AZZ INC
FORM OF 2006 STOCK APPRECIATION RIGHTS PLAN FOR DIRECTORS
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<TYPE>EX-10.2
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<DESCRIPTION>FORM OF 2006 STOCK APPRECIATION RIGHTS PLAN FOR DIRECTORS
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<TITLE>Form of 2006 Stock Appreciation Rights Plan for Directors</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 10.2 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>AZZ incorporated </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>FISCAL YEAR 2006 STOCK APPRECIATION RIGHTS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>PLAN FOR DIRECTORS </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>DATED MAY 18, 2005 </B></FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>AZZ incorporated </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>FISCAL YEAR 2006 STOCK APPRECIATION RIGHTS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>PLAN FOR DIRECTORS </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>TABLE OF CONTENTS </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 1 Purpose of Plan </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 2 Administration of Plan </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 3 Eligibility and Grant </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">ARTICLE 4 Terms of Rights </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 5
Limitations on Number of Rights and Date of Grant </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 6 Appreciation
Amount </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 7 Payment of Appreciation Amount </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 8 Nature of Rights </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 9 Termination of Rights </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 10 Adjustment to Rights </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">ARTICLE 11 Termination and Amendment </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE
12 Rights Agreement </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 13 Miscellaneous Provisions </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">ARTICLE 14 Definitions </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">AZZ incorporated, a Texas corporation (the &#147;Company&#148;), hereby establishes and sets forth the
terms of the AZZ incorporated, FISCAL YEAR 2006 STOCK APPRECIATION RIGHTS PLAN FOR DIRECTORS (the &#147;Plan&#148;) to be effective May 18, 2005. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 1. PURPOSE OF PLAN </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The purpose of this Plan is to enable the Company to attract and retain directors of the highest caliber by offering to them an opportunity to share in
increases in the value of the Company to which they contribute. This Plan will seek to accomplish this purpose by granting such directors stock appreciation rights (collectively, the &#147;Rights&#148; and individually, a &#147;Right&#148;), which
will be associated with shares of common stock of the Company, one dollar ($1.00) par value (the &#147;Common Stock&#148;), and which will be subject to all of the terms and conditions contained in this Plan. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 2. ADMINISTRATION OF PLAN </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>2.1 </B>This Plan shall be administered by the Nominating and Corporate
Governance Committee of the Board of Directors of the Company (the &#147;Administrative Committee&#148;). </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>2.2 </B>A majority of the members of the Administrative Committee shall constitute a quorum. All actions of the Administrative Committee shall require
the affirmative vote of members who constitute a majority of such quorum. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2"><B>2.3 </B>The Administrative Committee shall have the following rights and powers: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Administrative Committee shall have the authority (i) to administer this Plan in accordance with its express terms; (ii) to determine all questions arising in connection with
the administration, interpretation, and application of this Plan, including all questions relating to the fair market value of the Common Stock; (iii) to correct any defect, supply any information and reconcile any inconsistency in the Plan in such
manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of this Plan; (iv) to prescribe, amend and rescind rules and regulations relating to the administration of this Plan; and (v) to make all other
determinations and to take all actions necessary or advisable for administration of this Plan provided, however, no action taken under the authority of this Section 2.3(a) shall be contrary to any specific provisions in the Plan.
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">All determinations made by the Administrative Committee on matters referred to in this Section 2.3 shall be final, conclusive and binding upon all persons and shall, except as
expressly provided to the contrary in this Plan, be at the sole discretion of the Administrative Committee. The Administrative Committee shall have all powers necessary or appropriate to accomplish its duties under this Plan or to administer this
Plan. </FONT></TD></TR></TABLE>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 3. ELIGIBILITY AND GRANT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>3.1</B> An individual shall be eligible to participate in this Plan provided that such individual is a non-employee
director of the Company (a &#147;Director&#148;) </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>3.2 </B>A
Director of the Company may be granted a Right only by a written Stock Appreciation Rights Agreement signed by the Company and the Director granting to a Director a number of SARs in accordance with action taken by the Board of Directors, in form
and substance approved by the Administrative Committee, in accordance with Article 12 hereof. Each Director of the Company who so enters into a written Stock Appreciation Rights Agreement with the Company shall sometimes be referred to in this Plan
as a &#147;Holder.&#148; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 4. TERMS OF RIGHTS
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Each Right granted to a Holder in accordance with Section
3 shall have the following terms: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>4.1 </B>The Right shall
be granted effective as of the effective date of the Stock Appreciation Rights Agreement evidencing the grant of the Right; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>4.2 </B>The Right shall be associated with one share of Common Stock; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>4.3 </B>Unless it earlier terminates as provided in Section 9, the Right shall vest (if the Holder is still a Director at
such time) upon the public release of financial results by the Company for its fiscal year ending on February 29, 2008 (the &#147;Normal Vesting Date&#148;) or (if the Holder is still a Director at such time) upon the occurrence of an Accelerating
Event under Section 10.2, which shall accelerate vesting (the &#147;Accelerated Vesting Date&#148;) as provided in Section 10.2; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>4.4 </B>Each Right shall have a base value (the &#147;Base Value&#148;) equal to the average of the closing prices of one share of the Common Stock as
listed on the New York Stock Exchange for those days on which it trades during the ninety calendar days period immediately following the public release of financial results for the Company&#146;s fiscal year ended February 28, 2005; and </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>4.5 </B>Each Right shall be subject to such other terms and conditions
as the Administrative Committee deems advisable and as are consistent with the terms and conditions of this Plan. Except as expressly provided herein, nothing contained in this Plan shall require that the terms and conditions of Rights granted
hereunder be uniform. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 5. LIMITATIONS ON NUMBER OF
RIGHTS AND DATE OF GRANT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>5.1 </B>The aggregate number
of Rights that may be granted under this Plan shall be Twenty Seven Thousand Seven Hundred Twenty (27,720). This number shall be subject to any adjustment required or permitted pursuant to the provisions of Section 10. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>5.2 </B>No Rights may be granted under this Plan after May 18, 2005.
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 6. APPRECIATION AMOUNT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>6.1 </B>Effective as of the Normal Vesting Date or Accelerated Vesting Date of a Right, the Holder of the Right shall
have the full, unconditional and nonforfeitable ownership of the Right and shall be entitled to receive the amount by which the fair market value (the &#147;FMV&#148;) of one share of Common Stock as determined by the methods provided below exceeds
the Base Value of the Right (the &#147;Appreciation Amount&#148;). Prior to the occurrence of a Normal Vesting Date or Accelerated Vesting Date, a Right may be terminated or otherwise adjusted as allowed herein. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>6.2 </B>The FMV for the purpose of calculating the Appreciation Amount for
a Right that reaches maturity on the Normal Vesting Date, shall be the average of the closing prices of one share of the Common Stock on the New York Stock Exchange for those days on which it traded during the ninety calendar days period immediately
following the public release of financial results for the Company&#146;s fiscal year ended February 29, 2008 (the &#147;Normal Determination Period&#148;). The FMV for the purpose of calculating the Appreciation Amount for a Right that reaches
maturity on an Accelerated Vesting Date shall be determined as set forth in Section 10.2 below (an &#147;Accelerated Determination Period&#148;). </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 7. PAYMENT OF APPRECIATION AMOUNT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>7.1</B>&nbsp;&nbsp;&nbsp;(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Within thirty (30) days following the expiration of the Normal Determination Period or, if applicable, an Accelerated Determination Period of a Right, the Company shall pay the
Appreciation Amount for each SAR which has vested (the Appreciation Amount times the number of Rights), without interest, to the Holder. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">In no event shall payment occur after the expiration of two and one-half months after the end of the Holder&#146;s taxable year in which the Normal Vesting Date or, if applicable,
the Accelerated Vesting Date occurs. The Normal Determination Period or, if applicable, the Accelerated Determination Period shall be shortened to the extent necessary to comply with the immediately preceding sentence. In such case, the
Administrative Committee shall determine the length of any shortened determination period, and its determination shall be binding on all parties. This Section 7.1(b) is intended to comply with the short-term deferral exception to the requirements of
section 409A of the Code and shall be construed and administered in a manner that qualifies for a good faith interpretation of such exception. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>7.2 </B>In the event of the death of a Holder of a Right, that has not been terminated, the right to receive any Appreciation Amounts due to the Holder
pursuant to this Plan may pass to the person or persons entitled thereto pursuant to the will of the Holder or, if no such will exists, pursuant to applicable laws of descent and distribution. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>7.3 </B>The Company shall be entitled to deduct from any payment required by this Plan (including any
Appreciation Amounts payable under Section 10.2) any amounts that the Company is required by applicable federal, state or local law to withhold therefrom on account of income or similar taxes. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 8. NATURE OF RIGHTS </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>8.1 </B>The Rights are intended solely as a means to measure the
Appreciation Amounts that may become payable under this Plan. The Rights shall not constitute equity or other securities of the Company, and Holders of Rights shall not be shareholders of the Company and shall not have any right of access to
financial or other information regarding the Company. The Company shall not be required to set aside any amounts for purposes of this Plan, in trust or otherwise, in advance of the respective dates prescribed for the payment of Appreciation Amounts.
All Holders shall, except as otherwise provided by law, be general creditors of the Company with respect to the Rights and the right to payment of any Appreciation Amounts under this Plan. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>8.2 </B>Except as expressly allowed in Section 7.2 above or pursuant to a
qualified domestic relations order (within the meaning of Section 414(p) of the Code), no Holder shall have any right to sell, assign, pledge or otherwise transfer the Rights or any other rights that the Holder may have under this Plan, and any
attempt to do so shall be void. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 9. TERMINATION OF
RIGHTS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">All of the Rights of a Holder shall terminate if
the Holder sells, assigns, pledges or otherwise transfers, or attempts to sell, assign, pledge or otherwise transfer, any Rights or any other rights that the Holder may have under this Plan; provided, however, that the foregoing shall not apply to a
transfer occurring upon the death of the Holder pursuant to the will of the Holder or applicable laws of descent and distribution or to a transfer or assignment pursuant to a qualified domestic relations order (within the meaning of Section 414(p)
of the Code). Additionally, all the rights of a Holder shall terminate if the Holder ceases to be a Director prior to the Normal Vesting Date or, if applicable, the Accelerated Vesting Date, unless such termination is due to death, Permanent
Disability or Removal. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 10. ADJUSTMENTS TO RIGHTS
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>10.1 </B>In the event that there is a material
alteration in the capital structure of the Company on account of a reorganization, merger, recapitalization, stock split, reverse stock split, stock dividend or otherwise in which the Company is the Surviving Entity, then the Administrative
Committee shall make such adjustments, if any, to the then outstanding Rights, including the Base Price, as the Administrative Committee determines to be appropriate and equitable under the circumstances. For purposes of this Section 10.1, neither
(a) the issuance of additional shares of Common Stock or other securities of the Company in exchange for consideration (including services) of any kind nor (b) the conversion into Common Stock of any securities of the Company now or hereafter
outstanding, shall be deemed material alterations in the capital structure of the Company. Notwithstanding the foregoing, however, in the event the Administrative Committee shall determine </FONT>
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<FONT FACE="Times New Roman" SIZE="2">that the nature of a material alteration in the capital structure of the Company is such that it is not feasible or advisable to make adjustments to the
Rights, the Administrative Committee may declare a Restructuring Event to have occurred, in which case an Accelerated Vesting Date will be established as provided in Section 10.2(i). </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>10.2 </B>In the event of (i) a Restructuring Event, (ii) the dissolution or liquidation of the Company, a merger or other
reorganization of the Company with one or more entities as a result of which the Company will not be the Surviving Entity, or a sale of all or substantially all of the assets of the Company, (iii) a Change in Control, (iv) a voluntary or involuntary
petition is filed for or against the estate of the Holder under the bankruptcy laws of the United States or under the insolvency laws of any state, and in the case of an involuntary petition, the petition is not dismissed within sixty (60) days
following the date of filing thereof, or (v) the termination as a Director of a Holder due to death, Permanent Disability (as defined below) or Retirement (as defined below), (each an &#147;Accelerating Event&#148;), an Accelerated Vesting Date
shall be established and a period (an &#147;Accelerated Determination Period&#148;) for the determination of the FMV shall be established as follows: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="34%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD></TR>
<TR>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Accelerating Event</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Accelerated Vesting Date</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Accelerated Determination Period and FMV</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">(i) A Restructuring Event.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date of such formal action as may be required to cause the material alteration in the Company&#146; s capital structure.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Closing Price of one share of Common Stock on the New York Stock Exchange on the last day before the Vesting Date on which shares of Common Stock traded shall be the FMV.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">(ii) Dissolution, liquidation, merger or other reorganization in which the Company is not the Surviving Entity.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date of Filing of Articles of Dissolution or Articles of Merger or other documents formalizing a reorganization.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Closing Price of one share of Common Stock on the New York Stock Exchange on the last day before the Vesting Date on which shares of Common Stock traded shall be the FMV.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">(iii) Change in Control.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Public announcement of an event constituting a Change in Control.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The average of the closing prices of one share of the Common Stock on the New York Stock Exchange for those days on which it trades during the fifteen (15) calendar days immediately following
the Accelerated Vesting Date shall be the FMV.</FONT></TD></TR>
</TABLE>

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<TR>
<TD WIDTH="34%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">(iv) Bankruptcy</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The date a voluntary petition is filed or sixty days following the date of filing of an involuntary petition, if not dismissed by that date.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The average of the closing prices of one share of the Common Stock on the New York Stock Exchange for those days on which it trades during the fifteen (15) calendar days immediately following
the Accelerated Vesting Date shall be the FMV.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">(v) Termination as a Director due to death, Permanent Disability, or Removal</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The last day of the Holder&#146;s service as a Director.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The average of the closing prices of one share of the Common Stock on the New York Stock Exchange for those days on which it trades during the fifteen (15) calendar days immediately following
the Accelerated Vesting Date shall be the FMV.</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 11.
TERMINATION AND AMENDMENT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Board of Directors may at
any time terminate, suspend or amend the terms of this Plan; provided, however, that the termination, suspension or amendment of this Plan shall not, without the consent of the Holder, alter or impair any rights or obligations with respect to any
Rights theretofore granted hereunder. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 12. RIGHTS
AGREEMENT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Rights granted hereunder shall be evidenced by
a Stock Appreciation Rights Agreement designating the name of the Holder, the number of Rights granted to the Holder by the Board of Directors of the Company, the method of determining the Base Value and the Normal Vesting Date and an Accelerated
Vesting Date of the Rights, and such other terms, conditions and provisions not inconsistent with the terms and conditions of this Plan as the Administrative Committee deems advisable. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 13. MISCELLANEOUS PROVISIONS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>13.1 </B>Nothing contained in this Plan shall obligate the Company to continue a person as a Director for any period nor
shall this Plan interfere in any way with the right of the Company to reduce such Holder&#146;s compensation. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>13.2 </B>Subject to Section 8, the provisions of this Plan shall inure to the benefit of and be binding upon each Holder and the heirs, successors and
assigns of each Holder. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>13.3</B> Where the context so requires, references herein to the singular shall include the plural,
and vice versa, and references to a particular gender shall include either or both additional genders. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>13.4</B> This Plan shall be construed, administered and enforced in accordance with the laws of the United States, to the extent applicable hereto, as
well as the laws of the State of Texas. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>13.5 </B>No action
taken under the Plan by the Administrative Committee shall be legally binding on a Holder if it is not taken in good faith. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE 14. DEFINITIONS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>14.1 </B>As used herein, the following terms have the meaning hereinafter set forth unless the context clearly indicates to the contrary: </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&#147;Change in Control&#148; means one or more of the following events: </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="13%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Any person within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, (the &#147;Exchange Act&#148;) other than the Company (including its
affiliates, directors or executive officers) has become the beneficial owner, within the meaning of Rule 13d-3 under the Exchange Act, of 50 percent or more of the combined voting power of the Company&#146;s then outstanding Common Stock and any
other class or classes of the Company&#146;s outstanding securities ordinarily entitled to vote in elections of directors (collectively, &#147;Voting Securities&#148;) (other than through the purchase of Voting Securities from the Company); or
</FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="13%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Shares representing 50 percent or more of the combined voting power of the Company&#146;s Voting Securities are purchased pursuant to a tender offer or exchange offer (other than an
offer by the Company or its subsidiaries or affiliates); or </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="13%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">During any two consecutive years, individuals who, at the beginning of such period constituted the entire Board of Directors, cease to constitute a majority of the Directors, unless
the election of each was approved by at least two-thirds of the Directors still in office who were Directors at the beginning of the period. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&#147;Code&#148; means the Internal Revenue Code of 1986, as amended. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(c)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&#147;Permanent Disability&#148; shall mean the inability for a period of at least six (6) consecutive months to carry out the duties and responsibilities of a Director.
</FONT></TD></TR></TABLE>

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<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(d)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&#147;Removal&#148; means the termination of a person&#146;s status as a Director (i) by shareholder vote, (ii) by the Company as a result of the person&#146;s ineligibility for
service as a Director or (iii) otherwise by the Company unless such termination results from the person&#146;s willful failure to perform his or her duties as a director or such person&#146;s breach of fiduciary duties to the Company or its
shareholders.<I></I> </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(e)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&#147;Subsidiary&#148; of the Company means an entity directly or indirectly controlled by the Company. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(f)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&#147;Surviving Entity&#148; means an entity continuing after a merger, consolidation or other reorganization to which the Company is a party, more than fifty percent (50%) of the
outstanding voting securities of which are owned in the aggregate by persons who were shareholders of the Company prior to the merger, consolidation or reorganization. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Adopted by the Nominating and Corporate Governance Committee on May 18, 2005. </B></FONT></P>
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