KENT ELECTRONICS CORPORATION
1996 EMPLOYEE INCENTIVE PLAN
KENT ELECTRONICS CORPORATION
1996 EMPLOYEE INCENTIVE PLAN
ARTICLE I
PLAN
1.1 PURPOSE. The Kent Electronics Corporation 1996 Employee Incentive
Plan is intended to provide a means whereby certain Employees of Kent
Electronics Corporation, a Texas corporation, and its Affiliates may develop a
sense of proprietorship and personal involvement in the development and
financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the
interests of the Company and its shareholders. Accordingly, the Company may
grant Awards to certain Employees in the form of Incentive Stock Options,
Nonqualified Stock Options and Performance Grants, subject to the terms of the
Plan.
1.2 EFFECTIVE DATE OF PLAN. The Plan is effective May 7, 1996, if within
12 months of such date, it shall have been approved by the vote of the holders
of a majority of the shares of Stock of the Company present in person or by
proxy and represented at a duly held shareholders' meeting. No Award shall be
granted pursuant to the Plan after May 6, 2006.
ARTICLE II
DEFINITIONS
The words and phrases defined in this Article shall have the meaning set
out in these definitions throughout the Plan, unless the context in which any
such word or phrase appears reasonably requires a broader, narrower, or
different meaning.
2.1 "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than
the Company) in an unbroken chain of corporations ending with the Company if, at
the time of the action or transaction, each of the corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
action or transaction, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
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2.2 "AWARD" means an award or grant made to an Employee under Articles V
through IX herein.
2.3 "AWARD AGREEMENT" means the written agreement provided in connection
with an Award setting forth the terms and conditions of the Award. Such
Agreement may contain any other provisions that the Committee, in its sole
discretion, shall deem advisable which are not inconsistent with the terms of
the Plan.
2.4 "BOARD OF DIRECTORS" or "Board" means the board of directors of the
Company.
2.5 "CHANGE OF CONTROL" means the happening of any of the following
events:
(i) the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation or the Stock is converted into other securities, cash or other
property in connection with such merger or consolidation;
(ii) the Company is recapitalized in such a manner that shares of
Stock are converted into or exchanged for other securities of the Company;
(iii) the Company sells or otherwise disposes of substantially all
its assets to another person, corporation or entity;
(iv) over 30% of the then outstanding Stock is acquired by another
corporation in exchange for stock (or stock and securities) of such
corporation; or
(v) over 30% of the then outstanding Stock is acquired in a single
transaction or a series of related transactions.
2.6 "CODE" means the Internal Revenue Code of 1986, as amended.
2.7 "COMMITTEE" means the Compensation Committee of the Board of Directors
or such other committee designated by the Board of Directors. The Committee
shall at all times consist solely of two or more members of the Board of
Directors, and all members of the Committee shall be both Disinterested Persons
and Outside Directors. Any member who no longer qualifies as a Disinterested
Person or an Outside Director shall automatically be removed from the Committee.
2.8 "COMPANY" means Kent Electronics Corporation, a Texas corporation.
2.9 "DISINTERESTED PERSON" means a "disinterested person" as that term is
defined in Rule 16b-3 under the Exchange Act.
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2.10 "EMPLOYEE" means a key employee employed by the Company or any
Affiliate to whom an Award is granted.
2.11 "FAIR MARKET VALUE" means, on a particular date or on the most recent
prior date on which Stock was traded, the reported closing price per share of
the Stock of the Company as reported by the New York Stock Exchange, Inc. or
other principal exchange or market on which the Stock is traded; in the event
the Stock of the Company is not publicly traded at the time a determination of
its value is required to be made hereunder, the determination of its Fair Market
Value shall be made by the Committee in such manner as it deems appropriate.
2.12 "INCENTIVE OPTION" means an option granted under the Plan which is
designated as an "Incentive Option" and satisfies the requirements of Section
422 of the Code.
2.13 "NONQUALIFIED OPTION" means an option granted under the Plan other
than an Incentive Option.
2.14 "OPTION" means an Incentive Option or a Nonqualified Option granted
under the Plan to purchase shares of Stock.
2.15 "OUTSIDE DIRECTOR" means a member of the Board of Directors serving on
the Committee who satisfies the requirements of Section 162(m) of the Code.
2.16 "PERFORMANCE GRANT" means an Award, denominated in cash or in Stock,
made to an Employee under Article VI which is intended to qualify as performance
based compensation as defined in Section 162(m) of the Code and regulations
issued thereunder.
2.17 "PLAN" means the Kent Electronics Corporation 1996 Employee Incentive
Plan, as set out in this document and as it may be amended from time to time.
2.18 "STOCK" means the voting common stock of the Company, without par
value, or in the event that the outstanding shares of voting common stock are
later changed into or exchanged for a different class of stock or securities of
the Company or another corporation, that other stock or security.
2.19 "10% SHAREHOLDER" means an individual who, at the time the Option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of any Affiliate. An individual shall
be considered as owning the stock owned, directly or indirectly, by or for his
brothers and sisters (whether by whole or half blood), spouse, ancestors, and
lineal descendants; and stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its shareholders, partners or beneficiaries.
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ARTICLE III
ELIGIBILITY
The individuals who shall be eligible to receive Awards shall be those
Employees as the Committee shall determine from time to time. However, no
non-Employee director shall be eligible to receive any Award or to receive
stock, stock options, or stock appreciation rights under any other plan of the
Company or any of its Affiliates, if receipt of it would cause the individual
not to be a Disinterested Person or Outside Director.
ARTICLE IV
GENERAL PROVISIONS RELATING TO AWARDS
4.1 AUTHORITY TO GRANT AWARDS. The Committee may grant Awards to those
Employees as it shall determine from time to time under the terms and conditions
of the Plan. Subject only to any applicable limitations set out in the Plan,
the amount of any Award and the number of shares of Stock to be covered by any
Award to be granted to an Employee shall be as determined by the Committee.
Each Award shall be evidenced by an Award Agreement which shall set forth the
terms and conditions of the Award. Except as otherwise provided herein, no
Award granted pursuant to the Plan shall vest in whole or in part in less than
six months after the date the Award is granted. An Employee who has received an
Award in any year may receive an additional Award or Awards in the same year or
in subsequent years. The Committee may, in its discretion, waive or accelerate
any restrictions to which the Awards may be subject; provided, however, that the
Committee may not alter, amend or modify pre-established performance based
criteria to which any Award may be subject.
4.2 DEDICATED SHARES. The total number of shares of Stock with respect to
which Awards may be granted under the Plan shall be 1,600,000 shares. The
shares of Stock may be treasury shares or authorized but unissued shares. The
numbers of shares of Stock stated in this Section 4.2 shall be subject to
adjustment in accordance with the provisions of Section 4.5.
In the event that any Award shall expire or terminate for any reason or any
Award is surrendered, the shares of Stock allocable to that Award may again be
subject to an Award under the Plan. Upon approval by the shareholders of the
Plan, the Committee will not issue any additional stock options under the
Company's Amended and Restated 1987 Stock Option Plan.
4.3 NON-TRANSFERABILITY. Except as set forth below, the Awards granted
hereunder shall not be transferable by the Employee otherwise than by will or
operation of the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder.
During the Employee's lifetime, Awards granted hereunder shall be
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exercisable only by the Employee. The Committee may grant Awards that are
transferable, without payment of consideration, to immediate family members of
the Employee or to trusts or partnerships for such family members; the
Committee may also amend outstanding Awards to provide for such transferability.
4.4 REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any Stock under any Award if issuing that Stock would constitute or result
in a violation by the Employee or the Company of any provision of any law,
statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, the Company shall not be required to issue any Stock
unless the Committee has received evidence satisfactory to it to the effect that
the holder of that Award will not transfer the Stock except in accordance with
applicable law, including receipt of an opinion of counsel satisfactory to the
Company to the effect that any proposed transfer complies with applicable law.
The determination by the Committee on this matter shall be final, binding and
conclusive. The Company may, but shall in no event be obligated to, register
any Stock covered by the Plan pursuant to applicable securities laws of any
country or any political subdivision. In the event the Stock issuable pursuant
to an Award is not registered, the Company may imprint on the certificate
evidencing the Stock any legend that counsel for the Company considers necessary
or advisable to comply with applicable law. The Company shall not be obligated
to take any other affirmative action in order to cause the exercise of, or the
issuance of shares under, an Award to comply with any law or regulation of any
governmental authority.
4.5 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of the Plan
and the Awards granted hereunder shall not affect 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 bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Stock or the rights thereof, 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 similar character or otherwise.
In the event of any change in the outstanding shares of Stock of the
Company by reason of any stock split, stock dividend, split-up, split-off,
spin-off, recapitalization, merger, consolidation, liquidation, rights offering,
share offering, reorganization, combination or exchange of shares, a sale by the
Company of all or part of its assets, any distribution to shareholders other
than a normal cash dividend, or other extraordinary or unusual event, if the
Committee shall determine, in its discretion, that such change equitably
requires an adjustment in the terms of any Award or the number of shares of
Stock available for Awards, such adjustment may be made by the Committee subject
to Section 162(m) of the Code, and shall be final, conclusive and binding for
all purposes of the Plan.
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4.6 TERMINATION OF EMPLOYMENT. Except as specifically provided herein,
the Committee shall set forth in the Award Agreement the status of any Award or
shares of Stock underlying any Award upon the termination of the Employee's
employment for any reason.
4.7 ELECTION UNDER SECTION 83(b) OF THE CODE. No Employee shall exercise
the election permitted under Section 83(b) of the Code without written approval
of the Committee. Any Employee doing so shall forfeit all Awards issued to the
Employee under the Plan.
ARTICLE V
OPTIONS
5.1 TYPE OF OPTION. The Committee shall specify whether a given option
shall constitute an Incentive Option or a Nonqualified Option.
5.2 OPTION PRICE. The price per share at which shares of Stock may be
purchased under an Incentive Option shall not be less than the greater of: (a)
100% of the Fair Market Value per share of Stock on the date the Option is
granted or (b) the per share par value of the Stock on the date the Option is
granted. The Committee in its discretion may provide that the price per share
at which shares of Stock may be purchased shall be more than 100% of Fair Market
Value per share. In the case of any 10% Shareholder, the price per share at
which shares of Stock may be purchased under an Incentive Option shall not be
less than the greater of: (a) 110% of the Fair Market Value per share of Stock
on the date the Incentive Option is granted or (b) the per share par value of
the Stock on the date the Incentive Option is granted.
The price per share at which shares of Stock may be purchased under a
Nonqualified Option shall not be less than the greater of: (a) 100% of the Fair
Market Value per share of Stock on the date the Option is granted or (b) the per
share par value of the Stock on the date the Option is granted. The Committee
in its discretion may provide that the price per share at which shares of Stock
may be purchased shall be more than 100% of Fair Market Value per share.
5.3 DURATION OF OPTIONS. No Option shall be exercisable after the
expiration of ten years from the date the Option is granted. In the case of a
10% Shareholder, no Incentive Option shall be exercisable after the expiration
of five years from the date the Incentive Option is granted.
5.4 AMOUNT EXERCISABLE. Each Option may be exercised from time to time,
in whole or in part, in the manner and subject to the conditions the Committee,
in its discretion, may provide in the Award Agreement, as long as the Option is
valid and outstanding. To the extent that the aggregate Fair Market Value
(determined as of the time an Incentive Option is granted) of the Stock with
respect to which Incentive Options first become exercisable by the optionee
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during any calendar year (under the Plan and any other incentive stock option
plan(s) of the Company or any Affiliate) exceeds $100,000, the Incentive Options
shall be treated as Nonqualified Options. In making this determination,
Incentive Options shall be taken into account in the order in which they were
granted.
5.5 EXERCISE OF OPTIONS. Subject to the tax withholding requirements set
forth in Section 9.3 herein, options shall be exercised by the delivery of
written notice to the Company setting forth the number of shares with respect to
which the Option is to be exercised and the address to which the certificates
representing shares of Stock issuable upon the exercise of such Option shall be
mailed, together with: (a) cash, check, certified check, bank draft, or postal
or express money order payable to the order of the Company for an amount equal
to the Option Price of the shares, (b) Stock at its Fair Market Value equal to
the Option Price of the shares on the date of exercise, and/or (c) any other
form of payment which is acceptable to the Committee. In order to enable an
Employee to have sufficient funds to pay the Option Price, the Committee may, to
the extent permitted by law, cause the Company to loan funds to the Employee, to
guarantee a loan by a third party to the Employee or to take such other action
as the Committee deems appropriate. The proceeds of the sale of shares subject
to the Options are to be added to the general funds of the Company and used for
its corporate purposes. No fractional shares shall be issued under the Plan.
Subject to the tax withholding requirements set forth in Section 9.3
herein, as promptly as practicable after receipt of written notification and
payment, the Company or a stock transfer agent of the Company shall deliver to
the Employee certificates for the number of shares with respect to which the
Option has been exercised, issued in the Employee's name. If shares of Stock
are used in payment, the Fair Market Value of the shares of Stock tendered must
be less than the Option Price of the shares being purchased, and the difference
must be paid by check. Delivery shall be deemed effected for all purposes when
the Company or a stock transfer agent of the Company shall have deposited the
certificates in the United States mail, addressed to the optionee, at the
address specified by the Employee.
Whenever an Option is exercised by exchanging shares of Stock owned by the
Employee, the Employee shall deliver to the Company certificates registered in
the name of the Employee representing a number of shares of Stock legally and
beneficially owned by the Employee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates (with signature guaranteed
by the Company or a commercial bank or trust company or by a brokerage firm
having a membership on a registered national stock exchange). The delivery of
certificates upon the exercise of Options is subject to the condition that the
person exercising the Option provide the Company with the information the
Company might reasonably request pertaining to exercise, sale or other
disposition.
5.6 SUBSTITUTION OPTIONS. Options may be granted under the Plan from time
to time in substitution for stock options held by employees of other
corporations who are about to
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become employees of or affiliated with the Company or any Affiliate as the
result of a merger or consolidation of the employing corporation with the
Company or any Affiliate, or the acquisition by the Company or any Affiliate of
the assets of the employing corporation, or the acquisition by the Company or
any Affiliate of stock of the employing corporation as the result of which it
becomes an Affiliate of the Company. The terms and conditions of the
substitute Options granted may vary from the terms and conditions set out in
the Plan to the extent the Committee, at the time of grant, may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted.
5.7 NO RIGHTS AS STOCKHOLDER. No Employee shall have any rights as a
stockholder with respect to Stock covered by an Option until the date a stock
certificate is issued for the Stock.
5.8 LIMITATIONS. The maximum number of Options which may be awarded under
this Article V during the term of the Plan shall be 1,600,000 shares, and the
maximum number of Options which may be awarded to any Employee under this
Article V during the term of the Plan shall be 1,600,000 shares.
5.9 CHANGE IN CONTROL. On a date at least 30 days prior to the effective
date of a Change in Control, any limitations as to the amount exercisable each
year may be modified at the discretion of the Committee so that all Options from
and after such date shall, if the Committee in its discretion so determines, be
exercisable in full. In addition, with respect to any event described in
clauses (i) through (v) of the definition of Change in Control, either (a) after
the effective date of such Change in Control, each holder of an outstanding
Option shall be entitled, upon exercise of such Option, to receive, in lieu of
shares of Stock, shares of such stock or other securities of the Company or the
surviving or acquiring corporation or such other property at the same rate per
share as the holders of shares of Stock received pursuant to the Change in
Control, or (b) all outstanding Options may be canceled by the Board as of the
effective date of the Change in Control, provided that notice of such
cancellation shall be given to each holder of an Option and each holder of an
Option shall have the right to exercise such Options in full (without regard to
any limitations that might be set forth in the Award Agreement) during a 30-day
period preceding the effective date of the Change in Control.
ARTICLE VI
PERFORMANCE GRANTS
6.1 PERFORMANCE GRANTS AND ELIGIBILITY. The Committee, in its sole
discretion, may designate certain key Employees of the Company who are eligible
to receive a Performance Grant if certain pre-established performance goals are
met. In determining which Employees shall be eligible for a Performance Grant,
the Committee may, in its discretion, consider the nature of the Employee's
duties, past and potential contributions to the success of the Company
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and its Affiliates, and such other factors as the Committee deems relevant in
connection with accomplishing the purposes of the Plan.
6.2 ESTABLISHMENT OF PERFORMANCE GRANT. The Committee shall determine the
terms of the Performance Grant, if any, to be made to an Employee for such
period designated by the Committee (the "Performance Cycle").
6.3 CRITERIA FOR PERFORMANCE GOALS. The performance goals shall be
pre-established by the Committee in accordance with Section 162(m) of the Code
and regulations issued thereunder. Performance goals determined by the
Committee may be based upon, but are not limited to, net profits, operating
income, Stock price, earnings per share, sales and/or return on equity.
6.4 COMMITTEE CERTIFICATION. The Committee must certify in writing that a
performance goal has been met prior to payment to any Employee of the
Performance Grant by issuance of a certificate for Stock or payment in cash. If
the Committee certifies the entitlement of an Employee to the performance based
Performance Grant, the payment shall be made to the Employee subject to other
applicable provisions of the Plan, including but not limited to, all legal
requirements and tax withholding.
6.5 PAYMENT AND LIMITATIONS. Performance Grants shall be paid on or
before the 30th day following both (a) the end of the Performance Cycle and (b)
certification by the Committee that the performance goals and any other material
terms of the Performance Grant and the Plan have been satisfied, or as soon
thereafter as is reasonably practicable. The Performance Grant may be paid in
Stock, cash, or a combination of Stock and cash, in the sole discretion of the
Committee. If paid in whole or in part in Stock, the Stock shall be valued at
Fair Market Value as of the date the Committee directs payments to be made in
whole or in part in Stock. However, no fractional shares of Stock shall be
issued, and the balance due, if any, shall be paid in cash.
The maximum amount which may be paid to any Employee pursuant to one or
more Performance Grants under this Article VI shall not exceed $8 million per
year.
6.6 TERMINATION OF EMPLOYMENT DURING PERFORMANCE CYCLE. Unless the terms
of an employment agreement, severance agreement or the Award Agreement provide
otherwise, if an Employee's employment with the Company and all Affiliates
terminates during a Performance Cycle (other than in connection with or within
one year after a Change of Control), he shall not be entitled to any payment
under this Article VI for that Performance Cycle.
6.7 CHANGE IN CONTROL. Upon a Change in Control, all Performance Grants
shall become immediately payable to the fullest extent of the Award regardless
of whether the Performance Cycle (hereinafter defined) upon which it is based
has been completed.
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ARTICLE VII
ADMINISTRATION
The Plan shall be administered by the Committee. All questions of
interpretation and application of the Plan and Awards granted thereunder shall
be subject to the determination of the Committee. A majority of the members of
the Committee shall constitute a quorum. All determinations of the Committee
shall be made by a majority of its members. Any decision or determination
reduced to writing and signed by a majority of the members shall be as effective
as if it had been made by a majority vote at a meeting properly called and held.
The Plan shall be administered in such a manner as to permit the Options granted
under it which are designated to be Incentive Options to qualify as Incentive
Options. In carrying out its authority under the Plan, the Committee shall have
full and final authority and discretion, including but not limited to the
following rights, powers and authorities, to:
(a) determine the Employees to whom and the time or times at which
Awards will be made,
(b) determine the number of shares and the purchase price of Stock or
dollar amount of cash covered in each Award, subject to the terms of the
Plan,
(c) determine the terms, provisions and conditions of each Award,
which need not be identical,
(d) define the effect, if any, on an Award of the death, disability,
retirement, or termination of employment of the Employee,
(e) proscribe, amend and rescind rules and regulations relating to
administration of the Plan, and
(f) make all other determinations and take all other actions deemed
necessary, appropriate, or advisable for the proper administration of the
Plan.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of the Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.
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ARTICLE VIII
AMENDMENT OR TERMINATION OF PLAN
The Board may amend, terminate or suspend the Plan at any time, in its sole
and absolute discretion; provided, however, that to the extent the Board desires
for any amendment to the Plan to maintain qualification of the Plan under Rule
16b-3 promulgated under the Exchange Act, no amendment that would (a) materially
increase the number of shares of Stock that may be issued under the Plan, (b)
materially modify the requirements as to eligibility for participation in the
Plan, or (c) otherwise materially increase the benefits accruing to participants
under the Plan, shall be made without the approval of the Company's
shareholders; provided further, however, that to the extent required to maintain
the status of any Incentive Option under the Code, no amendment that would (a)
change the aggregate number of shares of Stock which may be issued under
Incentive Options, (b) change the class of employees eligible to receive
Incentive Options, or (c) decrease the Option price for Incentive Options below
the Fair Market Value of the Stock at the time it is granted, shall be made
without the approval of the Company's shareholders. Subject to the preceding
sentence, the Board shall have the power to make any changes in the Plan and in
the regulations and administrative provisions under it or in any outstanding
Incentive Option as in the opinion of counsel for the Company may be necessary
or appropriate from time to time to enable any Incentive Option granted under
the Plan to continue to qualify as an incentive stock option or such other stock
option as may be defined under the Code so as to receive preferential federal
income tax treatment.
ARTICLE IX
MISCELLANEOUS
9.1 NO ESTABLISHMENT OF A TRUST FUND. No property shall be set aside nor
shall a trust fund of any kind be established to secure the rights of any
Employee under the Plan. All Employees shall at all times rely solely upon the
general credit of the Company for the payment of any benefit which becomes
payable under the Plan.
9.2 NO EMPLOYMENT OBLIGATION. The granting of any Award shall not
constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ any
Employee. The right of the Company or any Affiliate to terminate the employment
of any person shall not be diminished or affected by reason of the fact that an
Award has been granted to him.
9.3 TAX WITHHOLDING. The Company or any Affiliate shall be entitled to
deduct from other compensation payable to each Employee any sums required by
federal, state, or local tax law to be withheld with respect to the grant or
exercise of an Option, the cash payment of a Performance Grant, or issuance of
Stock in payment of a Performance Grant. In the alternative,
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the Company may require the Employee (or other person exercising the Option or
receiving Stock) to pay the sum directly to the employer corporation. If the
Employee (or other person exercising the Option or receiving the Stock) is
required to pay the sum directly, payment in cash or by check of such sums for
taxes shall be delivered (a) on the date of exercise, or (b) on the date of
payment of all or part of a Performance Grant in Stock, whichever is
applicable. The Company shall have no obligation upon exercise of any Option,
or notice of the Committee's decision to pay all or part of the Performance
Grant in Stock, until payment has been received, unless withholding (or offset
against a cash payment) as of or prior to the date of exercise or issuance of
Stock is sufficient to cover all sums due with respect to that exercise or
issuance of Stock. The Company and its Affiliates shall not be obligated to
advise an Employee of the existence of the tax or the amount which the employer
corporation will be required to withhold.
9.4 FORFEITURE FOR DISHONESTY. Notwithstanding anything to the contrary
in the Plan, if the Committee finds, after full consideration of the facts
presented on behalf of both the Company and the Employee, that the Employee has
been engaged in fraud, embezzlement, theft, commission of a felony or dishonesty
in the course of his employment by the Company which damaged the Company or an
Affiliate, or for disclosing trade secrets of the Company or an Affiliate, the
Employee shall forfeit all unexercised Options and all exercised Options under
which the Company has not yet delivered the certificates. The decision of the
Committee shall be final. No decision of the Committee, however, shall affect
the finality of the discharge of such Employee by the Company in any manner.
9.5 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. With
respect to administration of the Plan, the Company shall indemnify each present
and future member of the Committee and the Board of Directors, and each member
of the Committee and the Board of Directors shall be entitled without further
act on his part to indemnity from the Company to the fullest extent allowed
under the Texas Business Corporation Act.
9.6 GENDER. If the context requires, words of one gender when used in the
Plan shall include the others and words used in the singular or plural shall
include the other.
9.7 HEADINGS. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of the Plan and shall
not be used in construing the terms of the Plan.
9.8 OTHER COMPENSATION PLANS. The adoption of the Plan shall not preclude
the Company from establishing any other forms of incentive or other compensation
for employees of the Company or any Affiliate.
9.9 OTHER AWARDS. The grant of an Award shall not confer upon the
Employee the right to receive any future or other Awards under the Plan, whether
or not Awards may be
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granted to similarly situated Employees, or the right to receive future Awards
upon the same terms or conditions as previously granted.
9.10 GOVERNING LAW. The provisions of the Plan shall be construed,
administered, and governed under the laws of the State of Texas.
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