Exhibit 10.1
US ONCOLOGY, INC.
2002 KEY EXECUTIVE PERFORMANCE STOCK OPTION PLAN
1. PURPOSE. The mission of US Oncology, Inc. (the "Company") is to increase
access to and advance the delivery of high-quality cancer care in
community-based settings throughout the United States. The Company understands
that it must have a highly motivated, focused and committed key executive
management team to accomplish its mission and objectives. The purpose of the
2002 Key Executive Performance Stock Option Plan (the "Plan") is to provide an
additional incentive to a limited number of key executives to enhance the
possibilities for long-term success beyond normal expectations and to reward
them upon the achievement of that success.
2. DEFINITIONS. As used herein the words and phrases below shall have the
following meanings:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Compensation Committee of the Board
(or, if there is no such committee, the Board committee performing
equivalent functions), which shall be comprised of at least three members
who are (i) "non-employee directors" as defined under rules and regulations
promulgated under Section 16(b) of the Exchange Act and (ii) "outside
directors" as defined in Section 162(m) of the Code, and who shall be
members of the Board, appointed by the Board to administer the Plan. The
Board shall have the power to fill vacancies on the Committee arising by
resignation, death, removal or otherwise.
(d) "Common Stock" shall mean the common stock of the Company, $.01
par value per share, regardless of the series or class.
(e) "Disability" shall mean the person so affected is unable to engage
in substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than one hundred eighty (180) days. The Committee's determination as
to whether a Participant has incurred a Disability shall be final and
conclusive as to all interested parties.
(f) "Eligible Employee" shall mean a key executive officer of the
Company as determined pursuant to Section 4.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" shall mean, with respect to a share of Common
Stock on any date herein specified, the average of the highest and lowest
quoted Selling Price per share of Common Stock on the date in question. The
term "Selling Price" per share of Common Stock for a day or days shall mean
(i) if the shares of Common Stock are listed or admitted for trading on a
national securities exchange, the reported sales price regular way, or, in
case no such reported sale takes place on such day or days, the average of
the reported closing bid and asked prices regular way, in either case on
the principal national securities exchange on which the shares of Common
Stock are listed or admitted for trading, or (ii) if the shares of Common
Stock are not listed or admitted for trading on a national securities
exchange, (A) the transaction price of the shares of Common Stock on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") or, in the case no such reported transaction takes place on such
day or days, the average of the reported closing bid and asked prices
thereof quoted on NASDAQ, or (B) if the shares of Common Stock are not
quoted on NASDAQ, the average of the closing bid and asked prices of the
shares of Common Stock in the over-the-counter market, as reported by The
National Quotation Bureau, Inc., or an equivalent generally accepted
reporting service, or (iii) if on any such trading days the shares of
Common Stock are not quoted by any such organization, the fair market value
per share of Common Stock on such day(s), as determined in good faith by
the Committee. If, in the discretion of the Committee, another means of
determining Fair Market Value shall be necessary or advisable in order to
comply with the requirements of Section 162(m) of the Code or any other
applicable law, governmental regulation, or ruling of any governmental
entity, then the Committee may provide for another means of such
determination.
(i) "Participant" shall mean any individual who has received an award
of a Stock Option and has not exercised the Stock Option and received the
Common Stock subject to the Stock Option.
(j) "Retirement" shall mean the termination of employment from the
Company constituting retirement as determined by the Committee.
(k) "Securities Act" shall mean the Securities Act of 1933, as now in
effect or as hereafter amended.
(l) "Stock Option" shall mean a stock option pursuant to which a
Participant is eligible to acquire Common Stock pursuant to the terms and
conditions of the Plan and the Stock Option Agreement.
(m) "Stock Option Agreement" shall mean the agreement described in
Section 7.
(n) "Terminated For Cause" shall mean that a Participant's employment
is terminated as a result of a breach of his or her written employment
agreement, if the Participant is subject to a written employment agreement,
or if the Committee determines that such Participant is being terminated as
a result of misconduct, dishonesty, disloyalty, disobedience or action that
might reasonably injure the Company or its business interests or
reputation.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. Subject to the provisions of the Plan, the Committee shall have
authority to adopt rules and regulations for carrying out the Plan, determine
the Eligible Employees, determine the exercise price and term of each Stock
Option, determine the vesting period and vesting conditions for Stock Options,
determine the series or class of Common Stock to be subject to the Stock Option,
determine the Fair Market Value of Common Stock, and interpret, construe, and
implement the provisions of the Plan. Decisions of the Committee (including
decisions regarding the interpretation and application of the Plan) shall be
binding on the Company and on all Participants and other interested parties. The
Committee shall hold its meetings at such times and places as it deems
advisable. A majority of the Committee shall constitute a quorum for a meeting.
All determinations of the Committee shall be made by a majority of its members
attending the meeting. Furthermore, any decision or determination reduced to
writing and signed by all of the members of the Committee shall be as effective
as if it had been made by a majority vote at a meeting properly called and held.
4. ELIGIBLE EMPLOYEES. The individuals who shall be eligible to participate
in the Plan shall be such key executive officers (including executive officers
who may be members of the Board of Directors) of the Company, or of any
subsidiary of the Company, as the Committee shall determine from time to time.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN; MAXIMUM GRANTS. The number
of shares of Common Stock available for Stock Options shall equal 5,000,000. The
shares of Common Stock available under the Plan may consist of shares of any
series of Common Stock provided that the rights of such shares to dividends, to
liquidation proceeds and to share in the appreciation in the value of the
Company shall be not less than the rights of any other series of Common Stock.
If any Stock Option shall expire or terminate for any reason without being
exercised, shares of Common Stock subject to such Stock Option shall again be
available for grant in connection with grants of subsequent Stock Options. The
maximum number of shares of Common Stock that may be granted under Stock Options
to any single Eligible Employee in any 12-month period shall be 750,000.
6. STOCK OPTION TERMS.
(a) Exercise Price. The exercise price per share of Common Stock under each
Stock Option shall be determined by the Committee; provided, however, that such
exercise price shall not be less than 100% of the Fair Market Value per share of
such Common Stock on the date of grant, as determined by the Committee.
(b) Term. The Committee shall fix the term of each Stock Option, which
shall be not more than ten years from the date of grant. In the event no term is
fixed, such term shall be ten years from the date of grant.
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(c) Exercise; Transferability. The Committee shall determine the time or
times at which a Stock Option may be exercised in whole or in part; provided,
however, that other than as provided in Section 10, in no event shall a Stock
Option be exercisable before the expiration of six months from the date of its
grant or after ten years from the date of its grant. Stock Options shall not be
transferable by the Participant otherwise than by will, under the laws of
descent and distribution, or pursuant to a qualified domestic relations order
(as defined by the Code) and shall be exercisable only by him or by his duly
appointed personal representative.
(d) Nonqualified Stock Options. Stock Options shall be "nonqualified" in
that they shall not be designated by the Committee as intended to be qualified
as "incentive" stock options under Section 422 of the Code.
(e) Method of Exercise. Stock Options shall be exercised by the delivery of
written notice to the Company setting forth the number of shares of Common Stock
with respect to which the Stock Option is to be exercised and, subject to the
subsequent provisions hereof, the address to which the certificates representing
shares of the Common Stock issuable upon the exercise of such Stock Option shall
be mailed. In order to be effective, such written notice shall be accompanied at
the time of its delivery to the Company by payment of the exercise price of such
shares of Common Stock, which payment shall be made in cash or by cashier's
check, certified check, or postal or express money order payable to the order of
the Company in an amount (in United States dollars) equal to the exercise price
of such shares of Common Stock. Such notice shall be delivered in person to the
Secretary of the Company, or shall be sent by registered mail, return receipt
requested, to the Secretary of the Company, in which case, delivery shall be
deemed made on the date such notice is deposited in the mail.
(f) Withholding. Whenever shares of Common Stock are to be issued or
delivered pursuant to the Plan, the Company shall require the Participant to
remit to the Company an amount sufficient to satisfy federal, state, and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares, which payment may be made in the manner set forth
in clause (e) above or in the manner permitted by clause (g) below.
(g) Alternative Payment for Stock. Alternatively, payment of the exercise
price may be made, in whole or in part, by delivery of shares of Common Stock
already owned by the Participant. Unless otherwise permitted by the Committee,
payment of the exercise price with shares of Common Stock shall be made only
with shares owned by the Participant for at least six (6) months. If payment is
made in whole or in part in shares of Common Stock owned by the Participant,
then the Participant shall deliver to the Company, in payment of the option
price of the shares of Common Stock with respect to which such Stock Option is
exercised, (i) certificates registered in the name of such Participant
representing a number of shares of Common Stock legally and beneficially owned
by such Participant, free of all liens, claims and encumbrances of every kind
and having a Fair Market Value as of the date of delivery of such notice that is
not greater than the exercise price of the shares of Common Stock with respect
to which such Stock Option is to be exercised, such certificates to be
accompanied by stock powers duly endorsed in blank by the record holder of the
shares represented by such certificates; and (ii), if the exercise price of the
shares of Common Stock with respect to which such Stock Option is to be
exercised exceeds such Fair Market Value, cash or a cashier's check, certified
check, or postal or express money order payable to the order of the Company in
an amount (in United States dollars) equal to the amount of such excess.
The Company may extend and maintain, or arrange for the extension and
maintenance of, financing to any Participant to purchase shares pursuant to
exercise of a Stock Option and/or to pay withholding taxes on such terms as may
be approved by the Committee in its sole discretion. In considering the terms
for extension or maintenance of credit by the Company, the Committee shall,
among other factors, consider the cost to the Company of any financing extended
by the Company.
(h) Terms of Initial Grants. Of the shares available under the Plan, at
least 3,750,000 shares shall be made as initial grants (the "Initial Grants")
following the adoption of the Plan by the Company's stockholders pursuant to
Section 22. The Stock Option Agreements for each Stock Option that is one of the
Initial Grants to a Participant in connection with the adoption of this Plan
shall contain the following provisions, none of which may be modified or revised
except in compliance with Section 17 of this Plan:
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(i) a requirement that the Participant shall not receive any
additional grants of stock options or other equity interests (including,
without limitation, restricted stock grants, stock appreciation rights and
phantom stock rights) in the Company, whether pursuant to this Plan or any
other plan, prior to the second anniversary of the Participant's initial
grant under this Plan;
(ii) a provision that vesting of the Stock Options granted shall not
occur until seven (7) years following the date of such grant, unless such
vesting is accelerated pursuant to provision (iii) below; and
(iii) a vesting schedule setting forth certain internal return on
invested capital ("ROIC") targets for the Company beginning with the fiscal
year ending December 31, 2002, which targets, if met, will result in some
or all of the Stock Options granted becoming vested and exercisable.
(i) No Change in Exercise Price. The exercise price of any Stock Option
granted at any time shall not be decreased or otherwise "repriced", whether
through amendment, cancellation or replacement grants. This requirement shall
not be modified or revised except in compliance with Section 17 of this Plan.
7. STOCK OPTION AGREEMENT. The Stock Options awarded to an Eligible
Employee shall be evidenced by a separate written agreement (the "Stock Option
Agreement") which shall be subject to the terms and provisions of the Plan, and
which shall be signed by the Participant and by the Chief Executive Officer or a
Vice President of the Company, other than the Participant, in the name of and on
behalf of the Company. The Stock Option Agreement shall contain such provisions
the Committee in its discretion deems advisable. In the event of any
inconsistency or conflict between the terms of the Plan and a Stock Option
Agreement, the terms of the Plan shall govern.
8. TERMINATION OF EMPLOYMENT, DEATH, DISABILITY AND RETIREMENT.
(a) Termination of Employment. If a Participant's employment is terminated
for any reason whatsoever other than death, Disability or Retirement, with
respect to any Stock Option granted pursuant to the Plan outstanding at the
time, unless otherwise established by the Committee, no further vesting shall
occur and the Participant shall be entitled to exercise his or her rights with
respect to the portion of the Stock Option vested as of the date of termination
for a period expiring on the earlier of (i) the expiration date set forth in the
Stock Option Agreement or (ii) ninety (90) calendar days after such termination
date and, thereafter, the Stock Option and the Participant's rights thereunder
shall be completely terminated; provided, however, that if a Participant is
Terminated for Cause, such Participant's right to exercise the vested portion of
his or her Stock Option shall terminate as of 12:01 a.m. on the date of
termination of employment.
(b) Retirement. Unless otherwise approved by the Committee, upon the
Retirement of a Participant:
(i) any nonvested portion of any outstanding Stock Option shall
immediately terminate and no further vesting shall occur; and
(ii) any vested Stock Option shall expire on the earlier of (A) the
expiration date set forth in the Stock Option Agreement with respect to
such Stock Option; or (B) the first anniversary of the date of Retirement.
(c) Death or Disability. Upon termination of employment as a result of
death or Disability:
(i) 50% of any nonvested portion of any outstanding Stock Option shall
immediately and fully vest notwithstanding the original vesting schedule;
and
(ii) any vested Stock Option, including those vested pursuant to
Section (c)(i), shall expire upon the earlier of (A) the expiration date
set forth in the Stock Option Agreement with respect to such Stock Option
or (B) the first anniversary of such termination of employment as a result
of death or Disability.
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9. REQUIREMENTS OF LAW. The Company shall not be required to sell or issue
any shares of Common Stock under any Stock Option if the issuance of such shares
shall constitute a violation by the Participant or the Company of any provision
of any law, statute, or regulation of any governmental authority whether it be
Federal or State. Specifically, in connection with the Securities Act, upon
exercise of any Stock Option, unless a registration statement under the
Securities Act is in effect with respect to the shares of Common Stock covered
by such Stock Option, the Company shall not be required to issue such shares
unless the Committee has received evidence satisfactory to it to the effect that
the holder of such Stock Option is acquiring such shares of Common Stock for
investment and not with a view to the distribution thereof, and that such shares
of Common Stock may otherwise be issued without registration under the
Securities Act or State securities laws. Any determination in this connection by
the Committee shall be final, binding and conclusive. The Company may, but shall
in no event be obligated to, register any securities covered hereby pursuant to
the Securities Act. The Company shall not be obligated to take any affirmative
action in order to cause the exercise of a Stock Option, or the issuance of
shares pursuant thereto, to comply with any law or regulation of any
governmental authority.
10. CHANGE IN STOCK AND ADJUSTMENTS; CHANGE OF CONTROL.
(a) The existence of outstanding Stock Options shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of, or affecting, the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
(b) If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of Common Stock outstanding, without
receiving compensation therefor in money, services or property, then (a) the
number, class, and per share price of shares of Common Stock subject to
outstanding Stock Options hereunder shall be appropriately adjusted in such a
manner as to entitle a Participant to receive upon exercise of a Stock Option,
for the same aggregate cash consideration, the same total number and class of
shares as he would have received had he exercised his Stock Option in full
immediately prior to the event requiring the adjustment; and (b) the number and
class of shares then reserved for issuance under the Plan shall be adjusted by
substituting for the total number and class of shares of Common Stock then
reserved that number and class of shares of Common Stock that would have been
received by the owner of an equal number of outstanding shares of each class of
Common Stock as the result of the event requiring the adjustment.
(c) After a merger of one or more corporations into the Company or after a
consolidation of the Company and one or more corporations in which the Company
is the surviving corporation, each holder of an outstanding Stock Option, upon
exercise of such Stock Option, shall be entitled to receive (at no additional
cost but subject to any required action by stockholders) in lieu of the number
and class of shares of Common Stock with respect to which such Stock Option is
exercisable, the number and class of shares of stock (or other securities or
consideration) to which such holder would have been entitled pursuant to the
terms of the agreement of merger or consolidation if, immediately prior to such
merger or consolidation, such holder had been the holder of record of the same
number and class of shares of Common Stock which he would have otherwise
received upon exercise of such Stock Option.
(d) If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
the Company is liquidated, or sells or otherwise disposes of substantially all
its assets to another corporation while unexercised Stock Options remain
outstanding under the Plan, (i) subject to the provisions of clause (iii) below,
after the effective date of such merger, consolidation, liquidation, or sale, as
the case may be, each holder of an outstanding Stock Option shall be entitled,
upon exercise of such Stock Option, to receive at no additional cost, in lieu of
shares of Common Stock, shares of such stock (or other securities or
consideration) as the holders of shares of Common Stock received pursuant to the
terms of the merger, consolidation, liquidation, or sale; (ii) unless otherwise
provided in the Participant's Stock Option Agreement, any limitations set forth
in or imposed pursuant to this Plan shall automatically lapse so that all Stock
Options, from and after a thirty (30) day period preceding the effective date of
such merger, consolidation, liquidation or sale, as the case may be, shall be
exercisable in full; and (iii) all outstanding Stock Options may be canceled by
the Board as of the effective date of any such merger, consolidation,
liquidation or sale provided that (a) notice of such cancellation shall be given
to each holder of a Stock Option, and (b)
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unless otherwise provided in the Participant's Stock Option Agreement, each
holder of a Stock Option shall have the right to exercise such Stock Option in
full (without regard to any limitations set forth in or imposed pursuant to
Section 8 hereof) during a thirty (30) day period preceding the effective date
of such merger, consolidation, liquidation, or sale. In the event the
acceleration of vesting provided by clause (ii) or (iii) above would result in
imposition of the excise tax imposed by Section 4999 of the Code, a Participant
may elect to waive such acceleration with respect to such number of shares
subject to unvested Stock Options as the Participant shall designate, and the
Participant shall be entitled to designate from among his unvested Stock Options
those Stock Options which shall not be subject to accelerated vesting.
(e) Except as expressly provided herein, 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, either upon direct sale,
exercise of rights or warrants to subscribe therefor, or conversion of shares or
obligations of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number, class or price of shares of Common Stock then subject to
outstanding Stock Options.
(f) Upon a Change of Control, any limitations set forth in or imposed
pursuant to this Plan shall automatically lapse so all Stock Options shall be
exercisable in full. For purposes of this Plan, a "Change of Control" is defined
(i) as the transfer of beneficial ownership of a majority of the outstanding
shares of US Oncology stock to any person or entity (including a "group" as such
term is used in Section 13(d)(3) of the Securities Exchange Act of 1934), except
that if beneficial ownership would be deemed to occur merely upon the execution
of voting agreements to support a merger, consolidation or other transaction to
be consummated in the future, then the Board of Directors may in its sole
discretion determine that the date of such Change of Control shall instead be
the date of such consummation, (ii) the stockholders of the Company prior to any
merger, consolidation or other transaction do not continue to own at least fifty
percent (50%) of the surviving entity following such merger, consolidation or
other transaction; (iii) the Company sells, leases or exchanges all or
substantially all if its assets to any other person or entity (other than a
direct or indirect wholly owned subsidiary of the Company); (iv) the Company is
materially or completely liquidated; or (v) during any consecutive two-year
period, individuals who constituted the Board of Directors of the Company
(together with any new directors whose election by the Board of Directors or
whose nomination for election by the stockholders of the Company was approved by
a vote of at least three quarters of the directors still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office. Notwithstanding anything
contained herein to the contrary, a "Change of Control" shall not be deemed to
have occurred in the event of a tender offer, leveraged buyout, leveraged
recapitalization or similar transaction in which the Company's then Chief
Executive Officer participates or has any agreement or arrangement to
participate directly or indirectly as an investor or participant (e.g., through
receipt of equity, additional stock options or entering into a new employment
agreement) in such transaction.
11. NO RIGHTS AS STOCKHOLDER. A holder of a Stock Option shall have no
rights as a stockholder with respect to any shares of Common Stock until the
issuance of a stock certificate for such shares. Except as otherwise provided in
Section 10, no adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities, or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued.
12. NO EFFECT ON EMPLOYMENT RELATIONSHIP. Participation in the Plan shall
not confer upon any employee any right to continue in the employ of the Company
or interfere in any way with the right of the Company to terminate any
employee's employment at any time.
13. NO FUND ESTABLISHED. It is not intended that awards under this Plan be
set aside in a trust which would qualify as an employee's trust within the
meaning of sections 401 or 402 of the Internal Revenue Code of 1986, as amended,
or in any other type of trust, fund, or separate account. The rights of any
Participant and any person claiming under such Participant shall not rise above
or exceed those of an unsecured creditor of the Company.
14. NO ASSIGNMENT OR ALIENATION OF BENEFITS. Except as contemplated by
Section 6(c), no right or benefit under this Plan shall be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge
the same shall be void. No right or benefit hereunder shall in any manner be
liable for or subject to any debts, contracts, liabilities, or torts of the
person entitled to such benefits.
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15. SUBSTITUTION OPTION. Stock Options may be granted under this Plan from
time to time in substitution for stock options held by employees (or nonemployee
directors) of another corporation who are about to become employees (or
nonemployee directors) of the Company as the result of a merger or consolidation
with the Company, or the acquisition by the Company of the assets of the other
corporation, or the acquisition by the Company of stock of the other corporation
as the result of which it becomes a subsidiary of the Company. The terms and
conditions of the substitute Stock Options so granted may vary from the terms
and conditions set forth in this Plan to such extent as the Board at the time of
grant may deem appropriate to conform, in whole or in part, to the provisions of
the stock options for which such substitute Stock Options are granted.
16. GENDER, TENSE AND HEADINGS. Whenever the context requires such, words
of the masculine gender used herein shall include the feminine and neuter, and
words used in the singular shall include the plural. Section headings as used
herein are inserted solely for convenience and reference and constitute no part
of the construction of this Plan.
17. AMENDMENT AND TERMINATION. The Board may modify, revise or terminate
the Plan at any time and from time to time; provided, however, that without the
further approval of the holders of at least a majority of the shares of Common
Stock that cast votes (in person or by proxy) on the proposal at a duly called
meeting, the Board may not (i) change the aggregate number of shares which may
be issued under Stock Options pursuant to the provisions of the Plan; (ii)
reduce the option price at which Stock Options may be granted to an amount less
than 100% of the Fair Market Value per share at the time the Stock Option is
granted, or otherwise materially increase the benefits accruing to Participants
under the Plan; (iii) change the class of persons eligible to receive Stock
Options; (iv) otherwise cause the Plan to not comply with the rules and
regulations promulgated under Section 16(b) of the Exchange Act or Section
162(m) of the Code, if applicable; or (v) change any of the terms set forth in
Sections 6(h) and 6(i), whether set forth in this Plan or in a Stock Option
Agreement. No amendment or termination may adversely affect any vested right of
a Participant without the written consent of such Participant.
18. NO GUARANTEE OF TAX CONSEQUENCES. Neither the Company nor the Committee
makes any commitment or guarantee that any federal, state or local tax treatment
will apply or be available to any person participating or eligible to
participate hereunder.
19. SEVERABILITY. In the event that any provision of this Plan shall be
held illegal, invalid or unenforceable for any reason, such provision shall be
fully severable, but shall not affect the remaining provisions of the Plan, and
the Plan shall be construed and enforced as if the illegal, invalid, or
unenforceable provision had never been included herein.
20. GOVERNING LAW. The provisions of the Plan shall be construed,
administered, and governed by the laws of the State of Texas, without giving
effect to principles of conflicts of laws, and, to the extent applicable, the
laws of the United States.
21. EFFECTIVE DATE. The Plan shall become effective and shall be deemed to
have been adopted on March 21, 2002, if within one year of that date it shall
have been approved by the holders of at least a majority of the shares of Common
Stock that cast votes (in person or by proxy) on the proposal at a duly called
meeting. No Stock Option shall be granted pursuant to the Plan after one day
more than ten years after the effective date.
22. STOCKHOLDERS APPROVAL. Notwithstanding any other provisions of the
Plan, in order for the Plan to continue as effective, on or before the date
which occurs twelve (12) months after the date the Plan is effective, the Plan
must be approved by the holders of at least a majority of the outstanding stock
of the Company entitled to vote thereon voting in person, or by proxy, at a duly
held stockholders' meeting, and no shares of Common Stock shall be issued under
the Plan until such approval has been secured.
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