Termination. A “termination” of employment with the Company includes a termination of employment with a Subsidiary (other than a direct transfer of employment between Subsidiaries or the Company and a Subsidiary).

Retirement. “Retirement” means termination of employment other than for Cause on or after the date when you are at least 55 years old and have at least five years of service (based on your employment with the Company and its Subsidiaries or predecessor companies).

Cause. “Cause” means: (i) your willful and continued failure to substantially perform your duties with the Company (other than any such failure resulting from Disability), as determined by the Company; or (ii) willfully engaging in conduct (other than conduct covered under (i) above) which is demonstrably and materially injurious to the Company, monetarily or otherwise, as determined by the Company, including, but not limited to, conviction of a felony.

Terms. Pursuant to the terms and conditions of the Plan and this Agreement, you have been granted Options as outlined below:

Grant Date:

 

Number of Options Granted:

 

Exercise Price Per Share:

 

Expiration Date:

Vesting. Except as provided in Section 3 below, the Options will vest and become non-forfeitable on the following dates (each such date, a “Vesting Date”):

Impact of Change in Employment Status. The Vesting Dates of your Options will change if the status of your employment with the Company changes, according to the following table:

Death

Termination due to Disability

Termination due to Retirement

Involuntary termination other than for Cause

Involuntary termination for Cause

Voluntary resignation

How to Exercise; Who Can Exercise. The Options hereby granted may be exercised by approved means permitted under the terms of the Plan, through the Company’s designated agent. During your lifetime, the Options will be exercisable only by you.

Stockholder Rights. The Options do not confer on you any rights of a stockholder of the Company unless and until shares of Common Stock are in fact issued to you in connection with the exercise of the Options.

Transferability. No rights granted under this Agreement can be assigned or transferred, whether voluntarily or involuntarily, by operation of law or otherwise, except by will or the laws of descent and distribution. In the event of any transfer or assignment of rights granted under this Agreement in accordance with this Section 6, the person or persons, if any, to whom such rights are transferred by will or by the laws of descent and distribution shall be treated after your death the same as you under this Agreement. Any attempted transfer or assignment of rights under this Agreement prohibited under this Section 6 shall be null and void.

Change in Control. Upon a Change in Control, the Options will become fully vested and nonforfeitable as of the date of the Change in Control.

Tax Withholding; Code Section 409A. The Company has the right to deduct or withhold, or require you to remit to the Company, an amount sufficient for payment of required withholding taxes with respect to any taxable event arising as a result of this Agreement or take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. The Options granted under this Agreement are intended to comply with or be exempt from Code Section 409A, and ambiguous provisions of this Agreement, if any, shall be construed and interpreted in a manner consistent with such intent.

Notice. Any written notice required or permitted by this Agreement shall be mailed, certified mail (return receipt requested) or hand-delivered. Notice to the Company shall be addressed to the Company’s General Counsel at 1000 Main St., Houston, TX 77002. Notice to you shall be addressed to you at your most recent home address on record with the Company. Notices are effective upon receipt.

Requirements of Law. The granting of Options and the issuance of shares of Common Stock under the Plan will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

Limitation of Rights. The granting of this Award shall not give you any rights to similar grants in future years or any right to be retained in the employ or service of the Company or its Subsidiaries or interfere in any way with the right of the Company or any such Subsidiary to terminate your services at any time, or your right to terminate your services at any time.

Severability. If any term, provision, covenant or restriction contained in this Agreement is held by a court or a federal regulatory agency of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions contained in this Agreement shall remain in full force and effect, and shall in no way be affected, impaired or invalidated.

Governing Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware.

Acceptance of Award. You are deemed to accept this Award and to agree that it is subject to the terms and conditions set forth in this Agreement and the Plan unless you provide the Company written notification not later than 30 days after the Grant Date of your rejection of this Award (in which case your Award will be forfeited and you shall have no further right or interest therein as of the Grant Date).