HOLLY CORPORATION
 
                     LONG-TERM INCENTIVE COMPENSATION PLAN
                            AS AMENDED AND RESTATED
       (FORMERLY DESIGNATED THE HOLLY CORPORATION 2000 STOCK OPTION PLAN)
 
     1.  Purpose.  The purpose of the Holly Corporation Long-Term Incentive
Compensation Plan as amended and restated (formerly designated the Holly
Corporation 2000 Stock Option Plan) (the "Plan") is to advance the interests of
Holly Corporation (the "Company") by strengthening the ability of the Company
and its subsidiaries to attract, retain and motivate able people of high caliber
as employees, directors and consultants through arrangements that relate the
compensation for such persons to the long-term performance of the Company.
Accordingly, the Plan provides for granting Incentive Stock Options,
Non-Qualified Stock Options, Restricted Stock Awards, Bonus Stock Awards, Stock
Appreciation Rights, Phantom Stock Awards, Performance Awards or any combination
of the foregoing, as the Committee shall determine.
 
     2.  Definitions.  For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof:
 
     (a) "Amendment Effective Date" means December 12, 2002. The Plan prior to
amendment was effective January 1, 2001.
 
     (b) "Award" means any Option, Restricted Stock Award, Bonus Stock Award,
Stock Appreciation Right, Phantom Stock Award, or Performance Award, together
with any other right or interest granted to a Participant under the Plan.
 
     (c) "Beneficiary" means one or more persons, trusts or other entities that
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or to which Awards or
other rights are transferred if and to the extent permitted under Section 10(d)
hereof. If, upon a Participant's death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means the persons,
trusts or other entities entitled by will or the laws of descent and
distribution to receive such benefits.
 
     (d) "Board" means the Company's board of directors.
 
     (e) "Bonus Stock Award" means Shares granted to a Participant under Section
6(c) hereof.
 
     (f) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, including regulations thereunder and successor provisions and regulations
thereto.
 
     (g) "Committee" means a committee of two or more directors designated by
the Board to administer the Plan; provided, however, that, unless otherwise
determined by the Board, the Committee shall consist solely of two or more
directors, each of whom shall be (i) a "nonemployee director" within the meaning
of Rule 16b-3 under the Exchange Act, and (ii) an "outside director" as defined
under Section 162(m) of the Code, unless administration of the Plan by "outside
directors" is not then required in order to qualify for tax deductibility under
Section 162(m) of the Code.
 
     (h) "Covered Employee" means an Eligible Person who is a Covered Employee
as specified in Section 8(b)(vi) of the Plan.
 
     (i) "Disability" means, as determined by the Board in the sole discretion
exercised in good faith of the Board, a physical or mental impairment of
sufficient severity that either the Participant is unable to continue performing
the duties he performed before such impairment or the Participant's condition
entitles him to disability benefits under any insurance or employee benefit plan
of the Company or its Subsidiaries and that impairment or condition is cited by
the Company as the reason for termination of the Participant's employment or
participation as a member of the Board.
 
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     (j) "Eligible Person" means any current or proposed officer, director, or
key employee or consultant whose services are deemed to be of potential benefit
to the Company or any of its Subsidiaries. An employee on leave of absence may
be considered as still in the employ of the Company or a Subsidiary for purposes
of eligibility for participation in the Plan.
 
     (k) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, including rules thereunder and successor provisions and rules
relating thereto.
 
     (l) "Fair Market Value" means the fair market value as determined by the
Committee. Unless otherwise determined by the Committee, the Fair Market Value
of a Share shall be the closing price of a Share, on the date on which the
determination of Fair Market Value is being made or if no Shares were traded on
such date then the last trading date prior thereto, as quoted on the composite
transactions table for the American Stock Exchange or, if the Shares are not
then subject to trading on the American Stock Exchange, then as quoted in a
comparable manner on any other national stock exchange or, if not so quoted,
then as reported for the over-the-counter market on which the largest volume of
trading of Shares has occurred in the 30 trading days prior to the date for
which a determination is made.
 
     (m) "Incentive Stock Option" means any Option intended to be and designated
as an incentive stock option within the meaning of Section 422 of the Code or
any successor provision thereto.
 
     (n) "Non-Qualified Stock Option" means any Option that does not constitute
an Incentive Stock Option.
 
     (o) "Option" means a right granted to a Participant under Section 6(a)
hereof to purchase Shares or other Awards at a specified price during specified
time periods.
 
     (p) "Participant" means a person who has been granted an Award under the
Plan which remains outstanding, including a person who is no longer an Eligible
Person.
 
     (q) "Performance Award" means a right granted to a Participant under
Section 8 hereof to receive cash based on performance conditions, as provided in
Section 8, measured over a period of not less than one year nor more than ten
years.
 
     (r) "Phantom Stock Award" means a right granted to a Participant under
Section 7(b) hereof.
 
     (s) "Qualified Member" means a member of the Committee who is a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3) and an "outside
director" within the meaning of regulation 1.162-27 under Section 162(m) of the
Code.
 
     (t) "Restricted Stock Award" means Shares granted to a Participant under
Section 6(b) hereof that are subject to certain restrictions and to a risk of
forfeiture.
 
     (u) "Rule 16b-3" means Rule 16b-3, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as from time to time
in effect and applicable to the Plan and Participants.
 
     (v) "Securities Act" means the Securities Act of 1933 and the rules and
regulations promulgated thereunder, or any successor law, as it may be amended
from time to time.
 
     (w) "Shares" means shares of the Company's common stock, par value $.01 per
share, and such other securities as may be substituted (or resubstituted) for
shares of the Company's common stock, par value $.01 per share, pursuant to
Section 10 hereof.
 
     (x) "Stock Appreciation Right" means a right granted to a Participant under
Section 7(a) hereof.
 
     (y) "Subsidiary" means with respect to the Company, any corporation or
other entity of which at least 50% of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by the Company
or any other entity determined by the Committee to constitute a Subsidiary due
to its relationship to the Company.
 
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     3.  Administration.
 
     (a) Authority of the Committee.  The Plan shall be administered by the
Committee except to the extent the Board elects to administer all or part of the
Plan or except to the extent the Board appoints a separate committee other than
the Committee to administer all or part of the Plan, in which case references
herein to the "Committee" shall be deemed to include references to the "Board"
and/or such additional committee, as applicable. To the extent a portion of the
Plan is administered by the Committee, and another portion of the Plan is
administered by the Board and/or a separate committee, references herein to
"Committee" shall be deemed to be references to the "Board" or such additional
committee, as applicable, but only to the extent the Board or additional
committee administers a portion of the Plan and only with respect to those
portions of the Plan that the Board has elected to administer or over which the
separate committee has been delegated authority. Subject to the express
provisions of the Plan and Rule 16b-3, the Committee shall have the authority,
in its sole and absolute discretion, to (i) adopt, amend, and rescind
administrative and interpretive rules and regulations relating to the Plan; (ii)
determine the Eligible Persons to whom, and the time or times at which, Awards
shall be granted; (iii) determine the amount of cash and the number of Options,
Restricted Stock Awards, Bonus Stock Awards, Stock Appreciation Rights, Phantom
Stock Awards, or Performance Awards, or any combination thereof, that shall be
the subject of each Award; (iv) determine the terms and provisions of each Award
agreement (which need not be identical), including provisions defining or
otherwise relating to (A) the term and the period or periods and extent of
exercisability of Options, (B) the extent to which the transferability of Shares
and Awards is restricted, (C) the effect of termination of employment of a
Participant on the Award, and (D) the effect of approved leaves of absence
(consistent with any applicable regulations of the Internal Revenue Service);
(v) accelerate the time of exercisability of any Option that has been granted;
(vi) construe the respective Award agreements and the Plan; (vii) make
determinations of the Fair Market Value of the Shares pursuant to the Plan;
(viii) delegate its duties under the Plan to such agents as it may appoint from
time to time, provided that the Committee may not delegate its duties with
respect to making Awards to, or otherwise with respect to Awards granted to,
Eligible Persons who are subject to Section 16(b) of the Exchange Act or Section
162(m) of the Code; (ix) subject to ratification by the Board, terminate,
modify, or amend the Plan; and (x) make all other determinations, perform all
other acts, and exercise all other powers and authority necessary or advisable
for administering the Plan, including the delegation of those ministerial acts
and responsibilities as the Committee deems appropriate. Subject to Rule 16b-3
and Section 162(m) of the Code, the Committee may correct any defect, supply any
omission, or reconcile any inconsistency in the Plan, in any Award, or in any
Award agreement in the manner and to the extent it deems necessary or desirable
to carry the Plan into effect, and the Committee shall be the sole and final
judge of that necessity or desirability. The determinations of the Committee on
the matters referred to in this Section 3(a) shall be final and conclusive.
 
     (b) Manner of Exercise of Committee Authority.  At any time that a member
of the Committee is not a Qualified Member, any action of the Committee relating
to an Award granted or to be granted to a Participant who is then subject to
Section 16 of the Exchange Act in respect of the Company, or relating to an
Award intended by the Committee to qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code and regulations thereunder, may
be taken either (i) by a subcommittee, designated by the Committee, composed
solely of two or more Qualified Members, or (ii) by the Committee but with each
such member who is not a Qualified Member abstaining or recusing himself or
herself from such action; provided, however, that, upon such abstention or
recusal, the Committee remains composed solely of two or more Qualified Members.
Such action, authorized by such a subcommittee or by the Committee upon the
abstention or recusal of such non-Qualified Member(s), shall be the action of
the Committee for purposes of the Plan. Any action of the Committee shall be
final, conclusive and binding on all persons, including the Company, its
Subsidiaries, stockholders, Participants, Beneficiaries, and transferees under
Section 10(d) hereof or other persons claiming rights from or through a
Participant. The express grant of any specific power to the Committee, and the
taking of any action by the Committee, shall not be construed as limiting any
power or authority of the Committee. The Committee may delegate to officers or
managers of the Company or any Subsidiary, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform such
functions, including administrative functions, as the Committee may determine,
to the extent that such delegation will not result in the loss of an exemption
under
 
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Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the
Exchange Act in respect of the Company and will not cause Awards intended to
qualify as "performance-based compensation" under Section 162(m) of the Code to
fail to so qualify. The Committee may appoint agents to assist it in
administering the Plan.
 
     (c) Limitation of Liability.  The Committee and each member thereof shall
be entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or employee of the Company or a
Subsidiary, the Company's legal counsel, independent auditors, consultants or
any other agents assisting in the administration of the Plan. Members of the
Committee and any officer or employee of the Company or a Subsidiary acting at
the direction or on behalf of the Committee shall not be personally liable for
any action or determination taken or made in good faith with respect to the
Plan, and shall, to the fullest extent permitted by law, be indemnified and held
harmless by the Company with respect to any such action or determination.
 
     4.  Shares Subject to Plan.
 
     (a) Overall Number of Shares Available for Delivery.  Subject to adjustment
in a manner consistent with any adjustment made pursuant to Section 10 of the
Plan, the total number of Shares that may be delivered in connection with Awards
under the Plan shall not exceed 1,500,000, including all Shares delivered with
respect to Options granted under the Plan prior to the Amendment Effective Date.
 
     (b) Application of Limitation to Grants of Awards.  No Award may be granted
if (i) the number of Shares to be delivered in connection with such Award
exceeds (ii) the number of Shares remaining available under the Plan minus the
number of Shares issuable in settlement of or relating to then-outstanding
Awards. The Committee may adopt reasonable counting procedures to ensure
appropriate counting, avoid double counting (as, for example, in the case of
tandem or substitute awards) and make adjustments if the number of Shares
actually delivered differs from the number of Shares previously counted in
connection with an Award.
 
     (c) Availability of Shares Not Delivered under Awards.  Shares subject to
an Award under the Plan that expires or is canceled, forfeited, settled in cash
or otherwise terminated without a delivery of Shares to the Participant,
including (i) the number of Shares withheld in payment of any exercise price of
an Award or taxes relating to Awards, and (ii) the number of Shares surrendered
in payment of any exercise price of an Award or taxes relating to any Award,
will again be available for Awards under the Plan, except that if any such
Shares could not again be available for Awards to a particular Participant under
any applicable law or regulation, such Shares shall be available exclusively for
Awards to Participants who are not subject to such limitation.
 
     (d) Shares Offered.  The Shares to be delivered under the Plan shall be
made available from (i) authorized but unissued Shares, or (ii) previously
issued Shares reacquired by the Company.
 
     5.  Eligibility; Per Person Award Limitations.  Awards may be granted under
the Plan only to Eligible Persons. In each fiscal year or 12-month period, as
applicable, during any part of which the Plan is in effect, an Eligible Person
may not be granted (a) Awards, provided for in Sections 6 and 7 of the Plan,
relating to more than 150,000 Shares, subject to adjustment in a manner
consistent with any adjustment made pursuant to Section 10 of the Plan, or (b)
Awards, provided for in Section 8 of the Plan, with a value at the time of
payment which exceeds the Fair Market Value of 150,000 Shares as of the date of
the grant of the Award.
 
     6.  Options, Restricted Stock and Bonus Stock.
 
     (a) Options.  The Committee is authorized to grant Options to Participants
on the following terms and conditions:
 
          (i) Exercise Price.  The exercise price or prices for Shares under
     each Option shall be determined by the Committee at the time the Option is
     granted, and may be less than, equal to or greater than, the Fair Market
     Value of the Shares at the time of the granting of the Option, provided
     that the exercise price per Share for any Option that is intended to be
     performance-based compensation under Section 162(m)(4)(C) of the Code or an
     Incentive Stock Option under Section 422 of the Code shall not be less than
     the Fair Market Value of a Share as of the effective date of grant of the
     Option; provided,
 
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     however, that in the case of an individual who owns stock possessing more
     than ten percent of the total combined voting power of all classes of stock
     of the Company or its parent or any Subsidiary, the exercise price per
     Share of any Incentive Stock Option under Section 422 of the Code shall not
     be less than 110% of the Fair Market Value of a Share as of the effective
     date of grant of the Incentive Stock Option.
 
          (ii) Time and Method of Exercise.  The Committee shall determine the
     time or times at which or the circumstances under which an Option may be
     exercised in whole or in part (including based on achievement of
     performance goals and/or future service requirements), the methods by which
     such exercise price may be paid or deemed to be paid, the form of such
     payment, including, without limitation, cash, Shares, other Awards or
     awards granted under other plans of the Company or any Subsidiary, or other
     property (including notes, to the extent permitted under applicable law, or
     other contractual obligations of Participants to make payment on a deferred
     basis), and the methods by or forms in which Shares will be delivered or
     deemed to be delivered to Participants, including, but not limited to, the
     delivery of Restricted Stock Awards subject to Section 6(b) hereof. In the
     case of an exercise whereby the exercise price is paid with Shares, the
     value of such Shares for purposes of calculating the exercise price paid
     shall be the Fair Market Value. Notwithstanding anything to the contrary
     herein, unless otherwise provided in any agreement evidencing an Option, in
     the event of the death of a Participant while in the employ of the Company
     or one of its Subsidiaries, an Option theretofore granted to the
     Participant shall be exercisable within the year succeeding such death
     (even if the Option would otherwise expire prior to one year from the date
     of death) but only to the extent that the optionee was entitled to exercise
     the Option as of the date of death.
 
          (iii) Incentive Stock Options.  The terms of any Incentive Stock
     Option granted under the Plan shall comply in all respects with the
     provisions of Section 422 of the Code. Anything in the Plan to the contrary
     notwithstanding, no term of the Plan relating to Incentive Stock Options
     (including any Stock Appreciation Right in tandem therewith) shall be
     interpreted, amended or altered, nor shall any discretion or authority
     granted under the Plan be exercised, so as to disqualify either the Plan or
     any Incentive Stock Option under Section 422 of the Code, unless the
     Participant has first requested the change that will result in such
     disqualification. Incentive Stock Options shall not be granted more than
     ten years after the earlier of the adoption of the Plan or the approval of
     the Plan by the Company's stockholders. Notwithstanding the foregoing, the
     Fair Market Value of Shares subject to an Incentive Stock Option and the
     aggregate Fair Market Value of shares of stock of any parent or Subsidiary
     corporation (within the meaning of Sections 424(e) and (f) of the Code)
     subject to any other incentive stock option (within the meaning of Section
     422 of the Code) of the Company or a parent or Subsidiary corporation
     (within the meaning of Sections 424(e) and (f) of the Code) that first
     becomes purchasable by a Participant in any calendar year may not (with
     respect to that Participant) exceed $100,000, or such other amount as may
     be prescribed under Section 422 of the Code or applicable regulations or
     rulings from time to time. As used in the previous sentence, Fair Market
     Value shall be determined as of the date the Incentive Stock Options are
     granted. Failure to comply with this provision shall not impair the
     enforceability or exercisability of any Option, but shall cause the excess
     amount of Shares to be reclassified in accordance with the Code. No
     Incentive Stock Option may be granted after December 13, 2010.
 
     (b) Restricted Stock Awards.  The Committee is authorized to grant
Restricted Stock Awards to Participants on the following terms and conditions:
 
          (i) Grant and Restrictions.  Restricted Stock Awards shall be subject
     to such restrictions on transferability, risk of forfeiture and other
     restrictions, if any, as the Committee may impose, which restrictions may
     lapse separately or in combination at such times, under such circumstances
     (including based on achievement of performance goals and/or future service
     requirements), in such installments or otherwise, as the Committee may
     determine at the date of grant or thereafter. Except to the extent
     restricted under the terms of the Plan and any Award agreement relating to
     the Restricted Stock Award, a Participant granted a Restricted Stock Award
     shall have all of the rights of a stockholder, including the right to vote
     the Restricted Stock Award and the right to receive dividends thereon
     (subject to any mandatory reinvestment or other requirement imposed by the
     Committee). During the restricted period
 
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     applicable to the Restricted Stock Award, the Restricted Stock Award may
     not be sold, transferred, pledged, hypothecated, margined or otherwise
     encumbered by the Participant.
 
          (ii) Forfeiture.  Except as otherwise determined by the Committee,
     upon termination of employment during the applicable restriction period,
     Restricted Stock Awards that are at that time subject to restrictions shall
     be forfeited and reacquired by the Company; provided that the Committee may
     provide, by rule or regulation or in any Award agreement, or may determine
     in any individual case, that restrictions or forfeiture conditions relating
     to Restricted Stock Awards shall be waived in whole or in part in the event
     of terminations resulting from specified causes, and the Committee may in
     other cases waive in whole or in part the forfeiture of Restricted Stock
     Awards.
 
          (iii) Certificates for Shares.  Restricted Stock Awards granted under
     the Plan may be evidenced in such manner as the Committee shall determine.
     If certificates for Shares relating to Restricted Stock Awards are
     registered in the name of the Participant, the Committee may require that
     such certificates bear an appropriate legend referring to the terms,
     conditions and restrictions applicable to such Restricted Stock Awards,
     that the Company retain physical possession of the certificates, and that
     the Participant deliver a stock power to the Company, endorsed in blank,
     relating to such Shares.
 
          (iv) Dividends and Splits.  As a condition to the grant of a
     Restricted Stock Award, the Committee may require or permit a Participant
     to elect that any cash dividends paid on a Share related to the Restricted
     Stock Award be automatically reinvested in additional Shares related to the
     Restricted Stock Award or applied to the purchase of additional Awards
     under the Plan. Unless otherwise determined by the Committee, Shares
     distributed in connection with a stock split or stock dividend, and other
     property distributed as a dividend, shall be subject to restrictions and a
     risk of forfeiture to the same extent as the Restricted Stock Award with
     respect to which such Shares or other property has been distributed.
 
     (c) Bonus Stock Awards.  The Committee is authorized to grant Awards of
Shares as bonuses, provided that, in the case of Participants subject to Section
16 of the Exchange Act, the amount of such grants remains within the discretion
of the Committee to the extent necessary to ensure that such Awards are exempt
from liability under Section 16(b) of the Exchange Act. Bonus Stock Awards shall
be subject to such other terms as shall be determined by the Committee.
 
     (d) Performance Goals.  To the extent the Committee determines that any
Award granted pursuant to this Section 6 shall constitute performance-based
compensation for purposes of Section 162(m) of the Code, the grant or settlement
of the Award shall, in the Committee's discretion, be subject to the achievement
of performance goals determined and applied in a manner consistent with Section
8(b).
 
     7.  Stock Appreciation Rights and Phantom Stock.
 
     (a) Stock Appreciation Rights.  The Committee is authorized to grant Stock
Appreciation Rights to Participants on the following terms and conditions:
 
          (i) Right to Payment.  A Stock Appreciation Right shall confer on the
     Participant to whom it is granted a right to receive, upon exercise
     thereof, the excess of (A) the Fair Market Value of one Share on the date
     of exercise over (B) the grant price of the Stock Appreciation Right as
     determined by the Committee.
 
          (ii) Rights Related to Options.  A Stock Appreciation Right granted in
     connection with an Option shall entitle a Participant, upon exercise
     thereof, to surrender that Option or any portion thereof, to the extent
     unexercised, and to receive payment of an amount computed pursuant to
     Subsection 7(a)(i) hereof. That Option shall then cease to be exercisable
     to the extent surrendered. A Stock Appreciation Right granted in connection
     with an Option shall be exercisable only at such time or times and only to
     the extent that the related Option is exercisable and shall not be
     transferable except to the extent that the related Option is transferable.
 
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          (iii) Right Without Option.  A Stock Appreciation Right granted
     independent of an Option shall be exercisable as determined by the
     Committee and set forth in the Award agreement governing the Stock
     Appreciation Right.
 
          (iv) Terms.  The Committee shall determine at the date of grant the
     time or times at which and the circumstances under which a Stock
     Appreciation Right may be exercised in whole or in part (including based on
     achievement of performance goals and/or future service requirements), the
     method of exercise, whether or not a Stock Appreciation Right shall be in
     tandem or in combination with any other Award, and any other terms and
     conditions of any Stock Appreciation Right.
 
     (b) Phantom Stock Awards.  The Committee is authorized to grant Phantom
Stock Awards to Participants, which are rights to receive cash at the end of a
specified deferral period, subject to the following terms and conditions:
 
          (i) Award and Restrictions.  Satisfaction of a Phantom Stock Award
     shall occur upon expiration of the deferral period specified for such
     Phantom Stock Award by the Committee (or, if permitted by the Committee, as
     elected by the Participant). In addition, Phantom Stock Awards shall be
     subject to such restrictions (which may include a risk of forfeiture), if
     any, as the Committee may impose, which restrictions may lapse at the
     expiration of the deferral period or at earlier specified times (including
     based on achievement of performance goals and/or future service
     requirements), separately or in combination, in installments or otherwise,
     as the Committee may determine.
 
          (ii) Forfeiture.  Except as otherwise determined by the Committee,
     upon termination of employment during the applicable deferral period or
     portion thereof to which forfeiture conditions apply (as provided in any
     Award agreement evidencing the Phantom Stock Awards), all Phantom Stock
     Awards that are at that time subject to deferral (other than a deferral at
     the election of the Participant) shall be forfeited; provided that the
     Committee may provide, by rule or regulation or in any Award agreement, or
     may determine in any individual case, that restrictions or forfeiture
     conditions relating to Phantom Stock Awards shall be waived in whole or in
     part in the event of terminations resulting from specified causes, and the
     Committee may in other cases waive in whole or in part the forfeiture of
     Phantom Stock Awards.
 
     (c) Performance Goals.  To the extent the Committee determines that any
Award granted pursuant to this Section 7 shall constitute performance-based
compensation for purposes of Section 162(m) of the Code, the grant or settlement
of the Award shall, in the Committee's discretion, be subject to the achievement
of performance goals determined and applied in a manner consistent with Section
8(b).
 
     8.  Performance Awards.
 
     (a) Performance Awards.  The Committee may grant Performance Awards based
on performance criteria measured over a period of not less than one year and not
more than ten years. The Committee may use such business criteria and other
measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to increase the amounts
payable under any Award subject to performance conditions except as limited
under Section 8(b) in the case of a Performance Award granted to a Covered
Employee.
 
     (b) Performance Goals.  The grant and/or settlement of a Performance Award
shall be contingent upon terms set forth in this Section 8(b).
 
          (i) General.  The performance goals for Performance Awards shall
     consist of one or more business criteria and a targeted level or levels of
     performance with respect to each of such criteria, as specified by the
     Committee. In the case of any Award granted to a Covered Employee,
     performance goals shall be designed to be objective and shall otherwise
     meet the requirements of Section 162(m) of the Code and regulations
     thereunder (including Treasury Regulation sec. 1.162-27 and successor
     regulations thereto), including the requirement that the level or levels of
     performance targeted by the Committee are such that the achievement of
     performance goals is "substantially uncertain" at the time of grant. The
     Committee may determine that such Performance Awards shall be granted
     and/or settled upon achievement of any one performance goal or that two or
     more of the performance goals must be achieved as a condition to the
 
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     grant and/or settlement of such Performance Awards. Performance goals may
     differ among Performance Awards granted to any one Participant or for
     Performance Awards granted to different Participants.
 
          (ii) Business Criteria.  One or more of the following business
     criteria for the Company, on a consolidated basis, and/or for specified
     Subsidiaries, divisions or business or geographical units of the Company
     (except with respect to the total stockholder return and earnings per share
     criteria), shall be used by the Committee in establishing performance goals
     for Performance Awards granted to a Covered Employee: (A) earnings per
     share; (B) increase in revenues; (C)increase in cash flow; (D) increase in
     cash flow return; (E) return on net assets; (F) return on assets; (G)
     return on investment; (H) return on capital; (I) return on equity; (J)
     economic value added; (K) gross margin; (L) net income; (M) pretax
     earnings; (N) pretax earnings before interest, depreciation and
     amortization; (O) pretax operating earnings after interest expense and
     before incentives, service fees, and extraordinary or special items; (P)
     operating income; (Q) total stockholder return; (R) debt reduction; and (S)
     any of the above goals determined on an absolute or relative basis or as
     compared to the performance of a published or special index deemed
     applicable by the Committee including, but not limited to, the Standard &
     Poor's 500 Stock Index or a group of comparable companies.
 
          (iii) Performance Period; Timing for Establishing Performance
     Goals.  Achievement of performance goals in respect of Performance Awards
     shall be measured over a performance period of not less than one year and
     not more than ten years, as specified by the Committee. Performance goals
     in the case of any Award granted to a Covered Employee shall be established
     not later than 90 days after the beginning of any performance period
     applicable to such Performance Awards, or at such other date as may be
     required or permitted for "performance-based compensation" under Section
     162(m) of the Code.
 
          (iv) Settlement of Performance Awards; Other Terms.  After the end of
     each performance period, the Committee shall determine the amount, if any,
     of Performance Awards payable to each Participant based upon achievement of
     business criteria over a performance period. The Committee may not exercise
     discretion to increase any such amount payable in respect of a Performance
     Award designed to comply with Section 162(m) of the Code. The Committee
     shall specify the circumstances in which such Performance Awards shall be
     paid or forfeited in the event of termination of employment by the
     Participant prior to the end of a performance period or settlement of
     Performance Awards.
 
          (v) Written Determinations.  All determinations by the Committee as to
     the establishment of performance goals, the amount of any Performance
     Award, and the achievement of performance goals relating to Performance
     Awards shall be made in writing in the case of any Award granted to a
     Covered Employee. The Committee may not delegate any responsibility
     relating to such Performance Awards.
 
          (vi) Status of Performance Awards under Section 162(m) of the
     Code.  It is the intent of the Company that Performance Awards granted to
     persons who are designated by the Committee as likely to be Covered
     Employees within the meaning of Section 162(m) of the Code and regulations
     thereunder (including Treasury Regulation sec. 1.162-27 and successor
     regulations thereto) shall, if so designated by the Committee, constitute
     "performance-based compensation" within the meaning of Section 162(m) of
     the Code and regulations thereunder. Accordingly, the terms of this Section
     8(b) shall be interpreted in a manner consistent with Section 162(m) of the
     Code and regulations thereunder. The foregoing notwithstanding, because the
     Committee cannot determine with certainty whether a given Participant will
     be a Covered Employee with respect to a fiscal year that has not yet been
     completed, the term Covered Employee as used herein shall mean only a
     person designated by the Committee, at the time of grant of a Performance
     Award, who is likely to be a Covered Employee with respect to that fiscal
     year. If any provision of the Plan as in effect on the date of adoption or
     any agreements relating to Performance Awards that are designated as
     intended to comply with Section 162(m) of the Code does not comply or is
     inconsistent with the requirements of Section 162(m) of the Code or
     regulations thereunder, such provision shall be construed or deemed amended
     to the extent necessary to conform to such requirements.
 
                                       8
<PAGE>
 
     9.  Certain Provisions Applicable to All Awards.
 
     (a) General.  Awards may be granted on the terms and conditions set forth
in Sections 6, 7 and 8 hereof and this Section 9. In addition, the Committee may
impose on any Award or the exercise thereof, such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine, including terms requiring forfeiture of Awards in the event of
termination of employment by the Participant and terms permitting a Participant
to make elections relating to his or her Award. The Committee shall retain full
power and discretion to accelerate or waive, at any time, any term or condition
of an Award that is not mandatory under the Plan; provided, however, that the
Committee shall not have any discretion to accelerate or waive any term or
condition of an Award that is intended to qualify as "performance-based
compensation" for purposes of Section 162(m) of the Code if such discretion
would cause the Award not to so qualify. Except in cases in which the Committee
is authorized to require other forms of consideration under the Plan, or to the
extent other forms of consideration must be paid to satisfy the requirements of
the Delaware General Corporation Law, no consideration other than services may
be required for the grant of any Award.
 
     (b) Stand-Alone, Additional, Tandem, and Substitute Awards.  Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution or exchange for, any other
Award or any award granted under another plan of the Company, any Subsidiary, or
any business entity to be acquired by the Company or a Subsidiary, or any other
right of a Participant to receive payment from the Company or any Subsidiary.
Such additional, tandem and substitute or exchange Awards may be granted at any
time. If an Award is granted in substitution or exchange for another Award, the
Committee shall require the surrender of such other Award in consideration for
the grant of the new Award. In addition, Awards may be granted in lieu of cash
compensation, including in lieu of cash amounts payable under other plans of the
Company or any Subsidiary.
 
     (c) Term of Awards.  The term of each Award shall be for such period as may
be determined by the Committee; provided that in no event shall the term of any
Option or Stock Appreciation Right exceed a period of ten years (or such shorter
term as may be required in respect of an Incentive Stock Option under Section
422 of the Code).
 
     (d) Form and Timing of Payment under Awards; Deferrals.  Subject to the
terms of the Plan and any applicable Award agreement, payments to be made by the
Company or a Subsidiary upon the exercise of an Option or other Award or
settlement of an Award may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any Award may, subject
to any limitations set forth in the Award agreement, be accelerated and cash
paid in lieu of Shares in connection with such settlement, in the discretion of
the Committee or upon occurrence of one or more specified events. In the
discretion of the Committee, Awards granted pursuant to Sections 7 or 8 of the
Plan may be payable in Shares to the extent permitted by the terms of the
applicable Award agreement. Installment or deferred payments may be required by
the Committee (subject to Section 10(f) of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Award not
provided for in the original Award agreement) or permitted at the election of
the Participant on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of amounts in respect of installment or deferred payments denominated
in Shares. Any deferral shall only be allowed as is provided in a separate
deferred compensation plan adopted by the Company. The Plan shall not constitute
an "employee benefit plan" for purposes of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.
 
     (e) Exemptions from Section 16(b) Liability.  It is the intent of the
Company that the grant of any Awards to or other transaction by a Participant
who is subject to Section 16 of the Exchange Act shall be exempt from Section
16(b) of the Exchange Act pursuant to an applicable exemption (except for
transactions acknowledged by the Participant in writing to be non-exempt).
Accordingly, if any provision of this Plan or any Award agreement does not
comply with the requirements of Rule 16b-3 as then applicable to any such
transaction, such provision shall be construed or deemed amended to the extent
necessary to conform to the
 
                                       9
<PAGE>
 
applicable requirements of Rule 16b-3 so that such Participant shall avoid
liability under Section 16(b) of the Exchange Act.
 
     10.  General Provisions.
 
     (a) Company's Right to Terminate or Modify Awards in Certain
Circumstances.  Except to the extent that an Award agreement provides otherwise
with specific reference to this Section 10(a), in the event of (i) an
acquisition of substantially all of the assets of the Company or of a greater
than 80% stock interest in the Company by an entity in which the Company does
not have a 50% or greater interest prior to such acquisition, or (ii) a merger,
consolidation, or recapitalization involving a fundamental change in the capital
structure of the Company, the Company shall have the right to terminate any
Award upon the payment of an amount equal to the then value of the Award,
without regard to vesting or forfeiture provisions of the Award, as determined
by the Committee, taking into account to the extent determined by the Committee
to be appropriate the Fair Market Value of Shares at the time of termination and
the performance of the Company up to the time of termination. Upon tender of
payment by the Company to a holder of the amount determined by the Committee
pursuant to this provision, the Award held by such holder shall automatically
terminate. Alternatively, in such circumstances, the Company, in the discretion
of the Board, may make arrangements for the acquiring or surviving corporation
to assume any or all outstanding Awards and substitute on equitable terms Awards
relating to the stock or performance of such acquiring or surviving corporation.
The determinations of the Board and/or the Committee pursuant to this Section
10(a) shall be final, binding and conclusive.
 
     (b) No Limitation on Other Company Transactions.  The existence of the Plan
and the Awards granted hereunder shall not affect in any way the right or power
of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of debt or equity securities affecting Shares or the rights thereof,
the dissolution or liquidation of the Company or any sale, lease, exchange or
other disposition of all or any part of its assets or business or any other
corporate act or proceeding.
 
     (c) Dilution or Other Adjustments.  In the event that there is any change
in the Shares through merger, consolidation, reorganization or recapitalization
or in the event of any stock split or dividend to holders of Shares payable in
Shares or the issuance to such holders of rights to subscribe to Shares, or in
the event of any change in the capital structure of the Company, the Board
shall, subject to any requirements of applicable law, regulations and rules,
make such adjustments with respect to any provision or provisions of the Plan,
including but not limited to the limitations on Awards that may be granted under
the Plan as set forth in Sections 4 and 5, and with respect to Awards
theretofore granted under the Plan as the Board deems appropriate to prevent
dilution or enlargement of Award rights. The determinations of the Board
pursuant to this Section 10(b) shall be final, binding and conclusive. Except as
hereinbefore expressly provided, the issuance by the Company of shares of stock
of any class or securities convertible into shares of stock of any class, for
cash, property, labor or services, upon direct sale, upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, and in any case
whether or not for fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Shares relating to Awards
theretofore granted or the exercise price per Share in the case of Options.
 
     (d) Transferability.
 
          (i) Permitted Transferees.  The Committee may, in its discretion,
     permit a Participant to transfer all or any portion of an Award or
     authorize all or a portion of an Award to be granted to an Eligible Person
     on terms which permit transfer by such Participant; provided that, in
     either case a transferee may only be a child, stepchild, grandchild,
     parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
     nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
     brother-in-law, or sister-in-law, including adoptive relationships, in each
     case with respect to the Participant, a trust in which these persons have
     more than fifty percent of the beneficial interest, a foundation in which
     these persons (or the Participant) control the management of assets, and
     any other entity in which these persons (or the
 
                                       10
<PAGE>
     Participant) own more than fifty percent of the voting interests
     (collectively, "Permitted Transferees"); provided further that, (A) there
     may be no consideration for any such transfer and (B) subsequent transfers
     of Awards transferred as provided above shall be prohibited except
     subsequent transfers back to the original holder of the Award and transfers
     to other Permitted Transferees of the original holder. Agreements
     evidencing Awards with respect to which such transferability is authorized
     at the time of grant must be approved by the Committee, and must expressly
     provide for transferability in a manner consistent with this Subsection
     10(d)(i).
 
          (ii) Qualified Domestic Relations Orders.  An Award may be
     transferred, to a Permitted Transferee, pursuant to a domestic relations
     order entered or approved by a court of competent jurisdiction upon
     delivery to the Company of written notice of such transfer and a certified
     copy of such order.
 
          (iii) Other Transfers.  Except as expressly permitted by Subsections
     10(d)(i) and 10(d)(ii) above, Awards shall not be transferable other than
     by will or the laws of descent and distribution. Notwithstanding anything
     to the contrary in this Section 10, an Incentive Stock Option shall not be
     transferable other than by will or the laws of descent and distribution.
 
          (iv) Effect of Transfer.  Following the transfer of any Award as
     contemplated by Subsections 10(d)(i), 10(d)(ii) and 10(d)(iii) above, (A)
     such Award shall continue to be subject to the same terms and conditions as
     were applicable immediately prior to transfer, provided that the term
     "Participant" shall be deemed to refer to the Permitted Transferee, the
     recipient under a qualified domestic relations order, the estate or heirs
     of a deceased Participant, or other transferee, as applicable, to the
     extent appropriate to enable the Permitted Transferee to exercise the
     transferred Award in accordance with the terms of the Plan and applicable
     law and (B) the provisions of the Award relating to exercisability thereof
     shall continue to be applied with respect to the original Participant and,
     following the occurrence of any such events described therein, the Awards
     shall be exercisable by the Permitted Transferee, the recipient under a
     qualified domestic relations order, the estate or heirs of a deceased
     Participant, or other transferee, as applicable, only to the extent and for
     the periods that would have been applicable in the absence of the transfer.
 
          (v) Procedures and Restrictions.  Any Participant desiring to transfer
     an Award as permitted under Subsections 10(d)(i), 10(d)(ii) or 10(d)(iii)
     above shall make application therefor in the manner and time specified by
     the Committee and shall comply with such other requirements as the
     Committee may require to assure compliance with all applicable securities
     laws. The Committee shall not give permission for such a transfer if (A) it
     would give rise to short-swing liability under Section 16(b) of the
     Exchange Act or (B) it may not be made in compliance with all applicable
     federal, state and foreign securities laws.
 
          (vi) Registration.  To the extent the issuance to any Permitted
     Transferee of any Shares issuable pursuant to Awards transferred as
     permitted in this Section 10(d) is not registered pursuant to the effective
     registration statement of the Company generally covering the Shares to be
     issued pursuant to the Plan to initial holders of Awards, the Company shall
     not have any obligation to register the issuance of any such Shares to any
     such transferee.
 
     (e) Taxes.  The Company and any Subsidiary are authorized to withhold from
any Award granted, or any payment relating to an Award under the Plan, including
from a distribution of Shares, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an Award, and
to take such other action as the Committee may deem advisable to enable the
Company and Participants to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of a Participant's tax
obligations, either on a mandatory or elective basis in the discretion of the
Committee.
 
     (f) Changes to the Plan and Awards.  The Board may amend, alter, suspend,
discontinue or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of stockholders or Participants, except that
any amendment or alteration to the Plan, including any increase in any Share
limitation, shall be subject to the approval of the Company's stockholders not
later than the annual meeting
 
                                       11
<PAGE>
 
next following such Board action if such stockholder approval is required by any
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Shares may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes in this Plan to stockholders for approval; provided that, without the
consent of an affected Participant, no such Board action may materially and
adversely affect the rights of such Participant under any previously granted and
outstanding Award. The Committee may waive any conditions or rights under, or
amend, alter, suspend, discontinue or terminate any Award theretofore granted
and any Award agreement relating thereto, except as otherwise provided in the
Plan; provided that, without the consent of an affected Participant, no such
Committee action may materially and adversely affect the rights of such
Participant under such Award.
 
     (g) Limitation on Rights Conferred under Plan.  Neither the Plan nor any
action taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ or service of the Company or a Subsidiary, (ii) interfering in any way
with the right of the Company or a Subsidiary to terminate any Eligible Person's
or Participant's employment or service at any time, (iii) giving an Eligible
Person or Participant any claim to be granted any Award under the Plan or to be
treated uniformly with other Participants and employees, or (iv) conferring on a
Participant any of the rights of a stockholder of the Company unless and until
the Participant is duly issued or transferred Shares in accordance with the
terms of an Award.
 
     (h) Nonexclusivity of the Plan.  Neither the adoption of the Plan by the
Board nor its submission to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements as it may deem
desirable, including incentive arrangements and awards which do not qualify
under Section 162(m) of the Code. Nothing contained in the Plan shall be
construed to prevent the Company or any Subsidiary from taking any corporate
action which is deemed by the Company or such Subsidiary to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Award made under the Plan. No employee, beneficiary or other
person shall have any claim against the Company or any Subsidiary as a result of
any such action.
 
     (i) Payments in the Event of Forfeitures; Fractional Shares; Share
Allotments.  Unless otherwise determined by the Committee, in the event of a
forfeiture of an Award with respect to which a Participant paid cash or other
consideration to the Company in exchange for such Award, the Participant shall
be repaid the amount of such cash or other consideration. Unless otherwise
determined by the Committee, no fractional Shares, or Shares in lots of less
than 100 Shares, shall be issued or delivered pursuant to the Plan or any Award.
The Committee shall determine whether cash, other Awards or other property shall
be issued or paid in lieu of such fractional Shares, or lots of less than 100
Shares, and whether fractional Shares or any rights thereto shall be forfeited
or otherwise eliminated.
 
     (j) Severability.  If any provision of the Plan is held to be illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions hereof, but such provision shall be fully severable and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein. If any of the terms or provisions of the Plan or any
Award agreement conflict with the requirements of Rule 16b-3 (as those terms or
provisions are applied to Eligible Persons who are subject to Section 16(b) of
the Exchange Act) or Section 422 of the Code (with respect to Incentive Stock
Options), then those conflicting terms or provisions shall be deemed inoperative
to the extent they so conflict with the requirements of Rule 16b-3 (unless the
Board or the Committee, as appropriate, has expressly determined that the Plan
or such Award should not comply with Rule 16b-3) or Section 422 of the Code.
With respect to Incentive Stock Options, if the Plan does not contain any
provision required to be included herein under Section 422 of the Code, that
provision shall be deemed to be incorporated herein with the same force and
effect as if that provision had been set out at length herein; provided,
further, that, to the extent any Option that is intended to qualify as an
Incentive Stock Option cannot so qualify, such Option (to that extent) shall be
deemed a Non-Qualified Stock Option for all purposes of the Plan.
 
     (k) Governing Law.  All questions arising with respect to the provisions of
the Plan and Awards shall be determined by application of the laws of the State
of Texas, without giving effect to any conflict of law
 
                                       12
<PAGE>
 
provisions thereof, except to the extent Texas law is preempted by federal law
or where the law of the state of incorporation of the Company shall be
mandatorily applied. The obligation of the Company to sell and deliver Shares
hereunder is subject to applicable federal and state laws and to the approval of
any governmental authority required in connection with the authorization,
issuance, sale, or delivery of such Shares.
 
     (l) Conditions to Delivery of Shares.  Nothing herein or in any Award
granted hereunder or any Award agreement shall require the Company to issue any
Shares with respect to any Award if that issuance would, in the opinion of
counsel for the Company, constitute a violation of the Securities Act or any
similar or superseding statute or statutes, any other applicable statute or
regulation, or the rules of any applicable securities exchange or securities
association, as then in effect. At the time of any exercise of an Option or
Stock Appreciation Right, or at the time of any grant of a Restricted Stock
Award, Bonus Stock Award or Phantom Stock Award, the Company may, as a condition
precedent to the exercise of such Option or Stock Appreciation Right, vesting of
any Restricted Stock Award or Phantom Stock Award, or grant of any Bonus Stock
Award, require from the Participant (or in the event of his death, his legal
representatives, heirs, legatees, or distributees) such written representations,
if any, concerning the holder's intentions with regard to the retention or
disposition of the Shares being acquired pursuant to the Award and such written
covenants and agreements, if any, as to the manner of disposal of such Shares
as, in the opinion of counsel to the Company, may be necessary to ensure that
any disposition by that holder (or in the event of the holder's death, his legal
representatives, heirs, legatees, or distributees) will not involve a violation
of the Securities Act or any similar or superseding statute or statutes, any
other applicable state or federal statute or regulation, or any rule of any
applicable securities exchange or securities association, as then in effect.
 
     (m) Plan Effective Date, Stockholder Approval and Plan Duration.  The Plan
has been adopted by the Board originally effective as of January 1, 2001 and as
amended and restated effective as of December 12, 2002 contingent upon the
approval of the stockholders of the Company. If the stockholders of the Company
do not approve the Plan as amended and restated, the Plan shall continue in
effect as originally adopted effective January 1, 2001. No Award, other than an
Incentive Stock Option, shall be granted under the Plan after December 31, 2010
and no Incentive Stock Option shall be granted under the Plan after December 13,
2010.
 
                                       13
 
</TEXT>
</DOCUMENT>