LYONDELL CHEMICAL CO
AMENDED AND RESTATED ELECTIVE DEFERRAL PLAN
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>4
<FILENAME>dex1011.txt
<DESCRIPTION>AMENDED AND RESTATED ELECTIVE DEFERRAL PLAN
<TEXT>
<PAGE>

                                                                   Exhibit 10.11

Lyondell Chemical Company

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ELECTIVE DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS

As Amended and Restated Effective January 1, 2002
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                                    ARTICLE I

                               GENERAL PROVISIONS

Section 1.1.  Purpose and Intent of Plan. This Plan is intended to provide an
opportunity for Directors who are not employees of the Company to accumulate
supplemental funds for retirement or special needs prior to retirement through
the deferral of portions of their Board and Board Committee Retainer Fees and
Meeting Fees.

Section 1.2.  Effective Date of Plan. This amended and restated Plan
document shall be effective as of January 1, 2002.

Section 1.3.  Definitions.

         (a)      Account means a separate bookkeeping account maintained by the
Company for each Participant and which measures and determines the amounts to be
paid to the Participant under the Plan. Effective October 1, 1996, separate
subaccounts within the Account for previous deferrals of Retainer and Meeting
Fees, will be consolidated into a single account balance.

         (b)      Administrative Committee means the Directors Benefit
Committee.

         (c)      Beneficiary means a person who is entitled to receive a
Participant's interest under this Plan in the event of the Participant's death.

         (d)      Board means the Board of Directors of Lyondell Chemical
Company.

         (e)      Board Committee means any committee established by the Board
which consists of Directors and which reports to the Board.

         (f)      Chairman Fee means the annual amount payable in cash to a
Director as additional compensation for serving as Chairman of the Board or as
Chairman of a Board Committee.

         (g)      Change in Control shall be deemed to have occurred as of the
date that one or more of the following occurs:

                  (i)        Individuals who, as of February 1, 1999, constitute
the entire Board ("Incumbent Directors") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a
                               --------  -------
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the then Incumbent Directors shall be considered as though such
individual was an Incumbent Director, 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, as such terms are used in Rule 14a-11
under the Securities Exchange Act of 1934, as amended or other

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actual or threatened solicitation of proxies or consents by or on behalf of any
Person (as defined below) other than the Board;

                  (ii)     The stockholders of the Company shall approve any
merger, consolidation or recapitalization of the Company (or, if the capital
stock of the Company is affected, any subsidiary of the Company), or any sale,
lease, or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or substantially
all of the assets of the Company (each of the foregoing being an "Acquisition
Transaction") where (1) the shareholders of the Company immediately prior to
such Acquisition Transaction would not immediately after such Acquisition
Transaction beneficially own, directly or indirectly, shares or other ownership
interests representing in the aggregate eighty percent (80%) or more of (a) the
then outstanding common stock or other equity interests of the corporation or
other entity surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as the case may be, or
of its ultimate parent corporation or other entity, if any (in either case, the
"Surviving Entity"), and (b) the Combined Voting Power of the then outstanding
Voting Securities of the Surviving Entity or (2) the Incumbent Directors at the
time of the initial approval of such Acquisition Transaction would not
immediately after such Acquisition Transaction constitute a majority of the
Board of Directors, or similar managing group, of the Surviving Entity;
provided, however, that, notwithstanding the foregoing, a Change of Control
--------  -------
shall not be deemed to have occurred for purposes of this Subsection (ii) if
each of the following conditions are met: (a) the Acquisition Transaction is
between the Company and/or its Affiliates, on the one hand, and Millennium
Chemicals Inc. ("Millennium") and/or its Affiliates, on the other hand, (b) the
Company or an entity that was a wholly owned subsidiary of the Company prior to
the Acquisition Transaction has a class of equity securities registered under
Section 12 of the Securities Exchange Act of 1934, as amended, immediately after
completion of the Acquisition Transaction, (c) Millennium or an entity that was
a wholly owned subsidiary of Millennium prior to the Acquisition Transaction has
a class of equity securities registered under Section 12 of the Securities
Exchange Act of 1934, as amended, immediately after completion of the
Acquisition Transaction, and (d) as a result of the Acquisition Transaction, the
Company or its Affiliates own a greater percentage equity interest in Equistar
Chemicals, LP ("Equistar") than was owned, directly or indirectly, by the
Company immediately prior to such Acquisition Transaction;

                  (iii)    The stockholders of the Company shall approve any
plan or proposal for the liquidation or dissolution of the Company; or

                  (iv)     Any Person shall be or become the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of securities of the Company representing
in the aggregate more than twenty percent (20%) of either (A) the then
outstanding shares of common stock of the Company ("Common Shares") or (B) the
Combined Voting Power of all then outstanding Voting Securities of the Company;
provided, however, that notwithstanding the foregoing, a Change in Control shall
--------  -------
not be deemed to have occurred for purposes of this Subsection (iv):

                           (1)      Solely as a result of an acquisition of
         securities by the Company which, by reducing the number of Common
         Shares or other Voting Securities outstanding, increases (a) the
         proportionate number of Common Shares beneficially

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         owned by any Person to more than twenty percent (20%) of the Common
         Shares then outstanding, or (b) the proportionate voting power
         represented by the Voting Securities beneficially owned by any
         Person to more than twenty percent (20%) of the Combined Voting
         Power of all then outstanding Voting Securities;

                           (2)      Solely as a result of an acquisition of
         securities directly from the Company, except for any conversion
         of a security that was not acquired directly from the Company; or

                           (3)      Solely as a result of a direct or indirect
         acquisition by Occidental Petroleum Corporation ("Occidental") or
         Millennium, or any Affiliate of either of them, of beneficial ownership
         of securities representing, (x) in the case of Occidental (with its
         Affiliates), no more than forty percent (40%), (y) in the case of
         Millennium (with its Affiliates), no more than forty percent (40%), and
         (z) in the case of Occidental (with its Affiliates) and Millennium
         (with its Affiliates) in the aggregate, no more than forty-nine percent
         (49%), of either (A) the then outstanding Common Shares or (B) the
         Combined Voting Power of all then outstanding Voting Securities of the
         Company, pursuant to or as contemplated under any agreement between the
         Company and Occidental and/or Millennium or Affiliates of either of
         them (including any subsequent related transaction or series of related
         transactions or acquisitions of Voting Securities of the Company by
         Occidental and/or Millennium or their Affiliates or assignees approved
         by the Incumbent Directors prior to the consummation of such
         transaction or series of related transactions) where, as a result of
         such transaction or series of related transactions, the Company or a
         Surviving Entity owns, directly or indirectly, a greater percentage
         equity interest in Equistar than was owned, directly or indirectly, by
         the Company immediately prior to such transaction or series of related
         transactions;

         provided, further, that if any Person referred to in paragraph (1) or
         (2) of this Subsection (iv) shall thereafter become the beneficial
         owner of additional shares or other ownership interests representing
         one percent (1%) or more of the outstanding Common Shares or one
         percent (1%) or more of the Combined Voting Power of the Company (other
         than (x) pursuant to a stock split, stock dividend or similar
         transaction or (y) as a result of an event described in paragraph (1),
         (2) or (3) of this Subsection (iv)), then a Change in Control shall be
         deemed to have occurred for purposes of this Subsection (iv).

         (v)      For purposes of this definition of Change in Control, the
following capitalized terms have the following meanings:

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                  (1)      "Affiliate" shall mean, as to a specified person,
         another person that directly, or indirectly through one or more
         intermediaries, controls or is controlled by, or is under common
         control with, the specified person, within the meaning of such terms as
         used in Rule 405 under the Securities Act of 1933, as amended, or any
         successor rule.

                  (2)      "Combined Voting Power" shall mean the aggregate
         votes entitled to be cast generally in the election of the Board of
         Directors, or similar managing group, of a corporation or other entity
         by holders of then outstanding Voting Securities of such corporation or
         other entity.

                  (3)      "Person" shall mean any individual, entity
         (including, without limitation, any corporation, partnership, trust,
         joint venture, association or governmental body) or group (as defined
         in Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the rules and
         regulations thereunder); provided, however, that Person shall not
         include the Company, LYONDELL-CITGO Refining LP ("LCR") or Equistar,
         any of their subsidiaries, any employee benefit plan of the Company,
         LCR or Equistar or any of their majority-owned subsidiaries or any
         entity organized, appointed or established by the Company, LCR,
         Equistar or such subsidiaries for or pursuant to the terms of any such
         plan.

         (4)      "Voting Securities" shall mean all securities of a corporation
         or other entity having the right under ordinary circumstances to
         vote in an election of the Board of Directors, or similar managing
         group, of such corporation or other entity.

         (h)      Citibank Base Rate means for any Plan Year the average of the
prime rates at Citibank, N. A., in effect on the first day of the current
calendar quarter and each of the three prior quarters provided, however, that if
for any quarter the first day of the calendar quarter is not a business day, the
prime rate in effect on the first business day of such quarter shall be deemed
the prime rate for the first day of such quarter.

         (i)      Code means the Internal Revenue Code of 1986, as amended.

         (j)      Common Stock means the Company's common stock, par value $1.00
per share.

         (k)      Company means Lyondell Chemical Company, and any successor
thereto.

         (l)      Deferral Election means a voluntary election made by a
Director to defer Retainer Fees and/or Meeting Fees pursuant to Section 2.2, for
which the Director has submitted a Participation Agreement.

         (m)      Deferral Period means a maximum number of years established by
the Administrative Committee in advance of a particular Deferral Election, over
which the Director elects to defer Retainer Fees or Meeting Fees. A new
Deferral Period shall normally start each January 1, except that with respect
to a new Director, the Deferral Period shall commence 30 days after the
Director's election to the Board.

         (n)      Deferred Compensation means the aggregate amount of Deferred
Retainer Fees and Supplemental Fees that a Director is required to defer
pursuant to Section 2.1 and the

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amount of Retainer Fees and Meeting Fees that a Director elects to defer
pursuant to a Deferral Election. If applicable, Deferred Compensation also
includes the present value as of December 31, 1998 of the accrued retirement
benefit earned under the Company's Retirement Plan for Non-Employee Directors
which a Director has elected to defer under this Plan effective January 1, 1999.

         (o)      Deferred Retainer Fees means the portion of the Retainer Fee
designated by the Administrative Committee as subject to the automatic deferral
provisions of Section 2.1. As of the 2001 Plan Year, the Deferred Retainer Fee
is 25% of the Retainer Fee otherwise payable to the Director.

         (p)      Deferred Stock Units or DSUs means a bookkeeping unit
representing the value of one share of Common Stock used to credit certain
deferrals to a Participant's account and track investment returns.

         (q)      Director means a Director of the Board who is not a current
employee of the Company or any of its subsidiaries or affiliates.

         (r)      Effective Date means January 1, 2002.

         (s)      Financial Hardship means a condition of financial difficulty,
determined by the Administrative Committee, upon advice of counsel, based on
written information supplied by the Participant or Beneficiary, as the case may
be, in accordance with such standards established, from time to time, by the
Administrative Committee, which condition is sufficient to justify a change in
payment election under the Plan without causing receipt of taxable income by any
other Plan Participant before the Participant or Beneficiary, as the case may
be, actually receives his benefit.

         (t)      In-Service Distribution means a distribution to a
Participant prior to Termination of Service pursuant to Section 4.4.

         (u)      Interest Rate means (i) for any Plan Year commencing prior to
a Change in Control, the interest rate adopted by the Administrative Committee
in advance of the election period for a Plan Year, which shall constitute the
interest rate applicable to that Plan Year; or (ii) for each Plan Year
commencing after a Change in Control, the interest rate which is equal to the
greater of (a) the Prime Rate or (b) 125 percent of the rolling average
Ten-Year Treasury Note Rate, as of October 1 prior to the commencement of the
applicable Plan Year.

         (v)      Meeting Fee means the amount paid in cash to a Director as
compensation for each Board and/or Board Committee meeting attended by the
Director.

         (w)      Participant means any Director who is participating in this
Plan as provided in Article II, or any former Director who has not received the
entire benefit to which he or she is entitled under this Plan.

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         (x)      Participation Agreement means the Deferral Election submitted
by a Participant to the Company prior to the beginning of the Deferral Period.

         (y)      Plan means this Elective Deferral Plan for Non-Employee
Directors.

         (z)      Plan Year means each calendar year beginning on January 1 and
ending on December 31, except that the first Plan Year shall be the period
commencing on August 1, 1990 and ending on December 31, 1990.

         (aa)     Prime Rate means the prime commercial lending rate of
Citibank, N.A. as publicly announced to be in effect at the close of business
on October 1 of the year immediately prior to the commencement of the
applicable Plan Year. The Prime Rate is not necessarily the lowest rate of
interest of Citibank, N.A.

         (bb)     Retainer Fee means the annual amount paid in cash to a
Director as compensation for serving in such capacity and any additional
Chairman Fees.

         (cc)     Retirement means the Director's termination of employment with
a right to an immediate retirement allowance from the Director's regular,
full-time employer.

         (dd)     Supplemental Fee means the annual amount payable as additional
compensation to a Director who is not accruing a benefit under the Retirement
Plan for Non-Employee Directors.

         (ee)     Survivor Benefit means the benefits described in Section 4.3
of the Plan.

         (ff)     Ten-Year Treasury Note Rate means the rate periodically
published by the U.S. Department of Treasury under the heading "10 year
Treasury Note Rate".

         (gg)     Termination of Service means the Director ceasing to be a
member of the Board.

         (hh)     Trust Agreement means the Lyondell Petrochemical Company
Non-Employee Directors Benefit Plans Trust Agreement and any amendments or
successor agreements thereto.

         (ii)     Unscheduled Distribution means a distribution to a
Participant pursuant to Section 4.5.

         (jj)     Valuation Date means the last day of each month, or such other
dates as the Administrative Committee may determine in its discretion, which may
be either more or less frequent, for the valuation of Participants' Accounts.

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                                   ARTICLE II

                      PARTICIPATION AND DEFERRAL ELECTIONS

Section 2.1.  Required Deferrals. The payment of the Supplemental Fee and the
Deferred Retainer Fee shall be automatically deferred under the Plan in the form
of Deferred Stock Units. The Director's Account described in Article III will be
credited as of the first day of each calendar month during the Plan Year with a
number of DSUs equal to (A) 1/12th of the amount of required deferrals under
this Section, divided by (B) the closing price of a share of Common Stock as of
the last trading day of the preceding calendar month.

Section 2.2.  Elective Deferrals. A Director may elect to make deferrals in
addition to the required deferrals described in Section 2.1 by submitting a
Participation Agreement for a Deferral Period to the Company no later than
thirty (30) days prior to the commencement of the Deferral Period and specifying
the desired form of crediting method pursuant to Section 3.5. Each Director's
Deferral Election shall be irrevocable except as authorized pursuant to Section
2.5.

Section 2.3.  Limitation on Deferral. Deferral Elections shall be subject to any
limitation established by the Administrative Committee in advance of a Deferral
Period, including a minimum deferral amount reasonably anticipated to be in
excess of Eight Thousand Dollars ($8,000) per Deferral Period and a minimum
deferral amount reasonably anticipated to be in excess of at least Two Thousand
Dollars ($2,000) per Plan Year in the Deferral Period. The maximum Deferral
Election for any Plan Year within a Deferral Period is an amount equal to one
hundred (100%) of the Participant's Retainer Fees and Meeting Fees that would
otherwise be payable in cash during such Plan Year.

Section 2.4.  Termination of Service. A Participant's required deferrals
pursuant to Section 2.1 and Deferral Elections shall terminate upon the
Participant's Termination of Service.

Section 2.5.  Modification of Deferral Elections. Deferral Elections
shall be irrevocable except as follows:

         (a)      Financial Hardship. The Administrative Committee may permit a
Participant to reduce the amount elected under a prior Deferral Election, or to
waive the remaining deferrals under a prior Deferral Election, upon a finding
that the Participant has suffered a Financial Hardship.

         (b)      Accelerated Deferral. At the Administrative Committee's
discretion, prior to the beginning of any Plan Year in any Deferral Period for
which two or more Plan Years remain, a Participant may elect to accelerate the
amount of Deferred Compensation previously elected pursuant to a Deferral
Election for any of the remaining Plan Years in that Deferral Period; provided,
however, that any acceleration of Deferred Compensation for remaining Plan
Years in the Deferral Period shall not increase, for any single Plan Year, the
total Retainer Fees or

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Meeting Fee deferrals above one hundred percent (100%) of the Participant's
Retainer Fees and Meeting Fees payable in cash during the Plan Year.

                                   ARTICLE III

                         DEFERRED COMPENSATION ACCOUNTS

Section 3.1.  Accounts. For record-keeping purposes only, Accounts shall
be maintained for each Participant.

Section 3.2.  Deferred Compensation. A Participant's Deferred Compensation shall
be credited to his or her Account as of the date when the corresponding
non-deferred portion of the compensation is paid or would have been paid but for
the deferral. Any Deferred Compensation attributable to the accrued benefit
earned by the Participant as of December 31, 1998 under the Company's Retirement
Plan for Non-Employee Directors shall be credited to the Participant's Account
effective January 1, 1999. The Company shall have the right to withhold from any
Retainer Fees or Meeting Fees or Plan benefits (or otherwise to cause the
Director, his Beneficiary or the executor or administrator of his estate to make
payment of) any federal, state, local or foreign taxes required to be withheld
with respect to any Deferred Compensation or benefits paid pursuant to the Plan,
including, but not limited to, Medicare taxes.

Section 3.3.  Deferred Stock Units. When dividends are paid on shares of Common
Stock, a Participant's Account which is then credited with DSUs shall be
credited as of the dividend record date with an additional number of DSUs equal
to (A) the total amount of dividends payable with respect to the number of
shares of Common Stock represented by the DSUs then credited to such
Participant's Account, divided by (B) the closing price per share of Common
Stock on the dividend record date.

Section 3.4.  Interest Rate. Except as provided in Section 4.8, the cash portion
of the Accounts shall be credited as of each Valuation Date with interest based
on the rates specified below, compounded annually. Interest shall be credited as
of each Valuation Date from the date when Deferred Compensation is credited to
Accounts based on the cash portion of the balance of each Account.

         (a)      Interest Rate During Participant's Lifetime. During a
Participant's lifetime, the Participant's Account will be credited with
interest at the greater of the Interest Rate previously announced by the
Company to be applicable for the Plan Year or the current Citibank Base Rate.

         (b)      Interest Rate After Participant's Death. Following a
Participant's death, the Participant's Account will be credited with interest
at an interest rate equal to the Citibank Base Rate. With respect to payments
made pursuant to Section 4.3(a), no interest shall be credited on that portion
of the benefit representing a Participant's unfulfilled Deferral Election for
each unexpired Deferral Period.

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Section 3.5.  Election as to Crediting Method. Once each Plan Year, a
Participant may elect to have the balance credited to his Account allocated
between DSUs and cash, and the corresponding crediting methods set forth in
Sections 3.3 and 3.4 above, on a prospective basis. Such elections shall be made
in the manner prescribed by the Administrative Committee and will be effective
as of the first day of the following Plan Year. Notwithstanding the foregoing,
the required deferrals described in Section 2.1 will always be credited in the
form of DSUs, regardless of a Participant's election, for the Plan Year for
which such amounts are earned. Once the end of such Plan Year is reached, a
Participant may elect to transfer the value of such DSUs into the cash portion
of his Account. However, Deferral Elections may specify the initial form in
which such Deferred Compensation (other than required deferrals described in
Section 2.1) is to be credited.

Section 3.6.  Determination of Accounts. A Participant's Account as of each
Valuation Date shall consist of the balance of the Participant's Account as of
the immediately preceding Valuation Date, plus the amount of the Participant's
Deferred Compensation (in both cash and DSUs) since that Valuation Date, plus
interest and dividend-derived DSUs credited to the Account and minus any
distributions or reductions made from the Account since the immediately
preceding Valuation Date. The value of DSUs credited to a Participant's Account
shall equal the closing price per share of Common Stock as of the most recent
Valuation Date.

Section 3.7.  Vesting of Accounts. Each Participant shall be one hundred percent
(100%) vested at all times in the amounts credited to his or her Account.

Section 3.8.  Statement of Accounts. At least annually, the Company
shall provide each Participant with a statement setting forth the balance of
his or her Account.

                                   ARTICLE IV

                                  PLAN BENEFITS

Section 4.1.  Plan Benefit. A Participant's benefit under the Plan shall equal
the amount of his or her Account as determined in accordance with Sections 3.6
and 4.6. DSUs credited to a Participant's Account shall be paid in cash based on
the closing price of a share of Common Stock as of the most recent Valuation
Date.

Section 4.2.  Distribution upon Termination of Service. (a) Lump Sum. Benefits
payable on account of a Participant's Termination of Service, other than due to
the death of the Participant, shall be paid in a lump sum payment of cash unless
the Participant has otherwise elected to have all or a portion of the benefits
distributed in accordance with Section 4.2(b) and/or Section 4.2(c) hereof.

         (b)    Deferred Commencement of Benefits. A Participant may elect to
have cash payment of all or any portion of the Participant's Account commence on
(i) January of any year following the Participant's Termination of Service or
(ii) the later of the month following

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Retirement or completion of all the Participant Deferrals under the Plan,
provided that payment of benefits must commence no later than the first January
following the year in which the Participant will reach age seventy-two (72).

         (c)      Installment Payments. A Participant may elect to have payment
of all or any portion of the Participant's Account benefits made in
substantially equal monthly cash installment payments of five (5) years, ten
(10) years or fifteen (15) years. The amount of each of the monthly installments
shall be redetermined effective as of January 1 of each year based on the
remaining Account balance and the remaining number of installment payments.

         (d)      Change of Election. A Participant, other than a former
Director, may change a distribution election once each year until the year in
which the Participant attains age 70. The change must be made during a period
established by the Administrative Committee which precedes a Deferral Period
and is irrevocable until the next period established by the Administrative
Committee. The Participant's distribution election shall become irrevocable as
of the year in which the Participant attains age 70, except that a Participant
may request in writing that the Administrative Committee approve a change of an
election made pursuant to Subsection (b) or (c) at any time prior to
commencement of the payment of benefits, or in the case of installment
payments, following commencement of payments, if (i) the Administrative
Committee determines that the Participant has experienced a Financial Hardship
justifying the request for a change of election, or (ii) the Participant agrees
to accept a reduction in the value of the benefit, as determined by the
Administrative Committee, upon advice of counsel, to be necessary to preclude
the receipt of taxable income by any Participant in the Plan before the
Participant actually receives his or her benefit.

         If a Participant has a voluntary Termination of Service prior to the
year in which the Participant attains age 72, the Administrative Committee shall
not honor any change in distribution elections made within the two calendar
years immediately preceding the year in which the Termination of Service
occurred. The Participant's distribution election which had been made before
that period shall be considered the controlling distribution election, unless
the Participant requests and the Administrative Committee grants, a change of
election for the reasons provided in (i) or (ii) above.

         (e)      Payment of Benefits Upon Death of Participant. Upon a
Participant's death, any of the Participant's vested and unpaid benefits
shall be paid in accordance with the applicable provisions of Section 4.3.

Section 4.3.  Survivor Benefits. (a) Death Prior to Termination of Service. If
the Participant dies prior to Termination of Service, the Survivor Benefit shall
be equal to the sum of the Participant's Account as determined in accordance
with Section 3.6 and 4.6 plus an amount equal to the Participant's unfulfilled
Deferral Elections for unexpired Deferral Periods, if any. The Survivor Benefit
shall be paid in a lump sum payment of cash unless the Participant has elected
to have all or a portion of the benefits distributed in accordance with
Subsection (b) hereof.

         (b)      Installment Payments. A Participant may elect to have payment
of the Survivor Benefit made to the Participant's Beneficiary in substantially
equal monthly cash payments of

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five (5) years, ten (10) years or fifteen (15) years if the Participant's
Termination of Service is due to the death of the Participant. The amount of
each of the monthly installments shall be redetermined effective as of January
1 of each year based on the remaining Account balance and the amount, if any,
attributable to the Participant's unfulfilled Deferral Elections and the
remaining number of installment payments.

         (c)      Death After Termination of Service. If the Participant dies
after Termination of Service and all benefits have not been paid in a lump sum
under Section 4.2(a), the Survivor Benefit shall be equal to the Participant's
Account as determined in accordance with Sections 3.6 and 4.6 and payable in the
form and at the time elected by the Participant.

         (d)      Change of Election. A Beneficiary may request the
Administrative Committee to approve a change in the form of payment from
installments to a lump sum provided that (i) the Administrative Committee
determines, upon application of the Beneficiary, that the Beneficiary has
experienced a Financial Hardship justifying the request for a change of
election, or (ii) the Beneficiary agrees to accept a reduction in the value of
the benefit, as determined by the Administrative Committee, upon advice of
counsel, to be necessary to preclude the receipt of taxable income by any
Participant in the Plan in advance of the time the Participant actually
receives his or her benefit.

         (e)      Death Following Change in Control. If a Participant is
entitled to a payment under Section 4.8 and dies prior to receiving his entire
Account, the balance of the Participant's Account shall be paid to
Participant's Beneficiary in cash in a lump sum payment or on an installment
basis, according to the Participant's existing election of manner of payment on
Change in Control.

Section 4.4.  In-Service Distributions. A Participant may elect to receive an
In-Service Distribution from his or her Account subject to the following
restrictions:

         (a)      Timing of Election. The election to take an In-Service
Distribution from the Account for a particular Deferral Election must be made
at the same time the Participant makes the particular Deferral Election.

         (b)      Amount of Distribution. The amount which a Participant can
elect to receive as an In-Service Distribution with respect to an Account shall
be such portions of the Participant's Account balance for the amounts deferred
under a particular Deferral Election, as prescribed by the Administrative
Committee in advance of the Deferral Period. If a previously elected amount
exceeds the Account balance when an In-Service Distribution is to be made, only
the Account balance will be paid.

         (c)      Timing and Manner of In-Service Distribution. The In-Service
Distribution shall be made in cash and shall commence at the time and in the
manner elected by the Participant in the Participation Agreement entered into
with respect to the Deferral Election; provided, however, that if the
Participant has a Termination of Service, the In- Service Distribution election
will be canceled and distribution will be made pursuant to Section 4.2 and
provided, further, that if the Participant commences Retirement and has elected
payment upon Retirement, the In-

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Service Distribution election will be canceled and distribution will be made
pursuant to Section 4.2. In no event shall an In-Service Distribution be made
prior to two (2) years following the initial effective date of the particular
Deferral Election.

         (d)      Treatment of Distribution. Amounts paid to a Participant
pursuant to this Section 4.4 shall be treated as distributions from the
Participant's Account.

Section 4.5.  Unscheduled Distributions. Upon a finding that a Participant
has suffered a Financial Hardship or upon the Participant agreeing to accept a
reduction of his or her benefit in an amount determined necessary by the
Administrative Committee, upon advice of counsel, to avoid constructive receipt
of taxable income by any other Participant, the Administrative Committee may,
in its sole discretion, make distributions from an Account prior to the time
specified for payment of the Account. Any unscheduled withdrawal will be paid
in a lump sum cash payment and will be subject to a minimum amount of $10,000
and any additional conditions prescribed by the Administrative Committee.
Applications for unscheduled distributions and determinations thereon by the
Administrative Committee shall be in writing, and a Participant may be required
to furnish proof of the Financial Hardship in a formal manner as deemed
appropriate by the Administrative Committee, upon advice of counsel.

Section 4.6.  Valuation and Settlement. The date on which a lump sum is paid
or the date on which installment payments commence shall be the "Settlement
Date". The Settlement Date shall be no more than thirty (30) days after the
last day of the month in which the Participant or his Beneficiary becomes
entitled to payments on account of Retirement, Termination of Service or death,
unless the Participant elected to defer commencement of payments pursuant to
Section 4.2(b). The Settlement Date for an In-Service Distribution or delayed
payments shall be the month which the Participant elects to have such payments
commence in the election form for designation of form of payment. The amount of
a lump sum and the initial amount of installment payments shall be based on the
value of the Participant's Account as of the Valuation Date immediately
preceding the Settlement Date.

Section 4.7.  Small Benefit. Notwithstanding any election made by the
Participant, the Company may pay any benefit in the form of a lump sum cash
payment to the Participant or any Beneficiary, if the value of the Plan benefits
remaining following a distribution for any reason, or the benefit payable to the
Participant or Beneficiary when payments to such Participant or Beneficiary
would otherwise commence, is less than $2,000.

Section 4.8.  Change in Control. Notwithstanding any contrary provisions of
this Article IV, in the event that a Change in Control occurs while this Plan
is in effect, the provisions of this Section 4.8 shall control. In the event of
a Change in Control, the full amount of contributions and earnings accrued or
credited to the Participant's Account (whether credited as cash amounts or as
DSUs), as of the date immediately preceding the Change in Control, shall be
distributed in cash to the Participant or the Participant's Beneficiary, if a
Survivor Benefit is being paid to a Beneficiary at the time of Change in
Control. Payment shall be made on a lump sum or installment basis, according to
the Participant's election of the manner of payment on Change in Control.

                                      -12-
<PAGE>

Section 4.9.  Combined Gross-up Payment; Tax Defense.

         (a)      Combined Gross-up Payment. If a Participant becomes entitled
to one or more payments (with a "payment" including, without limitation, an
increase in pension benefits and the vesting of an option or other non-cash
benefit or property) pursuant to the terms of any plan, arrangement or
agreement with the Company (the "Total Payments"), which are or become subject
to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") (or any similar tax that may hereafter be imposed) (the
"Excise Tax"), the Company shall pay to the Participant an additional cash
amount (the "Combined Gross-up Payment") such that the net amount retained by
the participant after reduction for (i) any Excise Tax on the Total Payments
and (ii) any federal, state and local income or employment tax and Excise Tax
payable with respect to the Combined Gross-up Payment, shall equal the Total
Payments. For purposes of determining the amount of the Combined Gross-up
Payment, a Participant shall be deemed (i) to pay federal income taxes at the
highest stated rate of federal income taxation (including surtaxes, if any) for
the calendar year in which the Combined Gross up Payment is to be made; and
(ii) to pay any applicable state and local income taxes at the highest stated
rate of taxation (including surtaxes, if any) for the calendar year in which
the Combined Gross-up Payment is to be made. Any Combined Gross-up Payment
required hereunder shall be made to the Participant at the same time any Total
Payment subject to the Excise Tax is paid or deemed received by the
Participant. The Combined Gross-up Payment shall not be paid under this Plan if
a Combined Gross-up Payment which is identical to or greater than the amount
calculated under this Section 4.9 is paid under any other plan, arrangement or
agreement with the Company.

         (b)      Tax Defense. If, in connection with the examination of a
Participant's tax return, the Internal Revenue Service asserts that any amount
payable or benefit provided hereunder is a "parachute payment" as defined in the
Code and such amount or benefit was not treated as a parachute payment in
determining a Combined Gross-up Payment, the Company at its cost shall assume
the defense of any controversy involving such issue and shall indemnify and hold
the Participant harmless for all liabilities, costs, taxes, interest and
penalties attributable to such issue and shall to the extent necessary (without
duplication) increase the Combined Gross-up Payment to give effect to any
additional amount or benefit determined to be a parachute payments. The
Participant shall cooperate with the Company so that the Company will be able to
challenge any adverse determination by the Internal Revenue Service through
administrative proceedings and, if determined by the Company, through
litigation.

                                    ARTICLE V

                           DESIGNATION OF BENEFICIARY

Section 5.1.  Designation of Beneficiary. Each Participant shall have the right
to designate a Beneficiary or Beneficiaries to receive his interest in his
Account upon his death as determined in accordance with Section 4.3. Such
designation shall be made on a form provided by and delivered to the Company.
The Participant shall have the right to change or revoke any such designation
from time to time by filing a new designation or notice of revocation with the

                                      -13-
<PAGE>

Company. No notice to or consent by any Beneficiary shall be required to effect
any such change or revocation.

Section 5.2.  Failure to Designate Beneficiary. If a Participant fails to
designate a Beneficiary before his or her death, or if no designated Beneficiary
survives the Participant, the balance in the Participant's Account shall be paid
in cash in a lump sum to the executor or administrator for his or her estate.

                                   ARTICLE VI

                                 ADMINISTRATION

Section 6.1.  Administrative Committee. The Administrative Committee shall
be responsible for the administration of the Plan.

Section 6.2.  Rules of Conduct. The Administrative Committee shall adopt such
rules for the conduct of its business and administration of this Plan as it
considers desirable, provided they do not conflict with the provisions of this
Plan.

Section 6.3.  Legal, Accounting, Clerical and Other Services. The Administrative
Committee may authorize one or more of its members or any agent to act on its
behalf and may contract for legal, accounting, clerical and other services to
carry out this Plan. All expenses of the Administrative Committee shall be paid
by the Company.

Section 6.4.  Interpretation of Provisions. The Administrative Committee shall
have the exclusive right and discretionary authority to interpret the provisions
of this Plan and to decide questions arising in its administration. The
decisions and interpretations of the Administrative Committee shall be final and
binding on the Company, Participants, Directors, Beneficiaries and all other
persons.

Section 6.5.  Records of Administration. Records reflecting the
administration of this Plan shall be kept.

Section 6.6.  Denial of Claim. The Administrative Committee shall provide
adequate notice in writing to any Participant, Director or Beneficiary whose
claim for benefits under this Plan has been denied, setting forth the specific
reasons for such denial. The Participant, Director or Beneficiary will be given
an opportunity for review by the Administrative Committee of the decision
denying the claim. The Participant, Director or Beneficiary shall be given sixty
(60) days from the date of the notice denying any such claim within which to
request such review.

Section 6.7.  Liability of Committee. No member of the Administrative Committee
shall be liable for any action taken in good faith or for exercise of any power
given the Administrative Committee, or for the actions of other members of said
Administrative Committee.

                                      -14-
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                                   ARTICLE VII

                          AMENDMENT AND DISCONTINUANCE

Section 7.1.  Amendment of Plan. This Plan may be amended from time to
time by the Board of Directors of the Company.

Section 7.2.  Termination. The Company intends to continue this Plan
indefinitely, but reserves the right to terminate it at any time. In the event
of a Change in Control, this Plan shall be terminated following distribution of
assets to Participants or to the Independent Plan Administrator under the Trust
Agreement.

Section 7.3.  Effect of Amendment or Termination. No amendment or termination of
this Plan may adversely affect the benefit payable to any former Participant or
Beneficiary receiving benefits under this Plan prior to the effective date of
the amendment or termination, or any Participant or Beneficiary of a deceased
Participant who, as of such effective date, was vested in or eligible to receive
a benefit under this Plan, except as follows. Payment of a Participant's Account
to the Participant or a Beneficiary in a previously elected manner of
distribution payable on Change in Control shall not be considered an amendment
which adversely affects benefits under this Plan.

         No amendment or termination of this Plan due to a Change in Control
shall adversely affect the amount of contributions and earnings accrued or
credited to any former or current Participant's Account under this Plan
immediately prior to the Change in Control.

                                  ARTICLE VIII

                                  MISCELLANEOUS

Section 8.1.  Unsecured General Creditor. Participants and their Beneficiaries
shall have no legal or equitable rights, claims or interests in any specific
assets or property of the Company, nor shall they be the beneficiaries of, or
have any rights, claims or interests in any life insurance policies, annuity
contracts, or the proceeds therefrom owned, or which may be acquired by, the
Company ("Policies"). Any such Policies or other assets of the Company shall be,
and remain, the general, unpledged, unrestricted assets of the Company. The
Company's obligation under the Plan shall be merely that of an unfunded and
unsecured promise of the Company to pay money in the future.

Section 8.2.  Grantor Trust. Although the Company is responsible for the payment
of all benefits under the Plan, the Company may, in its sole discretion,
contribute funds to a grantor trust for the purpose, as it deems appropriate, of
paying benefits under this Plan. Such trust may be irrevocable, but assets of
the trust shall be subject to the claims of creditors of the Company.

                                      -15-
<PAGE>

To the extent any benefits provided under the Plan are actually paid from the
trust, the Company shall have no further obligation with respect thereto but to
the extent not so paid, such benefits shall remain the obligation of, and shall
be paid, by the Company. The Participants or Beneficiaries of deceased
Participants shall have the status of unsecured creditors insofar as their
legal claim for benefits under the Plan and shall have no security interest in
the grantor trust.

Section 8.3.  Payments and Benefits Not Assignable. Payments to and benefits
under this Plan are not assignable, transferable or subject to alienation since
they are primarily for the support and maintenance of the Participants and
Beneficiaries. Likewise, such payments shall not be subject to attachment by
creditors of, or through legal process against, the Company, the Administrative
Committee or the Participants.

Section 8.4.  No Right To Service On The Board. The provisions of this Plan
shall not give a Director the right to be retained in the service of the
Company nor shall this Plan or any action taken under the Plan be construed as
a contract for service on the Board.

Section 8.5.  Adjustments. At the Company's request, the Administrative
Committee may, with respect to a Participant, adjust such Participant's benefit
under this Plan or make such other adjustments with respect to such Participant
as are required to correct administrative errors or provide uniform treatment
of Participants in a manner consistent with the intent and purpose of this Plan.

Section 8.6.  Obligation to Company. If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the Participant has
outstanding any debt, obligation, or other liability representing an amount
owing to the Company, or any benefit plan maintained by the Company, then the
Company may offset such amount owed to it or such benefit plan against the
amount of benefits otherwise distributable. Such determination shall be made by
the Administrative Committee.

Section 8.7.  Protective Provisions. Each Participant shall cooperate with the
Company by furnishing any and all information requested by the Company in order
to facilitate the payment of benefits hereunder, taking such physical
examinations as the Company may deem necessary and taking such other relevant
action as may be requested by the Company. If a Participant refuses to
cooperate, the Company shall have no further obligation to the Participant under
the Plan. If the Participant makes any material misstatement of information or
nondisclosure of medical history, then no benefits will be payable hereunder to
such Participant or his Beneficiary, provided, that in the Company's sole
discretion, benefits may be payable in an amount reduced to compensate the
Company for any loss, cost, damage or expense suffered or incurred by the
Company as a result in any way of any such action, misstatement or
nondisclosure.

Section 8.8.  Gender, Singular and Plural. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, as the
identity of the person or persons may require. As the context may require, the
singular may be read as the plural and the plural as the singular.

                                      -16-
<PAGE>

Section 8.9.  Law Governing. This Plan shall be construed, regulated and
administered under the laws of the State of Texas, except to the extent that
such laws are preempted by ERISA.

Section 8.10. Notice. Any notice or filing required or permitted to be given to
the Administrative Committee or the Company under the Plan shall be sufficient
if in writing and hand delivered, or sent by registered or certified mail, to
the principal office of the Company, directed to the attention of the Secretary
of the Company. Such notice shall be deemed given as to the date of delivery or,
if delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.

Section 8.11. Successors and Assigns. This Plan shall be binding upon the
Company and its successors and assigns.

Section 8.12. Provisions for Incapacity. If the Administrative Committee deems
any person entitled to receive any payment under the provisions of this Plan
incapable of receiving or disbursing the same by reason of minority, illness or
infirmity, mental incompetency, or incapacity of any kind, the Administrative
Committee may, in its sole discretion, take any one or more of the following
actions: it may apply such payment directly for the comfort, support and
maintenance of such person; it may reimburse any person for any such support
theretofore supplied to the person entitled to receive any such payment; or it
may pay such payment to any other person selected by the Administrative
Committee to disburse such payment for the comfort, support and maintenance of
the person entitled thereto, including, without limitations, to any relative who
has undertaken, wholly or partially, the expense of such person's comfort, care
and maintenance, or any institution in whose care or custody the person entitled
to the payment may be. The Administrative Committee may, in its sole discretion,
deposit any payment due to a minor to the minor's credit in any savings or
commercial bank of the Administrative Committee's choice.

                                      -17-

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