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                                                                    Exhibit 10.1

                             COOPER INDUSTRIES, LTD.
                              AMENDED AND RESTATED
                       DIRECTORS' RETAINER FEE STOCK PLAN
                     (AS AMENDED AND RESTATED APRIL 1, 2003)

1.       Purpose. The purpose of the Amended and Restated Directors' Retainer
         Fee Stock Plan (the "Plan") is to attract, motivate and retain
         experienced and knowledgeable persons to serve as directors of Cooper
         Industries, Ltd. (the "Company") and to promote identification of such
         directors' interests with those of the Company's shareholders.

2.       Definitions. As used in the Plan:

         2.1.     "Affiliate" shall have the meaning set forth in Rule 12b-2
                  under Section 12 of the Exchange Act.

         2.2.     "Annual Service Fee" means the annual cash retainer fee
                  payable to a Nonemployee Director for his or her services on
                  the Board; the annual retainer fee, if any, payable to a
                  Nonemployee Director for serving as a chairperson of a
                  committee of the Board; and any fees payable to a Nonemployee
                  Director for attendance at meetings of the Board or any of its
                  committees.

         2.3.     "Beneficial Owner" shall have the meaning set forth in Rule
                  13d-3 under the Exchange Act.

         2.4.     "Board" means the Board of Directors of the Company.

         2.5.     For all purposes of the Plan, a "Change in Control" shall be
                  deemed to have occurred if the event set forth in any one of
                  the following paragraphs shall have occurred:

                  2.5.1.   any Person is or becomes the Beneficial Owner,
                           directly or indirectly, of securities of the Company
                           (not including in the securities beneficially owned
                           by such Person any securities acquired directly from
                           the Company or its affiliates) representing 25% or
                           more of the combined voting power of the Company's
                           then outstanding securities, excluding any Person who
                           becomes such a Beneficial Owner in connection with a
                           transaction described in clause (i) of paragraph
                           2.5.3 below; or

                  2.5.2.   the following individuals cease for any reason to
                           constitute a majority of the number of directors then
                           serving: individuals who, on the date hereof,
                           constitute the Board and any new director (other than
                           a director whose initial assumption of office is in
                           connection with an actual or threatened election
                           contest, including but not limited to a consent
                           solicitation, relating to the election of directors
                           of the Company) whose appointment or

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                           election by the Board or nomination for election by
                           the Company's shareholders was approved or
                           recommended by a vote of at least two-thirds ( 2/3)
                           of the directors then still in office who either were
                           directors on the date hereof or whose appointment,
                           election or nomination for election was previously so
                           approved or recommended; or

                  2.5.3.   there is consummated a merger or consolidation of the
                           Company or any direct or indirect subsidiary of the
                           Company with any other corporation, other than (i) a
                           merger or consolidation which results in the
                           directors of the Company immediately prior to such
                           merger or consolidation continuing to constitute at
                           least a majority of the Board of Directors of the
                           Company, the surviving entity or any parent thereof,
                           or (ii) a merger or consolidation effected to
                           implement a recapitalization of the Company (or
                           similar transaction) in which no Person is or becomes
                           the Beneficial Owner, directly or indirectly, of
                           securities of the Company (not including in the
                           securities Beneficially Owned by such Person any
                           securities acquired directly from the Company or its
                           Affiliates) representing 25% or more of the combined
                           voting power of the Company's then outstanding
                           securities; or

                  2.5.4.   the shareholders of the Company approve a plan of
                           complete liquidation or dissolution of the Company or
                           there is consummated an agreement for the sale or
                           disposition by the Company of all or substantially
                           all of the Company's assets, other than a sale or
                           disposition by the Company of all or substantially
                           all of the Company's assets to an entity, at least
                           60% of the combined voting power of the voting
                           securities of which are owned by shareholders of the
                           Company in substantially the same proportions as
                           their ownership of the Company immediately prior to
                           such sale.

         2.6.     "Change in Control Price" means the higher of (i) the Fair
                  Market Value on the date of determination of the Change in
                  Control or (ii) the highest price per share actually paid for
                  the Common Stock in connection with the Change in Control of
                  the Company.

         2.7.     "Committee" means the Committee on Nominations and Corporate
                  Governance of the Board.

         2.8.     "Common Stock" means the Class A common shares, par value
                  $0.01 a share, of the Company.

         2.9.     "Deferral Election" shall have the meaning set forth in
                  Section 7 hereof.

         2.10.    "Deferred Shares" shall have the meaning set forth in Section
                  7 hereof.

         2.11.    "Deferred Share Account" shall have the meaning set forth in
                  Section 7 hereof.

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         2.12.    "Dividend Equivalents" shall have the meaning set forth in
                  Section 8 hereof.

         2.13.    "Exchange Act" means the Securities Exchange Act of 1934, as
                  amended from time to time.

         2.14.    "Fair Market Value" of a share of Common Stock, as of any
                  date, means the average of the high and low sales prices of a
                  share of Common Stock as reported on the Stock Exchange
                  composite tape on the applicable date, provided that if no
                  sales of Common Stock were made on the Stock Exchange on that
                  date, the average of the high and low prices as reported on
                  the composite tape for the preceding day on which sales of
                  Common Stock were made.

         2.15.    "Issue Dates" means the first business day of each calendar
                  quarter in a Plan Year.

         2.16.    "Nonemployee Director" means a member of the Board who is not
                  an employee of the Company or any of its subsidiaries.

         2.17.    "Person" shall have the meaning given in Section 3(a)(9) of
                  the Exchange Act, as modified and used in Sections 13(d) and
                  14(d) thereof, except that such term shall not include (i) the
                  Company or any of its subsidiaries, (ii) a trustee or other
                  fiduciary holding securities under an employee benefit plan of
                  the Company or any of its subsidiaries, (iii) an underwriter
                  temporarily holding securities pursuant to an offering of such
                  securities, (iv) a corporation owned, directly or indirectly,
                  by the shareholders of the Company in substantially the same
                  proportions as their ownership of stock of the Company, or (v)
                  any individual, entity or group whose ownership of securities
                  of the Company is reported on Schedule 13G pursuant to Rule
                  13d-1 promulgated under the Exchange Act (but only for so long
                  as such ownership is so reported).

         2.18.    "Plan Year" means the 12-month period commencing May 1 and
                  ending on the following April 30. The first Plan Year shall
                  commence on May 1, 1998.

         2.19.    "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
                  Act (or any successor rule to the same effect).

         2.20.    "Stock Exchange" means the New York Stock Exchange, Inc.
                  ("NYSE") or, if the Common Stock is no longer included on the
                  NYSE, then such other market price reporting system on which
                  the Common Stock is traded or quoted.

         2.21.    "Voting Stock" means securities entitled to vote in an
                  election of directors of the Company.

3.       Authorized Shares. The total number of shares of the Company's Common
         Stock available for issuance under the Plan is 100,000, including
         Deferred Shares (as defined

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         below), subject to adjustment pursuant to Section 13 hereof. Shares of
         Common Stock available for issuance under the Plan may be authorized
         and unissued shares or shares held by any of the Company's subsidiaries
         as the Company may determine from time to time.

4.       Administration of the Plan. The Plan shall be administered by the
         Committee. The Committee shall, subject to the provisions of the Plan,
         adopt such rules as it may deem appropriate in order to carry out the
         purpose of the Plan. All questions of interpretation, administration,
         and application of the Plan shall be determined by a majority of the
         members of the Committee, except that the Committee may authorize any
         one or more of its members, or any officer or employee of the Company,
         to execute and deliver documents on behalf of the Committee. The
         determination of such majority shall be final and binding in all
         matters relating to the Plan. No member of the Committee shall be
         liable for any act done or omitted to be done by such member or by any
         other member of the Committee in connection with the Plan, except for
         such member's own willful misconduct or as expressly provided by
         statute. All costs and expenses involved in administration of the Plan
         shall be borne by the Company.

5.       Participation. Each Nonemployee Director shall be eligible to
         participate in the Plan.

6.       Election to Receive Common Stock in Lieu of Annual Service Fee. Prior
         to the first day of each Plan Year, each Nonemployee Director may make
         an election to receive all or a portion of his or her Annual Service
         Fee for such Plan Year in Common Stock (a "Stock Election") in lieu of
         cash. Such shares of Common Stock shall be transferred in accordance
         with Section 9 hereof, except to the extent that a Deferral Election
         shall be in effect with respect to such shares or to the extent that
         Section 12 hereof applies. Any Stock Election shall be in writing,
         shall specify the percentage of the Annual Service Fee to be paid in
         Common Stock, and shall be irrevocable for the Plan Year for which the
         Stock Election is made. Notwithstanding the foregoing, any Nonemployee
         Director who is newly elected or appointed to the Board after the first
         day of a Plan Year may make the election under this Section 6 upon the
         date of his or her election or appointment to the Board with respect to
         the percentage of the Annual Service Fee that is payable for the
         remainder of that Plan Year.

7.       Deferral Election. Prior to the first day of each Plan Year, each
         Nonemployee Director may make an election to defer the receipt (a
         "Deferral Election") of all or any percentage of the shares of Common
         Stock otherwise payable to such Nonemployee Director pursuant to
         Section 6 hereof. In such event, the Company shall credit to an account
         (a "Deferred Share Account") maintained on behalf of such Nonemployee
         Director, as of the date on which the shares would otherwise be
         transferred hereunder, the shares of Common Stock ("Deferred Shares")
         deferred. Any Deferral Election shall be in writing, shall specify the
         percentage of shares to be deferred, and shall be irrevocable for the
         Plan Year for which the Deferral Election is made. Notwithstanding the
         foregoing, any Nonemployee Director who is newly elected or appointed
         to the Board after the first day of a Plan Year may make the election
         under this Section 7 upon the date of his or her

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         election or appointment to the Board with respect to the percentage of
         the Stock Election that is to be deferred for the remainder of that
         Plan Year.

         Deferred Shares will be distributed in whole shares of Common Stock and
         cash in lieu of fractional shares. At the time of the Deferral
         Election, the Nonemployee Director shall elect to receive the Deferred
         Shares in either a lump sum or in no more than 10 substantially equal
         annual installments. The lump sum will be paid on either (a) the March
         1 following the calendar year that the Nonemployee Director ceases to
         serve on the Board or (b) a date designated by the Nonemployee Director
         on the Deferral Election. Installment payments shall commence on the
         March 1 following the calendar year that the Nonemployee Director
         ceases to serve on the Board and shall continue on each March 1 until
         all Deferred Shares are distributed. All Deferral Elections are subject
         to Section 12 of this Plan.

         In the event of the Nonemployee Director's death before distribution of
         all of his or her Deferred Shares, the balance of the Deferred Shares
         shall be distributed in a lump sum to the beneficiary or beneficiaries
         designated in writing by the Nonemployee Director, or if no designation
         has been made, to the estate of the Nonemployee Director.

8.       Dividend Equivalents. Deferred Shares shall be credited with an amount
         equal to the dividends that would have been paid on an equal number of
         outstanding shares of Common Stock ("Dividend Equivalents"). Dividend
         Equivalents shall be credited (i) as of the payment date of such
         dividends, and (ii) only with respect to Deferred Shares credited to
         such Nonemployee Director prior to the record date of the dividend.
         When credited, Dividend Equivalents shall be converted into an
         additional number of Deferred Shares as of the payment date of the
         dividend, based on the Fair Market Value on such payment date. Such
         Deferred Shares shall thereafter be treated in the same manner as any
         other Deferred Shares under the Plan.

9.       Transfer of Shares. Shares of Common Stock issuable to a Nonemployee
         Director under Section 6 hereof shall be transferred to such
         Nonemployee Director on the Issue Dates. The total number of shares of
         Common Stock to be transferred shall be determined by the following
         formula:

               % of Stock Election x Quarterly Service Fee Payable
           ----------------------------------------------------------
           Fair Market Value of a Share of Common Stock on Issue Date

         The Company will instruct its registrar to make an entry on the
         Company's Shareholder records evidencing that the shares (including any
         fractional shares) of Common Stock have been issued as of the Issue
         Dates.

         Notwithstanding anything to the contrary herein, if on any Issue Date
         the number of shares of Common Stock otherwise issuable to the
         Nonemployee Directors shall exceed the number of authorized shares of
         Common Stock remaining available under the Plan, the available shares
         shall be allocated among the Nonemployee Directors in proportion to

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         the number of shares they would otherwise be entitled to receive and
         the remainder of the Nonemployee Directors' Annual Service Fee shall be
         payable in cash.

10.      Rights as a Shareholder. Except as otherwise expressly provided herein
         with respect to Dividend Equivalents, a Nonemployee Director shall have
         no rights as a shareholder of the Company with respect to any Common
         Stock to be issued under the Plan until he or she becomes the holder of
         record of such shares.

11.      Vesting. A Nonemployee Director shall be 100% vested in his or her
         Deferred Share Account at all times.

12.      Change in Control. Upon a Change in Control, all Deferred Shares, to
         the extent credited prior to the Change in Control, shall be issued
         immediately, or if the Common Stock is no longer trading on the Stock
         Exchange, shall be paid immediately in cash. For purposes of this
         Section 12, the cash equivalent value of a Deferred Share shall be the
         Change in Control Price.

13.      Effect of Certain Changes in Capitalization. In the event of any
         recapitalization, stock split, reverse stock split, stock dividend,
         reorganization, merger, consolidation, spin-off, combination,
         repurchase, or share exchange, or other similar corporate transaction
         or event affecting the Common Stock, the maximum number or class of
         shares available under the Plan, and the number or class of shares of
         Common Stock to be delivered hereunder shall be adjusted by the
         Committee to reflect any such change in the number or class of issued
         shares of Common Stock.

14.      Term of Plan. The Plan shall become effective on April 30, 1998
         provided that the Plan shall have been approved by the Company's
         shareholders at the 1998 annual meeting of shareholders. Unless
         terminated earlier pursuant to Section 15, the Plan shall have a term
         of 10 years. Notwithstanding the foregoing, any Deferral Elections made
         prior to the termination of the Plan shall continue in accordance with
         the terms hereof.

15.      Amendment; Termination. The Board may at any time and from time to time
         alter, amend, or terminate the Plan in whole or in part; provided,
         however, that no such action shall, without the consent of a
         Nonemployee Director, affect the rights of such Nonemployee Director in
         any Common Stock issued to or deferred by such Nonemployee Director
         under the Plan, and provided, further that no amendment shall be
         effective prior to approval by the Company's shareholders to the extent
         such approval is then required by law, rule or regulation or pursuant
         to Rule 16b-3 in order to preserve the exemption provided by Rule
         16b-3.

16.      Rights of Directors. Nothing contained in the Plan shall confer upon
         any Nonemployee Director any right to continue in the service of the
         Company as a director.

17.      Government and Other Regulations. The obligations of the Company to
         deliver shares under the Plan shall be subject to all applicable laws,
         rules and regulations and such

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         approvals by any government agency as may be required, including,
         without limitation, compliance with the Securities Act of 1933, as
         amended.

18.      Nontransferability. The rights and benefits under the Plan shall not be
         transferable by a Nonemployee Director other than by the laws of
         descent and distribution or pursuant to a qualified domestic relations
         order as defined in the Internal Revenue Code of 1986, as amended, or
         Title I of the Employee Retirement Income Security Act of 1974, as
         amended, or the rules thereunder.

19.      Withholding. To the extent required by applicable federal, state,
         local, or foreign law, a Nonemployee Director shall make arrangements
         satisfactory to the Company for the payment of any withholding tax
         obligations that arise in connection with the Plan. The Company shall
         not be required to issue any Common Stock under the Plan until such
         obligations are satisfied. A Nonemployee Director may satisfy any such
         withholding obligation by (i) having the Company retain the number of
         shares of Common Stock or (ii) tendering the number of shares of Common
         Stock, in either case, whose Fair Market Value equals the amount
         required to be withheld.

20.      Governing Law. To the extent that federal laws do not otherwise
         control, the Plan and all rights hereunder shall be construed in
         accordance with and governed by the laws of the State of Texas.

21.      Headings. The headings of sections herein are included solely for
         convenience of reference and shall not affect the meaning of any of the
         provisions of the Plan.

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                                                                    Exhibit 10.2

                              AMENDED AND RESTATED
                             COOPER INDUSTRIES, LTD.
                              DIRECTORS' STOCK PLAN
                    (AS AMENDED AND RESTATED APRIL 29, 2003)

1.       Purpose and Authorized Shares.

         1.1      The purpose of this Directors' Stock Plan (the "Plan") is to
         align more closely the interests of the nonemployee Directors of Cooper
         Industries, Ltd. (the "Company") with the interests of the Company's
         shareholders and to attract, motivate and retain experienced and
         knowledgeable Directors. Accordingly, the Company will distribute
         shares, restricted stock units exchangeable for shares, or options to
         purchase shares, of Common Stock of the Company to nonemployee
         Directors on the terms and conditions set forth in this Plan.

         1.2      The total number of shares of Common Stock available for
         issuance under this Plan is 200,000, subject to adjustment pursuant to
         Section 12. Shares available for issuance under this Plan may be
         authorized and unissued shares or shares held by any of the Company's
         subsidiaries, as the Company may determine from time to time. Any
         shares that have been subject to an option which for any reason expires
         or is terminated unexercised, and any shares that have been subject to
         restricted stock units that do not vest, shall again be available for
         grants of options or for exchange of restricted stock units.

2.       Definitions. As used in the Plan:

         2.1      "Board" means the Board of Directors of the Company.

         2.2      For all purposes of the Plan, a "Change in Control" shall have
         occurred if any of the following events shall occur:

                  (a)      any Person is or becomes the Beneficial Owner,
                  directly or indirectly, of securities of the Company (not
                  including in the securities beneficially owned by such Person
                  any securities acquired directly from the Company or its
                  Affiliates) representing 25% or more of the combined voting
                  power of the Company's then outstanding securities, excluding
                  any Person who becomes such a Beneficial Owner in connection
                  with a transaction described in clause (i) of paragraph (c)
                  below; or

                  (b)      the following individuals cease for any reason to
                  constitute a majority of the number of directors then serving:
                  individuals who, on the date hereof, constitute the Board and
                  any new director (other than a director whose initial
                  assumption of office is in connection with an actual or
                  threatened election contest, including but not limited to a
                  consent solicitation, relating to the election of directors of
                  the Company) whose appointment or election by the Board or
                  nomination for election by the Company's shareholders was
                  approved or recommended by a vote of at least two-thirds (2/3)
                  of the directors then still in office who either were
                  directors on the date hereof or whose appointment, election or
                  nomination for election was previously so approved or
                  recommended; or

                  (c)      there is consummated a merger or consolidation of the
                  Company or any direct or indirect subsidiary of the Company
                  with any other corporation, other than (i) a merger or
                  consolidation which results in the directors of the Company
                  immediately prior to such merger

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                  or consolidation continuing to constitute at least a majority
                  of the Board of Directors of the Company, the surviving entity
                  or any parent thereof, or (ii) a merger or consolidation
                  effected to implement a recapitalization of the Company (or
                  similar transaction) in which no Person is or becomes the
                  Beneficial Owner, directly or indirectly, of securities of the
                  Company (not including in the securities Beneficially Owned by
                  such Person any securities acquired directly from the Company
                  or its Affiliates) representing 25% or more of the combined
                  voting power of the Company's then outstanding securities; or

                  (d)      the shareholders of the Company approve a plan of
                  complete liquidation or dissolution of the Company or there is
                  consummated an agreement for the sale or disposition by the
                  Company of all or substantially all of the Company's assets,
                  other than a sale or disposition by the Company of all or
                  substantially all of the Company's assets to an entity, at
                  least 60% of the combined voting power of the voting
                  securities of which are owned by shareholders of the Company
                  in substantially the same proportions as their ownership of
                  the Company immediately prior to such sale.

                  (e)      For purposes of this Section 2.2, "Affiliate" shall
                  have the meaning set forth in Rule 12b-2 promulgated under
                  Section 12 of the Exchange Act; "Beneficial Owner" shall have
                  the meaning set forth in Rule 13d-3 under the Exchange Act;
                  and "Person" shall have the meaning given in Section 3(a)(9)
                  of the Exchange Act, as modified and used in Sections 13(d)
                  and 14(d) thereof, except that such term shall not include (i)
                  the Company or any of its subsidiaries, (ii) a trustee or
                  other fiduciary holding securities under an employee benefit
                  plan of the Company or any of its subsidiaries, (iii) an
                  underwriter temporarily holding securities pursuant to an
                  offering of such securities, (iv) a corporation owned,
                  directly or indirectly, by the shareholders of the Company in
                  substantially the same proportions as their ownership of stock
                  of the Company, or (v) any individual, entity or group whose
                  ownership of securities of the Company is reported on Schedule
                  13G pursuant to Rule 13d-1 promulgated under the Exchange Act
                  (but only for so long as such ownership is so reported).

         2.3      "Change in Control Price" means the higher of (i) the Fair
         Market Value on the date of determination of the Change in Control or
         (ii) the highest price per share actually paid for the Common Stock in
         connection with the Change in Control of the Company.

         2.4      "Common Stock" means the Class A common shares, par value
         $0.01 a share, of the Company.

         2.5      "Deferral Election" shall have the meaning set forth in
         Section 5 hereof.

         2.6      "Deferred Shares" shall have the meaning set forth in Section
         5 hereof.

         2.7      "Deferred Share Account" shall have the meaning set forth in
         Section 5 hereof.

         2.8      "Dividend Equivalents" shall have the meaning set forth in
         Section 7 hereof.

         2.9      "Exchange Act" means the Securities Exchange Act of 1934, as
         amended from time to time.

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         2.10     "Fair Market Value" of a share of Common Stock, as of any
         date, means the average of the high and low sales prices of a share of
         Common Stock as reported on the Stock Exchange composite tape on the
         applicable date, provided that if no sales of Common Stock were made on
         the Stock Exchange on that date, the average of the high and low prices
         as reported on the composite tape for the preceding day on which sales
         of Common Stock were made.

         2.11     "Grant Date" shall mean the day on which the Annual Meeting of
         Shareholders commences.

         2.12     "Participant" means a member of the Board who is not an
         officer or employee of the Company or any of its subsidiaries.

         2.13     "Restricted Stock Award" shall have the meaning set forth in
         Section 4 hereof.

         2.14     "Restricted Stock Unit" shall have the meaning set forth in
         Section 6 hereof.

         2.15     "Stock Award" shall have the meaning set forth in Section 4
         hereof.

         2.16     "Stock Exchange" means the New York Stock Exchange, Inc.
         ("NYSE") or, if the Common Stock is no longer included on the NYSE,
         then such other market price reporting system on which the Common Stock
         is traded or quoted.

         2.17     "Voting Stock" means securities entitled to vote in an
         election of Directors of the Company.

3.       Administration.

         3.1      This Plan shall be, to the maximum extent possible,
         self-effectuating. This Plan shall be construed, interpreted and, to
         the extent required, administered by the Board or a committee appointed
         by the Board to act on its behalf under this Plan. Notwithstanding the
         foregoing, no Director shall participate in any decision relating
         solely to his or her benefits. Subject to the foregoing, the Board may
         resolve any questions and make all other determinations and adjustments
         required by this Plan, maintain all the necessary records for the
         administration of the Plan, and provide forms and procedures to
         facilitate the implementation of this Plan.

         3.2      Any determination of the Board or committee made in good faith
         shall be conclusive. In performing its duties, the Board or the
         committee shall be entitled to rely on public records and on
         information, opinions, reports or statements prepared or presented by
         officers or employees of the Company or other experts believed to be
         reliable and competent. The Board or the committee may delegate
         ministerial, bookkeeping and other nondiscretionary functions to
         individuals who are officers or employees of the Company.

4.       Award of Stock and Restricted Stock Units. Each Participant shall
         receive annually on the Grant Date an award of 500 shares of Common
         Stock (a "Stock Award") and 1,000 Restricted Stock Units (a "Restricted
         Stock Award") for services to be provided by the Participant as a
         Director from the Grant Date until the next Annual Meeting of the
         Shareholders. Any Participant who is newly elected or appointed to the
         Board after the Grant Date shall receive, on the first business day of
         the first quarter following his or her election or appointment as a
         director, a pro rata award for the year he or she is elected or
         appointed. For example, if the Company has four regular Board meetings
         during the year, the pro rata award to a newly elected or appointed
         Participant would be as follows:

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                  (a)      if elected or appointed at or before the first
                  regular Board meeting following the Grant Date, an award of
                  375 shares of Common Stock and 750 Restricted Stock Units on
                  the date of his or her election or appointment to the Board;
                  or

                  (b)      if elected or appointed at or before the second
                  regular Board meeting following the Grant Date, an award of
                  250 shares of Common Stock and 500 Restricted Stock Units on
                  the date of his or her election or appointment to the Board;
                  or

                  (c)      if elected or appointed at or before the third
                  regular Board meeting following the Grant Date, an award of
                  125 shares of Common Stock and 250 Restricted Stock Units on
                  the date of his or her election or appointment to the Board.

         A Participant shall not be required to make any payment for any shares
         or Restricted Stock Units delivered under this Section 4, other than
         services rendered as a Director. Upon delivery of shares of Common
         Stock, the recipient shall have the entire beneficial ownership
         interest in, and all rights and privileges of an owner as to those
         shares, including the right to vote the shares and to receive dividends
         thereon.

5.       Deferral Election.

         5.1      Prior to the Grant Date, each Participant may make an election
         to defer the receipt (a "Deferral Election") of all or any percentage
         of the Stock Award otherwise payable to such Participant pursuant to
         Section 4 hereof. In such event, the Company shall credit to an account
         (a "Deferred Share Account") maintained on behalf of such Participant,
         as of the date on which the shares would otherwise be transferred
         hereunder, the shares of Common Stock deferred ("Deferred Shares"). Any
         Deferral Election shall be in writing, shall specify the percentage of
         shares to be deferred, and shall be irrevocable for the Stock Award for
         which the Deferral Election is made. Notwithstanding the foregoing, any
         Participant who is newly elected or appointed to the Board after the
         Grant Date may make the election under this Section 5 on the date of
         his or her election or appointment to the Board with respect to the
         percentage of the new Participant's pro-rata Stock Award that is to be
         deferred.

         5.2      Deferred Shares will be distributed in whole shares of Common
         Stock and cash in lieu of fractional shares. At the time of the
         Deferral Election, the Participant shall elect to receive the Deferred
         Shares in either a lump sum or in no more than 10 substantially equal
         annual installments. The lump sum will be paid on either (i) the March
         1 following the calendar year that the Participant ceased to serve on
         the Board or (ii) a date designated by the Participant on the Deferral
         Election. Installment payments shall commence on the March 1 following
         the calendar year that the Participant ceased to serve on the Board and
         shall continue on each March 1 until all Deferred Shares are
         distributed. All Deferral Elections are subject to Section 13 of this
         Plan.

         5.3      In the event of the Participant's death before distribution of
         all of his or her Deferred Shares, the balance of the Deferred Shares
         shall be distributed in a lump sum to the beneficiary or beneficiaries
         designated in writing by the Participant, or if no designation has been
         made, to the estate of the Participant.

6.       Restricted Stock Units.

         6.1      Each Restricted Stock Unit represents the right to receive one
         share of Common Stock upon the Participant ceasing to serve on the
         Board for any reason ("Restricted Stock Unit"). A Participant cannot
         exchange his or her Restricted Stock Units for shares of Common Stock
         prior to such Participant ceasing to serve on the Board. The Company
         shall maintain on behalf of each Participant an account listing the
         Restricted Stock Units granted to such Participant. Restricted Stock
         Units shall

                                      - 4 -

<PAGE>

         vest on a pro rata basis upon each regular Board meeting during the
         year following the Grant Date for such Restricted Stock Units. For
         example, if the Company has four regular Board meetings during the
         year, 250 Restricted Stock Units would vest upon each regular Board
         meeting following the Grant Date. When a Participant ceases his or her
         service on the Board for any reason including, without limitation,
         death or retirement in accordance with the Board's retirement policy,
         such Participant shall forfeit any unvested Restricted Stock Units.

         6.2      Shares issued in exchange for Restricted Stock Units will be
         distributed in whole shares and cash in lieu of fractional shares.
         Prior to the Grant Date, each director shall elect to receive the
         shares issuable upon the exchange of his or her Restricted Stock Units
         in either a lump sum or in no more than 10 substantially equal annual
         installments. Each such election shall be in writing and shall be
         irrevocable for the Restricted Stock Award for which the election is
         made. The lump sum will be paid on the March 1 following the calendar
         year that the Participant ceases to serve on the Board. Installment
         payments shall commence on the March 1 following the calendar year that
         the Participant ceases to serve on the Board and shall continue on each
         March 1 until all shares issuable upon the exchange for such
         Participant's Restricted Stock Units are distributed. All Restricted
         Stock Units are subject to Section 13 of this Plan.

         6.3      In the event of the Participant's death before distribution of
         all of the shares issuable upon exchange of the Participant's vested
         Restricted Stock Units, the balance of such shares shall be distributed
         in a lump sum to the beneficiary or beneficiaries designated in writing
         by the Participant, or if no designation has been made, to the estate
         of the Participant.

7.       Dividend Equivalents. Deferred Shares and Restricted Stock Units shall
         be credited with an amount equal to the dividends that would have been
         paid on an equal number of outstanding shares of Common Stock
         ("Dividend Equivalents"). Dividend Equivalents shall be credited (i) as
         of the payment date of such dividends, and (ii) only with respect to
         Deferred Shares and Restricted Stock Units credited to such Participant
         prior to the record date of the dividend. When credited, Dividend
         Equivalents shall be converted into an additional number of Deferred
         Shares or Restricted Stock Units, as applicable, as of the payment date
         of the dividend, based on the Fair Market Value on such payment date.
         Such Deferred Shares or Restricted Stock Units shall thereafter be
         treated in the same manner as any other Deferred Shares or Restricted
         Stock Units, respectively, under the Plan.

8.       Rights as a Shareholder. Except as otherwise expressly provided herein
         with respect to Dividend Equivalents, a Participant shall have no
         rights as a shareholder of the Company with respect to any Deferred
         Shares or Restricted Stock Units until he or she becomes the holder of
         record of such shares.

9.       Vesting. A Participant shall be 100% vested in his or her Deferred
         Share Account at all times. A Participant shall be vested in his or her
         Restricted Stock Units as provided in Section 6.1 hereof.

10.      Award of Stock Options. Each Participant shall receive annually on the
         Grant Date a nonqualified option to purchase 2,000 shares of Common
         Stock upon the terms and conditions set forth in this Plan.

11.      Terms and Conditions of Options.

         11.1     The option exercise price shall be the Fair Market Value on
         the Grant Date.

         11.2     The option shall become fully exercisable on the third
         anniversary of the Grant Date. If, prior to the third anniversary of
         the Grant Date, the Participant ceases to be a Director of the Company
         for any reason other than death or retirement in accordance with the
         Board's retirement policy, the option rights shall terminate
         immediately. If the Participant dies while serving as a Director of the
         Company

                                      - 5 -

<PAGE>

         or retires in accordance with the Board's retirement policy, all
         outstanding options shall become fully exercisable immediately.

         11.3     The duration of stock options shall be 10 years from the Grant
         Date.

         11.4     Options may be exercised in whole or in part by delivering to
         the Company at its principal executive office (directed to the
         attention of the Secretary or Assistant Secretary) a written notice,
         signed by the Participant or by the Participant's executor,
         administrator or a person entitled by will or the laws of descent and
         distribution to exercise the option, as the case may be, of the
         election to exercise the option and stating the number of shares in
         respect of which it is then being exercised. The option shall be deemed
         exercised as of the date the Company receives such notice. Payment of
         the exercise price shall be made in cash or with shares of Common Stock
         or a combination of both delivered at the time that an option, or any
         part thereof, is exercised.

                  No shares shall be issued pursuant to the exercise of an
         option until full payment therefor is received. Common Stock used as
         payment shall have been owned by the Participant not less than six
         months preceding the date the option is exercised and shall be valued
         at its Fair Market Value.

         11.5     An option may be exercised only by the Participant or, in the
         case of the Participant's death, by the executor or administrator of
         the Participant's estate or by the person who acquired the right to
         exercise such option by bequest or inheritance. After the Participant
         ceases to be a member of the Board, vested options may be exercised for
         the remaining term of the option or for a period of five years,
         whichever is less.

         11.6     An option shall not be transferable by the Participant other
         than by will or by the laws of descent and distribution.

12.      Changes in Common Stock. In the event of any change in the number of
         outstanding shares by reason of any stock dividend, stock split,
         recapitalization, merger, consolidation, exchange of shares or other
         similar corporate change, the following shall be adjusted appropriately
         to reflect such change: (i) the number of shares available for issuance
         under the Plan; (ii) the number of shares and Restricted Stock Units
         awarded pursuant to Section 4; (iii) the number of shares credited to a
         Deferred Share Account pursuant to Section 5; (iv) the number of
         Restricted Stock Units credited to a Participant's account pursuant to
         Section 6; (v) the number of shares granted in each option pursuant to
         Section 10; (vi) the number of shares subject to outstanding options;
         and (vii) the option exercise price per share.

13.      Change in Control. In the event of a Change in Control, all outstanding
         options shall vest automatically, all outstanding options shall be
         canceled and the Company shall make a payment in cash to each
         Participant with an outstanding option, within 10 days after the
         effective date of the Change in Control, in an amount equal to the
         excess of the Change in Control Price over the option exercise price
         times the number of shares subject to the outstanding options. Upon a
         Change in Control, all Deferred Shares, to the extent credited prior to
         the Change in Control, shall be issued immediately, or if the Common
         Stock is no longer trading on the Stock Exchange, shall be paid
         immediately in cash. Upon a Change in Control, all Restricted Stock
         Units shall be converted into unrestricted shares of Common Stock and
         issued immediately, or if the Common Stock is no longer trading on the
         Stock Exchange, shall be paid immediately in cash. For purposes of this
         Section 13, the cash equivalent value of a Deferred Share or a
         Restricted Stock Unit shall be the Change in Control Price.
         Notwithstanding the foregoing, (i) at the Company's option, the Company
         may issue shares in lieu of making a cash payment with respect to
         outstanding stock options if the payment of cash would have the adverse
         effect of preventing a pooling of interest transaction that was
         approved by the Board of Directors, or (ii) in the event of a corporate
         merger, consolidation, exchange of shares or other similar corporate
         change, the Board of Directors shall be authorized to issue or assume
         stock options

                                      - 6 -

<PAGE>

         by means of a substitution of new options for previously issued options
         or an assumption of previously issued options.

14.      Amendment and Termination. The Board may, from time to time, amend or
         terminate the Plan; provided, however, that no amendment or termination
         shall adversely affect the rights of any Participant without his or her
         consent with respect to outstanding options, and no amendment shall be
         effective prior to approval by the Company's shareholders to the extent
         such approval is then required pursuant to applicable stock exchange
         rules or SEC regulations, including Rule 16b-3 under the Exchange Act
         in order to preserve the exemptions provided by Rule 16b-3. In
         addition, the provisions of this Plan that determine the amount, price
         or timing of awards shall not be amended more than once every six
         months (other than as may be necessary to conform to any applicable
         changes in the Internal Revenue Code of 1986, as amended or the rules
         thereunder), unless such amendment is consistent with Rule 16b-3.

15.      Effective Date. This Plan shall be effective on the date shareholder
         approval is obtained and shall continue for a period of 10 years after
         the effective date, provided that options that are outstanding 10 years
         after the effective date shall continue to be outstanding and
         exercisable in accordance with their terms.

16.      Interpretation. It is the intent of the Company that this Plan satisfy
         and be interpreted in a manner that satisfies the applicable
         requirements of Rule 16b-3 under the Exchange Act so that Participants
         will be entitled to the benefits of Rule 16b-3 or other exemptive rules
         under Section 16 of the Exchange Act and will not be subjected to
         avoidable liability thereunder. Any contrary interpretation shall be
         avoided.

17.      Government and Other Regulations. The obligations of the Company to
         deliver shares under the Plan shall be subject to all applicable laws,
         rules and regulations and such approvals by any government agency as
         may be required, including, without limitation, compliance with the
         Securities Act of 1933, as amended.

18.      No Right to Continue as a Director. Nothing contained in this Plan
         shall be deemed to confer upon any Participant any right to continue as
         a Director of the Company.

19.      Governing Law. To the extent that Federal laws do not otherwise
         control, the Plan and all determinations made and actions taken
         pursuant thereto, shall be governed by the laws of the State of Texas.

                                      - 7 -

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