy all obligations for withholding of such taxes. The Committee may also permit withholding
to be satisfied by the transfer to the Corporation of shares of Common Stock theretofore owned by
the holder of the Employee Award with respect to which withholding is required. If shares of
Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made. The Committee may provide for loans,
to the extent not otherwise prohibited by law, on either a short term or demand basis, from the
Corporation to a Participant who is an Employee to permit the payment of taxes required by law.

     14. Amendment, Modification, Suspension or Termination of the Plan. The Board may amend,
modify, suspend or terminate this Plan for the purpose of meeting or addressing any changes in
legal requirements or for any other purpose permitted by law, except that (i) no amendment or
alteration that would adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such Participant and (ii) no
amendment or alteration shall be effective prior to its approval by the stockholders of the
Corporation to the extent such approval is required by applicable legal requirements or the
requirements of the securities exchange on which the Corporation’s Common Stock is listed.

     15. Assignability. Unless otherwise determined by the Committee and provided in the Award
Agreement or the terms of the Award, no Award or any other benefit under this Plan shall be
assignable or otherwise transferable except by will, by beneficiary designation or the laws of
descent and distribution or pursuant to a qualified domestic relations order as defined by the Code
or Title I of the Employee Retirement Income Security Act, or the rules thereunder. In the event
that a beneficiary designation conflicts with an assignment by will, the beneficiary designation
will prevail. The Committee may prescribe and include in applicable Award Agreements or the terms
of the Award other restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this paragraph 15 shall be null and void.

     16. Adjustments.

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

12

 

     (b) In the event of any subdivision or consolidation of outstanding shares of Common
Stock, declaration of a dividend payable in shares of Common Stock or other stock split,
then (i) the number of shares of Common Stock reserved under this Plan and available for
issuance pursuant to specific types of Awards as described in paragraph 5, (ii) the number
of shares of Common Stock covered by outstanding Awards, (iii) the Grant Price or other
price in respect of such Awards, (iv) the appropriate Fair Market Value and other price
determinations for such Awards, and (v) the Stock Based Awards Limitations shall each be
proportionately adjusted by the Board as appropriate to reflect such transaction. In the
event of any other recapitalization or capital reorganization of the Corporation, any
consolidation or merger of the Corporation with another corporation or entity, the adoption
by the Corporation of any plan of exchange affecting Common Stock or any distribution to
holders of Common Stock of securities or property (including special cash dividends but not
normal cash dividends or dividends payable in Common Stock), the Board shall make
appropriate adjustments to (x) the number of shares of Common Stock reserved under this Plan
and (y)(i) the number of shares of Common Stock covered by Awards, (ii) the Grant Price or
other price in respect of such Awards, (iii) the appropriate Fair Market Value and other
price determinations for such Awards, and (iv) the Stock Based Awards Limitations to reflect
such transaction; provided that such adjustments shall only be such as are necessary to
maintain the proportionate interest of the holders of the Awards and preserve, without
increasing, the value of such Awards. In the event of a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation, the Board shall
be authorized (x) to assume under the Plan previously issued compensatory awards, or to
substitute new Awards for previously issued compensatory awards, including Awards, as part
of such adjustment; (y) to cancel Awards that are Options or SARs and give the Participants
who are the holders of such Awards notice and opportunity to exercise for 30 days prior to
such cancellation; or (z) to cancel any such Awards and to deliver to the Participants cash
in an amount that the Committee shall determine in its sole discretion is equal to the fair
market value of such Awards on the date of such event, which in the case of Options or SARs
shall be the excess of the Fair Market Value of Common Stock on such date over the exercise
or strike price of such Award.

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

     18. Unfunded Plan. This Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Participants under this Plan, any such accounts shall be used merely as
a bookkeeping convenience, including bookkeeping accounts established by a third

13

 

party administrator retained by the Corporation to administer the Plan. The Corporation shall
not be required to segregate any assets for purposes of this Plan or Awards hereunder, nor shall
the Corporation, the Board or the Committee be deemed to be a trustee of any benefit to be granted
under this Plan. Any liability or obligation of the Corporation to any Participant with respect to
an Award under this Plan shall be based solely upon any contractual obligations that may be created
by this Plan and any Award Agreement or the terms of the Award, and no such liability or obligation
of the Corporation shall be deemed to be secured by any pledge or other encumbrance on any property
of the Corporation. Neither the Corporation nor the Board nor the Committee shall be required to
give any security or bond for the performance of any obligation that may be created by this Plan.

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

     20. Successors. All obligations of the Corporation under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Corporation, whether the existence of
such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise,
of all or substantially all of the business and/or assets of the Corporation.

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

     22. Effectiveness and Term. The Existing Plan is amended and restated in its entirety as set
forth herein effective as of July 27, 2004. All Awards granted on June 26, 2004, July 27, 2004,
and August 4, 2004 shall be deemed to be granted in Class A Common Stock. No Award shall be made
ten years after January 8, 2004.

14

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