EXHIBIT 10.1
KIRBY CORPORATION
2005 STOCK AND INCENTIVE PLAN
ARTICLE I
GENERAL
Section 1.1. Purpose. The purpose of this Plan is to advance the
interests of Kirby Corporation, a Nevada corporation (the "Company"), by
providing an additional incentive to attract and retain qualified and competent
employees for the Company and its subsidiaries, upon whose efforts and judgment
the success of the Company is largely dependent, through the award of (i)
Options to purchase shares of Common Stock (which Options may be Incentive Stock
Options or Nonincentive Stock Options); (ii) shares of Restricted Stock; and
(iii) Performance Awards.
Section 1.2. Definitions. As used herein, the following terms shall
have the meaning indicated:
(a) "Award" means a grant under this Plan in the form of Options,
Restricted Stock, Performance Awards or any combination of the foregoing.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" means the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended) becomes the
beneficial owner, directly or indirectly, of voting securities representing
thirty percent (30%) or more of the combined voting power of the Company's
then outstanding voting securities;
(ii) The Board ceases to consist of a majority of Continuing
Directors, with the term "Continuing Director" meaning a Director who
(A) is a Director on the effective date of the Plan or (B) is nominated or
appointed to serve as a Director by a majority of the then Continuing
Directors;
(iii) The stockholders of the Company approve (A) any consolidation or
merger of the Company or any Subsidiary that results in the holders of
the Company's voting securities immediately prior to the consolidation or
merger having (directly or indirectly) less than a majority ownership
interest in the outstanding voting securities of the surviving entity
immediately after the consolidation or merger, (B) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company or
(C) any plan or proposal for the liquidation or dissolution of the Company;
(iv) The stockholders of the Company accept a share exchange, with the
result that stockholders of the Company immediately before such share
exchange do not own, immediately following such share exchange, at least a
majority of the voting securities of
the entity resulting from such share exchange in substantially the
same proportion as their ownership of the voting securities outstanding
immediately before such share exchange; or
(v) Any tender or exchange offer is made to acquire thirty percent
(30%) or more of the voting securities of the Company, other than an
offer made by the Company, and shares are acquired pursuant to that offer.
For purposes of this definition, the term "voting securities" means equity
securities, or securities that are convertible or exchangeable into equity
securities, that have the right to vote generally in the election of Directors.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee, if any, appointed by the
Board.
(f) "Date of Grant" means the date on which the Committee takes formal
action to grant an Award to an Eligible Person.
(g) "Director" means a member of the Board.
(h) "Disability" means mental or physical disability as determined by a
medical doctor satisfactory to the Committee.
(i) "Eligible Person" means an employee of the Company or a Subsidiary.
(j) "Fair Market Value" of a Share means the mean of the high and low
sales price on the New York Stock Exchange on the day of reference as quoted in
any newspaper of general circulation or, if the Shares shall not have been
traded on such exchange on such date, the mean of the high and low sales price
on such exchange on the next day prior thereto on which the Shares were so
traded, as quoted in any newspaper of general circulation. If the Shares are
not listed for trading on the New York Stock Exchange, the Fair Market Value on
the date of reference shall be determined by any fair and reasonable means
prescribed by the Committee.
(k) "Incentive Stock Option" means an option that is an incentive stock
option as defined in Section 422 of the Code.
(l) "Nonincentive Stock Option" means an option that is not an Incentive
Stock Option.
(m) "Option" means any option granted under this Plan.
(n) "Optionee" means a person to whom a stock option is granted under this
Plan or any successor to the rights of such person under this Plan by reason of
the death of such person.
(o) "Participant" means a person to whom an Award is granted under the
Plan.
(p) "Performance Award" means an Award granted pursuant to Article IV.
(q) "Performance Objectives" means the objectives established by the
Committee pursuant to Section 4.1(b).
(r) "Performance Period" means the period over which the performance of a
holder of a Performance Award is measured.
(s) "Plan" means this Kirby Corporation 2005 Stock and Incentive Plan.
(t) "Restricted Stock" means Shares granted under this Plan that are
subject to restrictions imposed by the Committee pursuant to Article III.
(u) "Restricted Stock Award" means an award of Restricted Stock under this
Plan.
(v) "Section 162(m) Participant" means each Participant who is, on the
last day of the applicable fiscal year of the Company, either (i) the chief
executive officer of the Company or (ii) one of the four most highly compensated
officers of the Company other than the chief executive officer.
(w) "Share" means a share of the common stock, par value ten cents ($0.10)
per share, of the Company.
(x) "Subsidiary" means any corporation (other than the Company) in any
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
Section 1.3. Total Shares and Limitations.
(a) The maximum number of Shares that may be issued under the Plan shall
be One Million (1,000,000) Shares, which may be from Shares held in the
Company's treasury or from authorized and unissued Shares. If any Award granted
under the Plan shall terminate, expire or be cancelled or surrendered as to any
Shares, or the Award is paid in cash in lieu of Shares, the Shares that were
subject to such Award shall not count against the above limit and shall again be
available for grants under the Plan. Shares equal in number to the Shares
surrendered in payment of the option price of an Option and Shares that are
withheld in order to satisfy federal, state or local tax liability, shall not
count against the above limit and shall be available for grants under the Plan.
(b) The maximum aggregate number of Shares that may be issued under the
Plan pursuant to the exercise of Incentive Stock Options shall be 500,000.
(c) The maximum number of Shares that may be issued to any Participant
pursuant to any Performance Award during the term of the Plan shall be 200,000.
(d) The maximum amount of cash that may be paid to any Participant
pursuant to any Performance Award during any calendar year shall be $2,000,000.
Section 1.4. Awards Under the Plan.
(a) Only Eligible Persons may receive awards under the Plan. Awards to
Eligible Persons may be in the form of (i) Options; (ii) shares of Restricted
Stock; (iii) Performance Awards; or (iv) any combination of the foregoing. No
Award shall confer on any person any right to continue as an employee of the
Company or any Subsidiary.
(b) Each Award shall be evidenced by an agreement containing any terms
deemed necessary or desirable by the Committee that are not inconsistent with
the Plan or applicable law.
ARTICLE II
STOCK OPTIONS
Section 2.1. Grant of Options. The Committee may from time to time
grant Options to Eligible Persons. Options may be Incentive Stock Options or
Nonincentive Stock Options as designated by the Committee on the Date of Grant.
If no such designation is made by the Committee for an Option, the Option shall
be a Nonincentive Stock Option. The aggregate Fair Market Value (determined as
of the Date of Grant) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year under the Plan and all such plans of the Company and any parent or
subsidiary of the Company (as defined in Section 424 of the Code) shall not
exceed $100,000.
Section 2.2. Exercise Price. The exercise price per Share for any
Option shall be determined by the Committee, but shall not be less than the Fair
Market Value on the Date of Grant and shall not be less than 110% of the Fair
Market Value on the Date of Grant for any Incentive Stock Option if the Optionee
is a person who owns directly or indirectly (within the meaning of Section
422(b)(6) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company.
Section 2.3. Term of Option. The term of an Option shall be determined
by the Committee, provided that, in the case of an Incentive Stock Option, if
the grant is to a person who owns directly or indirectly (within the meaning of
Section 422(b)(6) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, the term of the
Option shall not exceed five years from the Date of Grant. Notwithstanding any
other provision of this Plan, no Option shall be exercised after the expiration
of its term.
Section 2.4. Vesting. Options shall be exercisable at such times and
subject to such terms and conditions as the Committee shall specify in the
option agreement. Unless the option agreement specifies otherwise, the
Committee shall have discretion at any time to accelerate such times and
otherwise waive or amend any conditions in respect of all or any portion of any
Options. Notwithstanding the other provisions of this Section 2.4 and unless
otherwise provided in the option agreement, upon the occurrence of a Change in
Control, all Options outstanding at the time of the Change in Control shall
become immediately exercisable.
Section 2.5. Termination of Options.
(a) Except as otherwise provided in the option agreement, the portion of
an Option that is exercisable shall automatically and without notice terminate
upon the earliest to occur of the following:
(i) thirty (30) days after the date on which the Optionee ceases to
be an Employee for any reason other than (x) death, (y) Disability or
(z) termination for cause;
(ii) one (1) year after the date on which the Optionee ceases to be an
Employee as a result of a Disability;
(iii) either (y) one (1) year after the death of the Optionee or (z)
six (6) months after the death of the Optionee if the Optionee dies
during the 30-day period described in Section 2.5(a)(i) or the one-year
period described in Section 2.5(a)(ii);
(iv) the date on which the Optionee ceases to be an Employee as a
result of a termination for cause; and
(v) the tenth anniversary of the Date of Grant of the Option.
(b) The portion of an Option that is not exercisable shall automatically
and without notice terminate on the date on which the Optionee ceases to be an
Employee for any reason.
(c) The Committee shall have discretion at any time to extend the term of
any Nonincentive Stock Option to any date that is not later than the date
described in Section 2.5(a)(v).
Section 2.6. Exercise of Options. An Option may be exercised in whole
or in part to the extent exercisable in accordance with Section 2.4 and the
option agreement. An Option shall be deemed exercised when (i) the Company has
received written notice of such exercise in accordance with the terms of the
Option and (ii) full payment of the aggregate exercise price of the Shares as to
which the Option is exercised has been made. Unless further limited by the
Committee for any Option, the exercise price of any Shares purchased shall be
paid solely in cash, by certified or cashier's check, by money order, by
personal check or with Shares owned by the Optionee for at least six months, or
by a combination of the foregoing. If the exercise price is paid in whole or in
part with Shares, the value of the Shares surrendered shall be their Fair Market
Value on the date received by the Company.
Section 2.7. Corporate Transactions.
(a) In the event of a merger, consolidation or other reorganization of the
Company in which the Company is not the surviving entity, the Board or the
Committee may provide for payment in cash or in securities of the Company or the
surviving entity in lieu of and in complete satisfaction of Options.
(b) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any
class, either in connection with direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
or exercise price of Shares then subject to outstanding Options granted under
the Plan.
(c) Without limiting the generality of the foregoing, the existence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
Section 2.8. Issuance of Shares. No person shall be, or have any of
the rights or privileges of, a stockholder of the Company with respect to any of
the Shares subject to any Option unless and until certificates representing such
Shares (whether in physical or in book-entry or other electronic form) shall
have been issued and delivered to such person.
ARTICLE III
RESTRICTED STOCK
Section 3.1. Grant of Restricted Stock Awards. The Committee may from
time to time grant Restricted Stock Awards to Eligible Persons.
Section 3.2. Terms and Conditions of Restricted Stock Awards. Each
Restricted Stock Award shall specify the number of shares of Restricted Stock
awarded, the price, if any, to be paid by the Participant receiving the
Restricted Stock Award, the date or dates on which the Restricted Stock will
vest and any other terms and conditions that the Committee may determine. The
vesting and number of shares of Restricted Stock may be conditioned upon the
completion of a specified period of service with the Company or its Subsidiaries
or upon the attainment of any performance goals established by the Committee,
including without limitation goals related to the performance of the Company or
any Subsidiary, division, department or other unit of the Company, the
performance of the Company's common stock or other securities, the performance
of the recipient of the Restricted Stock Award or any combination of the
foregoing.
Section 3.3. Restrictions on Transfer. Unless otherwise provided in
the grant relating to a Restricted Stock Award, stock certificates representing
the Restricted Stock granted to a Participant (whether in physical or in
book-entry or other electronic form) shall be registered in the Participant's
name or, at the option of the Committee, not issued until such time as the
Restricted Stock shall become vested or as otherwise determined by the
Committee. If certificates are issued prior to the shares of Restricted Stock
becoming vested, either in physical or in book-entry or other electronic form,
such certificates shall either be held by the Company on behalf of the
Participant, or delivered to the Participant bearing a legend to restrict
transfer of the certificate until the Restricted Stock has vested, as determined
by the Committee. The
Committee shall determine whether the Participant shall have the right to vote
and/or receive dividends on the Restricted Stock before it has vested. Except
as may otherwise be expressly permitted by the Committee, no share of Restricted
Stock may be sold, transferred, assigned or pledged by the Participant until
such share has vested in accordance with the terms of the Restricted Stock
Award. Unless the grant of a Restricted Stock Award specifies otherwise, in the
event that a Participant ceases to be an Employee before all the Participant's
Restricted Stock has vested, or in the event other conditions to the vesting of
Restricted Stock have not been satisfied prior to any deadline for the
satisfaction of such conditions set forth in the award agreement, the shares of
Restricted Stock that have not vested shall be forfeited and any purchase price
paid by the Participant for the forfeited Shares shall be returned to the
Participant. At the time Restricted Stock vests (and, if the Participant has
been issued legended certificates for Restricted Stock, upon the return of such
certificates to the Company), a certificate for such vested shares shall be
delivered to the Participant (or the beneficiary designated by the Participant
in the event of death), free of all restrictions.
Section 3.4. Accelerated Vesting. Notwithstanding the vesting
conditions set forth in a Restricted Stock Award, unless the Restricted Stock
Award grant or other agreement with the Participant specifies otherwise:
(a) the Committee may in its discretion at any time accelerate the vesting
of Restricted Stock or otherwise waive or amend any conditions of a grant of a
Restricted Stock Award, and
(b) all shares of Restricted Stock shall vest upon a Change in Control of
the Company.
Section 3.5. Section 83(b) Election. If a Participant receives
Restricted Stock that is subject to a "substantial risk of forfeiture," such
Participant may elect under Section 83(b) of the Code to include in his or her
gross income, for the taxable year in which the Restricted Stock is received,
the excess of the Fair Market Value of such Restricted Stock on the Date of
Grant (determined without regard to any restriction other than one which by its
terms will never lapse), over the amount paid for the Restricted Stock. If the
Participant makes the Section 83(b) election, the Participant shall (a) make
such election in a manner that is satisfactory to the Committee, (b) provide the
Company with a copy of such election, (c) agree to notify the Company promptly
if any Internal Revenue Service or state tax agent, on audit or otherwise,
questions the validity or correctness of such election or of the amount of
income reportable on account of such election and (d) agree to such federal and
state income tax withholding as the Committee may reasonably require in its sole
discretion.
ARTICLE IV
PERFORMANCE AWARDS
Section 4.1. Terms and Conditions of Performance Awards. The Committee
may from time to time grant Awards that are intended to be "performance-based
compensation," which are payable in stock, cash or a combination thereof, at the
discretion of the Committee.
(a) Performance Period. The Committee shall establish a Performance
Period for each Performance Award at the time such Performance Award is granted.
A Performance Period may overlap with Performance Periods relating to other
Performance Awards granted hereunder to the same Participant. The Committee
shall not grant Performance Awards to Section 162(m) Participants after the
earliest to occur of (i) the 90th day after the start of the Performance Period,
(ii) the date on which 25% of the Performance Period has elapsed or (iii) the
date on which the satisfaction of the Performance Objectives becomes
substantially certain.
(b) Performance Objectives. The Committee shall establish written
performance objectives for the Participant at the time of the grant of each
Performance Award. Each Performance Award shall be contingent upon the
achievement of the Performance Objectives established by the Committee.
Performance Objectives shall be based on earnings, cash flow, economic value
added, total stockholder return, return on equity, return on capital, return on
assets, revenues, operating profit, EBITDA, net profit, earnings per share,
stock price, cost reduction goals, debt to capital ratio, financial return
ratios, profit or operating margins, working capital or other comparable
objective tests selected by the Committee, or any combination of the foregoing,
for the Company on a consolidated basis or, if applicable, for one or more
Subsidiaries, divisions, departments or other units of the Company or one or
more of its Subsidiaries.
(c) Amount; Frequency. The Committee shall determine at the time of grant
of Performance Awards the target and maximum values of Performance Awards and
the date or dates when Performance Awards are earned.
(d) Payment. Following the end of each Performance Period, the holder of
each Performance Award will be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, based on the achievement
of the Performance Objectives for such Performance Period, as determined in
writing by the Committee. Unless otherwise provided in the Performance Award, if
the Participant exceeds the specified minimum level of acceptable achievement
but does not attain the Performance Objectives, the Participant shall be deemed
to have partly earned the Performance Award, and shall become entitled to
receive a portion of the total award, as determined by the Committee. Unless
otherwise provided in the Performance Award, if a Performance Award is granted
after the start of a Performance Period, the Performance Award shall be reduced
to reflect the portion of the Performance Period during which the Performance
Award was in effect.
(e) Termination of Employment. Unless otherwise provided in the
Performance Award, a Participant who receives a Performance Award and who ceases
to be an Employee as a result of death, Disability or retirement before the end
of the applicable Performance Period shall be entitled to receive, to the extent
earned as a result of the full or partial achievement of the Performance
Objectives during the Performance Period, a portion of the Performance Award
that is proportional to the portion of the Performance Period during which the
Participant was employed, with payment to be made following the end of the
Performance Period. Unless otherwise provided in the Performance Award, a
Participant who receives a Performance Award who ceases to be an Employee for
any reason other than death, Disability or retirement shall not be entitled to
any part of the Performance Award unless the Committee determines otherwise.
(f) Accelerated Vesting. Notwithstanding the vesting conditions set forth
in a Performance Award, unless the Performance Award specifies otherwise (i) the
Committee may in its discretion at any time accelerate the time at which the
Performance Award is considered to have been earned or otherwise waive or amend
any conditions (including but not limited to Performance Objectives) in respect
of a Performance Award, and (ii) all Performance Awards shall be considered
earned upon a Change in Control of the Company. In addition, upon a Change in
Control of the Company, unless a Performance Award specifies otherwise, each
Participant shall receive the target Performance Award such Participant could
have earned for the proportionate part of the Performance Period prior to the
Change in Control, and shall retain the right to earn any additional portion of
his or her Performance Award if such Participant remains in the Company's employ
through the end of the Performance Period.
(g) Stockholder Rights. The holder of a Performance Award shall, as such,
have none of the rights of a stockholder of the Company.
ARTICLE V
ADDITIONAL PROVISIONS
Section 5.1. Administration of the Plan. The Plan shall be
administered by the Committee. The Committee shall have the authority to
interpret the provisions of the Plan, to adopt such rules and regulations for
carrying out the Plan as it may deem advisable, to decide conclusively all
questions arising with respect to the Plan, to establish performance criteria in
respect of Awards under the Plan, to determine whether Plan requirements have
been met for any Participant in the Plan and to make all other determinations
and take all other actions necessary or desirable for the administration of the
Plan. All decisions and acts of the Committee shall be final and binding upon
all affected Participants. If there is no Committee, the Board shall administer
the Plan and in such case all references to the Committee shall be deemed to be
references to the Board.
Section 5.2. Adjustments for Changes in Capitalization. In the event
of any (a) stock dividends, stock splits, recapitalizations, combinations,
exchanges of shares, mergers, consolidations, liquidations, split-ups,
split-offs, spin-offs or other similar changes in capitalization, (b)
distributions to stockholders, including a rights offering, other than regular
cash dividends, (c) changes in the outstanding stock of the Company by reason of
any increase or decrease in the number of issued Shares resulting from a
split-up or consolidation of Shares or any similar capital adjustment or the
payment of any stock dividend, (d) Share repurchase at a price in excess of the
market price of the Shares at the time such repurchase is announced or (e) other
similar increase or decrease in the number of the Shares, the Committee, in its
sole discretion, shall make appropriate adjustment in the number and kind of
shares authorized by the Plan (including the numbers of Shares specified in
Section 1.3(b) and (c)), in the number, price or kind of shares covered by the
Awards and in any outstanding Awards under the Plan. In the event of any
adjustment in the number of Shares covered by any Award, any fractional Shares
resulting from such adjustment shall be disregarded and each such Award shall
cover only the number of full Shares resulting from such adjustment.
Section 5.3. Amendment.
(a) The Board may amend or modify the Plan in any respect at any time,
subject to stockholder approval if required by applicable law or regulation or
by applicable stock exchange rules. Such action shall not impair any of the
rights of any Participant with respect to any Award outstanding on the date of
the amendment or modification without the Participant's written consent.
(b) The Committee shall have the authority to amend any Award to include
any provision which, at the time of such amendment, is authorized under the
terms of the Plan; however, no outstanding Award may be revoked or altered in a
manner unfavorable to the Participant without the written consent of the
Participant.
Section 5.4. Transferability of Awards. An Award shall not be
transferable by the Participant otherwise than by will or the laws of descent
and distribution. So long as a Participant lives, only such Participant or his
or her guardian or legal representative shall have the right to exercise such
Award.
Section 5.5. Beneficiary. A Participant may file with the Company a
written designation of beneficiary, on such form as may be prescribed by the
Committee, to receive any Shares, Awards or payments that become deliverable to
the Participant pursuant to the Plan after the Participant's death. A
Participant may, from time to time, amend or revoke a designation of
beneficiary. If no designated beneficiary survives the Participant, the
executor or administrator of the Participant's estate shall be deemed to be the
Participant's beneficiary.
Section 5.6. Non-uniform Determinations. Determinations by the
Committee under the Plan (including, without limitation, determinations of the
Eligible Persons to receive Awards, the form, amount and timing of Awards, the
terms and provisions of Awards and the agreements evidencing Awards and
provisions with respect to termination of employment) need not be uniform and
may be made by the Committee selectively among persons who receive, or are
eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.
Section 5.7. Duration and Termination. The Plan shall be of unlimited
duration, provided that no Incentive Stock Option shall be granted under the
Plan on or after the tenth anniversary of the effective date of the Plan. The
Board may suspend, discontinue or terminate the Plan at any time. Such action
shall not impair any of the rights of any holder of any Award outstanding on the
date of the Plan's suspension, discontinuance or termination without the
holder's written consent.
Section 5.8. Withholding. Prior to the issuance of any Shares under
the Plan, arrangements satisfactory to the Committee in its sole discretion
shall have been made for the Participant's payment to the Company of the amount,
if any, that the Committee determines to be necessary for the Company or
Subsidiary employing the Participant to withhold in accordance with applicable
federal or state income tax withholding requirements. If the Committee allows
Shares to be withheld from an Award to satisfy such withholding requirements,
the amount withheld in Shares shall not exceed the minimum amount required to be
withheld, determined on the date that the amount of tax to be withheld is to be
determined. When payments under the
Plan are made in cash, such payments shall be net of an amount sufficient to
satisfy such withholding requirements.
Section 5.9. Agreements and Undertakings. As a condition of any
issuance or transfer of a certificate for Shares, the Committee may obtain such
agreements or undertakings, if any, as it may deem necessary or advisable to
assure compliance with any provision of the Plan, any agreement or any law or
regulation including, but not limited to, the following:
(a) a representation, warranty or agreement by the Participant to the
Company that the Participant is acquiring the Shares for investment and not with
a view to, or for sale in connection with, the distribution of any such Shares;
and
(b) a representation, warranty or agreement to be bound by any legends
that are, in the opinion of the Committee, necessary or appropriate to comply
with the provisions of any securities law deemed by the Committee to be
applicable to the issuance of the Shares and are endorsed on the Share
certificates.
Section 5.10. Uncertificated Shares. In lieu of issuing stock
certificates for Shares acquired pursuant to the Plan, the Company may issue
such Shares in book-entry or other electronic or uncertificated form, unless
prohibited by applicable law or regulation or by applicable stock exchange
rules.
Section 5.11. Governing Law. The Plan shall be governed by the laws of
the State of Texas except to the extent that federal law or Nevada corporate law
is controlling.
Section 5.12. Effective Date. The Plan was adopted by the Board on
March 3, 2005 and shall be effective upon approval by the stockholders of the
Company.
ADOPTED BY THE BOARD: March 3, 2005
APPROVED BY THE STOCKHOLDERS: April 26, 2005