GAMECOM, INC.
2000 INCENTIVE STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this GameCom, Inc. 2000 Incentive Stock
Option Plan, (the "Plan") are to enable GameCom, Inc. (the "Company") and its
Subsidiaries (as defined herein) to attract, retain and motivate the Key
Employees (as defined herein) who are important to the success and growth of the
business of the Company, and to create a long-term mutuality of interest between
the stockholders of the Company and such Key Employees by granting them options
(which may, in the case of Key Employees, be either incentive stock options (as
defined herein) or non-statutory stock options) to purchase the Company's Common
Stock.
2. Definitions.
(a) "Act" means the Securities Exchange Act of 1934.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means such committee, if any, as may be appointed from time
to time by the Board to administer the Plan, consisting of two or more
directors, each of whom shall qualify as an "outside director" within the
meaning of Section 162(m) of the Code and, to the extent required by Rule 16b-3
promulgated under Section 16(b) of the Act as then in effect, or any successor
provisions ("Rule 16b-3"), as a "non-employee director" within the meaning of
Rule 16b-3. If for any reason the appointed Committee does not meet the
requirements of Rule 16b-3 or Section 162(m) of the Code, such non-compliance
shall not affect the validity of the Options, grants, interpretations or other
actions of the Committee. If the Board does not appoint a committee for this
purpose, "Committee" means the Board.
(e) "Common Stock" means the common stock of the Company, par value $.005,
any common stock into which such Common Stock may be converted, and any common
stock resulting from any reclassification of the Common Stock.
(f) "Company" means the Company and its Subsidiaries, any of whose employees
are Participants in the Plan.
(g) "Disability" means permanent and total disability, as determined by the
Committee in its sole discretion, provided that in no event shall any disability
that is not a permanent and total disability within the meaning of Section
22(e)(3) of the Code be treated as a Disability. A Disability shall be deemed to
occur at the time of the determination by the Committee of the Disability.
(h) "Fair Market Value" means the value of a Share (as defined herein) on a
particular date, determined as follows:
(i) If the Common Stock is listed on such date on a national securities
exchange or quoted on the National Market System of The Nasdaq Stock Market,
Inc. ("NASDAQ"), the closing sales price of a Share on such exchange or on the
National Market System, as the case may be, on such date, or in the absence of
reported sales on such day, the mean between the reported bid and asked prices
on such exchange or on the National Market System, as the case may be, on such
date; or
(ii) If the Common Stock is not listed or quoted as described in the
preceding clause, but bid and asked prices are quoted through NASDAQ, the mean
between the closing bid and asked prices as quoted through NASDAQ on such date;
or
(iii) If the Common Stock is not listed or quoted as described in clauses
(i) or (ii) above, by such other method as the Committee determines to be
reasonable and consistent with applicable law; or
(iv) If the Common Stock is not publicly traded, such amount as is set by
the Committee in good faith.
(i) "Incentive Stock Option" means any Option which is intended to qualify as
an "incentive stock option" as defined in Section 422 of the Code.
(j) "Key Employee" means any person who is an executive officer or other
valuable staff, managerial, professional or technical employee of the Company,
as determined by the Committee. A Key Employee may also be a director of the
Company.
(k) "Option" means the right to purchase one Share at a prescribed purchase
price on the terms specified in the Plan. An Option may be an Incentive Stock
Option or a non-qualified option.
(l) "Participant" means a Key Employee of the Company who is granted Options
under the Plan.
(m) "Purchase Price" means the purchase price per Share payable upon exercise
of an option.
(n) "Securities Act" means the Securities Act of 1933, as it may be amended
from time to time, or any successor statute.
(o) "Share" means a share of Common Stock.
(p) "Subsidiary" means any "subsidiary corporation" within the meaning of
Section 424(f) of the Code. An entity shall be deemed a Subsidiary of the
Company only for such periods as the requisite ownership relationship is
maintained.
(q) "Substantial Stockholder" means any Participant who is a Key Employee and
who, at the time of grant, owns directly or is deemed to own, by reason of the
attribution rules set forth in Section 424(d) of the Code, Shares possessing
more than 10% of the total combined voting power of all classes of stock of the
Company, a Subsidiary, or any "parent corporation" within the meaning of Section
424(e) of the Code.
(r) "Termination of Employment" means cessation of an individual's status as
an employee of the Company or any Subsidiary. In the event an entity shall cease
to be a Subsidiary of the Company, any individual who is not otherwise an
employee of the Company or another Subsidiary shall suffer a Termination of
Employment at the time the entity ceases to be a Subsidiary. A leave of absence
approved by the Committee shall not constitute a Termination of Employment.
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3. Effective Date/Expiration of Plan. The Plan shall become effective on
February 1, 2000 (the "Effective Date"), subject, however, to approval by the
Company's stockholders. The Plan will terminate on the tenth anniversary of the
Effective Date, unless earlier terminated in accordance with Section 11. No
Option shall be granted under the Plan on or after the tenth anniversary of the
Effective Date, but Options previously granted may extend beyond that date.
4. Administration.
(a) Duties of the Committee. The Plan shall be administered by the Committee.
The Committee shall have full authority, subject to the terms of the Plan: to
interpret the Plan and to decide all questions and settle all controversies and
disputes that may arise in connection with the Plan; to establish, amend, and
rescind rules for carrying out the Plan; to administer the Plan; to select Key
Employees to participate in, and grant Options to Key Employees under, the Plan;
to determine the terms, exercise price and permitted forms of payment for each
Option granted under the Plan; to determine which Options granted under the Plan
to Key Employees shall be Incentive Stock Options; to prescribe the form or
forms of the agreements evidencing Options and any other instruments required
under the Plan and to change such forms from time to time; and to make all other
determinations and take all such steps in connection with the Plan and the
Options as the Committee, in its sole discretion, deems necessary or desirable.
The Committee shall not be bound to any standards of uniformity or similarity of
action, interpretation or conduct in the discharge of its duties, regardless of
the apparent similarity of the matters coming before it. The determination,
action or conclusion of the Committee in connection with the foregoing shall be
final and conclusive.
(b) Advisors. The Committee may designate officers or other employees of the
Company or professional advisors to assist it in the administration of the Plan,
and may grant authority to such persons to execute Option Agreements (as defined
herein) or other documents on behalf of the Committee. The Committee may employ
such legal counsel, consultants and agents as it may deem desirable for the
administration of the Plan, and may rely upon any opinion received from any such
counsel or consultant and any computation received from any such consultant or
agent. Expenses incurred by the Committee in the engagement of such counsel,
consultants and agents shall be paid by the Company.
(c) Indemnification. No officer, member or former member of the Committee
shall be liable for any action taken or made in good faith with respect to the
Plan or any Option granted under it. To the maximum extent permitted by
applicable law, the Company shall indemnify and hold harmless each officer,
member or former member of the Committee and the Board against any cost or
expense (including reasonable fees of counsel reasonably acceptable to the
Company) or liability (including any sum paid in settlement of a claim), and
shall advance all amounts necessary to pay the foregoing at the earliest time
and to the fullest extent permitted by applicable law, arising out of any act or
omission to act in connection with the Plan. Such indemnification shall be in
addition to any rights of indemnification the officers, members or former
members may have as officers or directors under applicable law or under the
Certificate of Incorporation or By-Laws of the Company.
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(d) Meetings of the Committee. The Committee shall select one of its members
as a Chairman and shall adopt such rules and regulations as it shall deem
appropriate concerning the holding of its meetings and the transaction of its
business. Any member of the Committee may be removed at any time, either with or
without cause, by resolution adopted by the Board, and any vacancy on the
Committee may at any time be filled by resolution adopted by the Board. All
determinations by the Committee shall be made by the affirmative vote of a
majority of its members. Any such determination may be made at a meeting duly
called and held at which a majority of the members of the Committee are in
attendance in person or through telephonic communication. Any determination set
forth in writing and signed by all of the members of the Committee shall be as
fully effective as if it had been made by a majority vote of the members at a
meeting duly called and held.
5. Shares; Adjustment Upon Certain Events.
(a) Shares to be Delivered; Fractional Shares. Shares to be issued under the
Plan shall be made available, at the discretion of the Board, either from
authorized but unissued Shares or from issued Shares reacquired by the Company
and held in treasury. No fractional Shares will be issued or transferred upon
the exercise of any Option. In lieu thereof, the Company shall pay a cash
adjustment equal to the same fraction of the Fair Market Value on the date of
exercise.
(b) Number of Shares. Subject to adjustment as provided below in this Section
5, the maximum aggregate number of Shares that may be issued under the Plan
shall be 6,000,000. If Options are for any reason canceled, or expire or
terminate unexercised, the Shares covered by such Options shall again be
available for the grant of Options, subject to the limit provided in the
preceding sentence. Subject to adjustment as provided below in this Section 5,
the maximum number of Shares subject to any Option which may be granted under
the Plan to each Key Employee shall not exceed 500,000 Shares in each calendar
year during the entire term of the Plan. Notwithstanding the foregoing, in order
to comply with Section 162(m) of the Code, the Committee shall take into account
that (i) if an Option is canceled, the canceled Option continues to be counted
against the maximum number of Shares for which Options may be granted to a Key
Employee under this Section 5(b) of the Plan, and (ii) if after the grant of an
Option, the Committee or the Board reduced the Purchase Price, the transaction
is treated as a cancellation of the Option and a grant of a new Option, and in
such case, both the Option that is deemed to be canceled and the Option that is
deemed to be granted, reduce the maximum number of Shares for which Options may
be granted to a Key Employee under the Option. To the extent that Shares for
which Options are permitted to be granted to a Key Employee during a calendar
year are not covered by a grant of an Option in the calendar year, such Shares
shall be available for grant or issuance to the Key Employee in any subsequent
calendar year during the term of the Plan.
(c) Adjustments; Recapitalization, etc. The existence of the Plan and Options
granted hereunder shall not affect in any way the right or power of the Board or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure, any merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference stocks ahead of or affecting Common
Stock, the dissolution or liquidation of the Company, or any sale or transfer of
all or part of its assets or business or any other corporate act or proceeding.
If the Company takes any such action, however, the following provisions shall,
to the extent applicable, govern:
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(i) If and whenever the Company shall effect a stock split, stock
dividend, subdivision, recapitalization or combination of Shares or other change
in the Company's capital stock, (x) the Purchase Price (as defined herein) per
Share and the number and class of Shares and/or other securities with respect to
which outstanding Options thereafter may be exercised, and (y) the total number
and class of Shares and/or other securities that may be issued under the Plan,
shall be proportionately adjusted by the Committee. The Committee may also make
such other adjustments as it deems necessary to take into consideration any
other event (including, without limitation, accounting changes) if the Committee
determines that such adjustment is appropriate to avoid distortion in the
operation of the Plan.
(ii) Subject to Section 5(c)(iii), if the Company merges or consolidates
with one or more corporations, then, from and after the effective date of such
merger or consolidation, upon exercise of Options theretofore granted, the
Participant shall be entitled to acquire under such Options, in lieu of the
number of Shares as to which such Options shall then be exercisable but on the
same terms and conditions of exercise thereof, the number and class of Shares
and/or other securities or property (including cash) which the Participant would
have held or been entitled to receive immediately after such merger or
consolidation if, immediately prior to such merger or consolidation, the
Participant had been the holder of record of the total number of Shares
receivable upon exercise of such Options (whether or not then exercisable) had
such merger or consolidation not occurred.
(iii) In the event of a merger or consolidation in which the Company is
not the surviving entity or any transaction that results in the acquisition of
substantially all of the Company's outstanding Common Stock by a single person
or entity or by a group of persons and/or entities acting in concert, or in the
event of the sale or transfer of all of the Company's assets (all of the
foregoing being referred to as "Acquisition Events"), then the Committee may, in
its sole discretion, terminate all outstanding Options granted to Key Employees
by delivering notice of termination to each such Key Employee, provided that,
during the twenty (20) day period following the date on which such notice of
termination is delivered, each Participant who is a Key Employee shall have the
right to exercise in full all of his Options that are then outstanding (without
regard to any limitations on exercisability otherwise contained in the Option
Agreements). If an Acquisition Event occurs and the Committee does not terminate
the outstanding Options pursuant to the preceding sentence, then the provisions
of Section 5(c)(ii) shall apply.
(iv) Subject to Section 5(b), the Committee may grant Options under the
Plan in substitution for options held by employees of another corporation who
concurrently become employees of the Company as the result of a merger or
consolidation of the employing corporation with the Company, or as the result of
the acquisition by the Company of property or stock of the employing
corporation. Such substitute awards be granted on such terms and conditions as
the Committee considers appropriate in the circumstances.
(v) If, as a result of any adjustment made pursuant to the preceding
paragraphs of this Section 5, any Participant shall become entitled upon the
exercise of Options to receive any securities other than Common Stock, then the
number and class of securities thereafter receivable upon exercise shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock set
forth in this Section 5, as determined by the Committee in its sole discretion.
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(vi) Except as expressly provided above, the issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash, property, labor or services, whether upon direct sale, upon
the exercise of rights or warrants to subscribe therefore, or upon conversion of
shares or other securities, and in any case whether or not for fair value, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number and class of Shares and/or other securities or property subject to
Options theretofore granted or the Purchase Price per Share.
6. Awards and Terms of Options for Key Employees.
(a) Grant. The Committee may grant Options, including Options intended to be
Incentive Stock Options, to Key Employees of the Company. Each Option shall be
evidenced by an Option agreement (the "Option Agreement") in such from not
inconsistent with the Plan as the Committee shall approve from time to time.
(b) Exercise Price. The purchase price per share (the "Purchase Price")
deliverable upon the exercise of an Option granted to a Key Employee shall be
determined by the Committee (but in no event less than the par value of the
Share), except that the Purchase Price of an Incentive Stock Option shall not be
less than 100% (110% for an Incentive Stock Option granted to a Substantial
Stockholder) of the Fair Market Value at the time the Incentive Stock Option is
granted. To the extent that the grant of an Option is intended to comply with
the exception for performance-based compensation under Section 162(m) of the
Code, the Purchase Price of the Option shall not be less than 100% of the Fair
Market Value at the time the Option is granted.
(c) Number of Shares. Each Option Agreement shall specify the number of
Options granted to the Key Employees, as determined by the Committee in its sole
discretion.
(d) Exercisability. At the time of grant, the Committee shall specify when
and on what terms the Options granted to a Key Employee shall be exercisable. In
the case of Options not immediately exercisable in full, the Committee may at
any time accelerate the time at which all or any part of the Options may be
exercised. No Option shall be exercisable after the expiration of ten (10) years
from the date of grant (five years (5) in the case of an Incentive Stock Option
granted to a Substantial Stockholder). Every Option shall be subject to earlier
termination as provided in Section 7 below.
(e) Special Rule for Incentive Options. If required by Section 422 of the
Code or any successor provision, to the extent the aggregate Fair Market Value
of the Shares with respect to which Incentive Stock Options are exercisable for
the first time by a Key Employee during any calendar year (under all plans of
his employer corporation and its parent and subsidiary corporations) exceeds
$100,000, such Options shall not be treated as Incentive Stock Options. Nothing
in this special rule shall be construed as limiting the exercisability of any
Option.
(f) Acceleration of Exercisability on Change of Control. Upon a Change of
Control of the Company (as defined herein) all outstanding Options granted to
Key Employees not then fully exercisable shall immediately become fully
exercisable. For this purpose, a "Change of Control" shall be deemed to have
occurred if:
(i) any person (or group of persons acting in concert) becomes the
beneficial owner of 30% or more of the Company's outstanding voting securities
or securities convertible into such amount of voting securities; or
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(ii) within two years after a tender offer or exchange offer, or as the
result of a merger, consolidation, sale of substantially all of the Company's
assets or a contested election of the Board of Directors, or any combination of
such transactions, the persons who were directors of the Company prior to such
transaction do not constitute a majority of the Board of Directors of the
Company or its successor; provided, however, that no transaction shall be deemed
to constitute a Change in Control if such transaction is approved by two-thirds
of the Prior Directors of the Company and the Successor Directors (each as
hereafter defined), if any, voting together. For purposes of this Agreement,
Prior Directors are those directors of the Company in office immediately prior
to such event, and Successor Directors are successors to Prior Directors who
were recommended to succeed Prior Directors by a majority of the Prior Directors
then in office.
(g) Exercise of Options.
(i) A Key Employee may elect to exercise one or more Options by giving
written notice to the Committee of such election and the number of Options such
Participant has elected to exercise, accompanied by payment in full of the
aggregate Purchase Price for the number of shares for which the Options are
being exercised.
(ii) Shares purchased pursuant to the exercise of Options granted to Key
Employees shall be paid for at the time of exercise as follows:
(A) in cash or by check, bank draft or money order payable to the
order of the Company;
(B) if so permitted by the Committee: (x) through the delivery of
unencumbered Shares (including Shares being acquired pursuant to the Options
then being exercised), provided such Shares (and such Options) have been owned
by the Key Employee for such periods as may be required by applicable accounting
standards to avoid a charge to earnings, (y) through a combination of Shares and
cash as provided above, (z) by delivery of a promissory note of the Key Employee
to the Company, such promissory note to be payable, in the case of an Incentive
Stock Option, on such terms as are specified in the Option Agreement (except
that, in lieu of a stated rate of interest, an Incentive Stock Option may
provide that the rate of interest on the promissory note will be such rate as is
sufficient, at the time the note is given, to avoid the imputation of interest
under the applicable provisions of the Code), or by a combination of cash (or
cash and Shares) and the Key Employee's promissory note; provided, that, if the
Shares delivered upon exercise of the Option is an original issue of authorized
Shares, at least so much of the exercise price as represents the par value of
such Shares shall be paid in cash or by a combination of cash and Shares;
(C) if the Common Stock is at the time publicly traded, through the
delivery of irrevocable instructions to a broker to deliver promptly to the
Company an amount equal to the aggregate Purchase Price; or
(D) on such other terms and conditions as may be acceptable to the
Committee and in accordance with the law of the State of Texas. Upon receipt of
payment, the Company shall deliver to the Participant as soon as practicable a
certificate or certificates for the Shares then purchased.
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7. Effect of Termination of Employment.
(a) Death, Disability, Retirement, etc. Upon the Termination of Employment of
a Key Employee, all outstanding Options then exercisable (and any outstanding
Options not previously exercisable but made exercisable by the Committee at or
after the Termination of Employment) shall remain exercisable by the Key
Employee for the following time periods (subject to the ten year limit set forth
in Section 6(d)).
(i) In the event of the Key Employee's death, such Options shall remain
exercisable (by the Key Employee's estate or by the person given authority to
exercise such Options by the Key Employee's will or by operation of law) for a
period of one (1) year from the date of the Key Employee's death, provided that
the Committee, in its sole discretion, may at any time extend such time period
to up to three years from the date of the Key Employee's death.
(ii) In the event the Key Employee retires at or after age 65 (or, with
the consent of the Committee, before age 65), or if the Key Employee's
employment terminates due to Disability, such Options shall remain exercisable
for one (1) year from the date of the Key Employee's termination of employment,
provided that the Committee, in its sole discretion, may at any time extend such
time period to up to three years from the date of the Key Employee's Termination
of Employment.
(b) Other Termination. In the event of a Termination of Employment for any
reason other than as provided in Section 7(a) or in 7(c), all outstanding
Options shall remain exercisable after such Termination of Employment (but only
to the extent exercisable immediately prior thereto) for a period of three (3)
months after such termination, provided that the Committee, in its sole
discretion, may extend such time period to up to one year from the date of the
Key Employee's Termination of Employment.
(c) Cause. Upon the Termination of Employment of a Key Employee for Cause (as
defined herein) or if it is discovered after his other Termination of Employment
that such Key Employee had engaged in conduct that would have justified a
Termination of Employment for Cause, all outstanding Options held by the Key
Employee shall immediately be canceled. Termination of Employment shall be
deemed to be for "Cause" for purposes of this Section 7(c) if (i) the Key
Employee shall have committed fraud or any felony in connection with his duties
as an employee of the Company, willful misconduct or any act of disloyalty,
dishonesty, fraud or breach of trust or confidentiality as to the Company, or
any other act which is intended to cause or may reasonably be expected to cause
economic or reputational injury to the Company or (ii) such termination is or
would be deemed to be for Cause under any employment agreement between the
Company and the Key Employee.
8. Nontransferability. No Option shall be transferable by the Participant
otherwise than by will or under applicable laws of descent and distribution, and
during the lifetime of the Participant may be exercised only by the Participant
or his guardian or legal representative. In addition, no Option shall be
assigned, negotiated, pledged or hypothecated in any way (whether by operation
of law or otherwise), and no Option shall be subject to execution, attachment or
similar process. Upon any attempt to transfer, assign, negotiate, pledge or
hypothecate any Option, or in the event of any levy upon any Option by reason of
any execution, attachment or similar process contrary to the provisions hereof,
such Option shall immediately become null and void. Notwithstanding the
foregoing, the Committee may determine at the time of grant or thereafter that
an Option (other than an Incentive Stock Option) that is otherwise not
transferable pursuant to this Section 8, is transferable in whole or in part and
in such circumstances and under such conditions, as specified by the Committee.
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9. Rights as a Stockholder. A Participant (or a permitted transferee of his
Options) shall have no rights as a stockholder with respect to any Shares
covered by such Participant's Options until such Participant shall have become
the holder of record of such Shares, and no adjustments shall be made for
dividends in cash or other property or distributions or other rights in respect
to any such Shares except as otherwise specifically provided for in this Plan.
10. Determinations. Each determination, interpretation or other action made or
taken pursuant to the provisions of this Plan by the Committee shall be final
and binding for all purposes and upon all persons, including, without
limitation, the Participants, the Company, the directors, officers and other
employees of the Company, and their respective heirs, executors, administrators,
personal representatives and other successors in interest.
11. Termination, Amendment and Modification. The Plan shall terminate at the
close of business on the tenth anniversary of the Effective Date, unless
terminated sooner as hereinafter provided, and no Option shall be granted under
the Plan on or after that date. The termination of the Plan shall not terminate
any outstanding Options that by their terms continue beyond the termination date
of the Plan. At any time prior to that date, the Board or the stockholders of
the Company may terminate, suspend or amend the Plan; provided, however, that no
amendment may be made that would require the approval of the stockholders of the
Company under Rule 16b-3, Section 162(m) of the Code or, with respect to
Incentive Stock Options, Section 422 of the Code, or under the rules of any
exchange or system on which the Company's securities are listed or traded at the
request of the Company, unless any such amendment is subject to such stockholder
approval. No such Option may be exercised prior to the receipt of such
stockholder approval. Nothing contained in this Section 11 shall be deemed to
prevent the Board or the Committee from authorizing amendments of outstanding
Options of Key Employees, so long as all Options outstanding at any one time
shall not call for issuance of more Shares than the remaining number provided
for under the Plan, and so long as the provisions of any amended Options would
have been permissible under the Plan if such Option had been originally granted
or issued as of the date of such amendment with such amended terms.
Notwithstanding anything to the contrary contained in this Section 11, no
termination, amendment or modification of the Plan may without the consent of
the Participant (or any transferee of such Participant's Options), alter or
impair the rights and obligations arising under any then outstanding Option.
12. Non-exclusivity. Neither the adoption nor the amendment of the Plan by the
Board, nor the submission of the Plan or such amendments to the stockholders of
the Company for approval, shall be construed as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting or issuance of stock
options, Shares and/or other incentives otherwise than under the Plan, and such
arrangements may be either generally applicable or limited in application.
13. Use of Proceeds. The proceeds of the sale of Shares subject to Options under
the Plan are to be added to the general funds of the Company and used for its
general corporate purposes as the Board shall determine.
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14. General Provisions.
(a) Right to Terminate Employment. Neither the adoption or the amendment of
the Plan nor the grant of Options shall impose any obligations on the Company to
continue the employment of any Key Employee, nor shall it impose any obligation
on the part of any Key Employee to remain in the employ of the Company, subject,
however, to the provisions of any agreement between the Company and a Key
Employee.
(b) Purchase for Investment. If the Board determines that the law so
requires, the holder of Options granted hereunder shall, upon any exercise or
conversion thereof, execute and deliver to the Company a written statement, in
form satisfactory to the Company, representing and warranting that such
Participant is purchasing or accepting the Shares then acquired for such
Participant's own account and not with a view to the resale or distribution
thereof, that any subsequent offer for sale or sale of any such Shares shall be
made either pursuant to (i) a registration statement on an appropriate form
under the Securities Act of 1933 (the "Securities Act"), which registration
statement shall have become effective and shall be current with respect to the
Shares being offered and sold, or (ii) a specific exemption from the
registration requirements of the Securities Act, and that in claiming such
exemption the holder will, prior to any offer for sale or sale of such Shares,
obtain a favorable written opinion from counsel approved by the Company as to
the availability of such exception.
(c) Trusts, etc. Nothing contained in the Plan and no action taken pursuant
to the Plan (including, without limitation, the grant of any Option thereunder)
shall create or be construed to create a trust of any kind, or a fiduciary
relationship, between the Company and any Participant or the executor,
administrator or other personal representative, or designated beneficiary of
such Participant, or any other persons. Any reserves that may be established by
the Company in connection with the Plan shall continue to be part of the general
funds of the Company, and no individual or entity other than the Company shall
have any interest in such funds until paid to a Participant. If and to the
extent that any Participant or such Participant's executor, administrator, or
other personal representative, as the case may be, acquires a right to receive
any payment from the Company pursuant to the Plan, such right shall be no
greater than the right of an unsecured general creditor of the Company.
(d) Notices. Each Participant shall be responsible for furnishing the
Committee with the current and proper address for the mailing to such
Participant of notices and the deliver to such Participant of agreements, Shares
and payments. Any notices required or permitted to be given shall be deemed
given if directed to the person to whom addressed at such address and mailed by
regular United States mail, first class and prepaid. If any item mailed to such
address is returned as 13 undeliverable to the addressee, mailing will be
suspended until the Participant furnishes the proper address.
(e) Severability of Provisions. If any provisions of the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions of the Plan, and the Plan shall be construed and enforced
as if such provisions had not been included.
(f) Payment to Minors, etc. Any benefit payable to or for the benefit of a
minor, an incompetent person or other person incapable of receipting therefor
shall be deemed paid when paid to such person's guardian or to the party
providing or reasonably appearing to provide for the care of such person, and
such payment shall fully discharge the Committee, the Company and their
employees, agents and representatives with respect thereto.
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(g) Headings and Captions. The headings and captions herein are provided for
reference and convenience only. They shall not be considered part of the Plan
and shall not be employed in the construction of the Plan.
(h) Controlling Law. The Plan shall be construed and enforced according to
the laws of the State of Texas.
15. Issuance of Stock Certificates; Legends and Payment of Expenses.
(a) Stock Certificates. Upon any exercise of Options and payment of the
aggregate Purchase Price as provided in the relevant Option Agreements, a
certificate or certificates for the Shares as to which Options have been
exercised shall be issued by the Company in the name of the person or persons
exercising such Options and shall be delivered to or upon the order of such
person or persons.
(b) Legends. Certificates for Shares issued upon exercise of Options shall
bear such legend or legends as the Committee, in its discretion, determines to
be necessary or appropriate to prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities Act or to
implement the provisions of any agreements between the Company and a Key
Employee with respect to such Shares.
(c) Payment of Expenses. The Company shall pay all issue or transfer taxes
with respect to the issuance or transfer of Shares, as well as all fees and
expenses necessarily incurred by the Company in connection with such issuance or
transfer and with the administration of the Plan.
16. Listing of Shares and Related Matters. If at any time the Board shall
determine in its sole discretion that the listing, registration or qualification
of the Shares covered by the Plan upon any national securities exchange or under
any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the award or sale of Shares under the Plan, no Shares will be delivered
unless and until such listing, registration, qualification, consent or approval
14 shall have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Board.
17. Withholding Taxes. The Company shall be entitled to withhold (or secure
payment from the Key Employee in cash or other property, including Shares
already owned by the Key Employee for six (6) months or more (valued at the Fair
Market Value thereof on the date of delivery) in lieu of withholding) the amount
of any Federal, state or local taxes required to be withheld by the Company in
connection with any Shares or cash payments deliverable under this Plan in
respect of Options granted to any Key Employee, and the Company may defer
delivery unless such withholding requirement is satisfied. The Committee may
permit any such withholding obligation to be satisfied by reducing the number of
Shares otherwise deliverable to the Key Employee.
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