EXHIBIT 10.1
AMENDED AND RESTATED
DELL COMPUTER CORPORATION
2002 LONG-TERM INCENTIVE PLAN
Capitalized terms used herein shall have the respective meanings
ascribed to them in Section 5.1(a) below.
ARTICLE I
GENERAL
1.1 PURPOSE. The 2002 Long-Term Incentive Plan (the "PLAN") has been
established by Dell Computer Corporation, a Delaware corporation (the
"COMPANY"), to attract and retain qualified employees, consultants and directors
and to motivate them to achieve long-term goals, to provide incentive
compensation opportunities that are competitive with those of similar companies
and to further align Participants' interests with those of the Company's other
stockholders through compensation alternatives based on the Company's common
stock, thereby promoting the long-term financial interests of the Company and
enhancing long-term stockholder return.
1.2 TERM. The Plan shall be effective as of the date on which it is
approved by the Company's stockholders (the "EFFECTIVE DATE"), and unless the
Plan is sooner terminated by the Board, no Award shall be granted under the plan
after the tenth anniversary of the Effective Date.
ARTICLE II
ADMINISTRATION AND OPERATION
2.1 THE COMMITTEE.
(a) CONSTITUTION. The Plan will be administered by a committee
of the Board (the "COMMITTEE") consisting of two or more directors designated
from time to time by the Board. Each member of the Committee shall qualify as a
"Non-Employee Director," as defined for purposes of Rule 16b-3 under the
Exchange Act, and as an "outside director," as defined for purposes of Section
162(m) of the Code.
(b) AUTHORITY.
(1) The Committee shall have complete and absolute
authority to construe and interpret the Plan and Awards granted
hereunder, to establish and amend rules for Plan administration and to
make all other determinations that it deems necessary or advisable for
the effective administration of the Plan.
(2) Subject to the provisions of the Plan, the
Committee shall have complete and absolute authority to select Award
recipients, to determine the types of Awards, to establish the terms,
conditions, performance criteria, restrictions and other provisions of
Awards and to amend, modify or suspend Awards. In making Award
determinations, the Committee may take into account the nature of
services rendered by the
recipient, his or her present and potential contribution to the
Company's success and such other factors as the Committee deems
relevant.
(3) In all matters relating to the Plan, the
Committee shall act in a manner that is consistent with the Company's
certificate of incorporation and by-laws and all applicable laws. The
decisions and determinations of the Committee shall be made in
accordance with its judgment as to the best interests of the Company
and its stockholders and in accordance with the purposes of the Plan.
All decisions relating to the Plan and any Award shall be final and
binding on all persons. No member of the Committee shall be personally
liable for any action or determination relating to the Plan or any
Award that was taken or made in good faith.
(c) DELEGATION. The Committee may delegate any or all of its
authority and responsibilities with respect to the Plan and Awards, on such
terms and conditions as it considers appropriate, to the Chief Executive Officer
or the President of the Company or to such other members of the Company's
management as it may determine; provided, however, that determinations and
decisions regarding Awards or other benefits under the Plan to the Executive
Officers may not be delegated and shall be made by the Committee. All references
to "Committee" herein shall include those persons to whom the Committee has
properly delegated authority and responsibility pursuant to this subsection.
2.2 ELIGIBILITY.
(a) The Eligible Recipients shall consist of (1) all employees
of the Company and its Subsidiaries, (2) all Non-Employee Directors and (3) any
consultants, independent contractors or advisors to the Company or its
Subsidiaries whom the Committee identifies as having a direct and significant
effect on the performance of the Company or any of its Subsidiaries. No Eligible
Recipient shall be entitled to receive any Award under the Plan unless and until
such Eligible Recipient has been designated by the Committee to be a Participant
and such Eligible Recipient has actually received such Award. The designation of
an Eligible Recipient to receive any Award under the Plan shall not require the
Committee to designate that person to receive any other Award under the Plan. In
selecting Eligible Recipients to be Participants and in determining the type and
amount of their respective Awards, the Committee shall consider any and all
factors that it deems relevant or appropriate.
(b) The Plan does not constitute a contract of employment with
any Eligible Recipient or Participant, and selection as a Participant will not
give any Eligible Recipient the right to be retained in the employ of the
Company or any Subsidiary or to continue to provide services to the Company or
any Subsidiary.
2.3 WITHHOLDING OF TAXES. All distributions under the Plan (including
the grant of Awards and the issuance of Stock, cash or other consideration
pursuant to an Award) are subject to withholding of all applicable taxes, and
the Committee may condition the delivery of any Award, or the issuance of any
Stock, cash or other consideration pursuant to an Award, on the satisfaction of
applicable withholding obligations. The Committee, subject to such requirements
as it may impose, may permit such withholding obligations to be satisfied
through cash payment by the Participant, through the surrender of shares of
Stock that the Participant already owns or through the surrender of shares of
Stock to which the Participant is otherwise entitled under the Plan.
ARTICLE III
SHARES AVAILABLE FOR AWARDS
3.1 AUTHORIZED SHARES. The number of Authorized Shares shall be equal
to the number of shares of Stock that, at the Effective Date, remain available
for issuance under the Company's 1994 Incentive Plan (the "1994 PLAN"). In
addition, any shares of Stock underlying outstanding awards under the 1994 Plan
that expire without being exercised or would otherwise again be available for
issuance under the 1994 Plan shall constitute Authorized Shares hereunder.
3.2 AVAILABLE SHARES. At any time, the number of shares that may then
be issued pursuant to Awards under the Plan (the "AVAILABLE SHARES") shall be
equal to the difference between (a) the number of Authorized Shares at such time
and (b) the sum of (1) the number of shares of Stock subject to issuance upon
exercise or settlement of then outstanding Awards and (2) the number of shares
of Stock that have been previously issued upon exercise or settlement of
outstanding Awards.
3.3 RESTORATION OF SHARES. If Stock subject to any Award is not issued
or ceases to be issuable for any reason, including because the Award is
forfeited, terminated, expires unexercised, is settled in cash in lieu of Stock
or is exchanged for other Awards, the shares of Stock that were subject to that
Award shall no longer be charged against the number of Authorized Shares in
calculating the number of Available Shares under Section 3.2 and shall again be
included in Available Shares. In addition, any shares of Stock that are issued
by the Company in connection with, through the assumption of or in substitution
for outstanding awards previously granted by an entity acquired by the Company
shall not be charged against the number of Authorized Shares in calculating the
number of Available Shares under Section 3.2.
3.4 ADJUSTMENTS TO NUMBER OF AUTHORIZED SHARES AND AVAILABLE SHARES. In
the event of any change in the number of outstanding shares of Stock by reason
of a stock dividend, split, spin-off, recapitalization, merger, consolidation,
combination, extraordinary dividend, exchange of shares or other similar change,
the number of Authorized Shares and the number of Available Shares, as well as
the exercise price, the number of shares and other appropriate terms of any
outstanding Award, may be equitably adjusted by the Committee in its sole
discretion.
3.5 SOURCE OF STOCK. Shares of Stock issued under the Plan may consist
in whole or in part of authorized and unissued shares or treasury shares.
3.6 NO FRACTIONAL SHARES. No fractional shares shall be issued under
the Plan or upon exercise or settlement of any Award. The Committee may
determine to pay cash in lieu of any fractional share that would otherwise be
issuable or may determine to cancel such fractional share with no payment of
consideration.
3.7 LIMITATION ON CERTAIN AWARDS.
(a) The maximum number of Authorized Shares that may be issued
pursuant to Restricted Awards (as defined below) shall be equal to the number of
shares of Stock that, at the Effective Date, remain available for issuance as
"Stock
Awards" under the 1994 Plan; provided, however, that this limitation shall not
apply with respect to shares of Stock issued in connection with the exercise or
settlement of an Award other than a Restricted Award, whether or not such shares
of Stock are subject to a substantial risk of forfeiture when issued. The term
"RESTRICTED AWARD" means a Stock Award or a Stock Option with an exercise price
that is less than 100% of the Fair Market Value per share of the Stock on the
date of grant (provided, however, that a Stock Option shall not be considered to
be a Restricted Award if the Participant pays or otherwise foregoes value to the
Company in an amount at least equal to the difference between the Fair Market
Value per share of Stock on the date of grant and the exercise price).
(b) Except for Restricted Awards relating to shares in the
Unrestricted Pool (as defined below), all Restricted Awards shall either be
subject to a vesting period of three years or more or be subject to vesting
(over a period of at least one year) that is contingent upon specified
performance standards. A Restricted Award that relates to shares in the
Unrestricted Pool may be subject to whatever vesting restriction the Committee
specifies, if any. The term "UNRESTRICTED POOL" shall mean, for each fiscal year
of the Company, a number of shares of Stock that is equal to 5% of the total
number of shares of Stock underlying Awards made under the Plan during such
fiscal year.
(c) No Participant shall receive in any fiscal year (1) Stock
Options to which more than 10,000,000 shares of Stock are subject or (2) Awards
(other than Stock Options) to which more than 3,000,000 shares of Stock are
subject.
(d) No Participant shall receive in any fiscal year cash in
payment for or settlement of a Performance Unit in excess of 0.5% of the
Company's aggregate consolidated operating income (as reported on the Company's
audited consolidated financial statements) during the Vesting Years. "VESTING
YEARS" shall mean the number of fiscal years of the Company immediately
preceding the fiscal year in which the Performance Unit vests equal to the
number of years required for vesting of the Performance Unit as set forth in the
applicable Award Agreement.
ARTICLE IV
AWARDS
4.1 GENERAL. Subject to the provisions of the Plan, the Committee shall
determine the type of Award to grant to a Participant. Awards may be granted
singly or in combination with other Awards. Awards also may be made in
combination with, in replacement of, as alternatives to or as the payment form
for grants or rights under any other compensation plan, contract or agreement of
the Company.
4.2 AWARD TERMS.
(a) Subject to the provisions of the Plan, the Committee shall
have complete and absolute authority to determine and establish the terms and
provisions of each Award, including (as applicable) (1) the number of shares of
Stock subject to the Award, (2) the exercise price or base price per share, (3)
the vesting and exercisability schedule (including provisions regarding
acceleration of vesting and exercisability), (4) the conditions under which the
Award is cancelled or forfeited, (5) whether the Award is transferable and, if
so, the circumstances under which such
Award may be transferred and (6) the termination and expiration of the Awards.
It shall be expressly within the discretion of the Committee to include in any
Award terms that provide for the acceleration of vesting and lapse of
restrictions, as applicable, upon or following a Participant's death, Permanent
Disability or Normal Retirement or upon the occurrence of a Change in Control.
(b) Notwithstanding the provisions of subsection (a) of this
Section, the following limitations shall apply to the Committee's exercise of
its discretion (in addition to any other limitations that may be contained in
other provisions of the Plan):
(1) The exercise price per share for an Incentive
Stock Option shall be not less than 100% of Fair Market Value of the
Stock on the date of grant.
(2) The exercise price per share for a Non-Qualified
Option shall not be less than 100% of the Fair Market Value of the
Stock on the date of grant unless:
(A) The Stock Option is granted
retroactively in tandem with or as a substitution for a Stock
Appreciation Right, in which case the exercise price per share
shall not be less than 100% of the Fair Market Value of the
Stock on the date the Stock Appreciation Right was granted (as
set forth in the applicable Award Agreement);
(B) The exercise price per share is not less
than 85% of the Fair Market Value of the Stock on the date of
grant and the Participant pays or otherwise foregoes value to
the Company in an amount at least equal to the difference
between the Fair Market Value per share of Stock on the date
of grant and the exercise price; or
(C) The Stock Option relates to shares in
the Unrestricted Pool.
(3) The base price for a Stock Appreciation Right
shall not be less than 100% of the Fair Market Value of the Stock on
the date of grant unless the Stock Appreciation Right is granted
retroactively in tandem with or in substitution for a Stock Option, in
which case the base price shall not be less than the exercise price of
such tandem or replaced Stock Option.
(4) No Award (or any portion thereof) may expire more
than ten years after the date of grant, except that the Committee may
extend the expiration of an Award to no more than fifteen years after
the date of grant if necessary, appropriate or desirable under laws,
rules or regulations applicable in any foreign jurisdiction.
4.3 AWARD AGREEMENTS. Each Award will be evidenced by a written
Agreement issued by the Company and setting forth the terms, provisions and
conditions of such Award (an "AWARD AGREEMENT"). Each Award Agreement shall be
in such form as may be specified by the Committee and may be evidenced by an
electronic transmission (including an e-mail or reference to a website or other
URL)
sent to the recipient through the Company's normal process for communicating
electronically with its employees. As a condition to receiving an Award, the
Committee may require the proposed Eligible Recipient to affirmatively accept
the Award and agree to the terms, provisions and conditions set forth in the
Award Agreement by physically or electronically executing the Award Agreement or
by otherwise physically or electronically acknowledging such acceptance and
agreement. With or without such affirmative acceptance and agreement, however,
the Committee may prescribe conditions (including the exercise or attempted
exercise of any benefit conferred by the Award) under which the proposed
Eligible Recipient may be deemed to have accepted the Award and agreed to the
terms, provisions and conditions set forth in the Award Agreement.
4.4 PERFORMANCE BASED COMPENSATION. The Committee may designate any
Award as "performance-based compensation" for purposes of Section 162(m) of the
Code. Any Awards designated as "performance-based compensation" shall be
conditioned on the achievement of one or more Performance Measures, and the
measurement may be stated in absolute terms or relative to comparable companies.
Notwithstanding any other provision of the Plan, the Committee may grant an
Award that is not contingent on performance goals or is contingent on
performance goals other than the Performance Measures, so long as the Committee
has determined that such Award is not required to satisfy the requirements for
"qualified performance-based compensation" within the meaning of Section 162(m)
of the Code.
4.5 TRANSFERABILITY OF AWARDS. The Committee may limit or provide for
the transferability of Awards by Participants and may grant an Award that
otherwise would be granted to an Eligible Recipient to a permitted transferee of
such Eligible Recipient.
4.6 PROHIBITION ON REPRICING. Notwithstanding any other provision of
the Plan, the Committee shall not "reprice" any Stock Option granted under the
Plan if the effect of such repricing would be to decrease the exercise price per
share applicable to such Stock Option. For this purpose, a "repricing" would
include a tandem cancellation and regrant or any other amendment or action that
would have substantially the same effect as decreasing the exercise price of
outstanding Stock Options.
4.7 PROHIBITION ON LOANS TO PARTICIPANTS. The Company shall not loan
funds to any Participant for the purpose of paying the exercise or base price
associated with any Award or for the purpose of paying any taxes associated with
the exercise or vesting of an Award.
4.8 RELOAD PROVISIONS. Stock Options may contain a provision pursuant
to which a Participant who pays all or a portion of the exercise price of the
Stock Option or the tax required to be withheld pursuant to the exercise of the
Stock Option by surrendering shares of Stock shall automatically be granted a
Stock Option for the purchase of the number of shares of Stock equal to the
number of shares surrendered (a "RELOAD OPTION"). A Reload Option shall have an
exercise price per share equal to the Fair Market Value of the Stock on the date
of grant of the Reload Option and shall have a term that is no longer than the
original term of the exercised Stock Option.
4.9 DIVIDENDS AND DIVIDEND EQUIVALENTS. An Award may provide the
Participant with the right to receive dividend payments or dividend equivalent
payments with respect to Stock subject to the Award (both before and after such
Stock is earned or vested), which payments may be either made currently or
credited to an account for the Participant and may be settled in cash or Stock,
as determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents.
4.10 SETTLEMENT OF AWARDS. The obligation to make payments and
distributions with respect to Awards may be satisfied through cash payments, the
delivery of shares of Stock, the granting of replacement Awards or any
combination thereof, as the Committee shall determine. Satisfaction of any such
obligations under an Award may be subject to such conditions, restrictions and
contingencies as the Committee shall determine. The Committee may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest or dividend equivalents and may include converting such credits into
deferred Stock equivalents.
4.11 AWARDS TO NON-EMPLOYEE DIRECTORS. Non-Employee Directors shall not
be eligible to receive any Awards under the Plan other than the Awards specified
in this Section.
(a) DISCRETIONARY AWARDS. The Committee may, in its
discretion, grant a Non-Qualified Option or Restricted Stock to any Non-Employee
Director; provided, however, that (1) no Non-Employee Director may receive
Awards (not including Awards granted in lieu of Annual Cash Retainer pursuant to
subsection (b) of this Section) covering more than 50,000 shares of Stock in any
Service Year (or, in the case of a newly-elected Non-Employee Director, covering
more than two times the annual limit in the Service Year in which such
Non-Employee Director is first elected or appointed to the Board) and (2) the
aggregate number of shares of Stock awarded as Restricted Stock to a
Non-Employee Director during any Service Year (not including Awards granted in
lieu of Annual Cash Retainer pursuant to subsection (b) of this Section) may not
exceed 20% of the total number of shares of Stock subject to all Awards granted
to such Non-Employee Director during such Service Year. Awards under this
Section are discretionary, and until the Committee grants an Award to a
Non-Employee Director, such Non-employee Director shall not have any right or
claim to any Award. The receipt of an Award under the Plan shall not give any
Non-Employee Director any right or claim to receive any other Award under the
Plan, and the Committee or the Board may determine that any or all Non-Employee
Directors are not eligible to receive Awards under the Plan for an indefinite
period or for specified Service Years.
(b) AWARDS IN LIEU OF ANNUAL CASH RETAINER. In addition to any
Awards granted pursuant to subsection (a) of this Section, the Committee, in its
discretion, may permit a Non-Employee Director to elect to receive a
Non-Qualified Option or Restricted Stock in lieu of all or a portion of his or
her Annual Cash Retainer for any Service Year. If the Committee permits any such
election, it, in its discretion, shall determine the appropriate terms of such
Award (including the appropriate number of shares of Stock subject to the Award
and, in the case of a Non-Qualified Option, the appropriate exercise price per
share). Any such election, if
permitted by the Committee, shall be made in accordance with such procedures as
are adopted from time to time by the Committee.
(c) TERMS OF NON-EMPLOYEE DIRECTOR AWARDS. In connection with
the grant of an Award under this Section, the Committee, in its discretion
pursuant to Section 4.2, shall establish the terms and provisions of such Award,
subject to the following limitations (in addition to any other applicable
limitations that may be contained in other provisions of the Plan):
(1) The exercise price per share of any Stock Option
granted pursuant to this Section shall not be less than 100% of the
Fair Market Value of the Stock on the date of grant;
(2) No Stock Option (or any portion thereof) granted
pursuant to this Section may be exercisable earlier than six months
from the date of grant; and
(3) No Restricted Stock (or any portion thereof)
granted pursuant to this Section may be transferable earlier than six
months from the date of grant.
ARTICLE V
GENERAL PROVISIONS
5.1 USE OF TERMS.
(a) DEFINED TERMS. As used herein, the following terms shall
have the respective meanings indicated below:
"Annual Cash Retainer" means the annual cash retainer fee, in such
amount as is established from time to time by resolution of the Board, payable
to a Non-Employee Director for his or her services as a director of the Company.
"Authorized Shares" means the aggregate number of shares of Stock that
may be issued pursuant to Awards under the Plan, as specified in Section 3.1.
"Available Shares" has the meaning specified in Section 3.2.
"Award" means an award granted under the Plan. An Award may be in the
form of Stock Options, Stock Appreciation Rights, Stock Bonuses, Restricted
Stock, Restricted Stock Units, Performance Units or Performance Shares.
"Award Agreement" has the meaning specified in Section 4.3.
"Board" means the Board of Directors of the Company.
"Change in Control" has the meaning specified from time to time by the
Committee.
"Code" means the Internal Revenue Code of 1986.
"Committee" has the meaning specified in Section 2.1(a).
"Company" has the meaning specified in Section 1.1.
"Effective Date" has the meaning specified in Section 1.2.
"Eligible Recipient" means any person who is eligible to receive an
Award under the Plan, as specified in Section 2.2(a).
"Exchange Act" means the Securities Exchange Act of 1934.
"Executive Officer" means an Executive Officer of the Company, as
designated from time to time by the Board.
"Fair Market Value" of a share of Stock on a particular date shall be
equal to the average of the high and low sales prices of the Stock (1) reported
by the Nasdaq National Market on that date or (2) if the Stock is listed on a
national stock exchange, reported on the stock exchange composite tape on that
date, or in either case, if no prices are reported on that date, on the last
preceding date on which such prices of the Stock are so reported. If the Stock
is traded over the counter at the time a determination of Fair Market Value is
required to be made hereunder, the Fair Market Value shall be deemed to be equal
to the average between the reported high and low or closing bid and asked prices
of Stock on the most recent date on which Stock was publicly traded. In the
event Stock is not publicly traded at the time a determination of Fair Market
Value is required to be made hereunder, the determination of Fair Market Value
shall be made by the Committee in such manner as it deems appropriate.
Notwithstanding the foregoing, the Committee may use any other definition of
Fair Market Value consistent with applicable tax, accounting and other rules.
"Incentive Stock Option" means a Stock Option that is intended to
satisfy the requirement applicable to an "incentive stock option" as that term
is described in Section 422(b) of the Code.
"1994 Plan" has the meaning specified in Section 3.1.
"Non-Employee Director" means a member of the Board who is not an
employee of the Company or any of its Subsidiaries.
"Non-Qualified Option" means a Stock Option that is not intended to
satisfy the requirement applicable to an "incentive stock option" as that term
is described in Section 422(b) of the Code.
"Normal Retirement" has the meaning specified from time to time by the
Committee.
"Participant" means any person who receives an Award under the Plan.
"Performance Measures" mean (1) total stockholder return (Stock price
appreciation plus dividends), (2) net income, (3) earnings per share, (4) return
on sales, (5) return on equity, (6) return on assets, (7) return on invested
capital, (8) increase in the market price of Stock or other securities, (9)
revenues (10) operating income, (11) operating margin (operating income divided
by revenues), (12) the
performance of the Company in any of the items mentioned in clause (1) through
(11) in comparison to the average performance of the companies included in the
Dow Jones Computer Index or successor index or (13) the performance of the
Company in any of the items mentioned in clause (1) through (11) in comparison
to the average performance of the companies used in a self-constructed peer
group established before the beginning of the period for measuring performance
under an Award; and any other performance objective approved by the stockholders
of the Company in accordance with Section 162(m) of the Code.
"Performance Share" is a grant of Stock subject to the satisfaction of
specified conditions or the achievement of specified performance goals.
"Performance Unit" is a right to receive a cash payment subject to the
satisfaction of specified conditions or the achievement of specified performance
goals.
"Permanent Disability" has the meaning specified from time to time by
the Committee.
"Plan" has the meaning specified in Section 1.1.
"Reload Option" has the meaning specified in Section 4.8.
"Restricted Award" has the meaning specified in Section 3.7(a).
"Restricted Stock" is Stock that is subject to a risk of forfeiture or
other restrictions that will lapse upon the satisfaction of specified conditions
or the achievement of specified performance goals.
"Restricted Stock Unit" is a right to receive Stock in the future, with
the right to future delivery of such Stock being subject to a risk of forfeiture
or other restrictions that will lapse upon the satisfaction of specified
conditions or the achievement of specified performance goals.
"Securities Act" means the Securities Act of 1933.
"Service Year" means the approximately annual period commencing at an
annual meeting of the Company's stockholders and ending at the next annual
meeting of the Company's stockholders.
"Stock" means the common stock, $0.01 par value per share, of the
Company.
"Stock Appreciation Right" is a right to receive an amount, payable in
cash or shares of Stock, equal to the excess of the Fair Market Value of a
specified number of shares of Stock on the date of exercise over a base price
for such number of shares of Stock set forth in the applicable Award Agreement.
"Stock Award" is an Award consisting of Restricted Stock, Restricted
Stock Units, Performance Shares or a Stock Bonus.
"Stock Bonus" is a grant of Stock that is not subject to a substantial
risk of forfeiture or other conditions.
"Stock Option" is a right to purchase a specified number of shares of
Stock at a specified price. A Stock Option may be an Incentive Stock Option or a
Non-Qualified Option.
"Subsidiary" means any entity of which 50% or more of the total
combined voting power of all classes of securities entitled to vote is owned,
directly or indirectly, by the Company. Notwithstanding the foregoing, the
Committee may use any other definition of "Subsidiary" it deems necessary or
desirable in accordance with its judgment as to the best interests of the
Company and its stockholders and in accordance with the purposes of the Plan.
"Unrestricted Pool" has the meaning specified in Section 3.7(b).
"Vesting Years" has the meaning specified in Section 3.7(d).
(b) OTHER DEFINITIONAL PROVISIONS.
(1) Words of any gender (whether masculine, feminine
or neuter) shall be deemed to include all other genders. Words of the
singular number shall be deemed to include the plural number, and vice
versa, where applicable.
(2) When used herein, the word "including" means
"including, without limitation."
(3) Unless otherwise specified, references herein to
Articles or Sections shall be deemed to be references to Articles or
Sections, as applicable, of the Plan. When used herein, the words
"hereof," "herein" and "hereunder" and words of similar import shall
refer to the Plan as a whole and not to any particular provision of the
Plan.
5.2 AMENDMENT AND TERMINATION. The Board or the Committee may at any
time and in any way amend, suspend or terminate the Plan or any Award granted
under the Plan; provided, however, that no such amendment, suspension or
termination may materially impair any Award then outstanding without the consent
of the holder of such Award; and provided further, however, that without the
requisite vote of the Company's stockholders, no amendment to the Plan may
increase the number of shares available for issuance under the Plan or modify
any of the limitations described in Section 3.7, 4.2(b), 4.6 or 4.7 in such a
manner as to materially reduce such limitation.
5.3 LIABILITY OF THE COMPANY. By accepting any benefits under the Plan,
each Participant and each person claiming under or through such Participant
shall be conclusively deemed to have indicated acceptance and ratification of,
and consented to, any action taken or made under the Plan by the Company, the
Board, the Committee or any other committee appointed by the Board. No
Participant or any person claiming under or through a Participant shall have any
right or interest, whether vested or otherwise, in the Plan or in any Award
hereunder, contingent or otherwise, unless and until such Participant shall have
complied with all of the terms, conditions and provisions of the Plan and the
Award Agreement relating thereto. Neither the Company, its directors, officers
or employees, nor any Subsidiary, shall be liable to any Participant or other
person if it is determined for any reason by the
Internal Revenue Service or any court having jurisdiction that any Incentive
Stock Option granted hereunder does not qualify for tax treatment as an
incentive stock option under Section 422 of the Code. Neither the Company, the
Board nor the Committee shall be required to give any security or bond for the
performance of any obligation which may be created by the Plan.
5.4 UNFUNDED PLAN. Insofar as it provides for Awards, the Plan shall be
unfunded. Although bookkeeping accounts may be established with respect to
Participants who are granted Awards, any such accounts will be used merely as an
administrative convenience. Except for the holding of Restricted Stock in
escrow, the Company shall not be required to segregate any assets that may at
any time be represented by Awards, nor shall the Plan be construed as providing
for such segregation, nor shall the Company, the Board or the Committee be
deemed to be a trustee of Stock or cash to be awarded under the Plan. Any
liability of the Company to any Participant with respect to an Award shall be
based solely upon any contractual obligations that may be created by the Plan;
no such obligation of the Company shall be deemed to be secured by any pledge or
other encumbrance on any property of the Company.
5.5 RIGHTS AS STOCKHOLDER. No Award under the Plan shall confer upon a
Participant any right as a stockholder of the Company prior to the date on which
he or she fulfills all service requirements and other conditions for receipt of
shares of Stock. If the transfer of Stock is restricted, certificates
representing such Stock may bear a legend referring to such restrictions.
5.6 COMPLIANCE WITH APPLICABLE LAWS. Notwithstanding any other
provision of the Plan or any Award Agreement, the Company shall have no
obligation to issue any shares of Stock under the Plan or pursuant to any Award
unless such issuance would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity. Prior to the issuance
of any shares of Stock under the Plan or pursuant to an Award, the Company may
require a written statement that the recipient is acquiring the shares for
investment and not for the purpose or with the intention of distributing the
shares. The certificates representing the shares of Stock issued pursuant to an
Award under the Plan may bear such legend or legends as the Committee deems
appropriate in order to assure compliance with applicable securities laws and
regulations.
5.7 GOVERNING LAW AND VENUE. The Plan and Awards granted hereunder
(including Award Agreements evidencing such Awards) will be governed by and
construed in accordance with the laws of the State of Delaware, United States of
America, other than with respect to choice of laws, rules and principles. Venue
for any and all disputes arising out of or in connection with the Plan, any
Award hereunder or any Award Agreement shall exclusively be in Williamson
County, Texas, United States of America, and the courts sitting in Williamson
County, Texas, United States of America shall have exclusive jurisdiction to
adjudicate such disputes.
5.8 FOREIGN JURISDICTIONS. To the extent that the Committee determines
that the material terms set by the Committee or imposed by the Plan preclude the
achievement of the material purposes of the Plan in jurisdictions outside the
United States, the Committee will have the authority and discretion to modify
those terms and provide for such additional terms and conditions as the
Committee determines to be necessary, appropriate or desirable to accommodate
differences in local law, policy or custom or to facilitate administration of
the Plan. The Committee may
adopt or approve sub-plans, appendices or supplements to, or amendments,
restatements or alternative versions of, the Plan as it may consider necessary,
appropriate or desirable, without thereby affecting the terms of the Plan as in
effect for any other purpose. The special terms and any appendices, supplements,
amendments, restatements or alternative versions, however, shall not include any
provisions that are inconsistent with the terms of the Plan as then in effect,
unless the Plan could have been amended to eliminate such inconsistency without
further approval by the stockholders.