Document:

exv10wcw5

Exhibit 10.C.5

AMENDMENT NO. 4 TO

RECEIVABLES PURCHASE AGREEMENT

          AMENDMENT NO. 4, dated as of October 31, 2008 (the “Effective Date”), to the RECEIVABLES
PURCHASE AGREEMENT dated as of October 6, 2006 and amended by Amendment No. 1 dated as of December
1, 2006, Amendment No. 2 dated as of October 4, 2007 and Amendment No. 3 dated October 2, 2008 (as
so amended, the “Agreement”), among SNG FUNDING COMPANY, L.L.C., a Delaware limited liability
company, SOUTHERN NATURAL GAS COMPANY, a Delaware corporation, as initial Servicer, STARBIRD
FUNDING CORPORATION and the other funding entities from time to time party hereto as Investors, BNP
PARIBAS, NEW YORK BRANCH, and the other financial institutions from time to time party hereto as
Managing Agents, and BNP PARIBAS, NEW YORK BRANCH, as Program Agent.

Preliminary Statement

          The parties hereto have agreed to modify the Agreement in certain respects as set forth herein
in accordance with Section 13.1 of the Agreement.

          NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, as follows:

ARTICLE 1 DEFINITIONS

          1.1 Definitions. Unless defined elsewhere herein, capitalized terms used in this
Amendment shall have the meanings assigned to such terms in the Agreement, as amended hereby.

ARTICLE 2 AMENDMENT

          2.1 Amendments to Exhibit I. Exhibit I to the Agreement is hereby amended as follows:

          (a) To amend and restate the definition of the term “Commitment Termination Date” contained
therein to read in its entirety as follows:

          ”Commitment Termination Date” means October 30, 2009, unless such date is extended with the
consent of the parties hereto.

          (b) To amend and restate the definition of the term “Program Limit” contained therein to read
in its entirety as follows:

          ”Program Limit” means $35,000,000, or such lesser amount as may from time be specified
by not less than ten (10) Business Days’ prior written notice by Servicer to the Program
Agent and Seller from time to time. Any reduction of the Program Limit shall be irrevocable
upon such notice being given and shall not be subject to

 

 

reinstatement and each partial reduction of the Program Limit shall be in an amount
equal to $1,000,000 or an integral multiple thereof

          2.2 Amendments to Schedule A. Exhibit I to the Agreement is hereby amended to change
from $40,000,000 to $35,000,000 each of (i) the Group Purchase Limit for the Investor Group which
includes Paribas, (ii) the Commitment of Paribas and (iii) the total Commitments of the Committed
Investors in the Investor Group which includes Paribas.

ARTICLE 3 MISCELLANEOUS

          3.1 Representations and Warranties.

          (a) Each Seller Party hereby represents and warrants to the Program Agent, the Managing Agents
and the Investors, as to itself that the representations and warranties of such Seller Party set
forth in Section 5.1 of the Agreement are true and correct in all material respects on and
as of the date hereof as though made on and as of such date and after giving effect to this
Amendment; and

          (b) Seller hereby represents and warrants to the Program Agent, the Managing Agents and the
Investors that, as of the date hereof and after giving effect to this Amendment, no event has
occurred and is continuing that constitutes an Amortization Event or Potential Amortization Event.

          3.2 Effectiveness. The amendments set forth in Sections 2.1(b) and
2.2 hereof shall be effective as of the Effective Date when this Amendment or a counterpart
hereof shall have been executed and delivered by Seller, Servicer, the Managing Agents and the
Program Agent and consented to by the Conduit Investors and the Required Committed Investors. The
amendment set forth in Section 2.1(a) hereof shall be effective when such amendments shall
have become effective subject to the further conditions that on the Effective Date, (i) the
amendment and restatement, dated the date hereof, the Fee Letter to which the Seller is a party
shall have become effective in accordance with its terms, (ii) the supplemental Fee Letter dated
the date hereof, to which El Paso is a party shall have become effective in accordance with its
terms and the fee contemplated thereby shall have been paid, and (iii) the Aggregate Capital does
not exceed the Program Limit, determined after giving effect to the amendments set forth in
Section 2.2 above.

          3.3 Amendments and Waivers. This Amendment may not be amended, supplemented or
modified nor may any provision hereof be waived except in accordance with the provisions of Section
13.1 of the Agreement.

          3.4 Counterparts. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and the same agreement.

          3.5 Continuing Effect; No Other Amendments. Except to the extent expressly stated
herein, all of the terms and provisions of the Agreement are and shall remain in full force

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and effect. This Amendment shall not constitute a novation of the Agreement, but shall
constitute an amendment thereof. This Amendment shall constitute a Transaction Document.

          3.6 CHOICE OF LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).

[SIGNATURE PAGES FOLLOW]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
by their duly authorized officers as of the date hereof.

	 	 	 	 	 
	 	SNG FUNDING COMPANY, L.L.C.

 	 
	 	By:  	SNG Finance  Company, L.L.C., its Manager
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                    /s/ John J. Hopper
 	 
	 	 	Name:  	John J. Hopper 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	SOUTHERN NATURAL GAS COMPANY, as Servicer

 	 
	 	By:  	     /s/ John J. Hopper
 	 
	 	 	Name:  	John J. Hopper 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	BNP PARIBAS, acting through its New York Branch, as

      Program Agent and as Managing Agent for the Starbird

      Investor Group

 	 
	 	By:  	     /s/ Mary Dierdorff
 	 
	 	 	Name:  	Mary Dierdorff 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                          /s/ Phillipe Mojon
 	 
	 	 	Name:  	Phillippe Mojon 	 
	 	 	Title:  	Vice President 	 
	 

CONSENTED TO:

	 	 	 	 	 
	STARBIRD FUNDING CORPORATION,	 	 
	     as a Conduit Purchaser	 	 
	 
	 	 	 	 
	By:

	 	      /s/ Louise E. Colby
 

Name: Louise E. Colby
	 	 
	 

	 	Title: Vice President	 	 

[Signature pages to Amendment No. 4 to

SNG Receivables Purchase Agreement]

 

 

	 	 	 	 	 
	BNP PARIBAS, acting through its New York Branch,	 	 
	     as Committed Investor	 	 
	 
	 	 	 	 
	By:

	 	     /s/ Mary Dierdorff
 

Name: Mary Dierdorff 

Title: Managing Director
	 	 
	 
	 	 	 	 
	By:

	 	     /s/ Phillipe Mojon	 	 
	 

	 	 	 	 
	 

	 	Name: Phillippe Mojon

Title: Vice President	 	 

[Signature pages to Amendment No. 4 to

SNG Receivables Purchase Agreement]exv10w47

EXHIBIT 10.47

ION GEOPHYSICAL CORPORATION

STOCK APPRECIATION RIGHTS PLAN

SECTION 1

GENERAL PROVISIONS RELATING

TO PLAN GOVERNANCE, COVERAGE AND BENEFITS

1.1 Purpose

     The purpose of the Plan is to foster and promote the long-term financial success of ION
Geophysical Corporation (the “Company”) and its Subsidiaries and to increase stockholder value by:
(a) encouraging the commitment of Directors and selected key Employees and Consultants, (b)
motivating superior performance of Directors and key Employees and Consultants by means of
long-term performance related incentives, (c) encouraging and providing Directors and selected key
Employees and Consultants with a program that aligns their personal interests to those of the
Company’s stockholders, (d) attracting and retaining Directors and selected key Employees and
Consultants by providing competitive incentive compensation opportunities, and (e) enabling
Directors and selected key Employees and Consultants to share in the long-term growth and success
of the Company.

     The Plan provides for payment of incentive compensation in the form of stock appreciation
rights. The Plan is not intended to be a plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and, as such, the Plan will be interpreted, construed
and administered consistent with its status as a plan that is not subject to ERISA.

     The Plan is effective as of November 17, 2008 (the “Effective Date”). The Plan will commence
on the Effective Date, and will remain in effect, subject to the right of the Board to amend or
terminate the Plan at any time pursuant to Section 5.6. However, in no event may any Stock
Appreciation Rights be granted under the Plan after ten (10) years from the Effective Date.

1.2 Definitions

     The following terms shall have the meanings set forth below:

     (a) Authorized Officer. The Chairman of the Board, the CEO, the President, or any
Executive Vice President or Senior Vice President or any other senior officer of the Company to
whom any of them delegate the authority to execute any SAR Agreement for and on behalf of the
Company. No officer or director shall be an Authorized Officer with respect to any SAR Agreement
for himself.

     (b) Board. The Board of Directors of the Company.

     (c) Cause. Except as otherwise provided by the Committee or as otherwise provided in
a Grantee’s employment agreement, when used in connection with the termination of a Grantee’s
Employment or service, shall mean the termination of the Grantee’s Employment or Grantee’s services
as a Director or Consultant by the Company or any Subsidiary by reason of (i) the conviction of the
Grantee by a court of competent jurisdiction of a crime involving moral turpitude or a felony; (ii)
the proven commission by the Grantee of a material act of fraud upon the Company or any Subsidiary,
or any customer or supplier thereof; (iii) the willful and proven misappropriation of any funds or
property of the Company or any Subsidiary, or any customer or supplier thereof; (iv) the willful,
continued and unreasonable failure by the Grantee to perform the material duties assigned to

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him
which is not cured to the reasonable satisfaction of the Company within 30 days after written
notice of such failure is provided to Grantee by the Board or by a designated officer of the
Company or a Subsidiary; (v) the
knowing engagement by the Grantee in any direct and material conflict of interest with the
Company or any Subsidiary without compliance with the Company’s or Subsidiary’s conflict of
interest policy, if any, then in effect; or (vi) the knowing engagement by the Grantee, without the
written approval of the Board, in any material activity which competes with the business of the
Company or any Subsidiary or which would result in a material injury to the business, reputation or
goodwill of the Company or any Subsidiary; or (vii) the material breach by a Consultant of such
Grantee’s contract with the Company.

     (d) CEO. The Chief Executive Officer of the Company.

     (e) Change in Control. Any of the events described in and subject to Section
4.5.

     (f) Code. The Internal Revenue Code of 1986, as amended, and the regulations and other
authority promulgated thereunder by the appropriate governmental authority. References herein to
any provision of the Code shall refer to any successor provision thereto.

     (g) Committee. A committee appointed by the Board to administer the Plan. The
Committee may be the Compensation Committee of the Board, or any subcommittee of the Compensation
Committee. The Board shall have the power to fill vacancies on the Committee arising by
resignation, death, removal or otherwise. The Board, in its sole discretion, may bifurcate the
powers and duties of the Committee among one or more separate committees, or retain all powers and
duties of the Committee in a single Committee. The members of the Committee shall serve at the
discretion of the Board.

     (h) Common Stock. The common stock of the Company, $.01 per value per share, and any
class of common stock into which such common shares may hereafter be converted, reclassified,
re-capitalized, or exchanged.

     (i) Company. ION Geophysical Corporation, a corporation organized under the laws of
the State of Delaware, and any successor-in-interest thereto.

     (j) Consultant. An independent agent, consultant, attorney, an individual who has
agreed to become an Employee within the next six months, or any other individual who is not a
Director or employee of the Company (or any Parent or Subsidiary) and who, in the opinion of the
Committee, is in a position to contribute to the growth or financial success of the Company (or any
Parent or Subsidiary), (ii), is a natural person and (iii) provides bona fide services to the
Company (or any Parent or Subsidiary), which services are not in connection with the offer or sale
of securities in a capital raising transaction, and do not directly or indirectly promote or
maintain a market for the Company’s securities.

     (k) Director. Any individual who is a member of the Board.

     (l) Disability. As determined by the Committee in its discretion exercised in good
faith, a physical or mental condition of the Employee that would entitle him to disability income
payments under the Company’s long term disability insurance policy or plan for employees, as then
effective, if any; or in the event that the Grantee is not covered, for whatever reason, under the
Company’s long-term disability insurance policy or plan, “Disability” means a permanent and total
disability as defined in Section 22(e)(3) of the Code. A determination of Disability may be made
by a physician selected or approved by the Committee and, in this respect, the Grantee shall submit
to any reasonable examination by such physician upon request.

     (m) Employee. Any employee of the Company (or any Parent or Subsidiary) within the
meaning of Section 3401(c) of the Code who, in the opinion of the Committee, is in a position to

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contribute to the growth, development or financial success of the Company (or any Parent or
Subsidiary), including, without limitation, officers who are members of the Board.

     (n) Employment. Employment by the Company (or any Parent or Subsidiary), or by any
corporation issuing or assuming a Stock Appreciation Right in any transaction described in Section
424(a) of the Code, or by a parent corporation or a subsidiary corporation of such corporation
issuing or assuming such SAR, as the parent-subsidiary relationship shall be determined at the time
of the corporate action described in Section 424(a) of the Code. In this regard, neither the
transfer of a Grantee from Employment by the Company to Employment by any Parent or Subsidiary, nor
the transfer of a Grantee from Employment by any Parent or Subsidiary to Employment by the Company,
shall be deemed to be a termination of Employment of the Grantee. Moreover, the Employment of a
Grantee shall not be deemed to have been terminated because of an approved leave of absence from
active Employment on account of temporary illness, authorized vacation or granted for reasons of
professional advancement, education, health, government service or military leave, or during any
period required to be treated as a leave of absence by virtue of any applicable statute, Company
personnel policy or agreement. Whether an authorized leave of absence shall constitute termination
of Employment hereunder shall be determined by the Committee in its discretion. Unless otherwise
provided in the SAR Agreement, the term “Employment” for purposes of the Plan is also defined to
include compensatory or advisory services performed by a Consultant for the Company (or any Parent
or Subsidiary).

     (o) Exchange Act. The Securities Exchange Act of 1934, as amended.

     (p) Fair Market Value. While the Company is a Publicly Held Corporation, the Fair
Market Value of one share of Common Stock on the date in question is deemed to be the closing sales
price on the immediately preceding business day of a share of Common Stock as reported on the New
York Stock Exchange or other principal securities exchange on which Shares are then listed or
admitted to trading, or as quoted on any national interdealer quotation system, if such shares are
not so listed.

     (q) Grantee. Any Employee, Director or Consultant who is granted an SAR under the
Plan.

     (r) Immediate Family. With respect to a Grantee, the Grantee’s child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships.

     (s) Non-Employee Director. A Director who is not an Employee.

     (t) Non-Employee Director Award. A SAR granted to a Grantee who is a Non-Employee
Director pursuant to such applicable terms, conditions, and limitations as the Board or Committee
may establish in accordance with this Plan.

     (u) Parent. Any corporation (whether now or hereafter existing) that constitutes a
“Parent” of the Company, as defined in Section 424(e) of the Code.

     (v) Plan. The ION Geophysical Corporation [2008] Stock Appreciation Rights Plan.

     (w) Publicly Held Corporation. A corporation issuing any class of common equity
securities required to be registered under Section 12 of the Exchange Act.

     (x) Retirement. The voluntary termination of Employment from the Company or any
Parent or Subsidiary constituting retirement for age on any date after the Employee attains the
normal retirement age of 65 years, or such other age as may be designated by the Committee in the
Employee’s SAR Agreement.

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     (y) SAR Agreement. The written agreement entered into between the Company and the
Grantee setting forth the terms and conditions pursuant to which an SAR is granted under the Plan,
as such agreement is further defined in Section 4.1 (a).

     (z) Share. A share of Common Stock of the Company.

     (aa) Spread. The difference between the exercise price per Share specified in any SAR
grant and the Fair Market Value of a Share on the date of exercise of the SAR.

     (bb) Stock Appreciation Right or SAR. An SAR described in Section 2.

     (cc) Subsidiary. Any corporation (whether now or hereafter existing) which
constitutes a “subsidiary” of the Company, as defined in Section 424(f) of the Code.

1.3 Plan Administration

     (a) Authority of the Committee. Except as may be limited by law and subject to the
provisions herein, the Committee shall have full power to (i) select Grantees who shall participate
in the Plan; (ii) determine the sizes, duration and any other applicable terms and conditions of
SAR awards and SAR Agreements; (iii) construe and interpret the Plan and any SAR Agreement or
other agreement entered into under the Plan; and (iv) establish, amend, or waive rules for the
Plan’s administration. Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan.

     (b) Meetings. The Committee shall designate a chairman from among its members who
shall preside at all of its meetings, and shall designate a secretary, without regard to whether
that person is a member of the Committee, who shall keep the minutes of the proceedings and all
records, documents, and data pertaining to its administration of the Plan. Meetings shall be held
at such times and places as shall be determined by the Committee and the Committee may hold
telephonic meetings.

     (c) Decisions Binding. All determinations and decisions made by the Committee shall
be made in its discretion pursuant to the provisions of the Plan, and shall be final, conclusive
and binding on all persons including the Company, Employees, Directors, Grantees, and their estates
and beneficiaries. The Committee’s decisions and determinations with respect to any SARs need not
be uniform and may be made selectively among SARs and Grantees, whether or not such SARs are
similar or such Grantees are similarly situated.

     (d) Modification of Outstanding SARs. The Committee may, in its discretion, provide
for the extension of the exercisability of an SAR, accelerate the vesting or exercisability of an
SAR, eliminate or make less restrictive any restrictions contained in an SAR Agreement, waive any
restriction or other provisions of an SAR, or otherwise amend or modify an SAR Agreement in any
manner that is either (i) not adverse to the Grantee to whom such SAR was granted or (ii) consented
to by such Grantee; provided, however, no SAR issued under the Plan will be repriced, replaced or
regranted through cancellation, or by lowering the exercise price of a previously granted SAR and
the period during which an SAR may be exercised shall not be extended later than the expiration of
the term of such SAR as specified in the SAR Agreement.

     (e) Delegation of Authority. The Committee may delegate to designated officers or
other employees of the Company any of its duties and authority under the Plan pursuant to such
conditions or limitations as the Committee may establish from time to time.

     (f) Expenses of Committee. The Committee may employ legal counsel, including, without
limitation, independent legal counsel and counsel regularly employed by the Company, and

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other
agents, as the Committee may deem appropriate for the administration of the Plan. The
Committee may rely upon any opinion or computation received from any such counsel or agent.
All expenses incurred by the Committee in interpreting and administering the Plan, including,
without limitation, meeting expenses and professional fees, shall be paid by the Company.

     (g) Indemnification. Each person who is or was a member of the Committee, or of the
Board, shall be indemnified by the Company against and from any damage, loss, liability, cost and
expense that may be imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he may be involved by
reason of any action taken or failure to act under the Plan, except for any such act or omission
constituting willful misconduct or gross negligence. Such person shall be indemnified by the
Company for all amounts paid by him in settlement thereof, with the Company’s approval, or paid by
him in satisfaction of any judgment in any such action, suit, or proceeding against him, provided
he shall give the Company an opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such persons may be entitled
under the Company’s Articles or Certificate of Incorporation or Bylaws, by contract, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

     (h) Awards in Foreign Countries. The Board shall have the authority to adopt
modifications, procedures, sub-plans, and other similar plan documents as may be necessary or
desirable to comply with provisions of the laws of foreign countries in which the Company or its
subsidiaries may operate to assure the viability of the benefits of SARs made to individuals
employed or providing services in such countries and to meet the objectives of the Plan.

1.4 Shares of Common Stock

     The references to Shares of Common Stock in the Plan are intended to provide the basis for
determining the size of an SAR award, and for measuring the spread upon an exercise of an SAR.
However, in no event will any Shares of Common Stock be issued, transferred or otherwise
distributed under the Plan.

1.5 Eligibility.

     The Committee shall from time to time designate those key Employees, Directors or Consultants,
if any, to be granted SARs under the Plan, the number of SARs granted, and any other terms or
conditions relating to the SARs as it may deem appropriate to the extent consistent with the
provisions of the Plan. A Grantee who has been granted SARs may, if otherwise eligible, be granted
additional SARs at any time.

SECTION 2

STOCK APPRECIATION RIGHTS

2.1 Stock Appreciation Rights

     (a) General Provisions. The terms and conditions of each SAR shall be evidenced by an
SAR Agreement. The exercise price per SAR shall be not less than one hundred percent (100%) of the
Fair Market Value of a Share of Common Stock on the date of grant of the SAR. The term of an SAR
shall be determined by the Committee; provided, however that such term shall not exceed ten years
from the date of grant.

     (b) Exercise. SARs shall be exercisable at such time and subject to such terms and
conditions as the Committee shall specify in the SAR Agreement for the SAR grant.

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     (c) Settlement. Upon exercise of an SAR, the holder shall receive a cash payment in
an amount equal to the Spread for each Share specified in the SAR Agreement for which the SAR is
being exercised. The Spread shall be paid promptly after the exercise of the SAR.

SECTION 3

PROVISIONS RELATING TO NON-EMPLOYEE DIRECTOR AWARDS

3.1 Generally

     All SAR awards to Non-Employee Directors shall be determined by the Board or Committee.

3.2 Vesting Period

     The Committee shall prescribe the vesting period for each SAR granted to a Non-Employee
Director.

SECTION 4

PROVISIONS RELATING TO PLAN PARTICIPATION

4.1 Plan Conditions

     (a) SAR Agreement. Each Grantee to whom an SAR is granted shall be required to enter
into an SAR Agreement with the Company, in such a form as is provided by the Committee. The SAR
Agreement shall contain specific terms as determined by the Committee, in its discretion, with
respect to the Grantee’s particular SARs. Such terms need not be uniform among all Grantees or any
similarly-situated Grantees. The SAR Agreement may include, without limitation, vesting, forfeiture
and other provisions particular to the particular Grantee’s SARs, as well as, for example,
provisions to the effect that the Grantee (i) shall not disclose any confidential information
acquired during Employment with the Company, (ii) shall abide by all the terms and conditions of
the Plan and such other terms and conditions as may be imposed by the Committee, (iii) shall not
interfere with the employment or other service of any employee, (iv) shall not compete with the
Company or become involved in a conflict of interest with the interests of the Company, and (v)
shall forfeit the Grantee’s SARs as determined by the Committee (including if terminated for
Cause). An SAR Agreement shall include such terms and conditions as are determined by the
Committee, in its discretion, to be appropriate with respect to any individual Grantee. The SAR
Agreement shall be signed by the Grantee to whom the SAR award is made and by an Authorized
Officer.

     (b) No Right to Employment. Nothing in the Plan or any instrument executed pursuant
to the Plan shall create any employment rights or right to serve on the Board (including without
limitation, rights to continued Employment or to continue to provide services as a Director or
Consultant) by any Grantee or affect the right of the Company to terminate the Employment or
services of any Grantee at any time without regard to the existence of the Plan.

4.2 Transferability

     SARs granted under the Plan shall not be transferable or assignable, pledged, or otherwise
encumbered other than by will or the laws of descent and distribution. However, the Committee may,
in its discretion, authorize all or a portion of the SARs to be granted on terms which permit
transfer by the Grantee to (i) the members of the Grantee’s Immediate Family, (ii) a trust or
trusts for the exclusive benefit of Immediate Family members, (iii) a partnership in which
Immediate Family members are the only partners, (iv) any other entity owned solely by Immediate
Family members, or

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(v) pursuant to a domestic relations order that would qualify under Code Section
414(p); provided that (A) the SAR
Agreement pursuant to which such SARs are granted must expressly provide for transferability
in a manner consistent with this Section 4.2, (B) the actual transfer must be approved in
advance by the Committee, and (C) subsequent transfers of transferred SARs shall be prohibited
except in accordance with the first sentence of this section. Following any permitted transfer,
the SAR shall continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that the term “Grantee” (subject to the immediately
succeeding paragraph) shall be deemed to refer to the transferee. The events of termination of
employment, as set out in Section 4.4 and in the SAR Agreement, shall continue to be
applied with respect to the original Grantee, and the SAR shall be exercisable by the transferee
only to the extent, and for the periods, specified in the SAR Agreement.

     In addition, the Company and the Committee shall have no obligation to provide any notices to
any Grantee or transferee thereof, including, for example, notice of the expiration of an SAR
following the original Grantee’s termination of employment.

     The designation by a Grantee of a beneficiary of an SAR shall not constitute a transfer of the
SAR. No transfer by will or by the laws of descent and distribution shall be effective to bind the
Company unless the Committee has been furnished with a copy of the deceased Grantee’s enforceable
will or such other evidence as the Committee deems necessary to establish the validity of the
transfer. Any attempted transfer in violation of this Section 4.2 shall be void and
ineffective. The Committee in its discretion shall make all determinations under this Section
4.2.

4.3 Change in Stock and Adjustments

     (a) Changes in Law. Subject to Section 4.5 (which only applies in the event
of a Change of Control), in the event of any change in applicable law which warrants equitable
adjustment because it interferes with the intended operation of the Plan, then, if the Committee
should determine, in its absolute discretion, that such change equitably requires an adjustment in
the number or kind of shares of stock or other securities or property to which the SARs relate or
in the terms and conditions of outstanding SARs, such adjustment shall be made in accordance with
such determination. Such adjustments may include changes with respect to (i) the exercise price
per SAR for outstanding SARs or (ii) the number of Shares to which a specific SAR award is deemed
to relate. Any adjustment under this paragraph of an outstanding SAR shall be made only to the
extent that such modification would not result in the assessment of taxation of such SARs under
Section 409A of the Code unless otherwise agreed to by the Grantee in writing. The Committee shall
give notice to each applicable Grantee of such adjustment, which shall be effective and binding.

     (b) Exercise of Corporate Powers. The existence of the Plan or outstanding SARs
hereunder shall not affect in any way the right or power of the Company or its stockholders to make
or authorize any or all adjustments, re-capitalizations, reorganizations or other changes in the
Company’s capital structure or its business or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.

     (c) Recapitalization of the Company. Subject to Section 4.5 (which only
applies in the event of a Change in Control), in the event that the Committee shall determine that
any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or
other property), re-capitalization, stock split, reverse stock split, rights offering,
reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision,
repurchase, or exchange of Common Stock or other securities of the Company, issuance of warrants or
other rights to purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event affects the Common Stock such that an adjustment is determined by
the Committee to be appropriate

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to prevent the dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Committee shall, in such manner as
it deems equitable, adjust any or all of (i) the
exercise price per SAR for outstanding SARs or (ii) the number of Shares to which a specific
SAR award is deemed to relate. Any adjustment under this paragraph of an outstanding SAR shall be
made only to the extent that such modification would not result in the assessment of taxation of
such SARs under Section 409A of the Code unless otherwise agreed to by the Grantee in writing. The
Committee shall give notice to each applicable Grantee of such adjustment, which shall be effective
and binding.

          Upon the occurrence of any such adjustment, the Company shall provide notice to each affected
Grantee of its computation of such adjustment, which shall be conclusive and shall be binding upon
each such Grantee.

     (d) Assumption of SARs by a Successor. Subject to the accelerated vesting and other
provisions of Section 4.5 that apply in the event of a Change in Control, in the event of a
Corporate Event, the Committee in its discretion shall have the right and power to:

          (i) cancel, effective immediately prior to the occurrence of the Corporate Event, each
outstanding SAR (whether or not then exercisable) and, in full consideration of such cancellation,
pay to the Grantee an amount in cash equal to the excess of (A) the value, as determined by the
Committee, of the property (including cash) received by the holders of Common Stock as a result of
such Corporate Event over (B) the exercise price of such SAR, if any; or

          (ii) make an equitable adjustment as determined by the Committee, in its discretion, in
accordance with Section 4.3(c) above; or

          (iii) provide for the assumption of the Plan and such outstanding SARs or for substitute
awards by the surviving entity or its parent.

     The Committee, in its discretion, shall have the authority to take whatever action it deems to
be necessary or appropriate to effectuate the provisions of this Subsection (d).

     A “Corporate Event” means any of the following: (i) a dissolution or liquidation of the
Company, (ii) a sale of all or substantially all of the Company’s assets, or (iii) a merger,
consolidation or combination involving the Company (other than a merger, consolidation or
combination (A) in which the Company is the continuing or surviving corporation and (B) which does
not result in the outstanding Shares being converted into or exchanged for different securities,
cash or other property, or any combination thereof). The Committee shall take whatever other action
it deems appropriate to preserve the rights of Grantees holding outstanding SARs.

4.4 Termination of Employment, Death, Disability and Retirement

     (a) Termination of Relationship. Unless otherwise expressly provided in the Grantee’s
SAR Agreement, if the Grantee’s Employment or services as a Director or Consultant is terminated
for any reason other than due to his death, Disability, Retirement, or for Cause, any non-vested
portion of any SARs at the time of such termination shall automatically expire and terminate and no
further vesting shall occur after the termination date. In such event, except as otherwise
expressly provided in his SAR Agreement, the Grantee shall be entitled to exercise his rights only
with respect to the portion of the SARs that were vested as of his termination of Employment or
service date. In such event, except as otherwise expressly provided in his SAR Agreement, the
Grantee shall be entitled to exercise his vested SARs for a period that shall end on the earlier of
(i) the expiration date set forth in the SAR Agreement or (ii) one hundred eighty (180) days after
the date of his termination.

     (b) Termination for Cause. Unless otherwise expressly provided in the Grantee’s SAR
Agreement, in the event of the termination of a Grantee’s Employment, or service as a Consultant or

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Director, for Cause, all vested and non-vested SARs granted to such Grantee shall immediately
expire,
and shall not be exercisable to any extent, as of 12:01 a.m., Houston, Texas time, on the date
of such termination of Employment or service for cause.

     (c) Retirement. Unless otherwise expressly provided in the Grantee’s SAR Agreement,
upon the termination of Employment due to the Retirement of any Employee who is a Grantee, all of
his SARs then outstanding shall become 100% vested and immediately and fully exercisable until the
earlier of (A) the expiration date set forth in the SAR Agreement for such SARs; or (B) the
expiration of twelve months after the date of his termination of Employment due to his Retirement.

     (d) Disability or Death. Unless otherwise expressly provided in the Grantee’s SAR
Agreement, upon the termination of Employment or service as a Director due to the Disability or
death of any Employee or Non-Employee Director who is a Grantee, all of his SARs then outstanding
shall become 100% vested and immediately and fully exercisable until the earlier of (A) the
expiration date set forth in the SAR Agreement for such SARs; or (B) the expiration of twelve
months after the date of his termination of Employment due to his Disability or death.

     (e) Continuation. Subject to the conditions and limitations of the Plan and
applicable law and regulation in the event that a Grantee ceases to be an Employee or Consultant,
as applicable, for whatever reason, the Committee and Grantee may mutually agree with respect to
any outstanding SARs then held by the Grantee (i) for an acceleration of or other adjustment in any
vesting schedule applicable to the SARs, (ii) for a continuation of the exercise period following
termination for a longer period than is otherwise provided under such SARs, or (iii) to any other
change in the terms and conditions of the SARs. In the event of any such change to an outstanding
SARs, a written amendment to the Grantee’s SAR Agreement shall be required.

4.5 Change in Control

     (a) Vesting; Amendment. In the event of a Change in Control (as defined below), all
SARS then outstanding shall become 100% vested and immediately and fully exercisable as of the day
immediately preceding the Change in Control date unless expressly provided otherwise in the
Grantee’s SAR Agreement.

     Notwithstanding any other provision of this Plan, unless otherwise expressly provided in the
Grantee’s SAR Agreement, the provisions of this Section 4.5 may not be terminated, amended,
or modified to adversely affect any SAR theretofore granted under the Plan without the prior
written consent of the Grantee with respect to his outstanding SARs.

     (b) Definition. For all purposes of this Plan, a “Change in Control” of the Company
means the occurrence of any one or more of the following events:

     (i) The acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of
either (i) the then-outstanding Shares of Common Stock of the Company (the “Outstanding
Company Stock”) or (ii) the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from the Company or any
Subsidiary, (ii) any acquisition by the Company or any Subsidiary or by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (iii)
any acquisition by any corporation pursuant to a reorganization, merger, consolidation or
similar business combination involving the Company (a “Merger”), if, following such Merger,
the conditions described in clauses (i) and (ii) of Section 4.5(c) (below) are
satisfied;

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     (ii) Individuals who, as of the Effective Date, constitute the Board of Directors of
the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director subsequent to the
Effective Date whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (i.e., a solicitation
by any person or group of persons for the purpose of opposing a solicitation of proxies or
consents by the Board with respect to the election or removal of Directors at any annual or
special meeting of stockholders) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

     (iii) Approval by the stockholders of the Company of a Merger, unless immediately
following such Merger, (i) substantially all of the holders of the Outstanding Company
Voting Securities immediately prior to such Merger beneficially own, directly or indirectly,
more than 50% of the common stock of the corporation resulting from such Merger (or its
parent corporation) in substantially the same proportions as their ownership of Outstanding
Company Voting Securities immediately prior to such Merger and (ii) at least a majority of
the members of the board of directors of the corporation resulting from such Merger (or its
parent corporation) were members of the Incumbent Board at the time of the execution of the
initial agreement providing for such Merger; or

     (iv) The sale or other disposition of all or substantially all of the assets of the
Company.

SECTION 5

GENERAL

5.1 Grant Period

     No SAR shall be granted under the Plan after ten (10) years from the Effective Date. Unless
sooner terminated by action of the Board, this Plan will terminate at 5:00 p.m. Houston, Texas
time, on November 17, 2018. SARs under this Plan may not be granted after that date, but any SAR
duly granted before that date will continue to be effective in accordance with its terms and
conditions.

5.2 Funding and Liability of Company

     No provision of the Plan shall require the Company, for the purpose of satisfying any
obligations under the Plan, to purchase assets or place any assets in a trust or other entity to
which contributions are made, or otherwise to segregate any assets. In addition, the Company shall
not be required to maintain separate bank accounts, books, records or other evidence of the
existence of a segregated or separately maintained or administered fund for purposes of the Plan.
Although bookkeeping accounts may be established with respect to Grantees who are entitled to cash,
any such accounts shall be used merely as a bookkeeping convenience. The Company shall not be
required to segregate any assets for any purposes of this Plan. The Plan shall not be construed as
providing for such segregation, nor shall the Company, the Board or the Committee be deemed to be a
trustee of any cash. Any liability or obligation of the Company to any Grantee with respect to an
SAR shall be based solely upon any contractual obligations that may be created by this Plan and any
SAR Agreement, and no such liability or obligation of the Company shall be deemed to be secured by
any pledge or other encumbrance on any property of the Company. Neither the Company, 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 the Plan.

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5.3 Withholding Taxes.

     The Company shall have the power and the right to deduct or withhold from any payment made
pursuant to this Plan an amount sufficient to satisfy federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any taxable event arising as
a result of the Plan or SAR award hereunder.

5.4 No Guarantee of Tax Consequences

     Neither the Company nor the Committee makes any commitment or guarantee that any federal,
state or local tax treatment will apply or be available to any person participating or eligible to
participate hereunder.

5.5 Designation of Beneficiary by Grantee

     Each Grantee may, from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid in case of his death
before he receives any or all of such benefit. Each such designation shall revoke all prior
designations by the same Grantee, shall be in a form prescribed by the Committee, and will be
effective only when filed by the Grantee in writing with the Committee during the Grantee’s
lifetime. In the absence of any such designation, benefits remaining unpaid at the Grantee’s death
shall be paid to the Grantee’s estate.

5.6 Amendment and Termination

     The Board shall have the power and authority to terminate or amend the Plan at any time. No
termination, amendment, or modification of the Plan shall adversely affect in any material way any
outstanding SAR previously granted to a Grantee under the Plan, without the written consent of such
Grantee or other designated holder of such SAR.

5.7 Successors to Company

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

5.8 Miscellaneous Provisions

     (a) No Employee, Director or Consultant, or other person shall have any claim or right to be
granted an SAR under the Plan. Neither the Plan, nor any action taken hereunder, shall be construed
as giving any Employee, Director or Consultant, any right to be retained in the Employment or other
service of the Company or any Parent or Subsidiary.

     (b) By accepting any SAR, each Grantee and each person claiming by or through him shall be
deemed to have indicated his acceptance of the Plan.

5.9 Severability

     In the event that any provision of this Plan shall be held illegal, invalid or unenforceable
for any reason, such provision shall be fully severable, but shall not affect the remaining
provisions of the Plan, and the Plan shall be construed and enforced as if the illegal, invalid, or
unenforceable provision was not included herein.

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5.10 Gender, Tense and Headings

     Whenever the context so requires, words of the masculine gender used herein shall include the
feminine and neuter, and words used in the singular shall include the plural. Section headings as
used herein are inserted solely for convenience and reference and constitute no part of the
interpretation or construction of the Plan.

5.11 Governing Law

     The Plan shall be interpreted, construed and constructed in accordance with the laws of the
State of Texas without regard to its conflicts of law provisions, except as may be superseded by
applicable laws of the United States or applicable provisions of the Delaware General Corporation
Law.

5.12 Deferred Compensation

     This Plan and any SAR Agreement issued under the Plan are intended to be exempt from Section
409A of the Code and shall be administered in a manner that is intended to meet the requirements of
such exemption and shall be construed and interpreted in accordance with such intent. To the
extent that an SAR or payment, or the settlement thereof, is subject to Section 409A of the Code
because such SAR is not exempt from Section 409A, except as the Board otherwise determines in
writing, the SAR shall be granted, paid, settled or deferred in a manner that will meet the
requirements of Section 409A of the Code, including regulations or other guidance issued with
respect thereto, such that the grant, payment or settlement shall not be subject to the excise tax
applicable under Section 409A of the Code. Any provision of this Plan or any SAR Agreement that
would cause an SAR or the payment or settlement thereof to fail to satisfy Section 409A of the Code
shall be amended (in a manner that as closely as practicable achieves the original intent of this
Plan or the SAR Agreement, as applicable) to comply with Section 409A of the Code on a timely
basis, which may be made on a retroactive basis, in accordance with regulations and other guidance
issued under Section 409A of the Code. In the event the Plan allows for a deferral of
compensation, the Plan is intended to qualify for certain exemptions under Title I of ERISA
provided for plans that are unfunded and maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly-compensated employees.

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