Annual Performance Pay Plan - Halliburton Co.


                     HALLIBURTON ANNUAL PERFORMANCE PAY PLAN
                AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001














                                     INDEX


ARTICLE I....................................................................  1
PURPOSE......................................................................  1

ARTICLE II...................................................................  1
DEFINITIONS..................................................................  1

         2.1      Definitions................................................  1
         2.2      Number.....................................................  4
         2.3      Headings...................................................  4

ARTICLE III..................................................................  5
PARTICIPATION................................................................  5

         3.1      Participants...............................................  5
         3.2      Partial Plan Year Participation............................  5
         3.3      No Right to Participate....................................  6
         3.4      Plan Exclusive.............................................  6
         3.5      Consent to Dispute Resolution..............................  6

ARTICLE IV...................................................................  6
ADMINISTRATION...............................................................  6

ARTICLE V....................................................................  7
REWARD DETERMINATIONS........................................................  7

         5.1      Performance Measures.......................................  7
         5.2      Performance Requirements...................................  7
         5.3      Reward Determinations......................................  7
         5.4      Reward Opportunities ......................................  8
         5.5      Discretionary Adjustments..................................  8
         5.6      Discretionary Bonuses......................................  8

ARTICLE VI...................................................................  8
DISTRIBUTION OF REWARDS......................................................  8

         6.1      Form and Timing of Payment.................................  8
         6.2      Excess Remuneration........................................  9
         6.3      Elective Deferral..........................................  9
         6.4      Tax Withholding............................................  9

                                       ii


ARTICLE VII..................................................................  9
TERMINATION OF EMPLOYMENT....................................................  9

         7.1      Termination of Service During Plan Year....................  9
         7.2      Termination of Service After End of Plan Year
                  But Prior to the Payment Date.............................. 10

ARTICLE VIII................................................................. 10
RIGHTS OF PARTICIPANTS AND BENEFICIARIES..................................... 10

         8.1      Status as a Participant or Beneficiary..................... 10
         8.2      Employment................................................. 10
         8.3      Nontransferability......................................... 11
         8.4      Nature of Plan............................................. 11

ARTICLE IX................................................................... 12
CORPORATE CHANGE............................................................. 12

ARTICLE X.................................................................... 12
AMENDMENT AND TERMINATION.................................................... 12

ARTICLE XI................................................................... 12
MISCELLANEOUS................................................................ 12

         11.1     Governing Law.............................................. 12
         11.2     Severability............................................... 13
         11.3     Successor.................................................. 13
         11.4     Effective Date............................................. 13

                                      iii


                                   HALLIBURTON
                           ANNUAL PERFORMANCE PAY PLAN


     The  Compensation  Committee of Directors of  Halliburton  Company,  having
heretofore  established  the Halliburton  Annual  Performance Pay Plan (formerly
known as the Annual  Reward  Plan),  pursuant to the  provisions of Article X of
said Plan,  hereby  amends and restates  said Plan to be effective in accordance
with the provisions of Section 11.4 hereof.

                                    ARTICLE I

                                     PURPOSE

     The purpose of the Halliburton  Annual Performance Pay Plan (the "Plan") is
to reward  management  and other key employees of the Company and its Affiliates
for  improving   financial  results  which  drive  the  creation  of  value  for
shareholders of the Company and thereby, serve to attract,  motivate, reward and
retain high caliber employees required for the success of the Company.  The Plan
provides  a means to link  total and  individual  cash  compensation  to Company
performance,  as measured by Cash Value Added ("CVA"), a demonstrated  driver of
shareholder value, and, where appropriate, additional performance measures which
drive CVA.

                                   ARTICLE II

                                   DEFINITIONS

     2.1  Definitions.  Where the  following words  and phrases  appear  in  the
Plan, they  shall have the  respective  meanings  set forth below,  unless their
context clearly indicates to the contrary.

          "Affiliate"  shall  mean a Subsidiary  of the  Company  or  a division
     or designated group of the Company or a Subsidiary.

          "Base Salary" shall mean the regular cash  compensation  actually paid
     during  a Plan  Year to  a  Participant  for  services  rendered  or  labor
     performed   while  participating  in   the  Plan,   including  base  pay  a
     Participant  could have received in cash in lieu of (i)  contributions made
     on  such  Participant's  behalf  to  a  qualified  Plan  maintained  by the
     Company  or  to   any  cafeteria   plan  under  Section  125  of  the  Code
     maintained by  the Company and (ii) deferrals of  compensation  made at the

                                       1


     Participant's election  pursuant to a plan or arrangement of the Company or
     an  Affiliate,  but excluding any  Rewards under  this Plan  and any  other
     bonuses, incentive pay or special awards.

          "Beneficiary" shall mean the person, persons, trust or trusts entitled
     by  Will or the  laws of descent  and distribution to  receive the benefits
     specified under the Plan in the  event of the Participant's  death prior to
     full payment of a Reward.

          "Board of Directors" shall mean the Board of Directors of the Company.

          "Business  Unit  CVA"  shall  mean  the  respective  CVA of designated
     business units, each calculated on an  aggregate basis for their respective
     operations.

          "Cause"  shall mean (i) the conviction of the  Participant of a felony
     under  Federal law or the law  of the state in  which such action occurred,
     (ii) dishonesty in course of fulfilling the Participant's employment duties
     or (iii) the disclosure  by the Participant to any  unauthorized  person or
     competitor of any confidential information or confidential  knowledge as to
     the business or affairs of the Company and its Affiliates.

          "CEO" shall mean the Chief Executive Officer of the Company.

          "Code" shall mean the Internal Revenue Code of 1986, as amended.

          "Committee" shall mean the  Compensation Committee of Directors of the
     Company,  appointed by the  Board of Directors from  among its members,  no
     member of which shall be an employee of the Company or a Subsidiary.

          "Common Stock" shall  mean the common stock, par value $2.50 per share
     of Halliburton Company.

          "Company" shall mean Halliburton Company and its successors.

          "Company CVA" shall mean CVA calculated on a consolidated basis.

          "Corporate Change"  shall  mean  one of  the following events: (i) the
     merger, consolidation or other  reorganization of the Company  in which the
     outstanding  Common  Stock is  converted into or exchanged  for a different
     class of  securities  of the  Company, a class  of securities  of any other
     issuer  (except a  direct or  indirect wholly  owned  Subsidiary),  cash or
     property; (ii) the sale, lease or exchange of  all or substantially  all of
     the assets of the Company to another corporation or entity (except a direct
     or  indirect  wholly   owned  Subsidiary);  (iii)   the  adoption   by  the
     stockholders of the Company of a plan of liquidation and  dissolution; (iv)
     the acquisition (other than any acquisition pursuant to any other clause of
     this definition) by any person or entity, including,  without limitation, a
     "group" as contemplated by  Section 13(d)(3) of the Securities Exchange Act
     of  1934,  as amended,  of beneficial  ownership,  as  contemplated by such
     Section,  of more  than twenty  percent (based  on  voting  power)  of  the
     Company's outstanding capital stock; or (v) as a result of or in connection

                                       2


     with a contested  election of directors, the  persons who were directors of
     the Company  before such  election shall cease  to constitute a majority of
     the Board.

          "CVA"  shall mean  the difference  between operating  cash  flow and a
     capital charge, calculated in accordance  with the criteria and  guidelines
     set forth in the Corporate Policy  entitled "Cash Value Added (CVA)," as in
     effect at the time any such calculation is made.

          "CVA Drivers" shall  mean such additional performance measures (either
     objective or subjective) as may be approved by the CEO from time to time to
     reinforce  key operating and  strategic goals important  to the Company and
     its business units. Particular CVA Drivers may  vary from  business unit to
     business  unit and from  Participant to  Participant  within  a  particular
     business  unit  as  deemed  appropriate  according  to  the  needs  of  the
     applicable business unit.

          "Dispute  Resolution  Program"  shall  mean  the  Halliburton  Dispute
     Resolution Plan.

          "ERISA" shall  mean the  Employee Retirement  Income  Security  Act of
     1974, as amended.

          "Group  CVA" shall  mean the  respective CVA of the Halliburton Energy
     Services Group and the Engineering  and Construction Group, each calculated
     on an aggregate basis for their respective operations.

          "Key Employees" shall mean regular, full-time employees of the Company
     or an Affiliate below the Officer level.

          "Officer" shall mean a full officer of the Company or an Affiliate.

          "Participant"  shall mean  any active  employee of  the  Company or an
     Affiliate  who participates  in the  Plan pursuant  to  the  provisions  of
     Article III hereof. An employee shall not be eligible to participate in the
     Plan while on a leave of absence.

          "Participant   Category"  shall   mean  a  grouping   of  Participants
     determined in accordance with the applicable provisions of Article III.

          "Payment Date" shall mean, with respect to a particular Plan Year, the
     last business  day of February  of the year next  following the end of such
     Plan Year.

          "Performance  Goals"  shall  mean,   for   a   particular  Plan  Year,
     established levels of applicable Performance Measures.

          "Performance  Measures" shall  mean the criteria  used in  determining
     Performance  Goals  for   particular  Participant  Categories,   which  may

                                       3


     include one or more of the following: Company CVA, Group CVA, Business Unit
     CVA and CVA Drivers.

          "Plan"  shall mean the  Halliburton  Annual Performance  Pay  Plan  as
     amended  and  restated  effective  January  1,  2001,  and  as the same may
     thereafter be amended from time to time.

          "Plan Year"  shall mean the calendar year ending December 31, 1995 and
     each subsequent calendar year thereafter.

          "Reward"  shall  mean  the dollar  amount  of  incentive  compensation
     payable  to a Participant  under  the Plan  for a Plan  Year  determined in
     accordance with Section 5.3.

          "Reward  Opportunity" shall  mean, with  respect  to  each Participant
     Category,  incentive reward payment  amounts, expressed as  a percentage of
     Base  Salary,  which  corresponds  to  various  levels  of  pre-established
     Performance Goals, determined pursuant to the Reward Schedule.

          "Reward  Schedule" shall mean  the schedule which  aligns the level of
     achievement of applicable Performance Goals with Reward Opportunities for a
     particular   Plan  Year,  such  that  the   level  of  achievement  of  the
     pre-established  Performance  Goals  at  the  end  of  such  Plan Year will
     determine the actual Reward.

          "Senior  Executive" shall  have the  meaning set  forth  in  Corporate
     Policy  3-9002, Executive  Compensation Administration,  as such Policy may
     from time to time be amended.

          "Subsidiary"  shall mean  any corporation  50 percent or more of whose
     voting power is owned, directly or indirectly, by the Company.

     2.2  Number. Wherever appropriate  herein, words used in the singular shall
be  considered to  include the plural  and words  used  in the plural  shall  be
considered to include the singular.
     2.3  Headings.  The headings of Articles  and Sections  herein are included
solely  for convenience, and  if there is any  conflict between headings and the
text of the Plan, the text shall control.

                                       4


                                   ARTICLE III

                                  PARTICIPATION

     3.1  Participants. Active  employees who  are Senior  Executives  as of the
beginning of  each Plan  Year shall be  Participants  for  such  Plan  Year.  In
addition, such other Officers and Key Employees as may be designated annually as
Participants  by the  CEO prior to the last day of March each Plan Year shall be
Participants for such Plan Year.
     3.2  Partial  Plan  Year Participation. If, after  the beginning  of a Plan
Year, an employee who was not previously a Participant for such Plan Year (i) is
newly  appointed or  elected as  a Senior  Executive or  (ii) returns  to active
employment  as a Senior  Executive following a  leave of absence,  such employee
shall become a Participant effective with such appointment or election or return
to  active service,  as the  case may be, for the balance of the Plan Year, on a
prorated basis,  unless the  Committee shall  determine, in its sole discretion,
that the participation  shall be delayed  until the beginning  of the  next Plan
Year. If, after the beginning of the Plan Year, (i) a person is newly elected or
appointed  as  an Officer (other  than a Senior  Executive) or  is newly  hired,
promoted or transferred into a position in which he or she is a Key Employee, or
(ii) an employee who was not previously a Participant for such Plan Year returns
to active  employment as an  Officer (other than  a Senior  Executive) or  a Key
Employee  following a leave of  absence, the CEO, or his delegate, may designate
such  person  as  a  Participant for  the pro  rata portion  of such  Plan  Year
beginning on the first day of the month following such designation.
     If an  employee who has  previously been designated as a  Participant for a
particular Plan Year takes a leave of absence during such Plan Year, all of such
Participant's  rights to a Reward for  such Plan Year shall be forfeited, unless
the Committee (with respect to  a Participant who is a  Senior Executive) or the
CEO (with  respect to  any  other  Participant) shall   determine   that   such
Participant's  Reward  for  such  Plan Year  shall  be  prorated based upon that
portion  of the  Plan Year during which he or she was an  active Participant, in
which  case the  prorated portion of the Reward shall be paid in accordance with
the provisions of Section 6.1.

                                       5


     Each Participant shall be assigned to a Participant Category at the time he
or  she becomes  a Participant  for a  particular Plan  Year.  If  a Participant
thereafter incurs a change in status due to promotion, demotion, reassignment or
transfer, (i)  the Committee, in  the case of the CEO or other Senior Executive,
or  (ii) the  CEO, or  his delegate,  in the  case of any other Participant, may
approve  such  adjustment  in such Participant's  Reward Opportunity  as  deemed
appropriate under  the circumstances (including termination  of participation in
the  Plan for  the remainder  of the Plan Year), such adjustment to be made on a
pro rata basis for the balance  of the Plan Year effective with the first day of
the  month  following  such  approval,  unless  some  other  effective  date  is
specified. All such approvals shall be documented in writing and filed with  the
Plan records for the applicable Plan Year.
     3.3  No  Right to Participate.  Except as provided in Sections 3.1 and 3.2,
no  Participant or other employee of  the Company or an  Affiliate shall, at any
time, have a right to participate in the Plan for any Plan Year, notwithstanding
having previously participated in the Plan.
     3.4  Plan Exclusive.  No employee shall  simultaneously participate in this
Plan  and in any other short-term incentive plan  of the Company or an Affiliate
unless such  employee's participation in such other plan is approved by the CEO,
or his delegate.
     3.5  Consent to  Dispute Resolution. Participation  in the Plan constitutes
consent  by  the  Participant to  be bound by the  terms and  conditions  of the
Dispute Resolution Program which in substance requires that all disputes arising
out of or in  any way related to employment  with the Company or its Affiliates,
including any disputes concerning the Plan, be resolved exclusively through such
program, which includes binding arbitration as the last step.

                                   ARTICLE IV
                                 ADMINISTRATION

     Each Plan Year,  the Committee shall establish the basis for payments under
the  Plan in relation  to given Performance  Goals, as  more fully  described in
Article V hereof, and, following the end of each Plan Year, determine the actual
Reward  payable for each  Participant Category.  The Committee  is authorized to

                                       6


construe  and  interpret  the  Plan, to  prescribe,  amend  and  rescind  rules,
regulations and procedures relating to  its administration and to make all other
determinations  necessary or advisable  for administration of the Plan.  The CEO
shall have such authority as is expressly provided in the Plan.  In addition, as
permitted  by  law, the  Committee  and  the  CEO  may  delegate  such of  their
respective  authority  granted under  the Plan as  deemed appropriate; provided,
however, that (i) the  Committee may not  delegate its authority with respect to
matters  relating to the CEO and other Senior  Executives and (ii) the Committee
and the CEO may not  delegate their respective authority under Article V hereof.
Decisions  of the  Committee and  the CEO,  or their  respective  delegates,  in
accordance with the authority granted hereby or delegated  pursuant hereto shall
be  conclusive  and  binding.  Subject  only  to  compliance  with  the  express
provisions hereof, the Committee, the CEO and their respective delegates may act
in  their sole  and absolute  discretion  with respect  to matters  within their
authority under the Plan.

                                    ARTICLE V

                              REWARD DETERMINATIONS

     5.1  Performance  Measures.  CVA shall be the primary  Performance  Measure
in  determining  Performance Goals  for any Plan Year.  In addition, appropriate
CVA  Drivers  applicable  to   particular  Participants  may  also  be  used  as
Performance Measures.
     5.2  Performance  Requirements. Prior to the last  day of February  of each
Plan Year, (i) the Committee shall approve the Company CVA, applicable Group CVA
and  applicable Business  Unit CVA Performance  Goals and  the CEO shall approve
appropriate  CVA  Drivers  applicable  to  certain  Participants  and  (ii)  the
Committee  shall   establish  a  Reward  Schedule  which  aligns  the  level  of
achievement of applicable Performance Goals with Reward Opportunities, such that
the level of achievement of the  pre-established Performance Goals at the end of
the Plan Year will determine the actual Reward.
     5.3  Reward  Determinations. After  the end  of each  Plan  Year,  (i)  the
Committee shall determine the extent to  which the Performance Goals (other than
CVA Drivers)  have been  achieved and (ii) the CEO shall determine the extent to

                                       7


which the applicable  CVA Drivers have  been achieved, and  the  amount  of  the
Reward  shall be computed  for each Participant  in accordance  with the  Reward
Schedule.
     5.4  Reward Opportunities. The established Reward Opportunities may vary in
relation  to the Participant  Categories and  within the Participant Categories.
In the  event a Participant  changes Participant Categories  during a Plan Year,
the Participant's Reward Opportunities shall be adjusted in  accordance with the
applicable provisions of Section 3.2.
     5.5  Discretionary  Adjustments. Once  established, Performance  Goals will
not be changed during the Plan Year.  However, if the Committee, in its sole and
absolute  discretion,  determines  that  there  has  been  (i)  a  change in the
business,  operations, corporate  or capital  structure,  (ii)  a change  in the
manner  in which  business is  conducted or  (iii) any  other material change or
event which will impact one or more Performance Goals in  a manner the Committee
did  not intend,  then the Committee may, reasonably contemporaneously with such
change  or  event,  make  such  adjustments  as  it shall  deem appropriate  and
equitable  in  the  manner  of  computing   the  relevant  Performance  Measures
applicable to  such Performance  Goal or  Goals for  the  Plan  Year;  provided,
however, that the CEO shall be authorized,  subject to the review and  oversight
of the Committee, to make adjustments in the manner of computing one or more CVA
Drivers  if, when  evaluated in  accordance with  the standards set forth in the
preceding  sentence, he  shall  deem  such adjustments  to  be  appropriate  and
equitable.
     5.6  Discretionary  Bonuses.  Notwithstanding any other provision contained
herein  to the  contrary,  the  Committee may, in its sole discretion, make such
other  or  additional  bonus  payments  to  a  Participant  as   it  shall  deem
appropriate.

                                   ARTICLE VI

                             DISTRIBUTION OF REWARDS

     6.1  Form and Timing of  Payment. Except as  otherwise  provided below, the
amount  of each  Reward shall  be paid  in cash  on the Payment Date, or as soon
thereafter  as practicable.  In the  event of  termination  of  a  Participant's

                                       8


employment  prior to the Payment Date for any  reason other than death (in which
case  payment shall be made in  accordance  with  the applicable  provisions  of
Article  VII), the amount  of any  Reward (or prorated portion thereof)  payable
pursuant to the  provisions of Sections 7.1 or 7.2 shall be  paid in cash on the
Payment Date, or as soon thereafter as practicable.
     6.2  Excess Remuneration. Notwithstanding the provisions of Section 6.1, to
the  extent   that  incentive  compensation   hereunder  does  not   qualify  as
performance-based  compensation  pursuant  to Section  162(m)  of the  Code, the
Committee  may,  in its  discretion,  with respect  to a  Participant who  is a
"covered  employee" for  purposes of  Section 162(m),  determine that payment of
that portion  of  a  Reward  which  would  otherwise  cause  such  Participant's
compensation to  exceed the limitation on  the amount of compensation deductible
by the Company in any taxable year pursuant  to such Section 162(m), be deferred
until such Participant is no longer a "covered employee." In such case, interest
shall be credited  on the portion  of the Reward  deferred for the period of the
deferral  as provided pursuant  to Article IV of the Halliburton Company Benefit
Restoration Plan, as amended, or other applicable plan.
     6.3  Elective  Deferral.  Nothing herein  shall be  deemed  to  preclude  a
Participant's election  to defer  receipt of  a percentage  of his or her Reward
beyond  the time such  amount would have  been payable hereunder pursuant to the
Halliburton Elective Deferral Plan or other similar plan.
     6.4  Tax Withholding. The Company or employing entity through which payment
of  a Reward  is to be  made shall  have the  right to  deduct from  any payment
hereunder  any amounts that  Federal, state, local  or foreign  tax laws require
with respect to such payments.

                                   ARTICLE VII

                            TERMINATION OF EMPLOYMENT

     7.1  Termination of  Service During Plan Year. In the event a Participant's
employment is terminated prior  to the last business day  of a Plan Year for any
reason other than death, normal  retirement at or after age 65 or disability (as
determined  by the CEO or his delegate), all of  such Participant's rights  to a
Reward for such Plan Year shall be forfeited, unless the Committee (with respect

                                       9


to a  Participant who was the CEO  or other Senior  Executive)  or the CEO (with
respect to any other Participant) shall determine that such Participant's Reward
for such  Plan Year  shall be  prorated based upon that portion of the Plan Year
during which he or she was a Participant,  in which case the prorated portion of
the  Reward shall  be paid in accordance  with the provisions of Section 6.1. In
the  case  of  death  during  the  Plan   Year,  the  prorated  amount  of  such
Participant's  Reward shall be paid to  the Participant's estate, or if there is
no administration of the estate, to the heirs at law, on the Payment Date, or as
soon  thereafter as practicable.  In the case of disability or normal retirement
at or after age 65, the prorated  amount of a Participant's Reward shall be paid
in accordance with the provisions of Section 6.1.
     7.2  Termination of Service After End of Plan Year But Prior to the Payment
Date.  If  a  Participant's employment  is  terminated  after  the  end  of  the
applicable Plan Year, but  prior to the Payment Date,  for any reason other than
termination  for Cause, the  amount of any  Reward applicable to  such Plan Year
shall be  paid to  the Participant in  accordance with the provisions of Section
6.1,  except in the  case of death,  in which case the amount of the Reward then
unpaid  shall  be  paid  to  such  Participant's  estate,  or  if  there  is  no
administration of the estate, to the heirs at law, as soon as practicable.
     If  a  Participant's employment  is  terminated  for  Cause,  all  of  such
Participant's  rights  to  a  Reward  applicable to  such  Plan  Year  shall  be
forfeited.

                                  ARTICLE VIII

                    RIGHTS OF PARTICIPANTS AND BENEFICIARIES

     8.1  Status   as  a  Participant   or  Beneficiary.  Neither  status  as  a
Participant  or Beneficiary shall be  construed as a commitment  that any Reward
will be paid or payable under the Plan.
     8.2  Employment.  Nothing contained in  the Plan or in any document related
to  the Plan  or to any  Reward shall confer  upon  any Participant any right to
continue  as an  employee or in  the employ of  the Company or  an  Affiliate or
constitute  any  contract or  agreement of  employment for  a specific  term  or

                                       10


interfere  in any way with  the right  of the Company  or an Affiliate to reduce
such  person's compensation, to  change the  position held  by such person or to
terminate the employment of such person, with or without cause.
     8.3  Nontransferability.  No benefit  payable  under, or  interest in, this
Plan shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge and any such attempted action shall be
void  and no such  benefit or  interest shall  be, in any manner, liable for, or
subject  to,  debts,  contracts,  liabilities  or torts  of  any  Participant or
Beneficiary; provided, however, that, nothing in this Section 8.3  shall prevent
transfer  (i) by Will, (ii) by  applicable laws  of descent  and distribution or
(iii) pursuant  to an order  that satisfies  the requirements  for  a "qualified
domestic  relations order"  as such  term is  defined in section 206(d)(3)(B) of
ERISA and  section  414(p)(1)(A) of  the  Code, including an order that requires
distributions  to   an  alternate  payee  prior  to  a  Participant's  "earliest
retirement age" as such term is defined in section 206(d)(3)(E)(ii) of ERISA and
section 414(p)(4)(B)  of the Code.  Any attempt at transfer, assignment or other
alienation  prohibited by  the preceding  sentence shall  be disregarded and all
amounts  payable hereunder shall  be paid only in accordance with the provisions
of the Plan.
     8.4  Nature of Plan. No Participant, Beneficiary or other person shall have
any right, title or interest in any fund or in any specific asset of the Company
or any Affiliate by reason of any Reward hereunder. There shall be no funding of
any  benefits which may become payable hereunder.  Nothing contained in the Plan
(or in any document related thereto), nor the creation  or adoption of the Plan,
nor any action taken pursuant to the provisions of the  Plan shall create, or be
construed to create, a trust of any kind or a fiduciary relationship between the
Company or an Affiliate and any Participant, Beneficiary or other person. To the
extent  that  a  Participant,  Beneficiary  or other  person acquires a right to
receive  payment  with  respect to  a Reward hereunder,  such right  shall be no
greater than the right of any unsecured general creditor of the Company or other
employing  entity,  as applicable.  All amounts payable under  the Plan shall be

                                       11


paid from the general assets of the  Company or employing entity, as applicable,
and  no  special  or  separate  fund  or  deposit shall  be established  and  no
segregation  of assets shall be made to assure payment of such amounts.  Nothing
in the Plan shall be deemed to give any employee any right to participate in the
Plan except in accordance herewith.

                                   ARTICLE IX

                                CORPORATE CHANGE

     In the  event of a  Corporate Change, (i)  with respect  to a Participant's
Reward  Opportunity for the  Plan Year in  which the Corporate  Change occurred,
such  Participant shall  be entitled  to an immediate  cash payment equal to the
maximum  amount of  Reward he or she would have been entitled to receive for the
Plan Year, prorated to the  date of the  Corporate Change; and (ii) with respect
to  a Corporate  Change that occurs after  the end of the Plan Year but prior to
the  Payment Date,  a Participant shall be entitled to an immediate cash payment
equal to the Reward earned for such Plan Year.

                                    ARTICLE X

                            AMENDMENT AND TERMINATION

     Notwithstanding anything  herein to the contrary, the Committee may, at any
time,  terminate  or, from  time  to time  amend, modify or  suspend  the  Plan;
provided, however, that, without the prior consent of the Participants affected,
no  such action may  adversely affect any  rights or obligations with respect to
any  Rewards theretofore  earned for  a particular Plan Year, whether or not the
amounts of  such Rewards have  been computed and whether or not such Rewards are
then payable.

                                   ARTICLE XI

                                  MISCELLANEOUS

     11.1 Governing Law.  The Plan and  all related  documents shall be governed
by, and  construed in accordance  with, the  laws of the State of Texas, without
giving  effect to  the principles of  conflicts of  law thereof,  except  to the
extent  preempted by  federal law.  The Federal Arbitration Act shall govern all
matters with regard to arbitrability.

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     11.2 Severability.  If any provision of  the Plan shall  be held illegal or
invalid  for any reason,  said illegality  or invalidity  shall  not  affect the
remaining  provisions hereof;  instead, each  provision shall be fully severable
and  the Plan  shall be  construed and  enforced as  if said  illegal or invalid
provision had never been included herein.
     11.3 Successor.  All  obligations  of the  Company  under the Plan shall be
binding upon and  inure to the benefit  of any successor to the Company, whether
the existence of such successor is the  result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
     11.4 Effective Date.  This amendment  and restatement  of the Plan shall be
effective from and after January 1, 2001, and  shall remain in effect until such
time as it may be terminated or amended pursuant to Article X.

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