EXHIBIT 10.11
CONFIDENTIAL
BIONUMERIK PHARMACEUTICALS, INC.
1993 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option
Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional
incentive to Employees and Consultants of the Company and its
Subsidiaries and to promote the success of the Company's business.
Options granted under this Plan may be incentive stock options (as
defined under Section 422 of the Code) or nonqualified stock options,
as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as
amended, and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Administrator" means the Board or any of its Committees,
as applicable, that is administering the Plan pursuant to Section 4 of
the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Company" means BioNumerik Pharmaceuticals, Inc., a Texas
corporation.
(f) "Consultant" means any consultant or advisor to the
Company or any Parent or Subsidiary and any director of the Company
whether compensated for such services or not, provided that if and in
the event the Company registers any class of any equity security
pursuant to the Exchange Act, the term Consultant shall thereafter not
include directors who are not compensated for their services or are
paid only a director's fee by the Company.
(g) "Continuous Status as an Employee" means the absence of
any interruption or termination of the employment relationship by the
Company or any Subsidiary. Continuous Status as an Employee shall not
be considered interrupted in the case of (i) any leave of absence
approved by the Board, including sick leave, military leave, or any
other personal leave; provided, however, that for purposes of Incentive
Stock Options, such leave is for a period of not more than ninety (90)
days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (ii) in the
case of transfers between locations of the Company or between the
Company, its Subsidiaries or its successor.
(h) "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the
Company. The payment of a director's fee by the Company shall not be
sufficient to constitute "employment" by the Company.
(i) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(j) "Fair Market Value" means, as of any date, the value of
Stock determined as follows:
(i) If the Stock is listed on any established stock
exchange or a national market system including without
limitation the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales
were reported, as quoted on such system or exchange or the
exchange with the greatest volume of trading in Stock for the
last market trading day prior to the time of determination) as
reported in the Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Stock is quoted on the NASDAQ System (but
not on the National Market System thereof) or regularly quoted
by a recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean between the
high and low asked prices for the Stock; or
(iii) In the absence of an established market for the
Stock, the Fair Market Value thereof shall be determined in
good faith by the Administrator.
(k) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code.
(1) "Nonqualified Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
(m) "Option" means a stock option granted pursuant to the
Plan.
(n) "Optioned Stock" means the Stock subject to an Option.
(o) "Optionee" means an Employee or Consultant who receives an
Option.
(p) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(q) "Plan" means this 1993 Stock Option Plan, as amended and
restated.
(r) "Share" means a share of the Stock, as adjusted in
accordance with Section 12 of the Plan.
2
(s) "Stock" means the Common Stock, par value $0.01 per share,
of the Company.
(t) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 12 of the Plan, the maximum number of shares of Stock which may
be optioned and sold under the Plan is 2,000,000 shares. The shares may
be authorized, but unissued, or reacquired Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which
were subject thereto shall, unless the Plan shall have been terminated,
become available for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and
Officers. With respect to grants of Options to Employees who
are also officers or directors of the Company, the Plan shall
be administered by (A) the Board or (B) a Committee designated
by the Board to administer the Plan, which Committee shall be
constituted in such a manner as to permit the Plan to comply
with Rule 16b-3 promulgated under the Exchange Act or any
successor thereto ("Rule 16b-3") with respect to a plan
intended to qualify thereunder as a discretionary plan. Once
appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.
From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and
remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by Rule 16b-3
with respect to a plan intended to qualify thereunder as a
discretionary plan. Notwithstanding the foregoing, the Plan
shall not be administered by the Board if (a) the Company and
its officers and directors are then subject to the
requirements of Section 16 of the Exchange Act and (b) the
Board's administration of the Plan would prevent the Plan from
complying with Rule 16b-3.
(ii) Multiple Administrative Bodies. If permitted by
Rule 16b-3, the Plan may be administered by different bodies
with respect to directors, nondirector officers and Employees
who are neither directors nor officers.
(iii) Administration With Respect to Consultants and
Other Employees. With respect to grants of Options to
Employees or Consultants who are neither directors nor
officers of the Company, the Plan shall be administered by (A)
the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy
the legal requirements relating to the
3
administration of incentive stock option plans, if any, of
corporate and securities laws applicable to the Company and of
the Code (the "Applicable Laws"). Once appointed, such
Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the
Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without
cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated
by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Stock,
in accordance with Section 2(j) of the Plan;
(ii) to select the officers, Consultants and
Employees to whom Options may from time to time be granted
hereunder;
(iii) to determine whether and to what extent Options
are granted hereunder;
(iv) to determine the number of shares of Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, the per share
exercise price for the Shares to be issued pursuant to the
exercise of an Option and any restriction or limitation, or
any vesting acceleration or waiver of forfeiture restrictions
regarding any Option or other award and/or the shares of Stock
relating thereto, based in each case on such factors as the
Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what
circumstances an Option may be bought-out for cash under
subsection 9(f);
(viii) to determine whether, to what extent and under
what circumstances Stock and other amounts payable with
respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount during any deferral
period); and
4
(ix) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of
the Stock covered by such Option shall have declined since the
date the Option was granted.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Administrator shall be final
and binding on all Optionees and any other holders of any Options.
Neither the Committee nor any member thereof shall be liable for any
act, omission, interpretation, construction or determination made in
connection with the Plan in good faith, and the members of the
Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including
counsel fees) arising therefrom to the full extent permitted by law.
5. Eligibility.
(a) Nonqualified Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Employee or Consultant who has
been granted an Option may, if he is otherwise eligible, be
granted an additional Option or Options.
(b) Each Option shall be designated in the written
option agreement as either an Incentive Stock Option or a
Nonqualified Stock Option. However, notwithstanding such
designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated
as Incentive Stock Options are exercisable for the first time
by any Optionee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options shall be treated as Nonqualified Stock
Options.
(c) For purposes of Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such
Shares is granted.
(d) The Plan shall not confer upon any Optionee any
right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any
way with his right or the Company's right to terminate his
employment or consulting relationship at any time, with or
without cause, unless otherwise agreed in writing by the
Company and such Optionee.
6. Term of Plan. The Plan shall become effective upon its
adoption by the Board of Directors. It shall continue in effect until
September 10, 2003 unless extended by the Board or sooner terminated
under Section 14 of the Plan. No grants of Options will be made
pursuant to the Plan after September 10, 2003.
5
7. Term of Option. The term of each Option shall be the term
stated in the Option Agreement; provided, however, that in the case of
an Incentive Stock Option, the term shall be no more than ten (10)
years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is
granted, owns Stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Option shall be five (5) years from the
date of grant thereof or such shorter term as may be provided in the
Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is
determined by the Administrator, but shall be subject to the following:
In the case of an Incentive Stock Option
(i) granted to an Employee who, at the time
of the grant of such Incentive Stock Option, owns
stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.
(ii) granted to any Employee, the per Share
exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist
entirely of (1) cash, (2) check, (3) promissory note, (4) other shares
of the Company's capital stock which (x) in the case of shares of the
Company's capital stock acquired upon exercise of an Option either have
been owned by the Optionee for more than six months on the date of
surrender or were not acquired, directly or indirectly, from the
Company, and (y) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain
from the total number of Shares as to which the Option is exercised
that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as
to which the Option is exercised, (6) delivery of a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (7) by delivering an irrevocable
subscription agreement for the Shares which irrevocably obligates the
option holder to take and pay for the Shares not more than twelve
months after the date of delivery of the subscription agreement, (8)
any combination of the foregoing methods of payment, (9) or such other
6
consideration and method of payment for the issuance of Shares to the
extent permitted under applicable laws.
9. Exercise of Option.
(a) Procedure for Exercise: Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator, including
performance criteria with respect to the Company and/or the Optionee,
and as shall be permissible under the terms of the Plan. An Option may
not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised, and the Optionee
deemed to be a stockholder of the Shares being purchased upon exercise,
when written notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to
exercise the Option and full payment for the Shares with respect to
which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Board, consist of any consideration
and method of payment allowable under Section 8(b) of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.
(b) Termination of Employment. In the event of termination of
an Optionee's relationship as a Consultant (unless such termination is
for purposes of becoming an Employee of the Company) or Continuous
Status as an Employee with the Company (as the case may be), such
Optionee may, but only within ninety (90) days (or such other period of
time as is determined by the Board, with such determination in the case
of an Incentive Stock Option being made at the time of grant of the
Option and not exceeding ninety (90) days) after the date of such
termination (but in no event later than the expiration date of the term
of such Option as set forth in the Option Agreement), exercise his
Option to the extent that Optionee was entitled to exercise it at the
date of such termination. To the extent that Optionee was not entitled
to exercise the Option at the date of such termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of an Optionee's
relationship as a Consultant or Continuous Status as an Employee as a
result of his total and permanent disability (as defined in Section
22(e)(3) of the Code), Optionee may, but only within twelve (12) months
from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent
so entitled within the time specified herein, the Option shall
terminate.
7
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised, at any time within twelve (12)
months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the
extent the Optionee was entitled to exercise the Option at the date of
death. To the extent that Optionee was not entitled to exercise the
Option at the date of death, or if the Optionee's estate (or such other
person who acquired the right to exercise the Option) does not exercise
such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such offer
is made.
10. Non-Transferability of Options. Unless determined
otherwise by the Administrator, an Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option transferable, such Option shall
contain such additional terms and conditions as the Administrator deems
appropriate.
11. Stock Withholding to Satisfy Withholding Tax Obligations.
At the discretion of the Administrator, Optionees may satisfy
withholding obligations as provided in this paragraph. When an Optionee
incurs tax liability in connection with an Option, which tax liability
is subject to tax withholding under applicable tax laws, and the
Optionee is obligated to pay the Company an amount required to be
withheld under applicable tax laws, the Optionee may satisfy the
withholding tax obligation by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, that number
of Shares having a Fair Market Value equal to the amount required to be
withheld. The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this
purpose shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option or Right as to which the election is
made;
8
(c) all elections shall be subject to the consent or
disapproval of the Administrator; and
(d) if the Optionee is subject to Rule 16b-3, the election
must comply with the applicable provisions of Rule 16b-3 and shall be
subject to such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section
16 of the Exchange Act with respect to Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code
because no election is filed under Section 83(b) of the Code, the
Optionee shall receive the full number of Shares with respect to which
the Option is exercised but such Optionee shall be unconditionally
obligated to tender back to the Company the proper number of Shares on
the Tax Date.
12. Adjustments Upon Changes in Capitalization, Merger or
Change in Control.
(a) Subject to any required action by the stockholders of the
Company, the number of Shares covered by each outstanding Option, and
the number of Shares which have been authorized for issuance under the
Plan but as to which no Options have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option,
as well as the price per share of Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Stock (or Common Stock
into which the Common Stock may be convertible) resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Stock, or any other increase or decrease in the
number of issued shares of Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be
made by the Administrator, whose determination in that respect shall be
final, binding and conclusive. Except as expressly provided herein, 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
or price of shares of Stock subject to an Option.
(b) In the event of the proposed dissolution or liquidation of
the Company, the Board shall notify the Optionee at least fifteen (15)
days prior to such proposed action. To the extent it has not been
previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action. In the event of a merger or
consolidation of the Company with or into another entity or another
transaction pursuant to which all or substantially all of the assets of
the Company are conveyed to another entity, the Option shall be assumed
or an equivalent option shall be substituted by such successor entity
or a parent or subsidiary of such successor entity. In the event that
such successor entity does not agree to assume the Option or to
substitute an equivalent option, the Administrator shall, in lieu of
such assumption or substitution, provide for the Optionee to have the
right to exercise the Option as to all of the Optioned Stock,
9
including Shares as to which the Option would not otherwise be
exercisable. If the Administrator makes an Option fully exercisable in
lieu of assumption or substitution in the event of a merger,
consolidation or other transaction covered by this paragraph, the
Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such
notice, and the Option will terminate upon the expiration of such
period.
(c) If the employment of any Optionee that is an Employee is
terminated by the Company other than for Cause (as defined in
subsection (d) below) within one year following a change in control (as
defined below), then all outstanding Options held by such Optionee on
the date of such termination shall automatically become 100% vested and
fully exercisable. For this purpose, a "change in control" means the
occurrence of any of the following after April 14, 1998:
(i) The acquisition by any person of direct or
indirect beneficial ownership of the Company's outstanding voting
securities in an amount sufficient to elect a majority of the Company's
Board of Directors. For purposes of this subsection (c), the term
"person" means any group, corporation, partnership, association, trust
(other than any trust holding stock for the account of Employees of the
Company pursuant to any stock purchase, ownership or employee benefit
plan of the Company), business entity, estate, or natural person, and
"beneficial ownership" means the direct or indirect power to vote or to
direct the voting of the security or the direct or indirect power to
dispose or direct the disposition of the security.
(ii) Completion of a tender offer or exchange offer
for and acquisition of 50% or more of the voting securities of the
Company that is required to be reported by the offeror to the
Securities and Exchange Commission pursuant to Section 14(d) of the
Exchange Act and the regulations promulgated thereunder.
(iii) The merger or consolidation of the Company with
or into another entity in a transaction in which the shareholders of
the Company immediately prior to such transaction do not own more than
50% of the voting securities of the surviving entity immediately
following such transaction.
(iv) The sale or transfer of all or substantially all
of the assets of the Company, other than to a wholly-owned subsidiary
of the Company.
(d) For purposes of subsection (c) above, "Cause" shall be
deemed to exist if:
(i) Optionee (A) has intentionally failed or refused
or habitually has neglected to carry out or to perform the reasonable
duties required of Optionee as an employee of the Company, after
written notice from the Company of such failure, refusal, neglect or
breach and the expiration of ten (10) business days following the
delivery of such notice during which such failure, refusal, neglect or
breach has remained unremedied, or (B) has intentionally breached any
statutory or common law duty of loyalty to the Company;
10
(ii) Optionee has been indicted on felony charges or
convicted of fraud, embezzlement or any crime involving moral
turpitude, unless the Board determines in good faith that such
indictment or conviction is unlikely to have a material adverse effect
on the Company's business or reputation;
(iii) Optionee dies or becomes subject to a mental or
physical condition that the Company, acting in good faith and upon
reasonable grounds, determines will render Optionee unable to perform
the essential functions of the job for which Optionee is employed
(whether with or without reasonable accommodation on the part of the
Company); or
(iv) Optionee materially breaches any confidentiality
or noncompetition agreement between Optionee and the Company.
13. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Administrator makes
the determination granting such Option, or such other date as is
determined by the Administrator. Notice of the determination shall be
given to each Employee or Consultant to whom an Option is so granted
within a reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made which would
impair the rights of any Optionee under any grant theretofore made,
without his or her consent. In addition, to the extent necessary and
desirable to comply with Rule 16b-3 under the Exchange Act or with
Section 422 of the Code (or any other applicable law or regulation,
including the applicable requirements of the NASD or an established
stock exchange), the Company shall obtain stockholder approval of any
Plan amendment in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and
such Options shall remain in full force and effect as if this Plan had
not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Board, which agreement must be in writing
and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of
such Option and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be
listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
11
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at
the time of any such exercise that the Shares are being purchased only
for investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant
provisions of law.
16. Reservation of Shares. The Company, during the term of
this Plan, will at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of
any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
17. Agreements. Options shall be evidenced by written
agreements in such form as the applicable Administrator shall approve
from time to time.
18. Information to Optionees. The Company shall provide to
each Optionee, during the period for which such Optionee has one or
more Options outstanding, copies of all annual reports and other
information which are generally provided to all stockholders of the
Company. The Company shall not be required to provide such information
to persons whose duties in connection with the Company assure their
access to equivalent information.
19. Governing Law: Construction. All rights and obligations
under the Plan shall be governed by, and the Plan shall be construed in
accordance with, the laws of the State of Texas without regard to the
principles of conflicts of laws. Titles and headings to Sections herein
are for purposes of reference only, and shall in no way limit, define
or otherwise affect the meaning or interpretation of any provisions of
the Plan.
12