MAXXAM 1994 OMNIBUS EMPLOYEE INCENTIVE PLAN
Contents of MAXXAM 1994 Employee Incentive Plan
Section 1. Establishment, Purpose, and Legal Compliance
1.1 Establishment
1.2 Purpose
1.3 Compliance Intention
Section 2. Definitions
2.1 Definitions of Certain Terms
Section 3. Eligibility
3.1 Eligibility for Awards
3.2 No Right to Participate
Section 4. Administration
4.1 Administration
4.2 Committee Membership
4.3 Non-Uniform Determinations
4.4 Authority to Direct Issuance of Stock
4.5 Evidence of Committee Action
Section 5. Stock Subject to Plan; Types and Nature of Awards
5.1 Maximum Grant Limitations
5.2 Minimum Pricing
5.3 Lapsed Awards
5.4 Adjustment in Capitalization
5.5 Types of Awards Under Plan
5.6 Evidence of Awards
5.7 Nature of Payments
5.8 Other Payments or Awards
Section 6. Effective Date and Plan Life
6.1 Effective Date
6.2 Plan Life
Section 7. Stock Options
7.1 Grant of Options
7.2 Option Price
7.3 Duration of Options
7.4 Exercise of Options
7.5 Payment
7.6 Restrictions on Stock Transferability
7.7 Termination of Employment
Section 8. Stock Appreciation Rights
8.1 Grant of Stock Appreciation Rights
8.2 Value of SARs
8.3 Effect of Exercise
8.4 Exercise of SARs
8.5 Limit on Appreciation
8.6 Rule 16b-3 Requirements
8.7 Termination of Employment
Section 9. Performance Units and Performance Shares
9.1 Grant of Performance Units or Performance Shares
9.2 Value of Performance Units and Performance Shares
9.3 Form and Timing of Payment
9.4 Termination of Employment
Section 10. Restricted Stock
10.1 Grant of Restricted Stock
10.2 Transferability
10.3 Other Restrictions
10.4 Rights of Grantee
10.5 Termination of Employment
Section 11. Unrestricted Stock
11.1 Grant of Unrestricted Stock
Section 12. Beneficiary Designation
12.1 Beneficiary Designation
Section 13. Rights of Employees
13.1 Employment
Section 14. Amendment, Modification, and Termination of Plan
14.1 Amendment, Modification, and Termination of Plan
14.2 Amendment of Plan Agreements
14.3 Rights of Grantees
Section 15. Tax Withholding
15.1 Tax Withholding
Section 16. Required Notifications by Grantee
16.1 Notification by Grantee of Election Under Section 83(b)
of the Code
16.2 Notification by Grantee Upon Disqualifying Disposition
Prior to Expiration of Holding Periods Under Section
421(b) of the Code
Section 17. Indemnification
17.1 Indemnification
Section 18. Nonassignability
18.1 Nonassignability
Section 19. Requirements of Law; Consents
19.1 Requirements of Law
19.2 Consents to Plan Actions
19.3 Nature of Consents
19.4 Governing Law
MAXXAM 1994 OMNIBUS EMPLOYEE INCENTIVE PLAN
Section 1. Establishment, Purpose, and Legal Compliance.
1.1 Establishment. MAXXAM Inc., a Delaware corporation
(the "Company"), hereby establishes the "MAXXAM 1994 OMNIBUS EMPLOYEE
INCENTIVE PLAN" (the "Plan"). The Plan permits the grant of certain rights
in respect of or measured by the value of the Stock of the Company,
including stock options, stock appreciation rights, performance units,
performance shares, restricted stock, or unrestricted stock, to certain
officers and selected key employees of the Company and its subsidiaries.
1.2 Purpose. The purpose of the Plan is to advance the
interests of the Company, by encouraging and providing for the acquisition
of equity interests (or rights measured by the market value of the equity)
in the success of the Company by key employees, by providing additional
incentives and motivation toward enhancing the long-term performance of the
Company, and by enabling the Company to attract and retain the services of
key employees upon whose judgment, interest, skills and special efforts the
successful conduct of its operations is largely dependent.
1.3 Compliance Intention. In formulating and adopting the
Plan, in submitting it for approval of the stockholders of the Company
and in the administration of the Plan, it is the intention of the Board of
Directors of the Company that the Plan comply with the provisions of Rule
16b-3 promulgated under the Securities Exchange Act of 1934 (hereafter
"Rule 16b-3") as it may apply to any Grantee, and that certain Awards may
be structured so that they comply with Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"). It is also the intention
of the Board that grants identified as "Incentive Stock Options" shall
qualify for treatment as "incentive stock options" under the provisions of
Section 422 of the Code.
Section 2. Definitions.
2.1 Definitions of Certain Terms. Whenever used herein,
the following terms shall have the respective meanings set forth below
unless the context clearly requires otherwise:
(a) "Award" means any Option, Stock Appreciation Right,
Performance Unit, Performance Share, Restricted Stock, or Unrestricted
Stock granted under this Plan. An Award may also be called a "Grant."
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Compensation Committee, or
designated subcommittee thereof, of the Board, from time to time serving.
(e) "Common Stock" means the Common Stock, par value $0.50
per share, of the Company.
(f) "Company" means MAXXAM Inc., a Delaware corporation.
(g) "Disability" means disability as defined in the
Company's pension plan for salaried employees.
(h) "Employee" means a regular full time salaried employee
(including an officer or director who is also an employee other than a
director who serves on the Committee) of the Company or a subsidiary
(other than Kaiser Aluminum Corporation and its subsidiaries).
(i) "Fair Market Value" means the closing price of the
Common Stock or Preferred Stock, as the case may be, as reported by the
American Stock Exchange on a particular date. In the event that there are
no transactions in such Stock on such date, the Fair Market Value shall be
determined as of the immediately preceding date on which there were such
transactions, provided that such date is not more than ten (10) business
days preceding the applicable date. If there were no such transactions
within such period, the Fair Market Value shall be determined by the
Committee.
(j) "Grant" shall have the same meaning as "Award."
(k) "Grantee" means an individual who holds an Award that
has not expired or been exercised or cancelled.
(l) "Option" means the right to purchase Stock at a stated
price for a specified period of time. For purposes of the Plan an Option
may be either (i) an "incentive stock option" within the meaning of
Section 422 of the Code (herein called an "Incentive Stock Option")
or (ii) a nonstatutory or non-qualified stock option.
(m) "Participant" shall have the same meaning as "Grantee."
(n) "Performance Unit" means a right to receive a payment
related to the performance of the Company, as determined by the Committee.
(o) "Performance Share" means a right, related to the
performance of the Company, to receive a payment equal to the value
of a share of Stock, as determined by the Committee.
(p) "Period of Restriction" means the period during which
shares of Restricted Stock are restricted pursuant to Section 10.2 or 10.3
of the Plan.
(q) "Restricted Stock" means Stock granted to a Participant
pursuant to Section 10.1 of the Plan.
(r) "Retirement" (including "Early Retirement" and "Normal
Retirement") means termination of employment for retirement under the
terms of the Company's pension plan for salaried employees.
(s) "Rule 16b-3" means the rule thus designated as
promulgated under the Securities Exchange Act of 1934.
(t) "Stock" means the capital stock of the Company,
consisting of the Common Stock and Class A $.05 Non Cumulative
Participating Convertible Preferred Stock ("Preferred Stock"), of which
there were at December 31, 1993 28,000,000 and 12,500,000 shares authorized
and approximately 8,698,464 and 678,239 shares outstanding, respectively.
(u) "Stock Appreciation Right" and "SAR" mean the right to
receive a payment in respect of the appreciation on a stated number of
shares of Stock, as more fully set forth in Section 8.
(v) "Unrestricted Stock" means Common Stock sold or granted
to a Participant which, although its resale may be subject to legal
restrictions or reporting requirements, is free of any legend on its
face and is not subject to transfer restrictions imposed by the Company.
Section 3. Eligibility.
3.1 Eligibility for Awards. Grants or Awards under the Plan
may be made to such Employees (including directors who are Employees, other
than Committee members) as may be selected by the Committee in its sole
discretion, including but not limited to, from among those Employees who
may be from time to time recommended for an Award by the Chief Executive
Officer of the Company.
3.2 No Right to Participate. No Employee, regardless of
position or responsibility, shall have any entitlement or right to cause
any Award or Grant under this Plan to be made to such Employee. The making
of an Award or Grant to an Employee under this Plan shall not entitle such
Employee to any subsequent or additional Award or Grant. No member of
the Committee shall be eligible for participation in the Plan.
Section 4. Administration.
4.1 Administration. The Committee shall be responsible for
the administration of the Plan. The Committee, by majority action thereof,
is authorized to interpret the Plan, to prescribe, amend, and rescind rules
and regulations relating to the Plan, to provide for conditions and
assurances deemed necessary or advisable to protect the interests of the
Company, and to make all other determinations necessary or advisable for
the administration of the Plan, but only to the extent not contrary to
the express provisions of the Plan (except that the Committee may correct
any defect, supply any omission and reconcile any inconsistency in the
Plan). Determinations, interpretations, or other actions made or taken
by the Committee pursuant to the provisions of the Plan shall be final and
binding and conclusive for all purposes and upon all persons whomsoever.
The Board, from which the Committee derives its authority hereunder, may
act as to any matter concerning the Plan, in the place of the Committee at
any time.
4.2 Committee Membership. The Committee shall consist of at
least three members of the Board (or such smaller number as may be
permitted under Rule 16b-3) appointed by and serving at the pleasure of the
Board. To the extent necessary for compliance with Rule 16b-3, members of
the Committee shall be "disinterested" within the meaning thereof. To the
extent necessary for compliance with section 162(m)(4)(C) of the Code,
members of the Committee shall be "outside directors" within the meaning
thereof.
4.3 Non-Uniform Determinations. The Committee's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Awards
under the Plan (whether or not such persons are similarly situated).
Without limiting the generality of the foregoing, the Committee shall be
entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Plan
agreements, as to (a) the persons to receive Awards under the Plan or (b)
the terms and provisions of Awards under the Plan.
4.4 Authority to Direct Issuance of Stock. By their adoption
of this Plan, the Board does authorize and direct the Committee to issue
the Stock pursuant to the terms of such Grants and Awards as may be made
under this Plan.
4.5 Evidence of Committee Action. Any action of the Committee
may be taken by a writing signed by a majority of the Committee members.
Any such written action shall be as effective as if taken at a meeting of
the Committee by resolution duly adopted upon a vote of the Committee.
Section 5. Stock Subject to Plan; Types and Nature of Awards.
5.1 Maximum Grant Limitations. The total number of shares of
Stock subject to issuance in respect of Awards under the Plan may not
exceed 1,000,000 shares of Common Stock and 1,000,000 shares of Preferred
Stock subject to adjustment upon occurrence of any of the events indicated
in Section 5.4. Of this total number of shares, up to an aggregate of
500,000 shares of each class may be subject to issuance in connection
with exercise of Incentive Stock Options. The shares to be delivered
under the Plan may consist, in whole or in part, of shares reserved for
issuance under this Plan or authorized but unissued shares not reserved
for any other purpose or stock acquired by the Company for purposes of
the Plan.
The maximum number of shares of each class of Stock for which
Options or Stock Appreciation Rights may be granted under this Plan to
any one Participant during any three-year period is 300,000, subject to
adjustments in accordance with the provisions of Section 5.4 hereof.
5.2 Minimum Pricing. No Award or Grant of any Option, SAR,
share, unit, or other rights made pursuant to this Plan may establish a
price for the Stock (including but not limited to an Option exercise price,
a SAR appreciation base, or a valuation of the Stock for payout purposes)
which is less than the par value of the Stock.
5.3 Lapsed Awards. Subject to the provisions of Section 5.1
above, if any Award granted under the Plan terminates, expires or lapses
for any reason, any shares subject to such Award again shall be available
for the grant of an Award.
5.4 Adjustment in Capitalization. In the event of any change
in the outstanding shares of Stock that occurs after ratification of the
Plan by the stockholders of the Company by reason of a Stock dividend or
split, recapitalization, merger, consolidation, combination, exchange of
shares, or other similar corporate change, the number of shares of Stock
available for issuance hereunder in the aggregate and subject to each
outstanding Award, the individual maximum set forth in Section 5.1, and
the exercise or base price of each outstanding Award, shall be equitably
adjusted (provided, however, that fractional shares shall be rounded to
the nearest whole share) by the Committee as appropriate to reflect such
changed capitalization. The Committee's determination shall be
conclusive. In the event of any such adjustment in capitalization, the
number and type of shares of Restricted Stock or Unrestricted Stock
subject to Grants then outstanding under the Plan shall be subject to the
same changes and adjustments, if any, as affect other holders of the
Company's Stock.
5.5 Types of Awards Under Plan. Awards may be made under the
Plan in the form of (a) Incentive Stock Options, (b) nonstatutory or
nonqualified Stock Options, (c) Stock Appreciation Rights or SARs, (d)
Performance Units or Performance Shares, (e) Restricted Stock and (f)
Unrestricted Stock.
5.6 Evidence of Awards. Each Award or Grant made under the
Plan shall be evidenced by a writing ("Plan Agreement") in the form of an
agreement with the Grantee which shall set forth the number of shares of
Stock subject to the Award, the restrictions, vesting rate or schedule,
exercise or base price, and such other conditions or terms of the Award as
the Committee may in its sole discretion deem necessary or desirable. By
acceptance of an Award, the Grantee thereby agrees to such terms and
conditions and to the terms of this Plan thereto pertaining.
5.7 Nature of Payments. Any and all Grants or Awards and
issuances of shares of Stock under the Plan shall be in consideration of
services performed for the Company by the Grantee. All such Grants and
issuances shall constitute a special incentive payment to the Grantee and
shall not be taken into account in computing the amount of salary or
compensation of the Grantee for the purpose of determining any benefits
under any pension, retirement, supplemental retirement, bonus, life
insurance or other benefit plan of the Company or under any agreement
between the Company and the Grantee, unless such plan or agreement
specifically provides otherwise.
5.8 Other Payments or Awards. Nothing contained in the Plan
shall be deemed in any way to limit or restrict the Company from making any
award or payment to any person under any other plan, arrangement or
understanding, whether now existing or hereafter in effect.
Section 6. Effective Date and Plan Life.
6.1 Effective Date and Effectiveness of Initial Grants. The
Plan was adopted by the Board as of March 30, 1994, subject to approval by
the Company's stockholders. All Awards made under the Plan prior to such
approval are subject in their entirety to such approval. If stockholder
approval is not obtained within one year from adoption by the Board, the
Plan shall terminate on such date and no Awards shall be deemed to have
been made under the Plan. In such event, to the extent provided in the
applicable Plan Agreement an award may be deemed to have been made as an
ad hoc grant by the Board.
6.2 Plan Life. The Plan shall remain in effect, subject to
the right of the Board to earlier terminate the Plan pursuant to Section 15
hereof, until December 31, 2003, and no Grant or Award hereunder may
thereafter be made. Notwithstanding the termination of the Plan, all
Awards made under the Plan prior to its termination shall remain in
effect until such Awards shall have been exercised, satisfied or
terminated in accordance with the terms and provisions of the Plan and
the terms of such Awards as set forth in the applicable Plan Agreements
evidencing the Awards.
Section 7. Stock Options.
7.1 Grant of Options. Options may be granted to Participants
at any time and from time to time as shall be determined by the Committee.
The Committee shall have complete discretion in determining the number of
Options granted to any Participant and the terms thereof, subject to the
provisions of the Plan. The Committee may grant any type of Option to
purchase Stock that is permitted by law at the time of grant. However,
no Incentive Stock Options shall be granted to any person who owns,
directly or indirectly, Stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company
except as provided in Section 422(c)(5) of the Code. To the extent that
the aggregate Fair Market Value (determined as of the time the Option is
granted) of the stock with respect to which Incentive Stock Options are
first exercisable by any Employee during any calendar year shall exceed
$100,000, or such higher amount as may be permitted from time to time under
section 422 of the Code, such options shall be treated as nonqualified
stock options. Nothing in this Section 7 of the Plan shall be deemed to
prevent the Grant of nonstatutory or non-qualified stock options in amounts
which exceed the maximum established by Section 422 of the Code.
7.2 Option Price. No Incentive Stock Option shall be granted
pursuant to the Plan at an option price that is less than the Fair Market
Value of the Stock on the date the Incentive Stock Option is granted.
7.3 Duration of Options. Each Option shall expire at such
time as the Committee shall determine at the time it is granted, provided,
however, that no Incentive Stock Option shall be exercisable later than
ten years from the date of grant.
7.4 Exercise of Options. Options granted under the Plan shall
vest and become exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each instance
approve, which need not be the same for all Participants. However, no
portion of any Option shall vest before the first anniversary of the date
of grant. Each Option which is intended to qualify as an Incentive Stock
Option shall comply with the applicable provisions of the Code pertaining
to such Options.
7.5 Payment. Any written notice of exercise of an Option
shall be accompanied by payment for the shares being purchased. Such
payment shall be made: (a) by certified or official bank check (or the
equivalent thereof acceptable to the Company) for the full option
exercise price; or (b) with the consent of the Committee, by delivery of
shares of Common Stock acquired at least six months prior to the option
exercise date and having a Fair Market Value (determined as of the
exercise date) equal to all or part of the Option exercise price and a
certified or official bank check (or the equivalent thereof acceptable to
the Company) for any remaining portion of the full Option exercise
price; or (c) at the discretion of the Committee and to the extent
permitted by law, by such other provision, consistent with the terms of
the Plan, as the Committee may from time to time prescribe. Shares of
Stock owned through employee benefit plans of the Company may be used to
make purchase payments if no adverse tax consequences to either the
Company or such plans would result. The proceeds from payment of Option
exercise prices shall be added to the general funds of the Company and
shall be used for general corporate purposes.
7.6 Restrictions on Stock Transferability. The Committee may
impose such restrictions on any shares of Stock acquired pursuant to the
exercise of an Option under the Plan as it shall deem advisable, which
may be in addition to any such restrictions required by law.
7.7 Termination of Employment. In the event the employment of
a Participant is terminated for cause, any Option held by such Participant
shall terminate immediately. In the event employment terminates for any
other reason, the exercisability of any Option held by the Participant
shall be governed by the applicable Plan Agreement, subject to the
Committee's authority to amend such Agreement as set forth in Section
14.2. If an Incentive Stock Option is not exercised within the period
prescribed in Section 422 of the Code, it shall be treated and honored by
the Company as a nonstatutory stock option for the remainder of its
allowable exercise period.
Section 8. Stock Appreciation Rights.
8.1 Grant of Stock Appreciation Rights. Stock Appreciation
Rights ("SARs") may be granted to Participants at any time and from time to
time as shall be determined by the Committee. The Committee shall have
complete discretion in determining the number of SARs granted to any
Participant and the terms thereof, subject to the provisions of the Plan.
A SAR may be granted at the discretion of the Committee either in
connection with or independently of a grant of Options, including in
connection with previously awarded Options to which SARs did not relate
at the time of grant.
8.2 Value of SARs. The Grantee of a SAR shall have the right,
subject to the terms of the Plan and the applicable Plan Agreement, to
receive from the Company an amount equal to (a) the excess of the Fair
Market Value of a share of Stock on the date of exercise of the SAR over
(b) the Fair Market Value of a share of Stock on the date of grant (or
over the Option exercise price if the Stock Appreciation Right is granted
in connection with an Option), multiplied by (c) the number of shares of
Stock with respect to which the SAR is exercised. The Committee in its
discretion shall determine whether payment upon exercise of a SAR will be
made in cash or Stock, or in a combination thereof.
8.3 Effect of Exercise. Upon the exercise of a SAR granted in
connection with an Option, the number of shares subject to the Option
shall be reduced by the number of shares with respect to which the SAR is
exercised. Upon the exercise of an Option in connection with which a SAR
has been granted, the number of shares subject to the SAR shall be
reduced by the number of shares with respect to which the Option is
exercised.
8.4 Exercise of SARs. SARs granted in connection with Options
may be exercised for all or part of the shares of Stock subject to the
related Option. The SAR may be exercised only with respect to the shares
of Stock for which its related Option is then exercisable. Option shares
with respect to which the SAR shall have been exercised, shall not be
deemed to have lapsed and may not be subject again to an Award under this
Plan. SARs granted independent of Options may be exercised upon whatever
terms and conditions the Committee, in its sole discretion, imposes upon
each grant; provided, however, that no SAR may be exercisable wholly or
in part before the first anniversary of the date of grant.
8.5 Limit on Appreciation. At the time of Grant, but not
thereafter, the Committee may establish in its sole discretion, a maximum
amount per share which will be payable upon exercise of a SAR.
8.6 Rule 16b-3 Requirements. Notwithstanding any other
provision of the Plan, the Committee may impose such conditions on exercise
of a SAR (including, without limitation, by limiting the time of exercise
to specified periods) as may be required to satisfy any requirement, from
time to time existing, of Rule 16b-3 (or any successor rule).
8.7 Termination of Employment. In the event the employment of
a Participant is terminated for cause, any SAR held by such Participant
shall terminate immediately. In the event employment terminates for any
other reason (including retirement), the exercisability of any SAR held
by the Participant shall be governed by the applicable Plan Agreement,
subject to Section 8.4 and to the Committee's authority to amend such
Agreement as set forth in Section 14.2.
Section 9. Performance Units and Performance Shares.
9.1 Grant of Performance Units or Performance Shares.
Performance Units or Performance Shares may be granted to Participants at
any time and from time to time as shall be determined by the Committee.
The Committee shall have complete discretion in determining the number of
Performance Units or Performance Shares granted to any Participant and
the terms thereof, subject to the provisions of the Plan.
9.2 Value of Performance Units and Performance Shares. Each
Performance Unit shall have such initial value, if any, as may be
specified by the Committee at the time the grant is made and each
Performance Share initially shall represent one share of Stock or such
other unit or value provided by the Committee at the time the Performance
Share is awarded. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will
determine the ultimate value of the Performance Unit or Performance Share
to the Participant. The time period during which the performance goals
must be met shall be called a performance period, and also is to be
determined by the Committee. After a performance period has ended, the
holder of a Performance Unit or Performance Share shall be entitled to
receive the value thereof as determined by the extent to which such
performance goals have been met.
9.3 Form and Timing of Payment. Payment pursuant to Section
9.2 shall be in cash, Stock (restricted or unrestricted), or a combination
thereof as determined by the Committee. Payment may be made in a lump
sum or installments as prescribed by the Committee at the time of grant.
If any payment is to be made on a deferred basis, the Committee may
provide for the accrual of dividend equivalents or interest during the
deferral period.
9.4 Termination of Employment. In the event the employment of
a Participant is terminated for cause, any Performance Unit or Performance
Share held by such Participant shall terminate immediately. In the event
employment terminates for any other reason, the exercisability of any
Performance Unit or Performance Share held by the Participant shall be
governed by the applicable Plan Agreement, subject to the Committee's
authority to amend such Agreement as set forth in Section 14.2.
Section 10. Restricted Stock.
10.1 Grant of Restricted Stock. The Committee, at any time and
from time to time, may grant shares of Restricted Stock under the Plan to
such Participants and in such amounts as it shall determine. The
Committee shall have complete discretion in determining the number of
such shares granted to any Participant and the terms of such Grant,
subject to the provisions of the Plan. In the event that the shares
granted are newly issued, the Participant shall pay to the Company an
amount no less than the par value thereof.
10.2 Transferability. The shares of Restricted Stock granted
hereunder may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated prior to the passage of such period of time, or
the satisfaction of such conditions, as may be specified by the Committee
in its sole discretion and set forth in the applicable Plan Agreement.
10.3 Other Restrictions. The Committee may impose such other
restrictions on any shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including, without limitation, restrictions
intended to comply with applicable Federal or state securities law, and
may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions. Unless the Committee shall
otherwise determine, any certificate evidencing shares of Restricted
Stock shall be held by the Company until such shares are free of all
restrictions specified in the applicable Plan Agreement.
10.4 Rights of Grantee. A Grantee of Restricted Stock shall
have the rights of a stockholder with respect thereto, subject to the
nontransferability and forfeiture provisions set forth in the applicable
Plan Agreement; provided, however, that any ordinary dividends which
become payable during the Period of Restriction shall be paid to the
Company.
10.5 Termination of Employment. In the event the employment
of a Participant is terminated for cause, any shares of Restricted Stock
held by such Participant shall be forfeited and returned to the Company
immediately. In the event employment terminates for any other reason,
the vesting of shares of Restricted Stock held by the Participant shall
be governed by the applicable Plan Agreement, subject to the Committee's
authority to amend such Agreement as set forth in Section 14.2. Upon the
forfeiture of any Restricted Shares, the Company shall repay to the
Participant any amount paid for such shares.
Section 11. Unrestricted Stock.
11.1 Grant of Unrestricted Stock. The Committee may grant
(either directly, as a payout medium for other rights granted under the
Plan or in exchange for other rights relinquished by a Participant) shares
of Stock free of restrictions under the Plan, to such Participants and in
such amounts as the Committee shall determine in its sole discretion. In
the event that the shares granted are newly issued, the Participant shall
pay to the Company an amount no less than the par value thereof.
Section 12. Beneficiary Designation.
12.1 Beneficiary Designation. Each Participant under the Plan
may name, from time to time, any beneficiary or beneficiaries (who may be
named contingently or successively) to whom any benefit under the Plan is
to be paid in case of his/her death before he/she receives any or all of
such benefit. Each designation will revoke all prior designations by the
same Participant, shall be in a form prescribed by the Committee, and
will be effective only when filed by the Participant in writing with the
Company during his/her lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to
his/her estate.
Section 13. Rights of Employees.
13.1 Employment. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to
continue in the employ of the Company.
Section 14. Amendment, Modification, and Termination of Plan.
14.1 Amendment, Modification, and Termination of Plan. The
Board at any time may suspend, discontinue or terminate, and from time to
time may amend, revise or modify the Plan, provided, however, stockholder
approval shall be required to the extent necessary for compliance with
Rule 16b-3 or with Section 162(m) or 422 of the Code.
14.2 Amendment of Plan Agreements. The Committee may amend
any outstanding Plan Agreement, including, without limitation, by amendment
which would (a) accelerate the time or times at which an Award becomes
unrestricted or may be exercised, or (b) waive or amend any goals,
restrictions or conditions set forth in the Agreement, or (c) extend the
scheduled expiration date of the Award.
14.3 Rights of Grantees. No amendment, revision,
modification, suspension, discontinuance or termination of the Plan shall
in any manner adversely affect any Award theretofore granted under the
Plan, without the consent of the Grantee.
Section 15. Tax Withholding.
15.1 Tax Withholding. The Company shall have the power to
withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local withholding tax
requirements on any Award under the Plan. To the extent permissible
under applicable tax, securities, and other laws, the Committee may, in
its sole discretion, permit the Participant to satisfy a tax withholding
requirement by directing the Company to apply shares of Stock to which
the Participant is entitled pursuant to an Award. The Committee may
impose such conditions on such withholding (including, without
limitation, by limiting the time of exercise to specific periods) as may
be necessary to satisfy the requirements of Rule 16b-3.
Section 16. Required Notifications by Grantee.
16.1 Notification by Grantee of Election Under Section 83(b)
of the Code. If any Grantee shall, in connection with an Award, make an
election permitted under Section 83(b) of the Code (i.e., an election to
include in gross income in the year of transfer the amounts specified in
Section 83(b) of the Code), such Grantee shall notify the Company of such
election within 10 days of filing such election with the Internal Revenue
Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Code Section 83.
16.2 Notification by Grantee Upon Disqualifying Disposition
Prior to Expiration of Holding Periods Under Section 421(b) of the Code.
Each Plan Agreement with respect to an Incentive Stock Option shall require
the Grantee to notify the Company of any disposition of shares of Common
Stock issued pursuant to the exercise of such Option under the
circumstances described in Section 421(b) of the Code (relating to
certain disqualifying dispositions of shares acquired by exercise of the
Option before expiration of the applicable holding periods), within 10
days of such disposition.
Section 17. Indemnification.
17.1 Indemnification. Each person who is or shall have been a
member of the Committee or of the Board shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him/her in
connection with or resulting from any claim, action, suit, or proceeding
to which he/she may be a party or in which he/she may be involved by
reason of any action taken or failure to act under the Plan and against
and from any and all amounts paid by him/her in settlement thereof, with
the Company's approval, or paid by him/her in satisfaction of any
judgment in any such action, suit, or proceeding against him/her,
provided he/she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he/she undertakes to handle
and defend it on his/her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or
any power that the Company may have to indemnify them or hold them
harmless.
Section 18. Nonassignability.
18.1 Nonassignability. To the extent necessary to comply with
Rule 16b-3 and with Section 422 of the Code, no Award or right granted to
any person under the Plan or under any Plan Agreement shall be assignable
or transferable other than by will or by the laws of descent and
distribution. All rights granted under the Plan or any Plan Agreement
shall be exercisable during the life of the Grantee only by the Grantee
or the Grantee's legal representative.
Section 19. Requirements of Law; Consents.
19.1 Requirements of Law. The granting of Awards and the
issuance of shares of Stock upon the exercise of an Option shall be subject
to all applicable laws, rules, and regulations, such approvals by any
governmental agencies or national securities exchanges as may be
required.
19.2 Consents to Plan Actions. If the Committee shall at any
time determine that any Consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the granting of any
Award under the Plan, the issuance or purchase of shares or other rights
thereunder, or the taking of any other action thereunder (each such
action being hereinafter referred to as a "Plan Action"), then such Plan
Action shall not be taken, in whole or in part, unless and until such
Consent shall have been effected or obtained to the full satisfaction of
the Committee.
19.3 Nature of Consents. The term "Consent" as used herein
with respect to any Plan action means (a) any and all listings,
registrations or qualifications in respect thereof upon any securities
exchange or under any Federal, state or local law, rule or regulation, (b)
any and all written agreements and representations by the Grantee with
respect to the disposition of shares, or with respect to any other matter,
which the Committee shall deem necessary or desirable to comply with the
terms of any such listing, registration or qualification or to obtain an
exemption from the requirement that any such listing, qualification or
registration be made and 9(c) any and all consents, clearances and
approvals in respect of a Plan action by any governmental or other
regulatory bodies.
19.4 Governing Law. The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State
of Texas.