EXHIBIT 10.9
ALLSTAR SYSTEMS, INC.
1996 INCENTIVE STOCK PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF JULY 1, 1997
1. PURPOSE OF THE PLAN
This Allstar Systems, Inc. 1996 Incentive Stock Plan is intended to
provide a means through which the Company and its Subsidiaries may attract able
persons to enter into the employ of the Company or its Subsidiaries and to
promote the interests of the Company by providing the employees and consultants
of the Company or any Subsidiary corporation, who are largely responsible for
the management, growth and protection of the business of the Company, with a
proprietary interest in the Company, thereby strengthening their concern for the
welfare of the Company and their desire to remain in its employ. A further
purpose of the Plan is to provide such persons with additional incentive and
reward opportunities to enhance the profitable growth of the Company.
The Plan was originally adopted by the Board of Directors and approved
by the stockholders effective September 30, 1996, and is hereby amended and
restated effective July 1, 1997.
2. DEFINITIONS
As used in the Plan, the following definitions apply to the terms
indicated below:
(a) "BOARD OF DIRECTORS" or "BOARD" shall mean the Board of
Directors of Allstar Systems, Inc.
(b) "CAUSE," when used in connection with the termination of a
Participant's Employment, shall mean the termination of the Participant's
Employment by the Company by reason of (i) the conviction of the Participant by
a court of competent jurisdiction as to which no further appeal can be taken of
a crime involving moral turpitude; (ii) the proven commission by the Participant
of an act of fraud upon the Company; (iii) the willful and proven
misappropriation of any funds or property of the Company by the Participant;
(iv) the willful, continued and unreasonable failure by the Participant to
perform material duties assigned to him; (v) the knowing engagement by the
Participant in any direct, material conflict of interest with the Company
without compliance with the Company's conflict of interest policy, if any, then
in effect; (vi) the knowing engagement by the Participant, without the written
approval of the Board, in any activity which competes with the business of the
Company or which would result in a material injury to the business, reputation
or goodwill of the Company; or (vii) the knowing engagement in any activity
which would constitute a material violation of the provisions of the Company's
Policies and Procedures Manual, if any, then in effect.
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(c) "CASH BONUS" shall mean an award of a bonus payable in cash
pursuant to Section 11 hereof.
(d) "CHANGE IN CONTROL" shall mean:
(i) a "change in control" of the Company, as that term is
contemplated in the federal securities laws; or
(ii) the occurrence of any of the following events:
(1) any Person becomes, after the effective date
of this Plan, the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly,
of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding
securities; provided, that the Board of Directors (as
constituted immediately prior to such person becoming such a
beneficial owner) may determine, in its sole discretion, that
a Change in Control has not occurred; and provided further,
that the acquisition of additional voting securities, after
the effective date of this Plan, by any Person who is, as of
the effective date of this Plan, the beneficial owner,
directly or indirectly, of 30% or more of the combined voting
power of the Company's then outstanding securities, shall not
constitute a "Change in Control" of the Company for purposes
of this Section 2(d).
(2) a majority of individuals who are nominated
by the Board of Directors for election to the Board of
Directors on any date, fail to be elected to the Board of
Directors as a direct or indirect result of any proxy fight or
contested election for positions on the Board of Directors; or
(3) the Board of Directors determines in its
sole and absolute discretion that there has been a change in
control of the Company.
(e) "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time. Reference in the Plan to any Section of the Code
shall be deemed to include any amendments or successor provisions to any Section
and any treasury regulations thereunder.
(f) "COMMITTEE" shall mean a committee appointed by the Board
consisting of not less than two directors serving on the Board who fulfill the
"non-employee director" requirements of Rule 16b-3 under the Exchange Act and
the "outside director" requirements of Section 162(m) of the Code. Without
limitation, the Committee may be the Compensation Committee of the Board or such
other committee, provided that the requirements of the previous sentence are
satisfied. The Board shall have the power to fill vacancies on the Committee
arising by resignation, death, removal or otherwise. The Board, in its sole
discretion, may bifurcate the powers and duties of the Committee among one or
more separate committees, or retain all powers and duties of the Committee in a
single Committee. The members of the Committee shall serve at the discretion of
the Board.
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(g) "COMMON STOCK" shall mean the Company's common stock, par
value $.01 per share.
(h) "COMPANY" shall mean Allstar Systems, Inc., a Delaware
corporation, and each of its Subsidiaries, and its successors.
(i) "CONSULTANT" shall mean any person who is engaged by the
Company or any Subsidiary to render consulting services and is compensated for
such services.
(j) "COVERED EMPLOYEE" shall mean a named executive officer who is
one of the group of covered employees as defined in Section 162(m) of the Code
and Treasury Regulation ss. 1.162-27(c) (or its successor).
(k) "DISABILITY" shall mean a permanent and total disability, as
defined in Section 22(e)(3) of the Code, of the Participant as determined by the
Committee in its discretion exercised in good faith.
(l) "EMPLOYEE" shall mean any person who is an employee of the
Company (or any Parent or Subsidiary) within the meaning of Section 3401(c) of
the Code and the applicable interpretive authority thereunder.
(m) "EMPLOYMENT" shall mean employment as an officer or common law
employee by the Company or any Parent or Subsidiary, or by any corporation
issuing or assuming an Incentive Award in any transaction described in Section
424(a) of the Code, or by a parent corporation or a subsidiary corporation of
such corporation issuing or assuming such Incentive Award, as the
parent-subsidiary relationship shall be determined at the time of the corporate
action described in Section 424(a) of the Code. In this regard, neither the
transfer of a Participant from Employment by the Company to Employment by any
Parent or Subsidiary, nor the transfer of a Participant from Employment by any
Parent or Subsidiary to Employment by the Company, shall be deemed to be a
termination of Employment of the Participant. The term "Employment" for purposes
of the Plan will also include compensatory services performed by a Consultant
for the Company or any Parent or Subsidiary.
(n) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(o) "FAIR MARKET VALUE" of a share of Common Stock on any date
shall be (i) the closing sales price on the immediately preceding business day
of a share of Common Stock as reported on the principal securities exchange on
which shares of Common Stock are then listed or admitted to trading or (ii) if
not so reported, the average of the closing bid and asked prices for a share of
Common Stock on the immediately preceding business day as quoted on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or (iii)
if not quoted on NASDAQ, the average of the closing bid and asked prices for a
share of Common Stock as quoted by the National Quotation Bureau's "Pink Sheets"
or the National Association of
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Securities Dealers' OTC Bulletin Board System. If the price of a share of Common
Stock shall not be so reported, the Fair Market Value of a share of Common Stock
shall be determined by the Committee in its absolute discretion.
(p) "INCENTIVE AGREEMENT" shall mean a written agreement entered
into between the Company and the Participant setting forth the terms and
conditions pursuant to which an Incentive Award is granted under the Plan.
(q) "INCENTIVE AWARD" shall mean an Option, a share of Restricted
Stock, a Performance Award, a share of Phantom Stock, a Stock Bonus or Cash
Bonus granted pursuant to the terms of the Plan.
(r) "INCENTIVE STOCK OPTION" shall mean an Option which is an
"incentive stock option" within the meaning of Section 422 of the Code and which
is identified as an Incentive Stock Option in the Incentive Agreement by which
it is evidenced.
(s) "ISSUE DATE" shall mean the date established by the Committee
on which certificates representing shares of Restricted Stock shall be issued by
the Company pursuant to the terms of Section 7(d) hereof.
(t) "NON-QUALIFIED STOCK OPTION" shall mean an Option which is not
an Incentive Stock Option and which is identified as a Non-Qualified Stock
Option in the Incentive Agreement by which it is evidenced.
(u) "OPTION" shall mean an option to purchase shares of Common
Stock of the Company granted pursuant to Section 6 hereof. Each Option shall be
identified as either an Incentive Stock Option or a Non-Qualified Stock Option
in the Incentive Agreement by which it is evidenced.
(v) "PARENT" shall mean a "parent corporation" of the Company,
whether now or hereafter existing, as defined in Section 424(e) of the Code.
(w) "PARTICIPANT" shall mean an Employee or Consultant who is
eligible to participate in the Plan and to whom an Incentive Award is granted
under the Plan, and, upon his death, his successors, heirs, executors and
administrators, as the case may be, to the extent permitted hereby.
(x) "PERFORMANCE AWARD" shall mean an award payable in cash or
Common Stock, which award is granted pursuant to Section 8 hereof and subject to
the terms and conditions contained herein.
(y) "PERFORMANCE-BASED EXCEPTION" shall mean the performance-based
exception from the tax deductibility limitations of Section 162(m) of the Code,
as prescribed in Code Section 162(m) and Treasury Regulation Section 1.162-27(e)
(or its successor).
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(z) "PERSON" shall mean a "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act, and the rules and regulations in
effect from time to time thereunder.
(aa) a share of "PHANTOM STOCK" shall represent the right to
receive in cash the Fair Market Value of a share of Common Stock of the Company,
which right is granted pursuant to Section 9 hereof and subject to the terms and
conditions contained herein.
(bb) "PLAN" shall mean the Allstar Systems, Inc. 1996 Incentive
Stock Plan, as amended and restated effective as of July 1, 1997, and as it may
be further amended from time to time.
(cc) a share of "RESTRICTED STOCK" shall mean a share of Common
Stock which is granted pursuant to the terms of Section 7 hereof and which is
subject to the restrictions set forth in Section 7(c) hereof for so long as such
restrictions continue to apply to such share.
(dd) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
(ee) "STOCK BONUS" shall mean a grant of a bonus payable in shares
of Common Stock pursuant to Section 10 hereof.
(ff) "SUBSIDIARY" shall mean any corporation in which at the
pertinent time the Company owns, directly or indirectly, stock vested with more
than 50% of the total combined voting power of all classes of stock of such
corporations within the meaning of Section 424(f) of the Code.
(gg) "VESTING DATE" shall mean the date established by the
Committee on which a share of Restricted Stock or Phantom Stock may vest.
3. STOCK SUBJECT TO THE PLAN
Under the Plan, the Committee may grant as Incentive Awards to
Participants: (a) Options; (b) shares of Restricted Stock; (c) Performance
Awards; (d) shares of Phantom Stock; (e) Stock Bonuses; and (f) Cash Bonuses.
The Committee may grant Options, shares of Restricted Stock,
Performance Awards, shares of Phantom Stock and Stock Bonuses under the Plan
with respect to a number of shares of Common Stock that in the aggregate at any
time does not exceed 417,500 shares of Common Stock, subject to adjustment
pursuant to Section 12 hereof. The grant of a Cash Bonus shall not reduce the
number of shares of Common Stock with respect to which Options, shares of
Restricted Stock, Performance Awards, shares of Phantom Stock or Stock Bonuses
may be granted pursuant to the Plan.
Unless the Committee designates that an Incentive Award is not intended
to comply with the Performance-Based Exception, the maximum number of shares of
Common Stock that may
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be subject to Incentive Awards granted to any one Covered Employee during any
calendar year shall be 100,000 shares of Common Stock, subject to adjustment
under Section 12 hereof. The limitation set forth in the preceding sentence
shall be applied in a manner which will permit compensation generated in
connection with the exercise of Options and the payment of Performance Awards
(or other Incentive Awards if applicable) to constitute "qualified
performance-based compensation" for purposes of Section 162(m) of the Code,
including, without limitation, counting against such maximum number of shares,
to the extent required under Section 162(m) of the Code, any shares subject to
Options that are canceled or repriced.
If any outstanding Option expires, terminates or is canceled or
forfeited for any reason, the shares of Common Stock subject to the unexercised
portion of such Option shall again be available for grant under the Plan. If any
shares of Restricted Stock or Phantom Stock, or any shares of Common Stock
granted as a Performance Award or a Stock Bonus are forfeited, terminated or
canceled for any reason, such shares shall again be available for grant under
the Plan. A payout of Phantom Stock or a Performance Award in cash shall
restore, on a one share for one share basis, the number of shares of Common
Stock reserved for issuance hereunder.
The Common Stock available for issuance or transfer under the Plan
shall be made available from shares now or hereafter (i) held in the treasury of
the Company, (ii) authorized but unissued shares, or (iii) shares to be
purchased or acquired by the Company. No fractional shares shall be issued under
the Plan; payment for fractional shares shall be made in cash.
4. ADMINISTRATION OF THE PLAN
(a) Authority of the Committee. Except as may be limited by law
and subject to the provisions herein, the Committee shall have full power to (i)
select Employees and Consultants to participate in the Plan; (ii) determine the
sizes, duration and types of Incentive Awards; (iii) determine the terms and
conditions of Incentive Awards and Incentive Agreements; (iv) determine whether
any shares subject to Incentive Awards will be subject to any restrictions on
transfer; (v) construe and interpret the Plan and any Incentive Agreement or
other agreement entered into under the Plan; and (vi) establish, amend, or waive
rules for the Plan's administration. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of the
Plan.
(b) Meetings. The Committee shall designate a chairman from among
its members who shall preside at its meetings, and shall designate a secretary,
without regard to whether that person is a member of the Committee, who shall
keep the minutes of the proceedings and the records, documents, and data
pertaining to its administration of the Plan. Meetings shall be held at such
times and places as shall be determined by the Committee, and the Committee may
hold telephonic meetings. The Committee may take any action otherwise proper
under the Plan by the affirmative vote, taken with or without a meeting, of a
majority of its members. The Committee may authorize any one or more of their
members or any officer of the Company to execute and deliver documents on behalf
of the Committee.
(c) Decisions Binding. All determinations and decisions made by
the Committee
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shall be made in its discretion pursuant to the provisions of the Plan, and
shall be final, conclusive and binding on all persons including the Company, its
shareholders, employees, Participants, and their estates and beneficiaries. The
Committee's determinations under the Plan and with respect to any individual
Incentive Award need not be uniform and may be made selectively among Incentive
Awards and Participants, whether or not such Incentive Awards are similar or
such Participants are similarly situated.
(d) Expenses of Committee. The Committee may employ legal counsel,
including, without limitation, independent legal counsel and counsel regularly
employed by the Company, consultants and agents as the Committee may deem
appropriate for the administration of the Plan. The Committee may rely upon any
opinion or computation received from any such counsel, consultant or agent. All
expenses incurred by the Committee in interpreting and administering the Plan,
including, without limitation, meeting expenses and professional fees, shall be
paid by the Company.
(e) Modification of Outstanding Incentive Awards. The Committee
may, in its absolute discretion, (i) accelerate the date on which any Option
granted under the Plan becomes exercisable, (ii) extend the date on which any
Option ceases to be exercisable, (iii) accelerate the Vesting Date or Issue
Date, or waive any condition imposed pursuant to Section 7(b) hereof, with
respect to any share of Restricted Stock, and (iv) accelerate the Vesting Date
or waive any condition imposed pursuant to Section 9 hereof with respect to any
share of Phantom Stock.
(f) Surrender of Previous Incentive Awards. The Committee may, in
its absolute discretion, grant Incentive Awards to Participants on the condition
that such Participants surrender to the Committee for cancellation such other
Incentive Awards (including, without limitation, Incentive Awards with higher
exercise prices) as the Committee directs. Notwithstanding Section 3 hereof,
Incentive Awards granted on the condition precedent of surrender of outstanding
Incentive Awards shall not count against the limits set forth in Section 3 until
such time as such Incentive Awards are surrendered.
(g) Leaves of Absence. Except as provided in Section 6(e)(4)
hereof, whether an authorized leave of absence, or absence in military or
government service, shall constitute termination of Employment shall be
determined by the Committee in its discretion exercised in accordance with any
applicable law.
(h) Indemnification. Each person who is or was a member of the
Committee shall be indemnified by the Company against and from any damage, loss,
liability, cost and expense that may be imposed upon or reasonably incurred by
him in connection with or resulting from any claim, action, suit, or proceeding
to which he may be a party or in which he may be involved by reason of any
action taken or failure to act under the Plan, except for any such act or
omission constituting willful misconduct or gross negligence. Such person shall
be indemnified by the Company for all amounts paid by him in settlement thereof,
with the Company's approval, or paid by him in satisfaction of any judgment in
any such action, suit, or proceeding against him, provided he shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of
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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.
5. ELIGIBILITY
The persons who shall be eligible to receive Incentive Awards pursuant
to the Plan shall be (a) those Employees who are largely responsible for the
management, growth and protection of the business of the Company or any
Subsidiary (including officers of the Company, whether or not they are directors
of the Company) and (b) any Consultant, as the Committee, in its absolute
discretion, shall select from time to time; provided, however, Incentive Stock
Options may only be granted to Employees.
6. OPTIONS
The Committee may grant Options pursuant to the Plan, which Options
shall be evidenced by Incentive Agreements in such form as the Committee shall
from time to time approve. Options shall also be subject to the following terms
and conditions:
(a) Identification of Options
All Options granted under the Plan shall be clearly identified in the
Incentive Agreement evidencing such Options as either Incentive Stock Options or
as Non-Qualified Stock Options.
(b) Exercise Price
The exercise price per share of Common Stock under each Option shall be
determined by the Committee; provided, however, that in the case of an Incentive
Stock Option, such exercise price shall not be less than 100% of the Fair Market
Value per share on the date the Incentive Stock Option is granted. To the extent
that a Non-Qualified Stock Option is intended to qualify for the
Performance-Based Exception, the exercise price shall not be less than 100% of
the Fair Market Value per share on the date the Option is granted. The Option
exercise price shall be subject to (i) the restrictions prescribed in Section
6(d) hereof and (ii) the adjustments provided in Section 12 hereof.
(c) Term and Exercise of Options
(1) Each Option shall be exercisable on such date or
dates, during such period and for such number of shares of Common Stock
as shall be determined by the Committee on the day on which such Option
is granted and set forth in the Incentive Agreement evidencing the
Option; provided, however, that (A) subject to the restrictions
provided in Section 6(d) hereof, no Option shall be exercisable after
the expiration of ten years from the date such Option was granted and
(B) no Option shall be exercisable until six months after the date of
grant; and, provided, further, that each Option shall be
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subject to earlier termination, expiration or cancellation as provided
in the Plan or the Incentive Agreement.
(2) Each Option shall be exercisable in whole or in part
with respect to whole shares of Common Stock. The partial exercise of
an Option shall not cause the expiration, termination or cancellation
of the remaining portion thereof. Upon the partial exercise of an
Option, the Incentive Agreement evidencing such Option shall be
returned to the Participant exercising such Option together with the
delivery of the certificates described in Section 6(c)(5) hereof.
(3) An Option shall be exercised by delivering notice to
the Company's principal office, to the attention of its Secretary, no
fewer than five business days in advance of the effective date of the
proposed exercise. Such notice shall be accompanied by the Incentive
Agreement evidencing the Option, shall specify the number of shares of
Common Stock with respect to which the Option is being exercised and
the effective date of the proposed exercise, and shall be signed by the
Participant. The Participant may withdraw such notice at any time prior
to the close of business on the business day immediately preceding the
effective date of the proposed exercise, in which case such Incentive
Agreement shall be returned to the Participant. Payment for shares of
Common Stock purchased upon the exercise of an Option shall be made on
the effective date of such exercise either (i) in cash, by certified
check, bank cashier's check or wire transfer, (ii) subject to the
approval of the Committee, in shares of Common Stock owned by the
Participant and held for at least six months, as valued at their Fair
Market Value on the effective date of such exercise, (iii) subject to
the approval of the Committee, in the form of a "cashless exercise" (as
described below) or (iv) subject to the approval of the Committee, in
any combination of the foregoing. Any payment in shares of Common Stock
shall be effected by the delivery of such shares to the Secretary of
the Company, duly endorsed in blank or accompanied by stock powers duly
executed in blank, together with any other documents as the Secretary
of the Company shall require from time to time.
The cashless exercise of an Option shall be pursuant to
procedures whereby the Participant by written notice, directs (i) an
immediate market sale or margin loan respecting all or a part of the
shares of Common Stock to which he is entitled upon exercise pursuant
to an extension of credit by the Company to the Participant in the
amount of the exercise price, (ii) the delivery of the shares of Common
Stock directly from the Company to a brokerage firm, and (iii) delivery
of the exercise price from the sale or the margin loan proceeds from
the brokerage firm directly to the Company.
(4) Any Option granted under the Plan may be exercised by
a broker-dealer acting on behalf of a Participant if (i) the
broker-dealer has received from the Participant or the Company a duly
endorsed Incentive Agreement evidencing such Option and instructions
signed by the Participant requesting the Company to deliver the shares
of Common Stock subject to such Option to the broker-dealer on behalf
of the Participant and specifying the account into which such shares
should be deposited, (ii) adequate
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provision has been made with respect to the payment of any withholding
taxes due upon such exercise, and (iii) the broker-dealer and the
Participant have otherwise complied with Section 220.3(e)(4) of
Regulation T, 12 CFR Part 220.
(5) Certificates for shares of Common Stock purchased
upon the exercise of an Option shall be issued in the name of the
Participant and delivered to the Participant as soon as practicable
following the effective date on which the Option is exercised;
provided, however, that such delivery shall be effected for all
purposes when a stock transfer agent of the Company shall have
deposited such certificates in the United States mail, addressed to the
Participant.
(6) During the lifetime of a Participant each Option
granted to him shall be exercisable only by him, a broker-dealer acting
on behalf of such Participant pursuant to Section 6(c)(4) hereof, or by
his legal guardian in the event of his Disability. No Option shall be
assignable or transferable otherwise than by will or by the laws of
descent and distribution.
(d) Limitations on Grant of Incentive Stock Options
(1) The aggregate Fair Market Value of shares of Common
Stock with respect to which "incentive stock options" (within the
meaning of Section 422 without regard to Section 422(d) of the Code)
are exercisable for the first time by a Participant during any calendar
year under the Plan (and any other stock option plan of the Company, or
of its Parent or any Subsidiary) shall not exceed $100,000. Such Fair
Market Value shall be determined as of the date on which each such
Incentive Stock Option is granted. If such aggregate Fair Market Value
of shares of Common Stock underlying such Incentive Stock Options
exceeds $100,000, then Incentive Stock Options granted hereunder to
such Participant shall, to the extent and in the order required by
regulations promulgated under the Code (or any other authority having
the force of such regulations), automatically be deemed to be
Non-Qualified Stock Options, but all other terms and provisions of such
Incentive Stock Options shall remain unchanged. In the absence of such
regulations promulgated under the Code (and authority), or if such
regulations (or authority) require or permit a designation of the
options which shall cease to constitute Incentive Stock Options,
Incentive Stock Options shall, to the extent of such excess and in the
order in which they were granted, automatically be deemed to be
Non-Qualified Stock Options, but all other terms and provisions of such
Incentive Stock Options shall remain unchanged.
(2) No Incentive Stock Option may be granted to an
individual if, at the time of the proposed grant, such individual owns
stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of its Parent or
any Subsidiary, unless (i) the exercise price of such Incentive Stock
Option is at least 110% of the Fair Market Value of a share of Common
Stock at the time such Incentive Stock Option is granted and (ii) such
Incentive Stock Option is not exercisable after the expiration of five
years from the date such Incentive Stock Option is granted.
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(e) Effect of Termination of Employment
(1) Unless otherwise expressly provided in the Incentive
Agreement, if the Employment of a Participant with the Company shall
terminate for any reason other than Cause, Disability or the death of
the Participant (i) Options granted to such Participant, to the extent
that they were exercisable at the time of such termination, shall
remain exercisable until the expiration of one month after such
termination, on which date they shall expire, and (ii) Options granted
to such Participant, to the extent that they were not exercisable at
the time of such termination, shall expire at the close of business on
the date of such termination; provided, however, that no Option shall
be exercisable after the expiration of its term.
(2) Unless otherwise expressly provided in the Incentive
Agreement, if the Employment of a Participant with the Company shall
terminate as a result of the Disability or the death of the
Participant, then (i) Options granted to such Participant, to the
extent that they were exercisable at the time of such termination,
shall remain exercisable until the expiration of one year after such
termination, on which date they shall expire, and (ii) Options granted
to such Participant, to the extent that they were not exercisable at
the time of such termination, shall expire at the close of business on
the date of such termination; provided, however, that no Option shall
be exercisable after the expiration of its term.
(3) Unless otherwise expressly provided in the Incentive
Agreement, in the event of the termination of a Participant's
Employment for Cause, all outstanding Options granted to such
Participant shall expire, and shall not be exercisable, as of the
commencement of business on the date of such termination.
(4) Unless otherwise expressly provided in the Incentive
Agreement, a Participant's Employment with the Company shall be deemed
terminated if the Participant's leave of absence (including military or
such leave or other bona fide leave of absence) extends for more than
90 days and the Participant's continued Employment with the Company is
not guaranteed by contract or statute.
(f) Acceleration of Exercise Date Upon Change in Control
Upon the occurrence of a Change in Control, each Option granted under
the Plan and outstanding at such time shall become fully and immediately
exercisable and shall remain exercisable until its expiration, termination or
cancellation pursuant to the terms of the Plan.
7. RESTRICTED STOCK
The Committee may grant shares of Restricted Stock pursuant to the
Plan. Each grant of shares of Restricted Stock shall be evidenced by an
Incentive Agreement containing such terms and conditions as prescribed by the
Committee. Each grant of shares of Restricted Stock shall
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also be subject to the following terms and conditions:
(a) Issue Date and Vesting Date
At the time of the grant of shares of Restricted Stock, the Committee
shall establish an Issue Date or Issue Dates and a Vesting Date or Vesting Dates
with respect to such shares. The Committee may divide such shares into classes
and assign a different Issue Date and/or Vesting Date for each class. Except as
provided in Sections 7(c) and 7(f) hereof, upon the occurrence of the Issue Date
with respect to a share of Restricted Stock, a share of Restricted Stock shall
be issued in accordance with the provisions of Section 7(d) hereof. Provided
that all conditions to the vesting of a share of Restricted Stock imposed
pursuant to Section 7(b) hereof are satisfied, and except as provided in
Sections 7(c) and 7(f) hereof, upon the occurrence of the Vesting Date with
respect to a share of Restricted Stock, such share shall vest and the
restrictions of Section 7(c) hereof shall cease to apply to such share.
(b) Conditions to Vesting
At the time of the grant of shares of Restricted Stock, the Committee
may impose such restrictions or conditions, not inconsistent with the provisions
hereof, to the vesting of such shares as it, in its absolute discretion, deems
appropriate. By way of example and not by way of limitation, the Committee may
require, as a condition to the vesting of any class or classes of shares of
Restricted Stock, that (i) the Participant or the Company achieve certain
performance criteria, such criteria to be specified by the Committee at the time
of the grant of such shares and (ii) prohibiting an election by the Participant
under Section 83(b) of the Code.
(c) Restrictions on Transfer Prior to Vesting
Prior to the vesting of a share of Restricted Stock, no transfer of a
Participant's rights with respect to such share, whether voluntary or
involuntary, by operation of law or otherwise, shall vest the transferee with
any interest or right in or with respect to such share, but immediately upon any
attempt to transfer such rights, such share, and all of the rights related
thereto, shall be forfeited by the Participant and the transfer shall be of no
force or effect.
(d) Issuance of Certificates
(1) Except as provided in Sections 7(c) or 7(f) hereof,
reasonably promptly after the Issue Date with respect to shares of
Restricted Stock, the Company shall cause to be issued a stock
certificate, registered in the name of the Participant to whom such
shares were granted, evidencing such shares; provided, that the Company
shall not cause to be issued such a stock certificates unless it has
received a stock power duly endorsed in blank with respect to such
shares. Each such stock certificate shall bear the following legend:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF
STOCK REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS,
TERMS AND
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CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST
TRANSFER) CONTAINED IN THE ALLSTAR SYSTEMS, INC. 1996
INCENTIVE STOCK PLAN AND AN AGREEMENT ENTERED INTO BETWEEN THE
REGISTERED OWNER OF SUCH SHARES AND ALLSTAR SYSTEMS, INC. A
COPY OF THE PLAN AND AGREEMENT IS ON FILE IN THE OFFICE OF THE
SECRETARY OF ALLSTAR SYSTEMS, INC., 6401 SOUTHWEST FREEWAY,
HOUSTON, TEXAS 77074.
Such legend shall not be removed from the certificate evidencing such
shares until such shares vest pursuant to the terms hereof.
(2) Each certificate issued pursuant to Section 7(d)(1)
hereof, together with the stock powers relating to the shares of
Restricted Stock evidenced by such certificate, shall be held by the
Company. The Company shall issue to the Participant a receipt
evidencing the certificates held by it which are registered in the name
of the Participant.
(e) Consequences Upon Vesting
Upon the vesting of a share of Restricted Stock pursuant to the terms
hereof and the Incentive Agreement, the restrictions of Section 7(c) shall cease
to apply to such share. Reasonably promptly after a share of Restricted Stock
vests, the Company shall cause to be issued and delivered to the Participant to
whom such shares were granted, a certificate evidencing such share, free of the
legend set forth in Section 7(d)(1) hereof, together with any other property of
the Participant held by Company pursuant to Section 12(a) hereof; provided,
however, that such delivery shall be effected for all purposes when the Company
shall have deposited such certificate and other property in the United States
mail, addressed to the Participant.
(f) Effect of Termination of Employment
(1) If the Employment of a Participant with the Company
shall terminate for any reason other than Cause prior to the vesting of
shares of Restricted Stock granted to such Participant, a portion of
such shares, to the extent not forfeited or canceled on or prior to
such termination pursuant to any provision hereof, may vest on the date
of such termination. The portion referred to in the preceding sentence
shall be determined by the Committee and may be based on the
achievement of any conditions imposed by the Committee with respect to
such shares pursuant to Section 7(b) hereof. Such portion may equal
zero and shall be deemed zero unless otherwise specified by the
Committee or in the Participant's Incentive Agreement.
(2) In the event of the termination of a Participant's
Employment for Cause, all shares of Restricted Stock granted to such
Participant which have not vested as of the commencement of business on
the date of such termination shall immediately be forfeited.
(g) Effect of Change in Control
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Upon the occurrence of a Change in Control, (i) all shares of
Restricted Stock which have been issued but are not vested shall immediately be
100% vested and (ii) all shares of Restricted Stock with respect to which the
Issue Date had not previously occurred shall immediately be issued and 100%
vested.
8. PERFORMANCE AWARDS
The Committee may grant Performance Awards pursuant to the Plan. Each
grant of Performance Awards shall be evidenced by an Incentive Agreement
containing such terms and conditions as prescribed by the Committee. Each grant
of Performance Awards shall also be subject to the following terms and
conditions:
(a) Performance Period and Performance Award
(1) With respect to each grant of a Performance Award,
the Committee shall establish a performance period over which the
performance of the applicable Participant shall be measured.
(2) In determining the amount of the Performance Award to
be granted to a particular Participant, the Committee may take into
account such factors as the Participant's responsibility level and
growth potential, the amount of other Incentive Awards granted to such
Participant, and such other considerations as the Committee deems
appropriate in its discretion. Each Performance Award shall be subject
to a maximum value as established by the Committee at the time of grant
of such award; provided, however, the maximum value that can be granted
or vest as a Performance Award to any one Covered Employee during any
calendar year is $1,000,000 as determined consistent with the
Performance-Based Exception.
(b) Performance Measures
A Performance Award shall be awarded to a Participant contingent upon
future performance of the Company (or any Subsidiary, division or department
thereof) by or in which the Participant is employed or responsible during the
performance period. The Committee shall establish, in writing, the performance
measures applicable to such performance within 90 days after the commencement of
the performance period, to which such measures relate, and at a time when the
outcome of such performance measures are substantially uncertain within the
meaning of the Performance-Based Exception, subject to such later revisions as
the Committee may deem appropriate to reflect significant unforeseen events or
changes.
(c) Payment
Upon the expiration of the performance period relating to a Performance
Award granted to a Participant, such Participant shall be entitled to receive
payment of an amount not exceeding the maximum value of the Performance Award,
based on the achievement of the performance measures for such performance
period, as determined by the Committee. The Committee shall
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certify in writing prior to the payment of a Performance Award that the
applicable performance measures and any other material terms of the grant have
been satisfied. Subject to Section 3 hereof, payment of a Performance Award may
be made in cash, Common Stock or a combination thereof, as determined by the
Committee. Payment shall be made in a lump sum or in installments as prescribed
by the Committee. Any payment to be made in Common Stock shall be based on the
Fair Market Value of the Common Stock on the payment date.
(d) Effect of Termination of Employment
If the Employment of a Participant shall terminate for any reason prior
to the expiration of the applicable performance period, the Performance Awards
relating to such performance period shall immediately be forfeited as of the
commencement of business on the date of such termination, except as may be
determined by the Committee in its sole and absolute discretion, or as may be
otherwise provided in the Incentive Agreement evidencing such Performance Award.
(e) Effect of Change in Control
Upon the occurrence of a Change in Control, the Committee (as
constituted immediately prior to such Change in Control) shall determine, in its
sole discretion, whether each Performance Award, which have not theretofore
satisfied the requisite performance measure or for which the performance period
has not expired, shall immediately be paid or whether such Performance Award
shall remain outstanding according to its respective terms.
9. PHANTOM STOCK
The Committee may grant shares of Phantom Stock pursuant to the Plan.
Each grant of shares of Phantom Stock shall be evidenced by an Incentive
Agreement containing such terms and conditions as prescribed by the Committee.
Each grant of shares of Phantom Stock shall also be subject to the following
terms and conditions:
(a) Vesting Date
At the time of the grant of shares of Phantom Stock, the Committee
shall establish a Vesting Date or Vesting Dates with respect to such shares. The
Committee may divide such shares into classes and assign a different Vesting
Date for each class. Provided that all conditions to the vesting of a share of
Phantom Stock imposed pursuant to Section 9(c) hereof are satisfied, and except
as provided in Section 9(d) hereof, upon the occurrence of the Vesting Date with
respect to a share of Phantom Stock, such share shall vest.
(b) Benefit Upon Vesting
Upon the vesting of a share of Phantom Stock, a Participant shall be
entitled to receive in cash, within 90 days of the date on which such share
vests, an amount in cash in a lump sum equal to the sum of (i) the Fair Market
Value of a share of Common Stock on the date on which such share of Phantom
Stock vests and (ii) the aggregate amount of cash dividends paid with
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respect to a share of Common Stock during the period commencing on the date on
which the share of Phantom Stock was granted and terminating on the date on
which such share vests.
(c) Conditions to Vesting
At the time of the grant of shares of Phantom Stock, the Committee may
impose, in the Participant's Incentive Agreement, such restrictions or
conditions, not inconsistent with the provisions of the Plan, to the vesting of
such shares as the Committee, in its absolute discretion, deems appropriate. By
way of example and not by way of limitation, the Committee may require, as a
condition to the vesting of any class or classes of shares of Phantom Stock,
that the Participant or the Company achieve certain performance criteria, such
criteria to be specified by the Committee at the time of the grant of such
shares.
(d) Effect of Termination of Employment
(1) If the Employment of a Participant with the Company
shall terminate for any reason other than Cause prior to the vesting of
shares of Phantom Stock granted to such Participant, a portion of such
shares, to the extent not forfeited or canceled on or prior to such
termination pursuant to any provision hereof, may vest on the date of
such termination. The portion referred to in the preceding sentence
shall be determined by the Committee and may be based on the
achievement of any conditions imposed by the Committee with respect to
such shares pursuant to Section 9(c) hereof. Such portion may equal
zero and shall be deemed zero unless otherwise specified by the
Committee or in the Participant's Incentive Agreement.
(2) In the event of the termination of a Participant's
Employment for Cause, all shares of Phantom Stock granted to such
Participant which have not vested as of the date of such termination
shall immediately be forfeited.
(e) Effect of Change in Control
Upon the occurrence of a Change in Control, all shares of Phantom Stock
which have not theretofore vested shall immediately be 100% vested.
10. STOCK BONUSES
The Committee may, in its absolute discretion, grant Stock Bonuses in
such amounts as it shall determine from time to time. A Stock Bonus shall be
paid at such time and subject to such conditions as the Committee shall
determine at the time of the grant of such Stock Bonus, all as set forth in the
Participant's Incentive Agreement. Certificates for shares of Common Stock
granted as a Stock Bonus shall be issued in the name of the Participant to whom
such grant was made and delivered to such Participant as soon as practicable
after the date on which such Stock Bonus is required to be paid.
11. CASH BONUSES
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The Committee may, in its absolute discretion, grant to a Participant,
in connection with any grant of Restricted Stock or shares of Common Stock
granted as a Performance Award or Stock Bonus or at any time thereafter, a cash
bonus, payable promptly after the date on which the Participant is required to
recognize income for federal income tax purposes in connection with such
Restricted Stock, Performance Award or Stock Bonus, in such amount as the
Committee shall determine; provided, however, that in no event shall the amount
of a Cash Bonus exceed the Fair Market Value of the related shares of Restricted
Stock or shares of Common Stock granted pursuant to a Performance Award or Stock
Bonus on such date. A Cash Bonus shall be subject to such terms and conditions
as the Committee shall determine at the time of its grant.
12. ADJUSTMENT UPON CHANGES IN COMMON STOCK
(a) Outstanding Restricted Stock, Performance Awards, and Phantom
Stock
Unless the Committee in its absolute discretion otherwise determines,
if a Participant receives any securities or other property (including dividends
paid in cash) as a result of any dividend, stock split recapitalization, merger,
consolidation, combination, exchange of shares or otherwise, with respect to a
share of Restricted Stock for which the Issue Date occurs prior to such event
but that has not vested as of the date of such event, such securities or other
property will not vest until such share of Restricted Stock vests and shall be
held by the Company pursuant to Section 7(d)(2) hereof as if such securities or
other property were unvested shares of Restricted Stock.
The Committee may, in its absolute discretion, adjust any grant of
shares of Restricted Stock for which the Issue Date has not occurred as of the
date of the occurrence of any of the following events, and any shares of Common
Stock upon the grant of a Performance Award or any grant of shares of Phantom
Stock, to reflect any dividend, stock split, recapitalization, merger,
consolidation, combination, exchange of shares or similar corporate change as
the Committee may deem appropriate to prevent the enlargement or dilution of
rights of Participants under the grant.
(b) Stock Subject to Plan, Outstanding Options, Increase or
Decrease in Issued Shares Without Consideration
Subject to any required action by the stockholders of the Company, in
the event of any increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or consolidation of shares of Common Stock or
the payment of a stock dividend (but only on the shares of Common Stock), or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Company, the Committee shall proportionally adjust (i)
the number of shares of Common Stock for which Incentive Awards may be granted
under the Plan and (ii) the number of shares and the exercise price per share of
Common Stock subject to each outstanding Option.
(c) Outstanding Options, Certain Mergers
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Subject to any required action by the stockholders of the Company, if
the Company shall be the surviving corporation in any merger or consolidation
(except a merger or consolidation as a result of which the holders of shares of
Common Stock receive securities of another corporation), each Option outstanding
on the date of such merger or consolidation shall entitle the Participant to
acquire upon exercise the securities which a holder of the number of shares of
Common Stock subject to such Option would have received in such merger or
consolidation.
(d) Outstanding Options, Certain Other Transactions
In the event of a dissolution or liquidation of the Company, a sale of
all or substantially all of the Company's assets, a merger or consolidation
involving the Company in which the Company is not the surviving corporation or a
merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Common Stock receive
securities of another corporation and/or other property, including cash, the
Committee shall, in its absolute discretion, have the power to:
(1) cancel, effective immediately prior to the occurrence
of such event, each Option outstanding immediately prior to such event
(whether or not then exercisable), and, in full consideration of such
cancellation, pay to the Participant to whom such Option was granted an
amount in cash, for each share of Common Stock subject to such Option
equal to the excess of (A) the value, as determined by the Committee in
its absolute discretion, of the property (including cash) received by
the holder of a share of Common Stock as a result of such event over
(B) the exercise price of such Option; or
(2) provide for the exchange of each Option outstanding
immediately prior to such event (whether or not then exercisable) for
an option on some or all of the property and, incident thereto, make an
equitable adjustment as determined by the Committee in its absolute
discretion in the exercise price of the option, or the number of shares
or amount of property subject to the option or, if appropriate, provide
for a cash payment to the Participant to whom such Option was granted
in partial consideration for the exchange of the Option.
(e) Outstanding Options, Other Changes
In the event of any change in the capitalization of the Company or
corporate change other than those specifically referred to in Sections 12(b),
(c) or (d) hereof, the Committee may, in its absolute discretion, make such
adjustments in the number and class of shares subject to Options outstanding on
the date on which such change occurs and in the per share exercise price of each
such Option as the Committee may consider appropriate to prevent dilution or
enlargement of rights.
(f) No Other Rights
Except as expressly provided in the Plan, no Participant shall have any
rights by reason of
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any subdivision or consolidation of shares of stock of any class, the payment of
any dividend, any increase or decrease in the number of shares of stock of any
class or any dissolution, liquidation, merger or consolidation of the Company or
any other corporation. Except as expressly provided in the Plan, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number of shares of Common Stock subject to
an Incentive Award or the exercise price of any Option.
13. RIGHTS AS A STOCKHOLDER
No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to any Incentive Award granted
pursuant to this Plan until the date of the issuance of a stock certificate with
respect to such shares. Except as otherwise expressly provided in Section 12
hereof, no adjustment to any Incentive Award shall be made for dividends or
other rights for which the record date occurs prior to the date such stock
certificate is issued.
14. NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO INCENTIVE AWARD
Nothing contained in the Plan or any Incentive Award shall confer upon
any Participant any right with respect to the continuation of his Employment or
interfere in any way with the right of the Company, subject to the terms of any
separate employment agreement to the contrary, to terminate at any time such
Employment or to increase or decrease the compensation of the Participant from
the rate in existence at the time of the grant of an Incentive Award.
No person shall have any claim or right to receive an Incentive Award
hereunder. The Committee's granting of an Incentive Award to a Participant at
any time shall neither require the Committee to grant an Incentive Award to such
Participant or any other Participant or other person at any time nor preclude
the Committee from making subsequent grants to such Participant or any other
Participant or other person.
15. SECURITIES MATTERS
(a) The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of any shares of Common Stock to be
issued hereunder or to effect similar compliance under any state laws.
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to cause to be issued or delivered any certificates evidencing shares
of Common Stock pursuant to the Plan unless and until the Company is advised by
its counsel that the issuance and delivery of such certificates is in compliance
with all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Common Stock are
traded. The Committee may require, as a condition of the issuance and delivery
of certificates evidencing shares of Common Stock pursuant to the terms hereof,
that the recipient of such shares make such covenants, agreements and
representations, and that such certificates bear such legends, as the Committee,
in its sole discretion, deems necessary or desirable.
(b) The exercise of any Option granted hereunder shall only be
effective at such time
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as counsel to the Company shall have determined that the issuance and delivery
of shares of Common Stock pursuant to such exercise is in compliance with all
applicable laws, regulations of governmental authorities and the requirements of
any securities exchange on which shares of Common Stock are traded. The Company
may, in its sole discretion, defer the effectiveness of any exercise of an
Option granted hereunder in order to allow the issuance of shares of Common
Stock pursuant thereto to be made pursuant to registration or an exemption from
registration or other methods for compliance available under federal or state
securities laws. The Company shall inform the Participant in writing of its
decision to defer the effectiveness of the exercise of an Option granted
hereunder. During the period that the effectiveness of the exercise of an Option
has been deferred, the Participant may, by written notice, withdraw such
exercise and obtain the refund of any amount paid with respect thereto.
(c) It is intended that the Plan and any grant of an Incentive
Award made to a person subject to Section 16 of the Exchange Act meet all of the
requirements of Rule 16b-3 promulgated thereunder. If any provision of the Plan
or any such Incentive Award would disqualify the Plan or such Incentive Award
under, or would otherwise not comply with, Rule 16b-3, such provision or
Incentive Award shall be construed or deemed amended to conform to Rule 16b-3 to
the extent permitted by applicable law and deemed advisable by the Board of
Directors.
16. QUALIFIED PERFORMANCE-BASED COMPENSATION
Unless otherwise determined by the Committee with respect to any
particular Incentive Award, it is intended that the Plan comply fully with and
meet all the requirements of Section 162(m) of the Code so that (i) Options
granted hereunder with an exercise price not less than Fair Market Value of a
share of Common Stock on the date of grant and (ii) the payment of a Performance
Award, shall qualify for the Performance-Based Exception. If any provision of
the Plan or an Incentive Award would disqualify the Plan or would not otherwise
permit the Plan or an Incentive Award to comply with the Performance-Based
Exception as so intended, such provision shall be construed or deemed amended to
conform to the requirements or provisions of the Performance-Based Exception to
the extent permitted by applicable law and deemed advisable by the Committee;
provided that no such construction or amendment shall have an adverse effect on
the economic value to a Participant of any outstanding Incentive Award
previously granted.
17. WITHHOLDING TAXES
Whenever shares of Common Stock are to be issued upon the exercise of
an Option, the occurrence of the Issue Date or Vesting Date with respect to a
share of Restricted Stock, the payment of a Performance Award in shares of
Common Stock or the payment of a Stock Bonus, the Company shall have the right
to require the Participant to remit to the Company in cash an amount sufficient
to satisfy federal, state and local withholding tax requirements, if any,
attributable to such exercise, occurrence or payment prior to the delivery of
any certificate or certificates for such shares. In addition, upon the grant of
a Cash Bonus, the payment of a Performance Award or the making of a payment with
respect to a share of Phantom Stock, the
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Company shall have the right to withhold from any cash payment required to be
made pursuant thereto an amount sufficient to satisfy the federal, state and
local withholding tax requirements, if any, attributable to such exercise or
grant.
18. TERMINATION AND AMENDMENT OF THE PLAN
The Board of Directors may at any time suspend or terminate the Plan or
revise or amend it in any respect whatsoever, provided, however, that without
approval of the Company's stockholders no revision or amendment shall (a) except
as provided in Section 12 hereof, increase the number of shares of Common Stock
hereunder that may be issued under the Plan, (b) except as provided in Section
12 hereof, increase the maximum number of shares of Common Stock that may be
subject to an Incentive Award subject to Section 162(m) of the Code for any one
Covered Employee for any calendar year, (c) increase the maximum value of a
Performance Award subject to Section 162(m) of the Code for any one Covered
Employee for any calendar year, (d) modify the requirements as to eligibility
for participation in the Plan, (e) extend the term of the Plan, or (f) decrease
any authority granted to the Committee under the Plan in contravention of Rule
16b-3 under the Exchange Act.
No termination, amendment, or modification of the Plan shall adversely
affect in any material way any outstanding Incentive Award previously granted
under the Plan, without the written consent of such Participant or other
designated holder of such Incentive Award.
In addition, to the extent that the Committee determines that (a) the
listing for qualification requirements of any national securities exchange or
quotation system on which the Company's Common Stock is then listed or quoted,
or (b) the Code (or regulations promulgated thereunder), require stockholder
approval in order to maintain compliance with such listing requirements or to
maintain any favorable tax advantages or qualifications, then the Plan shall not
be amended in such respect without approval of the Company's stockholders.
19. NO OBLIGATION TO EXERCISE
The grant to a Participant of an Option shall impose no obligation upon
such Participant to exercise such Option.
20. TRANSFERS UPON DEATH
Upon the death of a Participant, outstanding Incentive Awards granted
to such Participant may be exercised only by the executors or administrators of
the Participant's estate or by any person or persons who shall have acquired
such right to exercise by will or by the laws of descent and distribution. No
transfer by will or the laws of descent and distribution of any Incentive Award,
or the right to exercise any Incentive Award, shall be effective to bind the
Company unless the Committee shall have been furnished with (a) written notice
thereof and with a copy of the will and/or such evidence as the Committee may
deem necessary to establish the validity of the transfer and (b) an agreement by
the transferee to comply with all the terms and conditions of the Incentive
Award that are or would have been applicable to the Participant and to be bound
by
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the acknowledgments made by the Participant in connection with the grant of
the Incentive Award.
21. EXPENSES AND RECEIPTS
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Incentive Award will be used for
general corporate purposes.
22. FAILURE TO COMPLY
In addition to the remedies of the Company elsewhere provided for
herein, failure by a Participant to comply with any of the terms and conditions
of the Plan or the agreement executed by such Participant evidencing an
Incentive Award, unless such failure is remedied by such Participant within ten
days after having been notified of such failure by the Committee, shall be
grounds for the cancellation and forfeiture of such Incentive Award, in whole or
in part, as the Committee, in its absolute discretion, may determine.
23. GOVERNING LAW
The Plan shall be interpreted, construed and constructed in accordance
with the laws of the State of Texas, except as superseded by the laws of the
United States.
24. EFFECTIVE DATE AND TERM OF PLAN
The Plan was adopted by the Board of Directors and approved by the
stockholders of the Company effective September 30, 1996. The Plan was amended
and restated effective July 1, 1997 with the approval of the Board of Directors.
No Incentive Award may be granted under the Plan after September 29, 2006.
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