EXHIBIT 10.14
CENTEX CORPORATION
2003 EQUITY INCENTIVE PLAN
1. PLAN. The Centex Corporation 2003 Equity Incentive Plan (the "Plan")
was adopted by the Corporation to reward certain key Employees of the
Corporation and its Affiliates and Non-employee Directors of the Corporation by
providing for certain cash benefits and by enabling them to acquire shares of
Common Stock of the Corporation.
2. OBJECTIVES. The purpose of this Centex Corporation 2003 Equity
Incentive Plan is to further the interests of the Corporation and its
shareholders by providing incentives in the form of Awards to key Employees and
Non-employee Directors who can contribute materially to the success and
profitability of the Corporation and its Affiliates. Such Awards will recognize
and reward outstanding performances and individual contributions and give
Participants in the Plan an interest in the Corporation parallel to that of the
shareholders, thus enhancing the proprietary and personal interest of such
Participants in the Corporation's continued success and progress. This Plan will
also enable the Corporation and its Affiliates to attract and retain such
Employees and Non-employee Directors.
3. DEFINITIONS. As used herein, the terms set forth below shall have
the following respective meanings:
"AFFILIATE" means a Subsidiary or Joint Venture.
"AUTHORIZED OFFICER" means the Chief Executive Officer of the
Corporation (or any other senior officer of the Corporation to whom he
or she shall delegate the authority to execute any Award Agreement,
where applicable).
"AWARD" means an Employee Award or a Director Award.
"AWARD AGREEMENT" means a written agreement setting forth the
terms, conditions and limitations applicable to an Award, to the extent
the Committee determines such agreement is necessary.
"BOARD" means the Board of Directors of the Corporation.
"BLACK-SCHOLES VALUE" means the formula given by the option
pricing model of such name used to calculate the theoretical fair value
of a stock option at any given time.
"CHANGE IN CONTROL" unless otherwise defined by the Committee,
means a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended,
whether or not the Corporation is then subject to such reporting
requirement; provided, that, without limitation, such a change in
control shall be deemed to have occurred if:
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(i) a third person, including a "Group" as defined in
Section 13(d)(3) of the Exchange Act, becomes the beneficial
owner of Common Stock having fifty (50) percent or more of
total number of votes that may be cast for the election of
Directors; or
(ii) as a result of, or in connection with, a
contested election for Directors, persons who were Directors
immediately before such election shall cease to constitute a
majority of the Board.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITTEE" means the independent Compensation Committee of
the Board as is designated by the Board to administer the Plan.
"COMMON STOCK" means Centex Corporation common stock, par
value $.25 per share.
"CORPORATION" means Centex Corporation, a Nevada corporation,
or any successor thereto.
"DIRECTOR" means an individual who is a member of the Board.
"DIRECTOR AWARD" means any Option, Stock Award or Performance
Award granted, whether singly, in combination or in tandem, to a
Participant who is a Non-employee Director pursuant to such applicable
terms, conditions and limitations (including treatment as a Performance
Award) as the Committee may establish in order to fulfill the
objectives of the Plan.
"DISABILITY" means a disability that renders the Participant
unable to engage in any occupation in accordance with the terms of the
Long Term Disability Plan of Centex Corporation.
"DIVIDEND EQUIVALENTS" means, with respect to Stock Units or
shares of Restricted Stock that are to be issued at the end of the
Restriction Period, an amount equal to all dividends and other
distributions (or the economic equivalent thereof) that are payable to
stockholders of record during the Restriction Period on a like number
of shares of Common Stock.
"EMPLOYEE" means an employee of the Corporation or any of its
Affiliates.
"EMPLOYEE AWARD" means any Option, Stock Award, or Performance
Award granted, whether singly, in combination or in tandem, to a
Participant who is an Employee pursuant to such applicable terms,
conditions and limitations (including treatment as a Performance Award)
as the Committee may establish in order to fulfill the objectives of
the Plan.
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"EMPLOYEE DIRECTOR" means an individual serving as a member of
the Board who is an Employee of the Corporation or any of its
Affiliates.
"EQUITY AWARD" means any Option, Stock Award, or Performance
Award (other than a Performance Award denominated in cash) granted to a
Participant under the Plan.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FAIR MARKET VALUE" of a share of Common Stock means, as of a
particular date, (i) (A) if Common Stock is listed on a national
securities exchange, the mean between the highest and lowest sales
price per share of such Common Stock on the consolidated transaction
reporting system for the principal national securities exchange on
which shares of Common Stock are listed on that date, or, if there
shall have been no such sale so reported on that date, on the next
succeeding date on which such a sale was so reported, or, at the
discretion of the Committee, the price prevailing on the exchange at
the time of exercise, (B) if Common Stock is not so listed but is
quoted on the NASDAQ National Market, the mean between the highest and
lowest sales price per share of Common Stock reported by the NASDAQ
National Market on that date, or, if there shall have been no such sale
so reported on that date, on the next succeeding date on which such a
sale was so reported or, at the discretion of the Committee, the price
prevailing on the NASDAQ National Market at the time of exercise, (C)
if Common Stock is not so listed or quoted, the mean between the
closing bid and asked price on that date, or, if there are no
quotations available for such date, on the next succeeding date on
which such quotations shall be available, as reported by the NASDAQ
Stock Market, or, if not reported by the NASDAQ Stock Market, by the
National Quotation Bureau Incorporated or (D) if Common Stock is not
publicly traded, the most recent value determined by an independent
appraiser appointed by the Corporation for such purpose, or (ii) if
applicable, the price per share as determined in accordance with the
procedures of a third party administrator retained by the Corporation
to administer the Plan.
"GRANT DATE" means the date an Award is granted to a
Participant pursuant to the Plan. The Grant Date for a substituted
award is the Grant Date of the original award.
"GRANT PRICE" means the price at which a Participant may
exercise his or her right to receive cash or Common Stock, as
applicable, under the terms of an Award.
"JOINT VENTURE" means any joint venture, partnership, limited
liability company or other non-corporate entity in which the
Corporation has at least 50% ownership, voting, capital or profit
interests (in whatever form).
"NON-EMPLOYEE DIRECTOR" means an individual serving as a
member of the Board who is not an Employee of the Corporation or any of
its Affiliates.
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"OPTION" means a right to purchase a specified number of
shares of Common Stock at a specified Grant Price, which is not
intended to comply with the requirements set forth in Section 422 of
the Code.
"PARTICIPANT" means an Employee or Non-employee Director to
whom an Award has been granted under this Plan.
"PERFORMANCE AWARD" means an Award made pursuant to this Plan
that is subject to the attainment in the future of one or more
Performance Goals.
"PERFORMANCE Goal" means a standard established by the
Committee, to determine in whole or in part whether a Qualified
Performance Award shall be earned.
"QUALIFIED PERFORMANCE AWARD" means a Performance Award made
to a Participant who is an Employee that is intended to qualify as
qualified performance-based compensation under Section 162(m) of the
Code, as described in Section 8(a)(iii)(B) of the Plan.
"RESTRICTED STOCK" means Common Stock that is restricted or
subject to forfeiture provisions.
"RESTRICTION PERIOD" means a period of time beginning as of
the Grant Date of an Award of Restricted Stock and ending as of the
date upon which the Common Stock subject to such Award is no longer
restricted or subject to forfeiture provisions.
"RETIREMENT" means termination from employment at age 62 or
later with at least 10 years of service.
"STOCK AWARD" means an Award in the form of shares of Common
Stock or Stock Units, including an award of Restricted Stock.
"STOCK UNIT" means a unit equal to one share of Common Stock
(as determined by the Committee) granted to either an Employee or a
Non-employee Director.
"SUBSIDIARY" means any corporation of which the Corporation
directly or indirectly owns shares representing 50% or more of the
combined voting power of the shares of all classes or series of capital
stock of such corporation which have the right to vote generally on
matters submitted to a vote of the stockholders of such corporation.
4. ELIGIBILITY.
(a) Employees. Employees eligible for the grant of Employee
Awards under this Plan are those Employee Directors and Employees who
hold positions of
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responsibility and whose performance, in the judgment of the Committee,
can have a significant effect on the success of the Corporation and its
Affiliates.
(b) Directors. Members of the Board eligible for the grant of
Director Awards under this Plan are those who are Non-employee
Directors.
5. COMMON STOCK AVAILABLE FOR AWARDS. Subject to the provisions of
paragraph 15 hereof, no Award shall be granted if it shall result in the
aggregate number of shares of Common Stock issued under the Plan plus the number
of shares of Common Stock covered by or subject to Awards then outstanding
(after giving effect to the grant of the Award in question) to exceed 3,000,000
shares. No more than 1,000,000 shares of Common Stock shall be available for
Stock Awards, other than Options or Performance Awards. The number of shares of
Common Stock that are the subject of Awards under this Plan that are forfeited
or terminated, expire unexercised, are settled in cash in lieu of Common Stock
or in a manner such that all or some of the shares covered by an Award are not
issued to a Participant or are exchanged for Awards that do not involve Common
Stock, shall again immediately become available for Awards hereunder. If the
Grant Price or other purchase price of any Option or other Award granted under
the Plan is satisfied by tendering shares of Common Stock to the Corporation by
either actual delivery or by attestation, or if the tax withholding obligation
resulting from the settlement of any such Option or other Award is satisfied by
tendering or withholding shares of Common Stock, only the number of shares of
Common Stock issued net of the shares of Common Stock tendered or withheld shall
be deemed delivered for purposes of determining the maximum number of shares of
Common Stock available for delivery under the Plan. Shares of Common Stock
delivered under the Plan in settlement, assumption or substitution of
outstanding awards or obligations to grant future awards under the plans or
arrangements of another entity shall not reduce the maximum number of shares of
Common Stock available for delivery under the Plan, to the extent that such
settlement, assumption or substitution is a result of the Corporation or an
Affiliate acquiring another entity or an interest in another entity. The
Committee may from time to time adopt and observe such procedures concerning the
counting of shares against the Plan maximum as it may deem appropriate. The
Board and the appropriate officers of the Corporation shall from time to time
take whatever actions are necessary to file any required documents with
governmental authorities, stock exchanges and transaction reporting systems to
ensure that shares of Common Stock are available for issuance pursuant to
Awards.
6. ADMINISTRATION.
(a) This Plan shall be administered by the Committee except as
otherwise provided herein.
(b) Subject to the provisions hereof, the Committee shall have
full and exclusive power and authority to administer this Plan and to
take all actions that are specifically contemplated hereby or are
necessary or appropriate in connection with the administration hereof.
The Committee shall also have full and exclusive power to interpret
this Plan and to adopt such rules, regulations and guidelines for
carrying out this Plan as it may deem necessary or proper, all of which
powers shall be exercised in the best interests of the Corporation and
in keeping with the objectives of this Plan. The Committee may, in its
discretion, provide for the extension of the exercisability of an
Award, accelerate the vesting or exercisability of an
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Award, eliminate or make less restrictive any restrictions applicable
to an Award, waive any restriction or other provision of this Plan
(insofar as such provision relates to Awards) or an Award or otherwise
amend or modify an Award in any manner that is either (i) not adverse
to the Participant to whom such Award was granted or (ii) consented to
by such Participant. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in this Plan or in any Award in
the manner and to the extent the Committee deems necessary or desirable
to further the Plan purposes. Any decision of the Committee, with
respect to Awards, in the interpretation and administration of this
Plan shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned.
(c) No member of the Committee or officer of the Corporation
to whom the Committee has delegated authority in accordance with the
provisions of paragraph 7 of this Plan shall be liable for anything
done or omitted to be done by him or her, by any member of the
Committee or by any officer of the Corporation in connection with the
performance of any duties under this Plan, except for his or her own
willful misconduct or as expressly provided by statute.
7. DELEGATION OF AUTHORITY. Following the authorization of a pool of
cash or shares of Common Stock to be available for Awards, the Committee may
authorize the Chief Executive Officer of the Corporation or a committee
consisting solely of members of the Board to grant individual Employee Awards
from such pool pursuant to such conditions or limitations as the Committee may
establish. The Committee may also delegate to the Chief Executive Officer and to
other executive officers of the Corporation its administrative duties under this
Plan (excluding its granting authority) pursuant to such conditions or
limitations as the Committee may establish. The Committee may engage or
authorize the engagement of a third party administrator to carry out
administrative functions under the Plan.
8. AWARDS.
(a) The Committee shall determine the type or types of Awards
to be made under this Plan and shall designate from time to time the
Participants who are to be the recipients of such Awards. Each Award
may, in the discretion of the Committee, be embodied in an Award
Agreement, which shall contain such terms, conditions and limitations
as shall be determined by the Committee in its sole discretion and, if
required by the Committee, shall be signed by the Participant to whom
the Award is granted and by an Authorized Officer for and on behalf of
the Corporation. Awards may consist of those listed in this paragraph
8(a) and may be granted singly, in combination or in tandem. Awards may
also be granted in combination or in tandem with, in replacement of, or
as alternatives to, grants or rights under this Plan or any other plan
of the Corporation or any of its Affiliates, including the plan of any
acquired entity. An Award may provide for the grant or issuance of
additional, replacement or alternative Awards upon the occurrence of
specified events. All or part of an Award may be subject to conditions
established by the Committee, which may include, but are not limited
to, continuous service with the Corporation and its Affiliates,
achievement of specific
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business objectives, increases in specified indices, attainment of
specified growth rates and other comparable measurements of
performance.
(i) Option. An Employee Award or Director Award may
be in the form of an Option. The Grant Price of an Option
shall be not less than the Fair Market Value of the Common
Stock subject to such Option on the Grant Date.
Notwithstanding anything contrary contained in this Plan
including Sections 8(a)(i)(A) and (B), in no event shall the
term of the Option extend more than ten (10) years after the
Grant Date. Options may not include provisions that "reload"
the option upon exercise. Subject to the foregoing provisions,
the terms, conditions and limitations applicable to any
Options awarded to Participants pursuant to this Plan,
including the Grant Price, the term of the Options, the number
of shares subject to the Option and the date or dates upon
which they become exercisable, shall be determined by the
Committee.
(A) Except as is otherwise provided in the
Award Agreement and subject to Committee discretion
as provided in Section 6(b):
(1) all rights to exercise an
Option shall terminate within four (4)
months after the date the Participant ceases
to be an Employee, or ceases to be a
Director, whichever may occur later, for any
reason other than death or Disability (but
in no event later than the end of the
original period of the Option).
(2) In the event of a Participant's
death, an Option will terminate fifteen (15)
months thereafter.
(3) In the event of a Participant's
Disability and resulting termination of
employment, an Option will terminate six (6)
months after such Participant's employment
termination date.
(4) In the event the employment of
the Participant is terminated for cause (as
determined by the Committee), all Options
whether or not vested shall terminate
immediately.
(5) All unvested Options are
cancelled upon termination of employment;
except that all non-qualified options shall
immediately vest upon Retirement.
(B) However, if an Option is held by a
Director who, on the date he or she ceases to be a
Director (and, if also an Employee, ceases to be an
Employee), is at least 62 years old and has at least
ten (10) years of service as a Director, then all
Common Stock subject to such Option will vest on the
date the Director ceases to be a Director, and all
rights to exercise such Option will terminate three
(3) years thereafter. Also, if an Option is held by a
Director who, on the date he or she ceases to be a
Director (and, if also an Employee, ceases to be an
Employee), is less than 62 years old or has less than
ten (10) years of service as a Director, then
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all Common Stock subject to such Option will continue
to vest in accordance with its terms for a period of
three (3) years following such date, and all rights
to exercise such Option will terminate three (3)
years after such date. If Options are awarded in the
final two (2) years of the term of a Director who is
approaching age 70, or an Employee Director who is at
least age 55 with at least ten (10) years of service
and his or her age plus years of service equal at
least 70, the outside exercise date is the one
provided in the Option or seven (7) years from the
grant date, whichever occurs earlier. This paragraph
8(a)(i)(B) shall not apply to a Participant who is
terminated for cause (as determined by the
Committee).
(ii) Stock Award. An Employee Award or Director Award
may be in the form of a Stock Award. The terms, conditions and
limitations applicable to any Stock Awards granted to
Participants pursuant to this Plan shall be determined by the
Committee; provided that any Stock Award which is not a
Performance Award shall have a minimum Restriction Period of
three years from the Grant Date, provided that (i) the
Committee may provide for earlier vesting upon a termination
of employment by reason of death, Disability or Retirement,
(ii) such three-year minimum Restriction Period shall not
apply to a Stock Award that is granted in lieu of salary or
bonus, and (iii) vesting of a Stock Award may occur
incrementally over the three-year minimum Restricted Period.
(iii) Performance Award. Without limiting the type or
number of Employee Awards or Director Awards that may be made
under the other provisions of this Plan, an Employee Award or
Director Award may be in the form of a Performance Award. The
terms, conditions and limitations applicable to any
Performance Awards granted to Participants pursuant to this
Plan shall be determined by the Committee; provided that any
Stock Award which is a Performance Award shall have a minimum
Restriction Period of one year from the Grant Date, provided
that the Committee may provide for earlier vesting upon a
termination of employment by reason of death, Disability or
Retirement. The Committee shall set Performance Goals in its
discretion which, depending on the extent to which they are
met, will determine the value and/or amount of Performance
Awards that will be paid out to the Participant.
(A) Nonqualified Performance Awards.
Performance Awards granted to Employees or Directors
that are not intended to qualify as qualified
performance-based compensation under Section 162(m)
of the Code shall be based on achievement of such
goals and be subject to such terms, conditions and
restrictions as the Committee or its delegate shall
determine.
(B) Qualified Performance Awards.
Performance Awards granted to Employees under the
Plan that are intended to qualify as qualified
performance-based compensation under Section 162(m)
of the Code shall be paid, vested or otherwise
deliverable solely on account of the attainment of
one or more pre-established, objective Performance
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Goals established by the Committee prior to the
earlier to occur of (x) 90 days after the
commencement of the period of service to which the
Performance Goal relates and (y) the lapse of 25% of
the period of service (as scheduled in good faith at
the time the goal is established), and in any event
while the outcome is substantially uncertain. A
Performance Goal is objective if a third party having
knowledge of the relevant facts could determine
whether the goal is met. Such a Performance Goal may
be based on one or more business criteria that apply
to the Employee, one or more business units or
divisions of the Corporation or the applicable
sector, or the Corporation as a whole, and if so
desired by the Committee, by comparison with a peer
group of companies. A Performance Goal may include
one or more of the following: (a) earnings, either in
the aggregate or on a per-share basis, reflecting
such dilution of shares as the Committee deems
appropriate, including operating earnings, pre-tax
earnings, earnings before interest and taxes, and
earnings before interest, taxes, depreciation and
amortization; (b) gross or net revenue; (c) operating
or net cash flow; (d) financial return ratios (e.g.,
return or net return on one or more of the following:
assets, net assets, equity, invested capital,
revenue); (e) margins, including net, operating or
pre-tax margins; (f) total shareholder return; (g)
financial ratios (e.g., debt to capitalization or
debt to equity); (h) growth in financial measures or
ratios (e.g., revenue, earnings, cash flow,
stockholders' equity, margins); or (i) customer
satisfaction, based on specified objective goals, or
a customer survey sponsored by the Corporation or one
or more business units or divisions of the
Corporation.
(C) Unless otherwise stated, such a
Performance Goal need not be based upon an increase
or positive result under a particular business
criterion and could include, for example, maintaining
the status quo or limiting economic losses (measured,
in each case, by reference to specific business
criteria). In interpreting Plan provisions applicable
to Performance Goals and Qualified Performance
Awards, it is the intent of the Plan to conform with
the standards of Section 162(m) of the Code and
Treasury Regulation Section 1.162-27(e)(2)(i), as to
grants to those Employees whose compensation is, or
is likely to be, subject to Section 162(m) of the
Code, and the Committee in establishing such goals
and interpreting the Plan shall be guided by such
provisions. Prior to the payment of any compensation
based on the achievement of Performance Goals, the
Committee must certify in writing that applicable
Performance Goals and any of the material terms
thereof were, in fact, satisfied. Subject to the
foregoing provisions, the terms, conditions and
limitations applicable to any Qualified Performance
Awards made pursuant to this Plan shall be determined
by the Committee.
(b) Notwithstanding anything to the contrary contained in this
Plan, the following limitations shall apply to any Employee Awards made
hereunder:
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(i) no Participant may be granted, during any fiscal
year, Employee Awards consisting of Options (including Options
that are granted as Performance Awards) that are exercisable
for more than 500,000 shares of Common Stock;
(ii) no Participant may be granted, during any fiscal
year, Employee Awards consisting of Stock Awards (including
Stock Awards that are granted as Performance Awards) covering
or relating to more than 250,000 shares of Common Stock (the
limitation set forth in this clause (ii), together with the
limitation set forth in clause (i) above and (c)(i) and (ii)
below, being hereinafter collectively referred to as the
"Stock Based Awards Limitations"); and
(iii) no Participant may be granted Employee Awards
under this Plan consisting of cash (including Awards that are
granted as Performance Awards) in respect of any fiscal year
having a value determined on the Grant Date in excess of an
amount equal to 2% of the consolidated net income of the
Corporation and its subsidiaries for such fiscal year plus the
Black-Scholes Value, determined as of the Option Grant Date,
of Options on 100,000 shares of Common Stock determined as if
such Options had an Option Grant Date on the effective date of
the Employee Award.
(c) Notwithstanding anything to the contrary contained in this
Plan the following limitations shall apply to any Director Awards made
hereunder:
(A) no Participant may be granted, during
any fiscal year, Director Awards consisting of
Options (including Options that are granted as
Performance Awards) that are exercisable for more
than 25,000 shares of Common Stock and
(B) no Participant may be granted, during
any fiscal year, Director Awards consisting of Stock
Awards (including Stock Awards that are granted as
Performance Awards) covering or relating to more than
15,000 shares of Common Stock.
9. CHANGE IN CONTROL. Notwithstanding the provisions of paragraph 8
hereof, unless otherwise expressly provided in the applicable Award Agreement,
or as otherwise specified in the terms of an Equity Award, in the event of a
Change in Control during a Participant's employment (or service as a
Non-employee Director) with the Corporation or one of its Affiliates, each
Equity Award granted under this Plan to the Participant shall become immediately
vested and fully exercisable, with performance-based equity awards vested at
target level (regardless of the otherwise applicable vesting or exercise
schedules or Performance Goals provided for under the Award Agreement or the
terms of the Equity Award).
10. PAYMENT OF AWARDS.
(a) General. Payment made to a Participant pursuant to an
Award may be made in the form of cash or Common Stock, or a combination
thereof, and may include such restrictions as the Committee shall
determine, including, in the case of Common Stock, restrictions on
transfer and forfeiture provisions. If such payment is made in the
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form of Restricted Stock, the Committee shall specify whether the
underlying shares are to be issued at the beginning or end of the
Restriction Period. In the event that shares of Restricted Stock are to
be issued at the beginning of the Restriction Period, the certificates
evidencing such shares (to the extent that such shares are so
evidenced) shall contain appropriate legends and restrictions that
describe the terms and conditions of the restrictions applicable
thereto. In the event that shares of Restricted Stock are to be issued
at the end of the Restricted Period, the right to receive such shares
shall be evidenced by book entry registration or in such other manner
as the Committee may determine.
(b) Deferral. With the approval of the Committee, amounts
payable in respect of Awards may be deferred and paid either in the
form of installments or as a lump-sum payment. The Committee may permit
selected Participants to elect to defer payments of some or all types
of Awards or any other compensation otherwise payable by the
Corporation in accordance with procedures established by the Committee
and may provide that such deferred compensation may be payable in
shares of Common Stock. Any deferred payment pursuant to an Award,
whether elected by the Participant or specified by the Award Agreement
or the terms of the Award or by the Committee, may be forfeited if and
to the extent that the Award Agreement or the terms of the Award so
provide.
(c) Dividends, Earnings and Interest. Rights to dividends or
Dividend Equivalents may be extended to and made part of any Stock
Award, subject to such terms, conditions and restrictions as the
Committee may establish. The Committee may also establish rules and
procedures for the crediting of interest or other earnings on deferred
cash payments and Dividend Equivalents for Stock Awards.
(d) Substitution of Awards. Subject to paragraphs 13 and 15,
at the discretion of the Committee, a Participant who is an Employee
may be offered an election to substitute an Employee Award for another
Employee Award or Employee Awards of the same or different type.
11. OPTION EXERCISE. Following exercise the Grant Price shall be paid
in full in cash at the time of delivery of the stock or, if permitted by the
Committee and elected by the optionee, the optionee may purchase such shares by
means of tendering Common Stock valued at Fair Market Value on the date of
exercise, or any combination thereof. The Committee shall determine acceptable
methods for Participants to tender Common Stock or other Awards. The Committee
may provide for procedures to permit the exercise or purchase of such Awards by
use of the proceeds to be received from the sale of Common Stock issuable
pursuant to an Award. The Committee may adopt additional rules and procedures
regarding the exercise of Options from time to time, provided that such rules
and procedures are not inconsistent with the provisions of this paragraph.
An optionee desiring to pay the Grant Price of an Option by tendering
Common Stock using the method of attestation may, subject to any such conditions
and in compliance with any such procedures as the Committee may adopt, do so by
attesting to the ownership of Common Stock of the requisite value in which case
the Corporation shall issue or otherwise deliver to the optionee upon such
exercise a number of shares of Common Stock subject to the Option equal to
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the result obtained by dividing (a) the excess of the aggregate Fair Market
Value of the shares of Common Stock subject to the Option for which the Option
(or portion thereof) is being exercised over the Grant Price payable in respect
of such exercise by (b) the Fair Market Value per share of Common Stock subject
to the Option, and the optionee may retain the shares of Common Stock the
ownership of which is attested.
12. TAXES. The Corporation or its designated third party administrator
shall have the right to deduct applicable taxes from any Employee Award payment
and withhold, at the time of delivery or vesting of cash or shares of Common
Stock under this Plan, an appropriate amount of cash or number of shares of
Common Stock or a combination thereof for payment of taxes or other amounts
required by law or to take such other action as may be necessary in the opinion
of the Corporation to satisfy all obligations for withholding of such taxes. The
Committee may also permit withholding to be satisfied by the transfer to the
Corporation of shares of Common Stock theretofore owned by the holder of the
Employee Award with respect to which withholding is required. If shares of
Common Stock are used to satisfy tax withholding, such shares shall be valued
based on the Fair Market Value when the tax withholding is required to be made.
The Committee may provide for loans, on either a short term or demand basis,
from the Corporation to a Participant who is an Employee to permit the payment
of taxes required by law.
13. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION OF THE PLAN. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Corporation to the extent such approval is
required by applicable legal requirements or the requirements of the securities
exchange on which the Corporation's stock is listed. Notwithstanding anything
herein to the contrary, without the prior approval of the Corporation's
stockholders, Options issued under the Plan will not be repriced, replaced, or
regranted through cancellation or by decreasing the exercise price of a
previously granted Option.
14. ASSIGNABILITY. Unless otherwise determined by the Committee and
provided in the Award Agreement or the terms of the Award or to a family limited
partnership, trust or similar entity pre-approved by the Committee, no Award or
any other benefit under this Plan shall be assignable or otherwise transferable
except by will, beneficiary designation or the laws of descent and distribution.
In the event that a beneficiary designation conflicts with an assignment by
will, the beneficiary designation will prevail. The Committee may prescribe and
include in applicable Award Agreements or the terms of the Award other
restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this paragraph 14 shall be null and
void.
15. ADJUSTMENTS.
(a) The existence of outstanding Awards shall not affect in
any manner the right or power of the Corporation or its stockholders to
make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the capital stock of the
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Corporation or its business or any merger or consolidation of the
Corporation, or any issue of bonds, debentures, preferred or prior
preference stock (whether or not such issue is prior to, on a parity
with or junior to the existing Common Stock) or the dissolution or
liquidation of the Corporation, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or
proceeding of any kind, whether or not of a character similar to that
of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of
outstanding shares of Common Stock, declaration of a dividend payable
in shares of Common Stock or other stock split, then (i) the number of
shares of Common Stock reserved under this Plan, (ii) the number of
shares of Common Stock covered by outstanding Awards, (iii) the Grant
Price or other price in respect of such Awards, (iv) the appropriate
Fair Market Value and other price determinations for such Awards, and
(v) the Stock Based Awards Limitations shall each be proportionately
adjusted by the Board as appropriate to reflect such transaction. In
the event of any other recapitalization or capital reorganization of
the Corporation, any consolidation or merger of the Corporation with
another corporation or entity, the adoption by the Corporation of any
plan of exchange affecting Common Stock or any distribution to holders
of Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Board may make
appropriate adjustments to (i) the number of shares of Common Stock
reserved under this Plan, (ii) the number of shares of Common Stock
covered by Awards, (iii) the Grant Price or other price in respect of
such Awards, (iv) the appropriate Fair Market Value and other price
determinations for such Awards, and (v) the Stock Based Awards
Limitations to reflect such transaction; provided that such adjustments
shall only be such as are necessary to maintain the proportionate
interest of the holders of the Awards and preserve, without increasing,
the value of such Awards. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board shall be authorized (x) to
assume under the Plan previously issued compensatory awards, or to
substitute new Awards for previously issued compensatory awards,
including Awards, as part of such adjustment or (y) to cancel Awards
that are Options and give the Participants who are the holders of such
Awards notice and opportunity to exercise for 30 days prior to such
cancellation.
16. RESTRICTIONS. No Common Stock or other form of payment shall be
issued with respect to any Award unless the Corporation shall be satisfied based
on the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.
17. UNFUNDED PLAN. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants under this Plan, any
such accounts shall be used merely as a bookkeeping convenience, including
bookkeeping accounts established by a third
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party administrator retained by the Corporation to administer the Plan. The
Corporation shall not be required to segregate any assets for purposes of this
Plan or Awards hereunder, nor shall the Corporation, the Board or the Committee
be deemed to be a trustee of any benefit to be granted under this Plan. Any
liability or obligation of the Corporation to any Participant with respect to an
Award under this Plan shall be based solely upon any contractual obligations
that may be created by this Plan and any Award Agreement or the terms of the
Award, and no such liability or obligation of the Corporation shall be deemed to
be secured by any pledge or other encumbrance on any property of the
Corporation. Neither the Corporation nor the Board nor the Committee shall be
required to give any security or bond for the performance of any obligation that
may be created by this Plan.
18. RIGHT TO EMPLOYMENT. Nothing in the Plan or an Award Agreement
shall interfere with or limit in any way the right of the Corporation to
terminate any Participant's employment or other service relationship at any
time, nor confer upon any Participant any right to continue in the capacity in
which he or she is employed or otherwise serves the Corporation.
19. SUCCESSORS. All obligations of the Corporation under the Plan with
respect to Awards granted hereunder shall be binding on any successor to the
Corporation, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Corporation.
20. GOVERNING LAW. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Texas.
21. EFFECTIVENESS. The Plan will be submitted to the stockholders of
the Corporation for approval at the 2003 annual meeting of shareholders and, if
approved, will become retroactively effective as of April 1, 2003.
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