As filed with the Securities and Exchange Commission on November 25, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ALLSTAR SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0515247
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
6401 SOUTHWEST FREEWAY
HOUSTON, TEXAS 77074
(713) 795-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
ALLSTAR SYSTEMS, INC.
1996 INCENTIVE STOCK OPTION PLAN
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of Plans)
JAMES H. LONG
ALLSTAR SYSTEMS, INC.
6401 SOUTHWEST FREEWAY
HOUSTON, TEXAS 77074
(713) 795-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
WITH COPIES TO:
NICK D. NICHOLAS
PORTER & HEDGES, L.L.P.
700 LOUISIANA, SUITE 3500
HOUSTON, TEXAS 77002
(713) 226-0600
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED AMOUNT OF
TITLE OF AMOUNT TO OFFERING MAXIMUM AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER SHARE OFFERING PRICE(2) FEE
- -------------------------------------- ---------------- --------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Common Stock, par value $.01 per share 617,500 $4.6875 $2,894,531.25 $877.13
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(1) Pursuant to Rule 416(a), also registered hereunder is an indeterminate
number of shares of Common Stock issuable as a result of the anti-dilution
provisions of the Allstar Systems, Inc. 1996 Incentive Stock Plan (the
"Incentive Plan"), the 1996 Non-Employee Director Stock Option Plan (the
"Director Plan") and the 1997 Employee Stock Purchase Plan (the "Purchase
Plan" and together with the Incentive Plan and the Director Plan, the
"Plans").
(2) Pursuant to Rule 457(c), the registration fee is calculated on the basis
of the average of the high and low price per share of Common Stock, as
quoted on the NASDAQ NMS on November 24, 1997. Pursuant to Rule 457(h),
the registration fee is calculated with respect to the maximum number of
the registrant's securities issuable under the Plans.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3 INCORPORATION OF DOCUMENTS BY REFERENCE.
Allstar Systems, Inc., a Delaware corporation (the "Company"), hereby
incorporates by reference into this registration statement (the "Registration
Statement") (i) the contents of its Prospectus, as filed with the Securities and
Exchange Commission (the "Commission") on July 8, 1997, pursuant to Rule 424(b)
of the Securities Act of 1933, as amended (the "Securities Act"), (ii) the
Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1997 and (iii) the description of the Company's common stock, par value $.01 per
share ("Common Stock"), contained in the Registration Statement on Form 8-A as
filed with the Commission on June 18, 1997.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act') subsequent to the filing date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration Statement
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents. The Company will provide, without charge, each
participant in the Company's Plans, on written or oral request of such person, a
copy (without exhibits, unless such exhibits are specifically incorporated by
reference) of any or all of the documents incorporated by reference pursuant to
this Item 3.
ITEM 4 DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5 INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") permits a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action.
In an action brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees, actually
and reasonably incurred in connection with the defense or settlement of such
action, and the corporation may not indemnify for amounts paid in satisfaction
of a judgment or in settlement of the claim. In any such action, no
indemnification may be paid in respect of any claim, issue or matter as to which
such person shall have been adjudged liable to the corporation except as
otherwise approved by the Delaware Court of Chancery or the court in which the
claim was brought. In any other type of proceeding, the indemnification may
extend to judgments, fines and amounts paid in settlement, actually and
reasonably incurred in connection with such other proceeding, as well as to
expenses.
The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner reasonably believed to
be in, or not opposed to, the best interests of the corporation and, in the case
of
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criminal actions or proceedings, the person had no reasonable cause to believe
his conduct was unlawful. The statute contains additional limitations applicable
to criminal actions and to actions brought by or in the name of the corporation.
The determination as to whether a person seeking indemnification has met the
required standard of conduct is to be made (1) by a majority vote of a quorum of
disinterested members of the board of directors, (2) by independent legal
counsel in a written opinion, if such a quorum does not exist or if the
disinterested directors so direct, or (3) by the stockholders.
The Company's Certificate of Incorporation and Amended and Restated Bylaws
require the Company to indemnify the Company's directors to the fullest extent
authorized by the DGCL or any other applicable law in effect. The Company's
Certificate of Incorporation limits the personal liability of a director to the
Company or its stockholders to damages for breach of the director's duty of
loyalty to the Company or its stockholders, acts or omissions not in good faith
or which involve intentional misconduct, improper dividend payments under
Section 174 of the DGCL or transactions in which the director received an
improper benefit.
ITEM 7 EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8 EXHIBITS.
4.1 The Company's 1996 Incentive Stock Plan
4.2 The Company's 1996 Non-Employee Director Stock Option Plan
4.3 The Company's 1997 Employee Stock Purchase Plan
5.1 Opinion of Porter & Hedges, L.L.P.
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page hereto)
ITEM 9 UNDERTAKINGS.
A. UNDERTAKING TO UPDATE
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)
(3) of the Securities Act;
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(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of a prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (A)(1)(i) and (A)(1)(ii) of this
section do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act, that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. UNDERTAKING WITH RESPECT TO DOCUMENTS INCORPORATED BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
C. UNDERTAKING WITH RESPECT TO INDEMNIFICATION
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned directors and
officers of Allstar Systems, Inc., do hereby constitute and appoint James H.
Long and Donald R. Chadwick, or either of them, our true and lawful attorneys
and agents, to do any and all acts and things in our name and on our behalf in
our capacities as directors and officers, and to execute any and all instruments
for us and in our names in the capacities indicated below, which said attorneys
and agents, or either of them, may deem necessary or advisable to enable said
corporation to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Commission, in connection with the
filing of this Registration Statement, including specifically without
limitation, power and authority to sign for any of us, in our names in the
capacities indicated below, any and all amendments hereto; and we do each hereby
ratify and confirm all that the said attorneys and agents, or either of them,
shall do or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on November 25, 1997.
ALLSTAR SYSTEMS, INC.
By:/s/ JAMES H. LONG
James H. Long
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on November 25, 1997.
SIGNATURE TITLE
/s/ JAMES H. LONG Director, Chairman of the Board, President
James H. Long and Chief Executive Officer
(Principal Executive Officer)
/s/ DONALD R. CHADWICK Director and Chief Financial Officer
Donald R. Chadwick (Principal Financial and Accounting Officer)
/s/ G. CHRIS ANDERSEN Director
G. Chris Andersen
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/s/ RICHARD D. DARRELL Director
Richard D. Darrell
/s/ JACK M. JOHNSON, JR. Director
Jack M. Johnson, Jr.
/s/ DONALD D. SYKORA Director
Donald D. Sykora
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
4.1 The Company's 1996 Incentive Stock Plan
4.2 The Company's 1996 Non-Employee Director Stock Option Plan
4.3 The Company's 1997 Employee Stock Purchase Plan
5.1 Opinion of Porter & Hedges, L.L.P.
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page hereto)
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EXHIBIT 4.1
ALLSTAR SYSTEMS, INC.
1996 INCENTIVE STOCK PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF JULY 1, 1997
1. PURPOSE OF THE PLAN
This Allstar Systems, Inc. 1996 Incentive Stock Plan is intended to
provide a means through which the Company and its Subsidiaries may attract able
persons to enter into the employ of the Company or its Subsidiaries and to
promote the interests of the Company by providing the employees and consultants
of the Company or any Subsidiary corporation, who are largely responsible for
the management, growth and protection of the business of the Company, with a
proprietary interest in the Company, thereby strengthening their concern for the
welfare of the Company and their desire to remain in its employ. A further
purpose of the Plan is to provide such persons with additional incentive and
reward opportunities to enhance the profitable growth of the Company.
The Plan was originally adopted by the Board of Directors and approved
by the stockholders effective September 30, 1996, and is hereby amended and
restated effective July 1, 1997.
2. DEFINITIONS
As used in the Plan, the following definitions apply to the terms
indicated below:
(a) "BOARD OF DIRECTORS" or "BOARD" shall mean the Board of Directors of
Allstar Systems, Inc.
(b) "CAUSE," when used in connection with the termination of a
Participant's Employment, shall mean the termination of the Participant's
Employment by the Company by reason of (i) the conviction of the Participant by
a court of competent jurisdiction as to which no further appeal can be taken of
a crime involving moral turpitude; (ii) the proven commission by the Participant
of an act of fraud upon the Company; (iii) the willful and proven
misappropriation of any funds or property of the Company by the Participant;
(iv) the willful, continued and unreasonable failure by the Participant to
perform material duties assigned to him; (v) the knowing engagement by the
Participant in any direct, material conflict of interest with the Company
without compliance with the Company's conflict of interest policy, if any, then
in effect; (vi) the knowing engagement by the Participant, without the written
approval of the Board, in any activity which competes with the business of the
Company or which would result in a material injury to the business, reputation
or goodwill of the Company; or (vii) the knowing engagement in any activity
which would constitute a material violation of the provisions of the Company's
Policies and Procedures Manual, if any, then in effect.
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(c) "CASH BONUS" shall mean an award of a bonus payable in cash pursuant
to SECTION 11 hereof.
(d) "CHANGE IN CONTROL" shall mean:
(i) a "change in control" of the Company, as that term is
contemplated in the federal securities laws; or
(ii) the occurrence of any of the following events:
(1) any Person becomes, after the effective date of this
Plan, the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding
securities; provided, that the Board of Directors (as constituted
immediately prior to such person becoming such a beneficial
owner) may determine, in its sole discretion, that a Change in
Control has not occurred; and provided further, that the
acquisition of additional voting securities, after the effective
date of this Plan, by any Person who is, as of the effective date
of this Plan, the beneficial owner, directly or indirectly, of
30% or more of the combined voting power of the Company's then
outstanding securities, shall not constitute a "Change in
Control" of the Company for purposes of this SECTION 2(d).
(2) a majority of individuals who are nominated by the
Board of Directors for election to the Board of Directors on any
date, fail to be elected to the Board of Directors as a direct or
indirect result of any proxy fight or contested election for
positions on the Board of Directors; or
(3) the Board of Directors determines in its sole and
absolute discretion that there has been a change in control of
the Company.
(e) "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time. Reference in the Plan to any Section of the Code shall be deemed
to include any amendments or successor provisions to any Section and any
treasury regulations thereunder.
(f) "COMMITTEE" shall mean a committee appointed by the Board consisting
of not less than two directors serving on the Board who fulfill the
"non-employee director" requirements of Rule 16b-3 under the Exchange Act and
the "outside director" requirements of Section 162(m) of the Code. Without
limitation, the Committee may be the Compensation Committee of the Board or such
other committee, provided that the requirements of the previous sentence are
satisfied. The Board shall have the power to fill vacancies on the Committee
arising by resignation, death, removal or otherwise. The Board, in its sole
discretion, may bifurcate the powers and duties of the Committee among one or
more separate committees, or retain all powers and duties of the
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Committee in a single Committee. The members of the Committee shall serve at the
discretion of the Board.
(g) "COMMON STOCK" shall mean the Company's common stock, par value $.01
per share.
(h) "COMPANY" shall mean Allstar Systems, Inc., a Delaware corporation,
and each of its Subsidiaries, and its successors.
(i) "CONSULTANT" shall mean any person who is engaged by the Company or
any Subsidiary to render consulting services and is compensated for such
services.
(j) "COVERED EMPLOYEE" shall mean a named executive officer who is one
of the group of covered employees as defined in Section 162(m) of the Code and
Treasury Regulation ss. 1.162- 27(c) (or its successor).
(k) "DISABILITY" shall mean a permanent and total disability, as defined
in Section 22(e)(3) of the Code, of the Participant as determined by the
Committee in its discretion exercised in good faith.
(l) "EMPLOYEE" shall mean any person who is an employee of the Company
(or any Parent or Subsidiary) within the meaning of Section 3401(c) of the Code
and the applicable interpretive authority thereunder.
(m) "EMPLOYMENT" shall mean employment as an officer or common law
employee by the Company or any Parent or Subsidiary, or by any corporation
issuing or assuming an Incentive Award in any transaction described in Section
424(a) of the Code, or by a parent corporation or a subsidiary corporation of
such corporation issuing or assuming such Incentive Award, as the
parent-subsidiary relationship shall be determined at the time of the corporate
action described in Section 424(a) of the Code. In this regard, neither the
transfer of a Participant from Employment by the Company to Employment by any
Parent or Subsidiary, nor the transfer of a Participant from Employment by any
Parent or Subsidiary to Employment by the Company, shall be deemed to be a
termination of Employment of the Participant. The term "Employment" for purposes
of the Plan will also include compensatory services performed by a Consultant
for the Company or any Parent or Subsidiary.
(n) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(o) "FAIR MARKET VALUE" of a share of Common Stock on any date shall be
(i) the closing sales price on the immediately preceding business day of a share
of Common Stock as reported on the principal securities exchange on which shares
of Common Stock are then listed or admitted to trading or (ii) if not so
reported, the average of the closing bid and asked prices for a share of Common
Stock on the immediately preceding business day as quoted on the National
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Association of Securities Dealers Automated Quotation System ("NASDAQ") or (iii)
if not quoted on NASDAQ, the average of the closing bid and asked prices for a
share of Common Stock as quoted by the National Quotation Bureau's "Pink Sheets"
or the National Association of Securities Dealers' OTC Bulletin Board System. If
the price of a share of Common Stock shall not be so reported, the Fair Market
Value of a share of Common Stock shall be determined by the Committee in its
absolute discretion.
(p) "INCENTIVE AGREEMENT" shall mean a written agreement entered into
between the Company and the Participant setting forth the terms and conditions
pursuant to which an Incentive Award is granted under the Plan.
(q) "INCENTIVE AWARD" shall mean an Option, a share of Restricted Stock,
a Performance Award, a share of Phantom Stock, a Stock Bonus or Cash Bonus
granted pursuant to the terms of the Plan.
(r) "INCENTIVE STOCK OPTION" shall mean an Option which is an "incentive
stock option" within the meaning of Section 422 of the Code and which is
identified as an Incentive Stock Option in the Incentive Agreement by which it
is evidenced.
(s) "ISSUE DATE" shall mean the date established by the Committee on
which certificates representing shares of Restricted Stock shall be issued by
the Company pursuant to the terms of SECTION 7(d) hereof.
(t) "NON-QUALIFIED STOCK OPTION" shall mean an Option which is not an
Incentive Stock Option and which is identified as a Non-Qualified Stock Option
in the Incentive Agreement by which it is evidenced.
(u) "OPTION" shall mean an option to purchase shares of Common Stock of
the Company granted pursuant to SECTION 6 hereof. Each Option shall be
identified as either an Incentive Stock Option or a Non-Qualified Stock Option
in the Incentive Agreement by which it is evidenced.
(v) "PARENT" shall mean a "parent corporation" of the Company, whether
now or hereafter existing, as defined in Section 424(e) of the Code.
(w) "PARTICIPANT" shall mean an Employee or Consultant who is eligible
to participate in the Plan and to whom an Incentive Award is granted under the
Plan, and, upon his death, his successors, heirs, executors and administrators,
as the case may be, to the extent permitted hereby.
(x) "PERFORMANCE AWARD" shall mean an award payable in cash or Common
Stock, which award is granted pursuant to SECTION 8 hereof and subject to the
terms and conditions contained herein.
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(y) "PERFORMANCE-BASED EXCEPTION" shall mean the performance-based
exception from the tax deductibility limitations of Section 162(m) of the Code,
as prescribed in Code ss. 162(m) and Treasury Regulation ss. 1.162-27(e) (or its
successor).
(z) "PERSON" shall mean a "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act, and the rules and regulations in effect
from time to time thereunder.
(aa) a share of "PHANTOM STOCK" shall represent the right to receive in
cash the Fair Market Value of a share of Common Stock of the Company, which
right is granted pursuant to SECTION 9 hereof and subject to the terms and
conditions contained herein.
(bb) "PLAN" shall mean the Allstar Systems, Inc. 1996 Incentive Stock
Plan, as amended and restated effective as of July 1, 1997, and as it may be
further amended from time to time.
(cc) a share of "RESTRICTED STOCK" shall mean a share of Common Stock
which is granted pursuant to the terms of SECTION 7 hereof and which is subject
to the restrictions set forth in SECTION 7(c) hereof for so long as such
restrictions continue to apply to such share.
(dd) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.
(ee) "STOCK BONUS" shall mean a grant of a bonus payable in shares of
Common Stock pursuant to SECTION 10 hereof.
(ff) "SUBSIDIARY" shall mean any corporation in which at the pertinent
time the Company owns, directly or indirectly, stock vested with more than 50%
of the total combined voting power of all classes of stock of such corporations
within the meaning of Section 424(f) of the Code.
(gg) "VESTING DATE" shall mean the date established by the Committee on
which a share of Restricted Stock or Phantom Stock may vest.
3. STOCK SUBJECT TO THE PLAN
Under the Plan, the Committee may grant as Incentive Awards to
Participants: (a) Options; (b) shares of Restricted Stock; (c) Performance
Awards; (d) shares of Phantom Stock; (e) Stock Bonuses; and (f) Cash Bonuses.
The Committee may grant Options, shares of Restricted Stock, Performance
Awards, shares of Phantom Stock and Stock Bonuses under the Plan with respect to
a number of shares of Common Stock that in the aggregate at any time does not
exceed 417,500 shares of Common Stock, subject to adjustment pursuant to SECTION
12 hereof. The grant of a Cash Bonus shall not reduce the number of shares of
Common Stock with respect to which Options, shares of Restricted Stock,
Performance Awards, shares of Phantom Stock or Stock Bonuses may be granted
pursuant to the Plan.
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Unless the Committee designates that an Incentive Award is not intended
to comply with the Performance-Based Exception, the maximum number of shares of
Common Stock that may be subject to Incentive Awards granted to any one Covered
Employee during any calendar year shall be 100,000 shares of Common Stock,
subject to adjustment under SECTION 12 hereof. The limitation set forth in the
preceding sentence shall be applied in a manner which will permit compensation
generated in connection with the exercise of Options and the payment of
Performance Awards (or other Incentive Awards if applicable) to constitute
"qualified performance-based compensation" for purposes of Section 162(m) of the
Code, including, without limitation, counting against such maximum number of
shares, to the extent required under Section 162(m) of the Code, any shares
subject to Options that are canceled or repriced.
If any outstanding Option expires, terminates or is canceled or
forfeited for any reason, the shares of Common Stock subject to the unexercised
portion of such Option shall again be available for grant under the Plan. If any
shares of Restricted Stock or Phantom Stock, or any shares of Common Stock
granted as a Performance Award or a Stock Bonus are forfeited, terminated or
canceled for any reason, such shares shall again be available for grant under
the Plan. A payout of Phantom Stock or a Performance Award in cash shall
restore, on a one share for one share basis, the number of shares of Common
Stock reserved for issuance hereunder.
The Common Stock available for issuance or transfer under the Plan shall
be made available from shares now or hereafter (i) held in the treasury of the
Company, (ii) authorized but unissued shares, or (iii) shares to be purchased or
acquired by the Company. No fractional shares shall be issued under the Plan;
payment for fractional shares shall be made in cash.
4. ADMINISTRATION OF THE PLAN
(a) AUTHORITY OF THE COMMITTEE. Except as may be limited by law and
subject to the provisions herein, the Committee shall have full power to (i)
select Employees and Consultants to participate in the Plan; (ii) determine the
sizes, duration and types of Incentive Awards; (iii) determine the terms and
conditions of Incentive Awards and Incentive Agreements; (iv) determine whether
any shares subject to Incentive Awards will be subject to any restrictions on
transfer; (v) construe and interpret the Plan and any Incentive Agreement or
other agreement entered into under the Plan; and (vi) establish, amend, or waive
rules for the Plan's administration. Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of the
Plan.
(b) MEETINGS. The Committee shall designate a chairman from among its
members who shall preside at its meetings, and shall designate a secretary,
without regard to whether that person is a member of the Committee, who shall
keep the minutes of the proceedings and the records, documents, and data
pertaining to its administration of the Plan. Meetings shall be held at such
times and places as shall be determined by the Committee, and the Committee may
hold telephonic meetings. The Committee may take any action otherwise proper
under the Plan by the affirmative vote, taken with or without a meeting, of a
majority of its members. The Committee may authorize
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any one or more of their members or any officer of the Company to execute and
deliver documents on behalf of the Committee.
(c) DECISIONS BINDING. All determinations and decisions made by the
Committee shall be made in its discretion pursuant to the provisions of the
Plan, and shall be final, conclusive and binding on all persons including the
Company, its shareholders, employees, Participants, and their estates and
beneficiaries. The Committee's determinations under the Plan and with respect to
any individual Incentive Award need not be uniform and may be made selectively
among Incentive Awards and Participants, whether or not such Incentive Awards
are similar or such Participants are similarly situated.
(d) EXPENSES OF COMMITTEE. The Committee may employ legal counsel,
including, without limitation, independent legal counsel and counsel regularly
employed by the Company, consultants and agents as the Committee may deem
appropriate for the administration of the Plan. The Committee may rely upon any
opinion or computation received from any such counsel, consultant or agent. All
expenses incurred by the Committee in interpreting and administering the Plan,
including, without limitation, meeting expenses and professional fees, shall be
paid by the Company.
(e) MODIFICATION OF OUTSTANDING INCENTIVE AWARDS. The Committee may, in
its absolute discretion, (i) accelerate the date on which any Option granted
under the Plan becomes exercisable, (ii) extend the date on which any Option
ceases to be exercisable, (iii) accelerate the Vesting Date or Issue Date, or
waive any condition imposed pursuant to SECTION 7(B) hereof, with respect to any
share of Restricted Stock, and (iv) accelerate the Vesting Date or waive any
condition imposed pursuant to SECTION 9 hereof with respect to any share of
Phantom Stock.
(f) SURRENDER OF PREVIOUS INCENTIVE AWARDS. The Committee may, in its
absolute discretion, grant Incentive Awards to Participants on the condition
that such Participants surrender to the Committee for cancellation such other
Incentive Awards (including, without limitation, Incentive Awards with higher
exercise prices) as the Committee directs. Notwithstanding SECTION 3 hereof,
Incentive Awards granted on the condition precedent of surrender of outstanding
Incentive Awards shall not count against the limits set forth in SECTION 3 until
such time as such Incentive Awards are surrendered.
(g) LEAVES OF ABSENCE. Except as provided in SECTION 6(E)(4) hereof,
whether an authorized leave of absence, or absence in military or government
service, shall constitute termination of Employment shall be determined by the
Committee in its discretion exercised in accordance with any applicable law.
(h) INDEMNIFICATION. Each person who is or was a member of the Committee
shall be indemnified by the Company against and from any damage, loss,
liability, cost and expense that may be imposed upon or reasonably incurred by
him in connection with or resulting from any claim, action, suit, or proceeding
to which he may be a party or in which he may be involved by reason of any
action taken or failure to act under the Plan, except for any such act or
omission constituting
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willful misconduct or gross negligence. Such person shall be indemnified by the
Company for all amounts paid by him in settlement thereof, with the Company's
approval, or paid by him in satisfaction of any judgment in any such action,
suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or Bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
5. ELIGIBILITY
The persons who shall be eligible to receive Incentive Awards pursuant
to the Plan shall be (a) those Employees who are largely responsible for the
management, growth and protection of the business of the Company or any
Subsidiary (including officers of the Company, whether or not they are directors
of the Company) and (b) any Consultant, as the Committee, in its absolute
discretion, shall select from time to time; PROVIDED, HOWEVER, Incentive Stock
Options may only be granted to Employees.
6. OPTIONS
The Committee may grant Options pursuant to the Plan, which Options
shall be evidenced by Incentive Agreements in such form as the Committee shall
from time to time approve. Options shall also be subject to the following terms
and conditions:
(a) IDENTIFICATION OF OPTIONS
All Options granted under the Plan shall be clearly identified in the
Incentive Agreement evidencing such Options as either Incentive Stock Options or
as Non-Qualified Stock Options.
(b) EXERCISE PRICE
The exercise price per share of Common Stock under each Option shall be
determined by the Committee; PROVIDED, HOWEVER, that in the case of an Incentive
Stock Option, such exercise price shall not be less than 100% of the Fair Market
Value per share on the date the Incentive Stock Option is granted. To the extent
that a Non-Qualified Stock Option is intended to qualify for the
Performance-Based Exception, the exercise price shall not be less than 100% of
the Fair Market Value per share on the date the Option is granted. The Option
exercise price shall be subject to (i) the restrictions prescribed in SECTION
6(D) hereof and (ii) the adjustments provided in SECTION 12 hereof.
(c) TERM AND EXERCISE OF OPTIONS
(1) Each Option shall be exercisable on such date or dates,
during such period and for such number of shares of Common Stock as
shall be determined by the Committee on
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the day on which such Option is granted and set forth in the Incentive
Agreement evidencing the Option; PROVIDED, HOWEVER, that (A) subject to
the restrictions provided in SECTION 6(d) hereof, no Option shall be
exercisable after the expiration of ten years from the date such Option
was granted and (B) no Option shall be exercisable until six months
after the date of grant; and, PROVIDED, FURTHER, that each Option shall
be subject to earlier termination, expiration or cancellation as
provided in the Plan or the Incentive Agreement.
(2) Each Option shall be exercisable in whole or in part with
respect to whole shares of Common Stock. The partial exercise of an
Option shall not cause the expiration, termination or cancellation of
the remaining portion thereof. Upon the partial exercise of an Option,
the Incentive Agreement evidencing such Option shall be returned to the
Participant exercising such Option together with the delivery of the
certificates described in SECTION 6(c)(5) hereof.
(3) An Option shall be exercised by delivering notice to the
Company's principal office, to the attention of its Secretary, no fewer
than five business days in advance of the effective date of the proposed
exercise. Such notice shall be accompanied by the Incentive Agreement
evidencing the Option, shall specify the number of shares of Common
Stock with respect to which the Option is being exercised and the
effective date of the proposed exercise, and shall be signed by the
Participant. The Participant may withdraw such notice at any time prior
to the close of business on the business day immediately preceding the
effective date of the proposed exercise, in which case such Incentive
Agreement shall be returned to the Participant. Payment for shares of
Common Stock purchased upon the exercise of an Option shall be made on
the effective date of such exercise either (i) in cash, by certified
check, bank cashier's check or wire transfer, (ii) subject to the
approval of the Committee, in shares of Common Stock owned by the
Participant and held for at least six months, as valued at their Fair
Market Value on the effective date of such exercise, (iii) subject to
the approval of the Committee, in the form of a "cashless exercise" (as
described below) or (iv) subject to the approval of the Committee, in
any combination of the foregoing. Any payment in shares of Common Stock
shall be effected by the delivery of such shares to the Secretary of the
Company, duly endorsed in blank or accompanied by stock powers duly
executed in blank, together with any other documents as the Secretary of
the Company shall require from time to time.
The cashless exercise of an Option shall be pursuant to
procedures whereby the Participant by written notice, directs (i) an
immediate market sale or margin loan respecting all or a part of the
shares of Common Stock to which he is entitled upon exercise pursuant to
an extension of credit by the Company to the Participant in the amount
of the exercise price, (ii) the delivery of the shares of Common Stock
directly from the Company to a brokerage firm, and (iii) delivery of the
exercise price from the sale or the margin loan proceeds from the
brokerage firm directly to the Company.
(4) Any Option granted under the Plan may be exercised by a
broker-dealer acting on behalf of a Participant if (i) the broker-dealer
has received from the Participant or
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the Company a duly endorsed Incentive Agreement evidencing such Option
and instructions signed by the Participant requesting the Company to
deliver the shares of Common Stock subject to such Option to the
broker-dealer on behalf of the Participant and specifying the account
into which such shares should be deposited, (ii) adequate provision has
been made with respect to the payment of any withholding taxes due upon
such exercise, and (iii) the broker-dealer and the Participant have
otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part
220.
(5) Certificates for shares of Common Stock purchased upon the
exercise of an Option shall be issued in the name of the Participant and
delivered to the Participant as soon as practicable following the
effective date on which the Option is exercised; PROVIDED, HOWEVER, that
such delivery shall be effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the
United States mail, addressed to the Participant.
(6) During the lifetime of a Participant each Option granted to
him shall be exercisable only by him, a broker-dealer acting on behalf
of such Participant pursuant to SECTION 6(C)(4) hereof, or by his legal
guardian in the event of his Disability. No Option shall be assignable
or transferable otherwise than by will or by the laws of descent and
distribution.
(d) LIMITATIONS ON GRANT OF INCENTIVE STOCK OPTIONS
(1) The aggregate Fair Market Value of shares of Common Stock
with respect to which "incentive stock options" (within the meaning of
Section 422 without regard to Section 422(d) of the Code) are
exercisable for the first time by a Participant during any calendar year
under the Plan (and any other stock option plan of the Company, or of
its Parent or any Subsidiary) shall not exceed $100,000. Such Fair
Market Value shall be determined as of the date on which each such
Incentive Stock Option is granted. If such aggregate Fair Market Value
of shares of Common Stock underlying such Incentive Stock Options
exceeds $100,000, then Incentive Stock Options granted hereunder to such
Participant shall, to the extent and in the order required by
regulations promulgated under the Code (or any other authority having
the force of such regulations), automatically be deemed to be
Non-Qualified Stock Options, but all other terms and provisions of such
Incentive Stock Options shall remain unchanged. In the absence of such
regulations promulgated under the Code (and authority), or if such
regulations (or authority) require or permit a designation of the
options which shall cease to constitute Incentive Stock Options,
Incentive Stock Options shall, to the extent of such excess and in the
order in which they were granted, automatically be deemed to be
Non-Qualified Stock Options, but all other terms and provisions of such
Incentive Stock Options shall remain unchanged.
(2) No Incentive Stock Option may be granted to an individual if,
at the time of the proposed grant, such individual owns stock possessing
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of its Parent or any
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Subsidiary, unless (i) the exercise price of such Incentive Stock Option
is at least 110% of the Fair Market Value of a share of Common Stock at
the time such Incentive Stock Option is granted and (ii) such Incentive
Stock Option is not exercisable after the expiration of five years from
the date such Incentive Stock Option is granted.
(e) EFFECT OF TERMINATION OF EMPLOYMENT
(1) Unless otherwise expressly provided in the Incentive
Agreement, if the Employment of a Participant with the Company shall
terminate for any reason other than Cause, Disability or the death of
the Participant (i) Options granted to such Participant, to the extent
that they were exercisable at the time of such termination, shall remain
exercisable until the expiration of one month after such termination, on
which date they shall expire, and (ii) Options granted to such
Participant, to the extent that they were not exercisable at the time of
such termination, shall expire at the close of business on the date of
such termination; PROVIDED, HOWEVER, that no Option shall be exercisable
after the expiration of its term.
(2) Unless otherwise expressly provided in the Incentive
Agreement, if the Employment of a Participant with the Company shall
terminate as a result of the Disability or the death of the Participant,
then (i) Options granted to such Participant, to the extent that they
were exercisable at the time of such termination, shall remain
exercisable until the expiration of one year after such termination, on
which date they shall expire, and (ii) Options granted to such
Participant, to the extent that they were not exercisable at the time of
such termination, shall expire at the close of business on the date of
such termination; PROVIDED, HOWEVER, that no Option shall be exercisable
after the expiration of its term.
(3) Unless otherwise expressly provided in the Incentive
Agreement, in the event of the termination of a Participant's Employment
for Cause, all outstanding Options granted to such Participant shall
expire, and shall not be exercisable, as of the commencement of business
on the date of such termination.
(4) Unless otherwise expressly provided in the Incentive
Agreement, a Participant's Employment with the Company shall be deemed
terminated if the Participant's leave of absence (including military or
such leave or other bona fide leave of absence) extends for more than 90
days and the Participant's continued Employment with the Company is not
guaranteed by contract or statute.
(f) ACCELERATION OF EXERCISE DATE UPON CHANGE IN CONTROL
Upon the occurrence of a Change in Control, each Option granted under
the Plan and outstanding at such time shall become fully and immediately
exercisable and shall remain exercisable until its expiration, termination or
cancellation pursuant to the terms of the Plan.
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7. RESTRICTED STOCK
The Committee may grant shares of Restricted Stock pursuant to the Plan.
Each grant of shares of Restricted Stock shall be evidenced by an Incentive
Agreement containing such terms and conditions as prescribed by the Committee.
Each grant of shares of Restricted Stock shall also be subject to the following
terms and conditions:
(a) ISSUE DATE AND VESTING DATE
At the time of the grant of shares of Restricted Stock, the Committee
shall establish an Issue Date or Issue Dates and a Vesting Date or Vesting Dates
with respect to such shares. The Committee may divide such shares into classes
and assign a different Issue Date and/or Vesting Date for each class. Except as
provided in SECTIONS 7(c) AND 7(f) hereof, upon the occurrence of the Issue Date
with respect to a share of Restricted Stock, a share of Restricted Stock shall
be issued in accordance with the provisions of SECTION 7(d) hereof. Provided
that all conditions to the vesting of a share of Restricted Stock imposed
pursuant to SECTION 7(b) hereof are satisfied, and except as provided in
SECTIONS 7(c) AND 7(f) hereof, upon the occurrence of the Vesting Date with
respect to a share of Restricted Stock, such share shall vest and the
restrictions of SECTION 7(c) hereof shall cease to apply to such share.
(b) CONDITIONS TO VESTING
At the time of the grant of shares of Restricted Stock, the Committee
may impose such restrictions or conditions, not inconsistent with the provisions
hereof, to the vesting of such shares as it, in its absolute discretion, deems
appropriate. By way of example and not by way of limitation, the Committee may
require, as a condition to the vesting of any class or classes of shares of
Restricted Stock, that (i) the Participant or the Company achieve certain
performance criteria, such criteria to be specified by the Committee at the time
of the grant of such shares and (ii) prohibiting an election by the Participant
under Section 83(b) of the Code.
(c) RESTRICTIONS ON TRANSFER PRIOR TO VESTING
Prior to the vesting of a share of Restricted Stock, no transfer of a
Participant's rights with respect to such share, whether voluntary or
involuntary, by operation of law or otherwise, shall vest the transferee with
any interest or right in or with respect to such share, but immediately upon any
attempt to transfer such rights, such share, and all of the rights related
thereto, shall be forfeited by the Participant and the transfer shall be of no
force or effect.
(d) ISSUANCE OF CERTIFICATES
(1) Except as provided in SECTIONS 7(c) OR 7(f) hereof,
reasonably promptly after the Issue Date with respect to shares of
Restricted Stock, the Company shall cause to be issued a stock
certificate, registered in the name of the Participant to whom such
shares were granted, evidencing such shares; PROVIDED, that the Company
shall not cause to be issued
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such a stock certificates unless it has received a stock power duly
endorsed in blank with respect to such shares. Each such stock
certificate shall bear the following legend:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS, TERMS AND
CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST
TRANSFER) CONTAINED IN THE ALLSTAR SYSTEMS, INC. 1996 INCENTIVE
STOCK PLAN AND AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED
OWNER OF SUCH SHARES AND ALLSTAR SYSTEMS, INC. A COPY OF THE PLAN
AND AGREEMENT IS ON FILE IN THE OFFICE OF THE SECRETARY OF
ALLSTAR SYSTEMS, INC., 6401 SOUTHWEST FREEWAY, HOUSTON, TEXAS
77074.
Such legend shall not be removed from the certificate evidencing such
shares until such shares vest pursuant to the terms hereof.
(2) Each certificate issued pursuant to SECTION 7(d)(1) hereof,
together with the stock powers relating to the shares of Restricted
Stock evidenced by such certificate, shall be held by the Company. The
Company shall issue to the Participant a receipt evidencing the
certificates held by it which are registered in the name of the
Participant.
(e) CONSEQUENCES UPON VESTING
Upon the vesting of a share of Restricted Stock pursuant to the terms
hereof and the Incentive Agreement, the restrictions of SECTION 7(C) shall cease
to apply to such share. Reasonably promptly after a share of Restricted Stock
vests, the Company shall cause to be issued and delivered to the Participant to
whom such shares were granted, a certificate evidencing such share, free of the
legend set forth in SECTION 7(D)(1) hereof, together with any other property of
the Participant held by Company pursuant to SECTION 12(A) hereof; PROVIDED,
HOWEVER, that such delivery shall be effected for all purposes when the Company
shall have deposited such certificate and other property in the United States
mail, addressed to the Participant.
(f) EFFECT OF TERMINATION OF EMPLOYMENT
(1) If the Employment of a Participant with the Company shall
terminate for any reason other than Cause prior to the vesting of shares
of Restricted Stock granted to such Participant, a portion of such
shares, to the extent not forfeited or canceled on or prior to such
termination pursuant to any provision hereof, may vest on the date of
such termination. The portion referred to in the preceding sentence
shall be determined by the Committee and may be based on the achievement
of any conditions imposed by the Committee with respect to such shares
pursuant to SECTION 7(b) hereof. Such portion may equal zero and shall
be deemed zero unless otherwise specified by the Committee or in the
Participant's Incentive Agreement.
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(2) In the event of the termination of a Participant's Employment
for Cause, all shares of Restricted Stock granted to such Participant
which have not vested as of the commencement of business on the date of
such termination shall immediately be forfeited.
(g) EFFECT OF CHANGE IN CONTROL
Upon the occurrence of a Change in Control, (i) all shares of Restricted
Stock which have been issued but are not vested shall immediately be 100% vested
and (ii) all shares of Restricted Stock with respect to which the Issue Date had
not previously occurred shall immediately be issued and 100% vested.
8. PERFORMANCE AWARDS
The Committee may grant Performance Awards pursuant to the Plan. Each
grant of Performance Awards shall be evidenced by an Incentive Agreement
containing such terms and conditions as prescribed by the Committee. Each grant
of Performance Awards shall also be subject to the following terms and
conditions:
(a) PERFORMANCE PERIOD AND PERFORMANCE AWARD
(1) With respect to each grant of a Performance Award, the
Committee shall establish a performance period over which the
performance of the applicable Participant shall be measured.
(2) In determining the amount of the Performance Award to be
granted to a particular Participant, the Committee may take into account
such factors as the Participant's responsibility level and growth
potential, the amount of other Incentive Awards granted to such
Participant, and such other considerations as the Committee deems
appropriate in its discretion. Each Performance Award shall be subject
to a maximum value as established by the Committee at the time of grant
of such award; PROVIDED, HOWEVER, the maximum value that can be granted
or vest as a Performance Award to any one Covered Employee during any
calendar year is $1,000,000 as determined consistent with the
Performance-Based Exception.
(b) PERFORMANCE MEASURES
A Performance Award shall be awarded to a Participant contingent upon
future performance of the Company (or any Subsidiary, division or department
thereof) by or in which the Participant is employed or responsible during the
performance period. The Committee shall establish, in writing, the performance
measures applicable to such performance within 90 days after the commencement of
the performance period, to which such measures relate, and at a time when the
outcome of such performance measures are substantially uncertain within the
meaning of the Performance-Based Exception, subject to such later revisions as
the Committee may deem appropriate to reflect significant unforeseen events or
changes.
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(c) PAYMENT
Upon the expiration of the performance period relating to a Performance
Award granted to a Participant, such Participant shall be entitled to receive
payment of an amount not exceeding the maximum value of the Performance Award,
based on the achievement of the performance measures for such performance
period, as determined by the Committee. The Committee shall certify in writing
prior to the payment of a Performance Award that the applicable performance
measures and any other material terms of the grant have been satisfied. Subject
to SECTION 3 hereof, payment of a Performance Award may be made in cash, Common
Stock or a combination thereof, as determined by the Committee. Payment shall be
made in a lump sum or in installments as prescribed by the Committee. Any
payment to be made in Common Stock shall be based on the Fair Market Value of
the Common Stock on the payment date.
(d) EFFECT OF TERMINATION OF EMPLOYMENT
If the Employment of a Participant shall terminate for any reason prior
to the expiration of the applicable performance period, the Performance Awards
relating to such performance period shall immediately be forfeited as of the
commencement of business on the date of such termination, except as may be
determined by the Committee in its sole and absolute discretion, or as may be
otherwise provided in the Incentive Agreement evidencing such Performance Award.
(e) EFFECT OF CHANGE IN CONTROL
Upon the occurrence of a Change in Control, the Committee (as
constituted immediately prior to such Change in Control) shall determine, in its
sole discretion, whether each Performance Award, which have not theretofore
satisfied the requisite performance measure or for which the performance period
has not expired, shall immediately be paid or whether such Performance Award
shall remain outstanding according to its respective terms.
9. PHANTOM STOCK
The Committee may grant shares of Phantom Stock pursuant to the Plan.
Each grant of shares of Phantom Stock shall be evidenced by an Incentive
Agreement containing such terms and conditions as prescribed by the Committee.
Each grant of shares of Phantom Stock shall also be subject to the following
terms and conditions:
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(a) VESTING DATE
At the time of the grant of shares of Phantom Stock, the Committee shall
establish a Vesting Date or Vesting Dates with respect to such shares. The
Committee may divide such shares into classes and assign a different Vesting
Date for each class. Provided that all conditions to the vesting of a share of
Phantom Stock imposed pursuant to SECTION 9(c) hereof are satisfied, and except
as provided in SECTION 9(d) hereof, upon the occurrence of the Vesting Date with
respect to a share of Phantom Stock, such share shall vest.
(b) BENEFIT UPON VESTING
Upon the vesting of a share of Phantom Stock, a Participant shall be
entitled to receive in cash, within 90 days of the date on which such share
vests, an amount in cash in a lump sum equal to the sum of (i) the Fair Market
Value of a share of Common Stock on the date on which such share of Phantom
Stock vests and (ii) the aggregate amount of cash dividends paid with respect to
a share of Common Stock during the period commencing on the date on which the
share of Phantom Stock was granted and terminating on the date on which such
share vests.
(c) CONDITIONS TO VESTING
At the time of the grant of shares of Phantom Stock, the Committee may
impose, in the Participant's Incentive Agreement, such restrictions or
conditions, not inconsistent with the provisions of the Plan, to the vesting of
such shares as the Committee, in its absolute discretion, deems appropriate. By
way of example and not by way of limitation, the Committee may require, as a
condition to the vesting of any class or classes of shares of Phantom Stock,
that the Participant or the Company achieve certain performance criteria, such
criteria to be specified by the Committee at the time of the grant of such
shares.
(d) EFFECT OF TERMINATION OF EMPLOYMENT
(1) If the Employment of a Participant with the Company shall
terminate for any reason other than Cause prior to the vesting of shares
of Phantom Stock granted to such Participant, a portion of such shares,
to the extent not forfeited or canceled on or prior to such termination
pursuant to any provision hereof, may vest on the date of such
termination. The portion referred to in the preceding sentence shall be
determined by the Committee and may be based on the achievement of any
conditions imposed by the Committee with respect to such shares pursuant
to SECTION 9(c) hereof. Such portion may equal zero and shall be deemed
zero unless otherwise specified by the Committee or in the Participant's
Incentive Agreement.
(2) In the event of the termination of a Participant's Employment
for Cause, all shares of Phantom Stock granted to such Participant which
have not vested as of the date of such termination shall immediately be
forfeited.
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(e) EFFECT OF CHANGE IN CONTROL
Upon the occurrence of a Change in Control, all shares of Phantom Stock
which have not theretofore vested shall immediately be 100% vested.
10. STOCK BONUSES
The Committee may, in its absolute discretion, grant Stock Bonuses in
such amounts as it shall determine from time to time. A Stock Bonus shall be
paid at such time and subject to such conditions as the Committee shall
determine at the time of the grant of such Stock Bonus, all as set forth in the
Participant's Incentive Agreement. Certificates for shares of Common Stock
granted as a Stock Bonus shall be issued in the name of the Participant to whom
such grant was made and delivered to such Participant as soon as practicable
after the date on which such Stock Bonus is required to be paid.
11. CASH BONUSES
The Committee may, in its absolute discretion, grant to a Participant,
in connection with any grant of Restricted Stock or shares of Common Stock
granted as a Performance Award or Stock Bonus or at any time thereafter, a cash
bonus, payable promptly after the date on which the Participant is required to
recognize income for federal income tax purposes in connection with such
Restricted Stock, Performance Award or Stock Bonus, in such amount as the
Committee shall determine; PROVIDED, HOWEVER, that in no event shall the amount
of a Cash Bonus exceed the Fair Market Value of the related shares of Restricted
Stock or shares of Common Stock granted pursuant to a Performance Award or Stock
Bonus on such date. A Cash Bonus shall be subject to such terms and conditions
as the Committee shall determine at the time of its grant.
12. ADJUSTMENT UPON CHANGES IN COMMON STOCK
(a) OUTSTANDING RESTRICTED STOCK, PERFORMANCE AWARDS, AND PHANTOM
STOCK
Unless the Committee in its absolute discretion otherwise determines, if
a Participant receives any securities or other property (including dividends
paid in cash) as a result of any dividend, stock split recapitalization, merger,
consolidation, combination, exchange of shares or otherwise, with respect to a
share of Restricted Stock for which the Issue Date occurs prior to such event
but that has not vested as of the date of such event, such securities or other
property will not vest until such share of Restricted Stock vests and shall be
held by the Company pursuant to SECTION 7(d)(2) hereof as if such securities or
other property were unvested shares of Restricted Stock.
The Committee may, in its absolute discretion, adjust any grant of
shares of Restricted Stock for which the Issue Date has not occurred as of the
date of the occurrence of any of the following events, and any shares of Common
Stock upon the grant of a Performance Award or any grant of shares of Phantom
Stock, to reflect any dividend, stock split, recapitalization, merger,
consolidation,
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combination, exchange of shares or similar corporate change as the Committee may
deem appropriate to prevent the enlargement or dilution of rights of
Participants under the grant.
(b) STOCK SUBJECT TO PLAN, OUTSTANDING OPTIONS, INCREASE OR DECREASE
IN ISSUED SHARES WITHOUT CONSIDERATION
Subject to any required action by the stockholders of the Company, in
the event of any increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or consolidation of shares of Common Stock or
the payment of a stock dividend (but only on the shares of Common Stock), or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Company, the Committee shall proportionally adjust (i)
the number of shares of Common Stock for which Incentive Awards may be granted
under the Plan and (ii) the number of shares and the exercise price per share of
Common Stock subject to each outstanding Option.
(c) OUTSTANDING OPTIONS, CERTAIN MERGERS
Subject to any required action by the stockholders of the Company, if
the Company shall be the surviving corporation in any merger or consolidation
(except a merger or consolidation as a result of which the holders of shares of
Common Stock receive securities of another corporation), each Option outstanding
on the date of such merger or consolidation shall entitle the Participant to
acquire upon exercise the securities which a holder of the number of shares of
Common Stock subject to such Option would have received in such merger or
consolidation.
(d) OUTSTANDING OPTIONS, CERTAIN OTHER TRANSACTIONS
In the event of a dissolution or liquidation of the Company, a sale of
all or substantially all of the Company's assets, a merger or consolidation
involving the Company in which the Company is not the surviving corporation or a
merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Common Stock receive
securities of another corporation and/or other property, including cash, the
Committee shall, in its absolute discretion, have the power to:
(1) cancel, effective immediately prior to the occurrence of such
event, each Option outstanding immediately prior to such event (whether
or not then exercisable), and, in full consideration of such
cancellation, pay to the Participant to whom such Option was granted an
amount in cash, for each share of Common Stock subject to such Option
equal to the excess of (A) the value, as determined by the Committee in
its absolute discretion, of the property (including cash) received by
the holder of a share of Common Stock as a result of such event over (B)
the exercise price of such Option; or
(2) provide for the exchange of each Option outstanding
immediately prior to such event (whether or not then exercisable) for an
option on some or all of the property and, incident thereto, make an
equitable adjustment as determined by the Committee in its
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<PAGE>
absolute discretion in the exercise price of the option, or the number
of shares or amount of property subject to the option or, if
appropriate, provide for a cash payment to the Participant to whom such
Option was granted in partial consideration for the exchange of the
Option.
(e) OUTSTANDING OPTIONS, OTHER CHANGES
In the event of any change in the capitalization of the Company or
corporate change other than those specifically referred to in SECTIONS 12(b),
(c) OR (d) hereof, the Committee may, in its absolute discretion, make such
adjustments in the number and class of shares subject to Options outstanding on
the date on which such change occurs and in the per share exercise price of each
such Option as the Committee may consider appropriate to prevent dilution or
enlargement of rights.
(f) NO OTHER RIGHTS
Except as expressly provided in the Plan, no Participant shall have any
rights by reason of any subdivision or consolidation of shares of stock of any
class, the payment of any dividend, any increase or decrease in the number of
shares of stock of any class or any dissolution, liquidation, merger or
consolidation of the Company or any other corporation. Except as expressly
provided in the Plan, 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 of shares of Common Stock subject to an Incentive Award or the exercise
price of any Option.
13. RIGHTS AS A STOCKHOLDER
No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to any Incentive Award granted
pursuant to this Plan until the date of the issuance of a stock certificate with
respect to such shares. Except as otherwise expressly provided in SECTION 12
hereof, no adjustment to any Incentive Award shall be made for dividends or
other rights for which the record date occurs prior to the date such stock
certificate is issued.
14. NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO INCENTIVE AWARD
Nothing contained in the Plan or any Incentive Award shall confer upon
any Participant any right with respect to the continuation of his Employment or
interfere in any way with the right of the Company, subject to the terms of any
separate employment agreement to the contrary, to terminate at any time such
Employment or to increase or decrease the compensation of the Participant from
the rate in existence at the time of the grant of an Incentive Award.
No person shall have any claim or right to receive an Incentive Award
hereunder. The Committee's granting of an Incentive Award to a Participant at
any time shall neither require the Committee to grant an Incentive Award to such
Participant or any other Participant or other person at any time nor preclude
the Committee from making subsequent grants to such Participant or any other
Participant or other person.
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<PAGE>
15. SECURITIES MATTERS
(a) The Company shall be under no obligation to effect the registration
pursuant to the Securities Act of any shares of Common Stock to be issued
hereunder or to effect similar compliance under any state laws. Notwithstanding
anything herein to the contrary, the Company shall not be obligated to cause to
be issued or delivered any certificates evidencing shares of Common Stock
pursuant to the Plan unless and until the Company is advised by its counsel that
the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authority and the requirements of
any securities exchange on which shares of Common Stock are traded. The
Committee may require, as a condition of the issuance and delivery of
certificates evidencing shares of Common Stock pursuant to the terms hereof,
that the recipient of such shares make such covenants, agreements and
representations, and that such certificates bear such legends, as the Committee,
in its sole discretion, deems necessary or desirable.
(b) The exercise of any Option granted hereunder shall only be effective
at such time as counsel to the Company shall have determined that the issuance
and delivery of shares of Common Stock pursuant to such exercise is in
compliance with all applicable laws, regulations of governmental authorities and
the requirements of any securities exchange on which shares of Common Stock are
traded. The Company may, in its sole discretion, defer the effectiveness of any
exercise of an Option granted hereunder in order to allow the issuance of shares
of Common Stock pursuant thereto to be made pursuant to registration or an
exemption from registration or other methods for compliance available under
federal or state securities laws. The Company shall inform the Participant in
writing of its decision to defer the effectiveness of the exercise of an Option
granted hereunder. During the period that the effectiveness of the exercise of
an Option has been deferred, the Participant may, by written notice, withdraw
such exercise and obtain the refund of any amount paid with respect thereto.
(c) It is intended that the Plan and any grant of an Incentive Award
made to a person subject to Section 16 of the Exchange Act meet all of the
requirements of Rule 16b-3 promulgated thereunder. If any provision of the Plan
or any such Incentive Award would disqualify the Plan or such Incentive Award
under, or would otherwise not comply with, Rule 16b-3, such provision or
Incentive Award shall be construed or deemed amended to conform to Rule 16b-3 to
the extent permitted by applicable law and deemed advisable by the Board of
Directors.
16. QUALIFIED PERFORMANCE-BASED COMPENSATION
Unless otherwise determined by the Committee with respect to any
particular Incentive Award, it is intended that the Plan comply fully with and
meet all the requirements of Section 162(m) of the Code so that (i) Options
granted hereunder with an exercise price not less than Fair Market Value of a
share of Common Stock on the date of grant and (ii) the payment of a Performance
Award, shall qualify for the Performance-Based Exception. If any provision of
the Plan or an Incentive Award would disqualify the Plan or would not otherwise
permit the Plan or an Incentive Award to comply with the Performance-Based
Exception as so intended, such provision shall be construed or deemed amended to
conform to the requirements or provisions of the
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<PAGE>
Performance-Based Exception to the extent permitted by applicable law and deemed
advisable by the Committee; provided that no such construction or amendment
shall have an adverse effect on the economic value to a Participant of any
outstanding Incentive Award previously granted.
17. WITHHOLDING TAXES
Whenever shares of Common Stock are to be issued upon the exercise of an
Option, the occurrence of the Issue Date or Vesting Date with respect to a share
of Restricted Stock, the payment of a Performance Award in shares of Common
Stock or the payment of a Stock Bonus, the Company shall have the right to
require the Participant to remit to the Company in cash an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any,
attributable to such exercise, occurrence or payment prior to the delivery of
any certificate or certificates for such shares. In addition, upon the grant of
a Cash Bonus, the payment of a Performance Award or the making of a payment with
respect to a share of Phantom Stock, the Company shall have the right to
withhold from any cash payment required to be made pursuant thereto an amount
sufficient to satisfy the federal, state and local withholding tax requirements,
if any, attributable to such exercise or grant.
18. TERMINATION AND AMENDMENT OF THE PLAN
The Board of Directors may at any time suspend or terminate the Plan or
revise or amend it in any respect whatsoever, PROVIDED, HOWEVER, that without
approval of the Company's stockholders no revision or amendment shall (a) except
as provided in SECTION 12 hereof, increase the number of shares of Common Stock
hereunder that may be issued under the Plan, (b) except as provided in SECTION
12 hereof, increase the maximum number of shares of Common Stock that may be
subject to an Incentive Award subject to Section 162(m) of the Code for any one
Covered Employee for any calendar year, (c) increase the maximum value of a
Performance Award subject to Section 162(m) of the Code for any one Covered
Employee for any calendar year, (d) modify the requirements as to eligibility
for participation in the Plan, (e) extend the term of the Plan, or (f) decrease
any authority granted to the Committee under the Plan in contravention of Rule
16b-3 under the Exchange Act.
No termination, amendment, or modification of the Plan shall adversely
affect in any material way any outstanding Incentive Award previously granted
under the Plan, without the written consent of such Participant or other
designated holder of such Incentive Award.
In addition, to the extent that the Committee determines that (a) the
listing for qualification requirements of any national securities exchange or
quotation system on which the Company's Common Stock is then listed or quoted,
or (b) the Code (or regulations promulgated thereunder), require stockholder
approval in order to maintain compliance with such listing requirements or to
maintain any favorable tax advantages or qualifications, then the Plan shall not
be amended in such respect without approval of the Company's stockholders.
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<PAGE>
19. NO OBLIGATION TO EXERCISE
The grant to a Participant of an Option shall impose no obligation upon
such Participant to exercise such Option.
20. TRANSFERS UPON DEATH
Upon the death of a Participant, outstanding Incentive Awards granted to
such Participant may be exercised only by the executors or administrators of the
Participant's estate or by any person or persons who shall have acquired such
right to exercise by will or by the laws of descent and distribution. No
transfer by will or the laws of descent and distribution of any Incentive Award,
or the right to exercise any Incentive Award, shall be effective to bind the
Company unless the Committee shall have been furnished with (a) written notice
thereof and with a copy of the will and/or such evidence as the Committee may
deem necessary to establish the validity of the transfer and (b) an agreement by
the transferee to comply with all the terms and conditions of the Incentive
Award that are or would have been applicable to the Participant and to be bound
by the acknowledgments made by the Participant in connection with the grant of
the Incentive Award.
21. EXPENSES AND RECEIPTS
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Incentive Award will be used for
general corporate purposes.
22. FAILURE TO COMPLY
In addition to the remedies of the Company elsewhere provided for
herein, failure by a Participant to comply with any of the terms and conditions
of the Plan or the agreement executed by such Participant evidencing an
Incentive Award, unless such failure is remedied by such Participant within ten
days after having been notified of such failure by the Committee, shall be
grounds for the cancellation and forfeiture of such Incentive Award, in whole or
in part, as the Committee, in its absolute discretion, may determine.
23. GOVERNING LAW
The Plan shall be interpreted, construed and constructed in accordance
with the laws of the State of Texas, except as superseded by the laws of the
United States.
24. EFFECTIVE DATE AND TERM OF PLAN
The Plan was adopted by the Board of Directors and approved by the
stockholders of the Company effective September 30, 1996. The Plan was amended
and restated effective July 1, 1997 with the approval of the Board of Directors.
No Incentive Award may be granted under the Plan after September 29, 2006.
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EXHIBIT 4.2
ALLSTAR SYSTEMS, INC.
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF JULY 1, 1997
1. PURPOSE OF THE PLAN. This Allstar Systems, Inc. 1996 Non-Employee
Director Stock Option Plan (the "PLAN") is adopted for the benefit of the
directors of the Allstar Systems, Inc., a Delaware corporation (the "COMPANY")
who, at the time of their service, are not employees of the Company or any of
its subsidiaries (the "NON-EMPLOYEE DIRECTORS"), and is intended to advance the
interests of the Company by providing the Non-Employee Directors with additional
incentive to serve the Company by increasing their proprietary interest in the
success of the Company.
2. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Compensation Committee,
which Compensation Committee shall consist of not less than two members of
the Board of Directors of the Company (the "BOARD".) For the purposes of
this Plan, a majority of the members of the Compensation Committee shall
constitute a quorum for the transaction of business, and the vote of a
majority of those members present at any meeting shall decide any question
brought before that meeting. No member of the Compensation Committee shall
be liable for any act or omission of any other member of the Compensation
Committee or for any act or omission on his own part, including (without
limitation) the exercise of any power or discretion given to him under
this Plan, except those resulting from his own gross negligence or willful
misconduct.
(b) The Compensation Committee shall have full authority to
administer the Plan, including authority to interpret and construe any
provision of the Plan and the terms of any option ("OPTION") granted under
it and to adopt such rules and regulations for administering the Plan as
it may deem necessary. Decisions of the Compensation Committee shall be
final and binding on all parties. Notwithstanding the above, the selection
of Non-Employee Directors to whom Options are to be granted, the number of
shares subject to any Option, the exercise price of any Option and the
ten-year maximum term of any Option shall be as hereinafter provided, and
the Compensation Committee shall have no discretion as to such matters.
<PAGE>
3. STOCK RESERVED FOR THE PLAN. The total number of shares of the
Company's common stock, par value $.01 per share (the "COMMON STOCK"), with
respect to which Options may be granted under the Plan, shall not exceed the
aggregate of 100,000 shares; PROVIDED, that the class and aggregate number of
shares which may be subject to the Options granted hereunder shall be subject to
adjustment in accordance with the provisions of Section 14 of this Plan. Such
shares may be treasury shares or authorized but unissued shares. The Company
shall reserve for issuance pursuant to this Plan such number of shares of Common
Stock as may from time to time be subject to Options granted hereunder. If any
Option expires or is canceled prior to its exercise in full, the shares
theretofore subject to such Option may again be made subject to an Option under
the Plan. All Options granted under the Plan will constitute non-qualified
options ("NQO").
4. GRANT OF OPTIONS.
(a) NON-EMPLOYEE DIRECTORS ELECTED AFTER THE EFFECTIVE DATE OF THIS
PLAN: INITIAL GRANT. For so long as this Plan is in effect and shares are
available for the grant of NQOs hereunder, each person who is elected as a
Non-Employee Director of the Company after the effective date of this Plan
and who is (A) not appointed or elected to the Board in connection with or
as a result of the completion of a financing or acquisition transaction in
which the appointment or election of such person, or the execution of an
agreement obligating the parties thereto to vote in favor of the
appointment or election of such person, is a condition to the obligation
of any party to the transaction to complete the transaction and (B) not
otherwise an employee of the Company or any of the Company's subsidiaries
(as defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "CODE") (a "NEW DIRECTOR") (New Directors are hereinafter
sometimes referred to herein as "ELIGIBLE DIRECTORS") shall be granted a
one-time NQO to purchase 5,000 shares of Common Stock at a per share
exercise price equal to the Fair Market Value (defined below) of a share
of Common Stock on such date (subject to the adjustments provided in
Section 15 hereof). This Section 4(a) shall only apply to a Non-Employee
Director the first time he or she is elected a director of the Company
after the effective date of this Plan. Persons elected to be a director
for a second or any subsequent term shall be granted NQOs in accordance
with Section 4(b) below.
(b) ANNUAL OPTION GRANT TO NON-EMPLOYEE DIRECTORS: SUBSEQUENT GRANT.
For so long as this Plan is in effect and there are shares available for
the grant of NQOs hereunder (beginning with those Eligible Directors
reelected at the Company's 1997 annual meeting of stockholders), each
Eligible Director who shall be reelected a Non-Employee Director for his
or her second or any subsequent term after the effective date of this
Plan, shall be granted an NQO to purchase 2,000 shares of Common Stock at
a per share exercise price equal to the Fair Market Value (defined below)
of a share of Common Stock on such date (subject to the adjustments
provided in Section 15 hereof). This Section 4(b) shall only
2
<PAGE>
apply to an Eligible Director on his or her second or any subsequent
election to the Company's Board of Directors.
(c) FAIR MARKET VALUE. For the purposes of this Plan, the "FAIR
MARKET VALUE" of a share of Common Stock as of any particular date shall
mean (i) the closing sales price on the immediately preceding business day
of a share of Common Stock as reported on the principal securities
exchange on which shares of Common Stock are then listed or admitted to
trading or (ii) if not so reported, the average of the closing bid and
asked prices for a share of Common Stock on the immediately preceding
business day as quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or (iii) if not quoted on NASDAQ,
the average of the closing bid and asked prices for a share of Common
Stock as quoted by the National Quotation Bureau's "Pink Sheets" or the
National Association of Securities Dealers' OTC Bulletin Board System. If
the price of a share of Common Stock shall not be so reported, the Fair
Market Value of a share of Common Stock shall be determined by the
Compensation Committee in its absolute discretion.
5. OPTION AGREEMENT. Each NQO granted under the Plan shall be evidenced by
an agreement, in a form approved by the Compensation Committee, which shall be
subject to the terms and conditions of the Plan. Any agreement may contain such
other terms, provisions and conditions as may be determined by the Compensation
Committee and that are not inconsistent with the Plan.
6. VESTING AND TERM OF OPTIONS. Each NQO granted under this Plan shall
vest in full on the date of grant; PROVIDED, HOWEVER, that such NQO shall be
subject to termination as provided in Section 8 hereof. Each option agreement
shall provide that the NQO shall expire ten years from the date of grant, unless
sooner terminated pursuant to Section 8 hereof.
7. EXERCISE OF OPTIONS. NQOs shall be exercisable at any time after the
date of grant, subject to termination as provided in Section 8 hereof. NQOs
shall be exercised by written notice to the Company setting forth the number of
shares with respect to which the NQO is being exercised and specifying the
address to which the certificates representing such shares are to be mailed.
Such notice shall be accompanied by cash or certified check, bank draft, or
postal or express money order payable to the order of the Company, for an amount
equal to the product obtained by multiplying the exercise price of the NQO by
the number of shares of Common Stock with respect to which the NQO is then being
exercised. As promptly as practicable after receipt of such written notification
and payment, the Company shall deliver to the Eligible Director a certificate or
certificates representing the number of shares of Common Stock with respect to
which such NQO has been so exercised, issued in the Eligible Director's name;
PROVIDED, HOWEVER, that such delivery shall be deemed effected for all purposes
when the Company's transfer agent shall have deposited such certificates in the
United States mail, addressed to the Eligible Director, at the address specified
pursuant to this Section 7.
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<PAGE>
Any NQO granted under the Plan may be exercised by a broker-dealer acting
on behalf of an Eligible Director if (i) the broker-dealer has received from the
Eligible Director or the Company a duly endorsed agreement evidencing such NQO
and instructions signed by the Eligible Director requesting the Company to
deliver the shares of Common Stock subject to such NQO to the broker-dealer on
behalf of the Eligible Director and specifying the account into which such
shares should be deposited and (ii) the broker-dealer and the Eligible Director
have otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part
220.
8. TERMINATION OF OPTIONS. Except as may be otherwise expressly provided
in this Plan or otherwise determined by the Compensation Committee in the Option
Agreement, each outstanding NQO, to the extent not previously exercised, shall
terminate on the earliest of the following:
(a) On the last day of the three-month period commencing on the date
on which the Eligible Director ceases to be a member of the Board for any
reason other than due to his death or permanent and total disability,
during which period the Eligible Director shall be entitled to exercise
all NQOs held by him when he ceased to be a member of the Board, to the
extent that such NQOs could have been exercised on such date; or
(b) On the last day of the 12-month period commencing on the date on
which the Eligible Director ceases to be a member of the Board due to his
death or his permanent and total disability (as defined in Section 22(e)
of the Code), during which period (i) the person to whom such NQOs are
transferable by will or by the laws of descent and distribution in event
of the Eligible Director's death or (ii) the Eligible Director (or his
personal representative) in the event of his permanent and total
disability, as applicable, shall be entitled to exercise all NQOs held by
the Eligible Director on the date on which he ceased to be a member of the
Board, to the extent that such NQOs could have been exercised on such
date; or
(c) Ten years after the date of grant of such NQO.
9. ASSIGNABILITY OF OPTIONS. During the term of an NQO, the NQO shall not
be assignable or otherwise transferable except by will or by the laws of descent
and distribution. Each NQO shall be exercised during the Eligible Director's
lifetime only by the Eligible Director.
10. NO RIGHTS AS STOCKHOLDER. No Eligible Director shall have any rights
as a stockholder with respect to shares covered by an NQO until the date of
issuance of a stock certificate or certificates representing such shares. Except
as provided in Section 14 hereof, no adjustment for dividends or otherwise shall
be made if the record date therefor is prior to the date of issuance of
certificates representing shares of Common Stock purchased pursuant to exercise
of this NQO.
4
<PAGE>
11. EXTRAORDINARY CORPORATE TRANSACTIONS. If the Company effects a merger,
consolidation, acquisition, separation, reorganization, liquidation or similar
transaction, the Company may substitute new options for the NQOs outstanding
under the Plan or a corporation other than the Company, including (without
limitation) a parent or subsidiary of the Company, may assume the Company's
duties as to NQOs outstanding under the Plan. In the event such corporation or
parent or subsidiary of the Company does not substitute new and substantially
equivalent option rights for, or assume, the NQOs then outstanding under the
Plan, all such outstanding NQOs shall be canceled, immediately prior to the
effective date of such extraordinary corporate transaction, and in full
consideration of such cancellation, the Eligible Director to whom the NQO was
granted shall be paid an amount in cash equal to the excess of (i) the value, as
determined by the Compensation Committee in its absolute discretion, of the
property (including cash) received by the holder of a share of Common Stock as a
result of such event less (ii) the exercise price of the NQO.
Except as otherwise expressly provided in this Plan, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services either on
direct sale or on the exercise of rights or warrants to subscribe therefor, or
on 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 or price of shares of Common
Stock then subject to outstanding NQOs.
12. INVESTMENT REPRESENTATIONS. If the shares issuable on exercise of an
NQO are not registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), the Company may imprint on the certificate representing such
shares the following legend or any other legend that counsel for the Company
considers necessary or advisable to comply with the Securities Act:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT
UPON SUCH REGISTRATION OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION, THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
The Company may, but shall in no event be obligated to, register any securities
covered under this Plan pursuant to the Securities Act and, if any shares are so
registered, the Company may remove any legend on certificates representing such
shares. The Company shall not be obligated to take any other affirmative action
to cause the exercise of an NQO or the issuance of shares pursuant thereto to
comply with any law or regulation of any governmental authority.
13. AMENDMENT OR TERMINATION. The Board may amend, modify, revise or
terminate this Plan at any time and from time to time; provided, however, that
without approval of the
5
<PAGE>
Company's stockholders no revision or amendment shall, except as provided in
Section 14 hereof, increase the number of shares of Common Stock hereunder that
may be issued under the Plan.
No termination, amendment, or modification of the Plan shall adversely
affect in any material way any outstanding NQO previously granted under the
Plan, without the written consent of the Eligible Director to whom it was
granted or other designated holder of such NQO.
In addition, to the extent that the Compensation Committee determines that
(a) the listing for qualification requirements of any national securities
exchange or quotation system on which the Company's Common Stock is then listed
or quoted, or (b) the Code (or regulations promulgated thereunder), require
stockholder approval in order to maintain compliance with such listing
requirements or to maintain any favorable tax advantages or qualifications, then
the Plan shall not be amended in such respect without approval of the Company's
stockholders.
14. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding NQOs shall not affect in any way the right or power of the Company
or its stockholders to make or authorize the dissolution or liquidation of the
Company, any sale or transfer of all or any part of the Company's assets or
business, any reorganization or other corporate act or proceeding, whether of a
similar character or otherwise, any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, any merger or consolidation of the Company, or any issuance of bonds,
debentures, preferred or prior preference stock senior to or affecting the
Common Stock or the rights thereof; PROVIDED, HOWEVER, that if (a) the
outstanding shares of Common Stock of the Company shall be subdivided into a
greater number of shares or (b) the outstanding shares of Common Stock shall be
combined a smaller number of shares thereof, then (x) the number of shares of
Common Stock available for the grant of NQOs under the Plan shall be
proportionally adjusted to equal the product obtained by multiplying such number
of available shares remaining by a fraction, the numerator of which is the
number of outstanding shares of Common Stock after giving effect to such
combination or subdivision and the denominator of which is that number of
outstanding shares of Common Stock prior to such combination or subdivision, (y)
the exercise price of any NQO then outstanding under the Plan shall be
proportionately adjusted to equal the product obtained by multiplying such
exercise price by a fraction, the numerator of which is the number of
outstanding shares of Common Stock prior to such combination or subdivision and
the denominator of which is that number of outstanding shares of Common Stock
after giving effect to such combination or subdivision, and (z) the number of
shares of Common Stock issuable on the exercise of any NQO then outstanding
under the Plan or thereafter granted under the Plan shall be proportionately
adjusted to equal the product obtained by multiplying such number of shares of
Common Stock by a fraction, the numerator of which is the number of outstanding
shares of Common Stock after giving effect to such combination or subdivision
and the denominator of which is that number of outstanding shares of Common
Stock prior to such combination or subdivision.
6
<PAGE>
15. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant and
exercise of NQOs thereunder, and the obligation of the Company to sell and
deliver shares acquirable on exercise of such NQOs, shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any governmental or regulatory agency or national securities exchange as may
be required. The Company shall not be required to sell or issue any shares on
exercise of any NQO if the issuance of such shares shall constitute a violation
by the Eligible Director or the Company of any provisions of any law or
regulation of any governmental authority. Each NQO granted under this Plan shall
be subject to the requirement that, if at any time the Board or the Compensation
Committee shall determine that (i) the listing, registration or qualification of
the shares subject thereto on any securities exchange or under any state or
federal law of the United States or of any other country or governmental
subdivision thereof, (ii) the consent or approval of any governmental regulatory
body, or (iii) the making of investment or other representations, are necessary
or desirable in connection with the issue or purchase of shares subject thereto,
no such NQO may be exercised in whole or in part unless such listing,
registration, qualification, consent, approval or representation shall have been
effected or obtained, free of any conditions not acceptable to the Compensation
Committee. Any determination in this connection by the Compensation Committee
shall be final, binding and conclusive.
16. INDEMNIFICATION OF COMPENSATION COMMITTEE AND BOARD OF DIRECTORS. The
Company shall, to the fullest extent permitted by law, indemnify, defend and
hold harmless any person who at any time is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative or investigative) in any way relating
to or arising out of this Plan (or any NQOs granted hereunder) by reason of the
fact that such person is or was at any time a member of the Compensation
Committee against judgments, fines, penalties, settlements and reasonable
expenses (including attorneys' fees) actually incurred by such person in
connection with such action, suit or proceeding, except to the extent that such
action, suit or proceeding results from such person's gross negligence or
intentional misconduct. This right of indemnification shall inure to the benefit
of the heirs, executors and administrators of each such person and is in
addition to all other rights to which such person may be entitled by virtue of
the bylaws of the Company or as a matter of law, contract or otherwise.
17. EFFECTIVE DATE OF THE PLAN. This Plan was originally effective on
September 30, 1996. No NQO shall be granted pursuant to this Plan on or after
September 29, 2006.
7
EXHIBIT 4.3
ALLSTAR SYSTEMS, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN
The purpose of the ALLSTAR SYSTEMS, INC. 1997 EMPLOYEE STOCK
PURCHASE PLAN (the "PLAN") is to furnish to eligible employees an incentive to
advance the best interests of ALLSTAR SYSTEMS, INC. (the "COMPANY") by providing
a method whereby they may voluntarily purchase stock of the Company at a
favorable price and upon favorable terms. The Plan is intended to constitute an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended from time to time (the "CODE").
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a committee (the "COMMITTEE") of two or
more directors of the Company appointed by the Board of Directors of the Company
(the "BOARD"). Once appointed, the Committee shall continue to serve until
otherwise directed by the Board of Directors. From time to time, the Board of
Directors may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members to fill
any vacancies.
Subject to the provisions of the Plan, the Committee shall interpret the
Plan, shall make such rules as it deems necessary for the proper administration
of the Plan, shall make all other determinations necessary or advisable for the
administration of the Plan and shall correct any defect or supply any omission
or reconcile any inconsistency in the Plan in the manner and to the extent that
the Committee deems desirable to carry the Plan into effect. Any action taken or
determination made by the Committee pursuant to this and the other paragraphs of
the Plan shall be conclusive on all parties. The act or determination of a
majority of the Committee shall be deemed to be the act or determination of the
Committee.
Notwithstanding any provision in the Plan to the contrary, no member of
the Committee shall be eligible to participate in the Plan during the term of
his or her membership on the Committee. No person shall be eligible to serve on
the Committee unless such a person is then (i) a "DISINTERESTED PERSON" within
the meaning of Rule 16b-3(c)(2)(i) of the Securities and Exchange Commission,
promulgated under Section 16 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), if and as such Rule is then in effect and (ii) an "OUTSIDE
DIRECTOR" within the meaning of Section 162(m) of the Code.
No member of the Committee shall be liable for any action, omission, or
determination relating to the Plan, and the Company shall indemnify and hold
harmless each member of the Committee and each other director or employee of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated from and against any cost or
expense (including attorneys' fees) or liability (including any sum paid in
settlement of a claim with
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the approval of the Committee) arising out of any action, omission or
determination relating to the Plan, unless, in either case, such action,
omission or determination was taken or made by such member, director or employee
in bad faith and without reasonable belief that it was in the best interests of
the Company.
3. ELIGIBILITY
All employees of the Company and those of any present or future subsidiary
corporations of the Company (within the meaning of Section 424(f) of the Code),
except for employees whose customary employment is less than 20 hours per week
or for not more than five months in any calendar year, shall be eligible to
participate in the Plan; PROVIDED, HOWEVER, no employee who owns stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or its parent or subsidiary corporation
(within the meaning of Section 423(b) of the Code) shall be eligible to
participate in the Plan. For purposes of the 5% stock ownership test, the
attribution rules of Section 424(d) of the Code shall apply with respect to
stock ownership of individuals.
4. STOCK SUBJECT TO THE PLAN
Subject to the provisions of paragraph 10 (relating to adjustment upon
changes in stock), the aggregate number of shares which may be purchased under
the Plan shall not exceed 100,000 shares of the Company's authorized common
stock, par value $.01 per share ("STOCK"), which shares may be authorized but
unissued shares or treasury shares or both. If any restricted shares purchased
under the Plan shall be forfeited for any reason, such shares shall again be
available for grant under the Plan.
5. PURCHASE OF SHARES
(a) GENERAL STATEMENT
Following the effective date of the Plan and continuing while the Plan
remains in force, the Company shall offer all eligible employees the right to
purchase shares of Stock at a price of 85% of the fair market value (as defined
below) per share of stock on the date on which either (a) the Company purchases
the shares for sale to the employee if the Committee elects to issue treasury
shares or (b) the date of the payroll deduction if the Committee elects to issue
authorized but unissued shares, whichever is applicable (each of which dates is
hereinafter referred to as a "DATE OF PURCHASE").
(i) The Committee may, in its absolute and sole discretion, elect to
have the Company purchase outstanding shares of Stock for purchase by
participants (defined below) under the Plan. If the Committee so
determines to issue such treasury shares to participants purchasing Stock
under the Plan, then the dollar amount of the participant's purchase shall
equal (i) the stated percentage of the participant's (defined below)
eligible compensation (as defined below) authorized by such participant in
accordance with subparagraph 6(b),
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multiplied by (ii) such participant's eligible compensation for the pay
period (determined as of the date of the payroll deduction in accordance
with subparagraph 5(b)), divided by eighty five percent (85%). The dollar
amount used by the Company for such purchases may be rounded up or down to
enable the Company to purchase whole numbers of shares. In the case of
rounding, any excess funds remaining when the Company has rounded down
shall be held by the Plan in an account in accordance with paragraph 11
hereof for the benefit of the participant and any excess shares purchased
by the Company in the case of rounding up shall be held by the Company as
treasury shares for future purchases under the Plan. The number of whole
shares of Stock purchased by the participant shall equal the dollar amount
determined in accordance with this subparagraph 5(a)(i), divided by the
fair market value per share of the Stock on the date of purchase.
(ii) If the Committee determines to issue authorized but unissued shares
of stock, then the number of whole shares of Stock purchased by the
participant shall equal (i) the stated percentage of the participant's
eligible compensation authorized by such participant in accordance with
subparagraph 6(b), multiplied by (ii) such participant's eligible
compensation for the pay period (determined as of the date of the payroll
deduction in accordance with subparagraph 5(b)), divided by (ii)
eighty-five percent (85%) of the fair market value per share of Stock as
of the date of the payroll deduction, rounded down to the nearest whole
share of Stock.
(b) ELECTION TO PARTICIPATE; PAYROLL DEDUCTION AUTHORIZATION
Except as provided in subparagraph 6(e), an eligible employee may
participate in the Plan only by means of payroll deduction. Each eligible
employee who elects to participate in the Plan shall deliver to the Company
during the calendar month immediately preceding the first day of each fiscal
year (the "ANNIVERSARY DATE") a written payroll deduction authorization in a
form prepared by the Company, whereby the employee gives notice of his or her
election to participate in the Plan (the "PARTICIPANT") as of the next following
fiscal year, and whereby the employee designates a stated percentage to be
deducted from his or her eligible compensation (defined below) for each of the
Company's pay days and paid into the Plan for his or her account. Unless, in
accordance with subparagraph 5(c), the Committee determines otherwise, the
stated percentage may not be less than two percent (2%), nor greater than
fifteen percent (15%), of the amount of eligible compensation (defined below)
from which the deduction is made; PROVIDED, HOWEVER, such stated percentage
shall not exceed the $25,000 limitation stated in subparagraph 6(d) for any
fiscal year.
The term "ELIGIBLE COMPENSATION" means base rate of pay or base monthly
salary on the date of grant. "ELIGIBLE COMPENSATION" does not include management
incentives and bonuses, overtime, extended work-week premiums, or other special
payments, fees, or allowances.
(c) CHANGES IN PAYROLL AUTHORIZATION
The payroll deduction authorization referred to in subparagraph 5(b) may
be reduced or increased on the first day of each fiscal quarter by the employee
by giving written notice to the
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Company that the employee's payroll deduction with respect to such quarterly
period shall thereafter be reduced or increased to a specified percentage
(subject to the limitations set forth in subparagraphs 5(b) and (d)), of the
employee's eligible compensation. Notwithstanding anything contained herein to
the contrary, the Committee, in its absolute and sole discretion, may permit a
participant to reduce his payroll deduction to a percentage of zero. Any
reduction or increase shall be irrevocable for the quarterly period in which it
was made.
(d) $25,000 LIMITATION
No employee may purchase shares under the Plan to the extent such
purchases under the Plan and under all other employee stock purchase plans of
the Company and its parent corporation and subsidiary corporations would exceed
$25,000 of the fair market value of the Stock (determined at and as of each date
of purchase) for each calendar year in which the employee participates in the
Plan.
(e) LEAVES OF ABSENCE
During leaves of absence (including military or sick leave or other bona
fide leaves of absence) approved by the Company not exceeding 90 days and
meeting the requirements of Treasury Regulation ss. 1.421-7(h)(2), a participant
may continue participation in the Plan by cash payments to the Company on the
participant's normal pay days equal to the reduction in the participant's
payroll deductions caused by his or her leave.
6. ISSUANCE OF SHARES
(a) GENERAL STATEMENT
Unless a participant gives written notice to the Company to withdraw from
the Plan pursuant to paragraph 7, each participant in the Plan automatically and
without any act on the participant's part shall be deemed to have purchased on
each date of purchase that number of whole shares of Stock as determined in
accordance with subparagraph 5(a). Of the shares purchased by the participant on
the date of purchase, eighty-five percent (85%) of such shares shall be
immediately vested and the Company shall deliver a stock certificate to the
participant in accordance with subparagraph 6(c). The remaining fifteen percent
(15%) of shares purchased on any date of purchase shall be restricted shares and
shall be issued in accordance with subparagraph 6(d). The shares of restricted
stock issued under the Plan shall vest cumulatively as follows: twenty percent
(20%) of the shares shall vest on the first anniversary date immediately
following the date of purchase, and twenty percent (20%) of the shares shall
vest on such date each year thereafter until all such shares are vested. All
restricted shares shall be subject to the following restrictions; PROVIDED,
HOWEVER, that upon the occurrence of a vesting date with respect to a share of
restricted stock, such share shall vest and the restrictions shall cease to
apply to such share:
(i) Prior to the vesting of restricted shares, no transfer of a
participant's rights with respect to such shares, whether voluntary or
involuntary, by operation of law or otherwise,
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shall vest the transferee with any interest or right in or with respect to
such share, but immediately upon any attempt to transfer such rights, such
share, and all of the rights related thereto, shall be forfeited by the
participant and the transfer shall be of no force or effect.
(b) "FAIR MARKET VALUE" DEFINED
For all purposes under the Plan, the "FAIR MARKET VALUE" of a share of
Stock on any date shall be (i) the closing sales price on the immediately
preceding business day of a share of Stock as reported on the principal
securities exchange on which shares of Stock are then listed or admitted to
trading or (ii) if not so reported, the average of the closing bid and asked
prices for a share of Stock on the immediately preceding business day as quoted
on the National Association of Securities Dealers Automated Quotation System
("NASDAQ") or (iii) if not quoted on NASDAQ, the average of the closing bid and
asked prices for a share of Stock as quoted by the National Quotation Bureau's
"Pink Sheets" or the National Association of Securities Dealers' OTC Bulletin
Board System. If the price of a share of Stock shall not be so reported, the
fair market value of a share of Stock shall be determined by the Committee in
its absolute discretion.
(c) DELIVERY OF STOCK CERTIFICATES FOR IMMEDIATELY VESTED SHARES
All shares purchased by participants pursuant to the Plan shall be held of
record by the Plan; PROVIDED, HOWEVER, that each participant shall for all
purposes be the beneficial owner (as that term is defined in Rule 13d-3 of the
Securities and Exchange Act of 1934) of that number of shares purchased by him.
The Company shall, as soon as practicable following the receipt of a written
notice by the participant, cause to be issued a stock certificate issued in the
participant's name for the number of immediately vested whole shares of Stock
purchased as of that date, which certificate shall be delivered as soon as
practicable following the date of receipt by the Company of such notice. The
Company shall issue to the participant a receipt evidencing the shares held
beneficially by him which are held of record by the Plan pursuant to this
subparagraph 6(c). In the event the Company is required to obtain from any
commission or agency authority to issue any such certificate, the Company shall
seek to obtain such authority. Inability of the Company to obtain from any such
commission or agency authority which counsel for the Company deems necessary for
the lawful issuance of any such certificate shall relieve the Company from
liability to any participant in the Plan except to return to the participant the
amount of the balance in his or her account.
(d) DELIVERY OF STOCK CERTIFICATES FOR RESTRICTED SHARES
All shares purchased by participants pursuant to the Plan shall be held of
record by the Plan; PROVIDED, HOWEVER, that each participant shall for all
purposes be the beneficial owner (as that term is defined in Rule 13d-3 of the
Securities and Exchange Act of 1934) of that number of shares purchased by him.
The Company shall, reasonably promptly after the receipt of written notice by a
participant requesting the issuance of a stock certificate evidencing his
restricted shares, cause to be issued a stock certificate, registered in the
participant's name, evidencing the number of whole restricted shares of Stock.
The Company shall not cause to be issued such a stock certificate unless
5
<PAGE>
it has received a stock power duly endorsed in blank with respect to such
shares. Each such stock certificate shall bear the following legend:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS
(INCLUDING FORFEITURE AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE
ALLSTAR SYSTEMS, INC. 1997 STOCK PURCHASE PLAN AND AN AGREEMENT ENTERED
INTO BETWEEN THE REGISTERED OWNER OF SUCH SHARES AND ALLSTAR SYSTEMS, INC.
A COPY OF THE PLAN AND AGREEMENT IS ON FILE IN THE OFFICE OF THE SECRETARY
OF ALLSTAR SYSTEMS, INC., 6401 SOUTHWEST FREEWAY, HOUSTON, TEXAS 77074.
Such legend shall not be removed from the certificate evidencing such
shares until such shares vest pursuant to the terms hereof.
(i) Each certificate issued pursuant to Section 6(d) hereof,
together with the stock powers relating to the restricted shares evidenced
by such certificate, shall be held by the Company. The Company shall issue
to the participant a receipt evidencing the certificates held by it which
are registered in the name of the participant.
(ii) Upon the vesting of restricted shares pursuant to the terms
hereof, the restrictions of Section 6(a)(i) shall cease to apply to such
shares. Reasonably promptly after restricted shares vest pursuant to the
terms hereof and a written request by the participant, the Company shall
cause to be issued and delivered to the participant a certificate
evidencing such share, free of the legend set forth in subparagraph 6(d)
hereof; PROVIDED, HOWEVER, that such delivery shall be effected for all
purposes when the Company shall have deposited such certificate in the
United States mail, addressed to the participant.
7. WITHDRAWAL FROM THE PLAN
(a) GENERAL STATEMENT
Any participant may withdraw in whole from the Plan at any time and
partial withdrawals shall not be permitted; PROVIDED, that a reduction of a
participant's payroll deduction to a percentage of zero, when permitted by the
committee in accordance with subparagraph 5(c), shall not constitute a
withdrawal, either in whole or in part, under this subparagraph 7(a). A
participant who wishes to withdraw from the Plan must deliver to the Company a
notice of withdrawal in a form prepared by the Company. The Company, promptly
following the time when the notice of withdrawal is delivered, shall refund to
the participant the amount of the balance in the participant's account under the
Plan; and thereupon, automatically and without any further act on his or her
part, the participant's payroll deduction authorization and the participant's
interest in the Plan shall terminate and any restricted shares which have not
then vested shall be forfeited and all rights of the participant to such
restricted shares shall terminate.
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<PAGE>
(b) ELIGIBILITY FOLLOWING WITHDRAWAL
A participant who withdraws from the Plan shall be eligible to participate
again in the Plan upon expiration of the fiscal year during which the
participant withdrew (provided that the participant is otherwise eligible to
participate in the Plan at such time). Notwithstanding the foregoing, if the
withdrawing participant is subject to Section 16 of the Exchange Act, such
participant shall not again be eligible to participate in the Plan until six
months after the date of his or her withdrawal.
8. TERMINATION OF EMPLOYMENT
(a) TERMINATION OF EMPLOYMENT OTHER THAN BY RETIREMENT OR DEATH
If the employment of a participant terminates other than by retirement or
death, his participation in the Plan automatically and without any act on his or
her part shall terminate as of the date of the termination of the participant's
employment. The Company shall promptly refund to the participant the amount of
the balance in the participant's account under the Plan, and thereupon his
interest in the Plan shall terminate and any restricted shares which have not
then vested shall be forfeited and all rights of the participant to such
restricted shares shall terminate.
(b) TERMINATION BY RETIREMENT
If a participant retires on or after his attainment of age 65, his
participation in the Plan automatically and without any act on his part shall
terminate as of the date of the termination of the participant's employment. The
Company shall promptly refund to the participant the amount of the balance in
the participant's account under the Plan, and thereupon his interest in the Plan
shall terminate and any restricted shares which have not then vested, to the
extent not forfeited pursuant to any provision hereof, shall vest in full on the
date of such termination. Any certificates theretofore held by the Company
pursuant to subparagraphs 6(c) or (d) shall be delivered to the participant as
soon as practicable after the date of such termination, free of any restrictive
legends thereon.
(c) TERMINATION BY DEATH
If the employment of a participant is terminated by the participant's
death, his participation in the Plan automatically and without any act on his
part shall terminate as of the date of the termination of the participant's
employment. The Company shall promptly refund to the participant the amount of
the balance in the participant's account under the Plan, and thereupon his
interest in the Plan shall terminate and any restricted shares which have not
then vested, to the extent not forfeited pursuant to any provision hereof, shall
vest in full on the date of such termination. Any certificates theretofore held
by the Company pursuant to subparagraphs 6(c) or (d) shall be delivered to the
participant as soon as practicable after the date of such termination, free of
any restrictive legends thereon.
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9. NO RIGHTS OF STOCKHOLDER UNTIL CERTIFICATE ISSUED
With respect to shares of Stock purchased by a participant, a participant
shall not be deemed to be a stockholder, and the participant shall not have any
of the rights or privileges of a stockholder until a certificate for shares has
been issued to the participant.
10. CHANGES IN STOCK ADJUSTMENTS
Whenever any change is made in the Stock, by reason of a stock dividend or
by reason of subdivision, combinations, or reclassification of shares,
appropriate action will be taken by the Board to adjust accordingly the number
of shares subject to the Plan.
If the Company shall not be the surviving corporation in any merger or
consolidation (or survives only as a subsidiary of an entity other than a
previously wholly-owned subsidiary of the Company), or if the Company is to be
dissolved or liquidated, then, unless a surviving corporation assumes or
substitutes a new plan for this Plan, the date of vesting for all restricted
shares shall be accelerated to dates fixed by the Committee prior to the
effective date of such merger or consolidation or such dissolution or
liquidation and any amounts held for the account of participants shall be
distributed immediately.
11. PLAN EXPENSES; USE OF FUNDS; NO INTEREST PAID
The expenses of the Plan shall be paid by the Company. All funds received
or held by the Company under the Plan shall be held in trust. No interest shall
be paid to any participant or credited to his account under the Plan.
12. TERM OF THE PLAN
The Plan was adopted by the Board on October 23, 1997, which date shall be
the effective date of the Plan, subject to stockholder approval. If not
terminated sooner under the provisions of paragraph 14, the Plan shall terminate
and no further purchases shall be made under the Plan at the EARLIER of (i) the
expiration of ten years from the date of its adoption by the Board, or (ii) the
point in time when no shares of Stock reserved for issuance under the Plan are
available.
13. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time. The Board
shall have the right to alter or amend the Plan or any part thereof from time to
time; provided, that the Board may not make any alteration or amendment which
would materially increase the benefits accruing to participants under the Plan,
increase the aggregate number of shares available for issuance under the Plan
(other than as a result of the anti-dilution provisions of paragraph 11), change
the class of individuals eligible to participate under the Plan, extend the term
of the Plan, cause the Plan to fail to meet the requirements Section 423 of the
Code, or otherwise modify the requirements as to eligibility for participation
in the Plan without the approval of the stockholders of the Company.
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14. SECURITIES LAWS
The Company shall not be obligated to issue any Stock pursuant the Plan at
any time when the shares subject to the Plan have not been registered under the
Securities Act of 1933 and such other state and federal laws, rules or
regulations as the Company or the Committee deems applicable and, in the opinion
of legal counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the issuance and
sale of such shares.
15. WITHHOLDING TAXES
Whenever shares of Stock which were received upon purchase under the Plan
are disposed of within one year from the date of purchase under the Plan (within
the meaning of Section 423(a)(1)), the Company shall have the right to require
the participant to remit to the Company in cash an amount sufficient to satisfy
federal, state and local withholding and payroll tax requirements, if any,
attributable to such disposition prior to authorizing such disposition or
permitting the delivery of any certificate or certificates with respect thereto.
16. NO RESTRICTION ON CORPORATE ACTION
Nothing contained in the Plan shall be construed to prevent the Company or
any subsidiary from taking any corporate action which is deemed by the Company
or such subsidiary to be appropriate or in its best interest, whether or not
such action would have an adverse effect on the Plan or any award made under the
Plan. No employee, beneficiary or other person shall have any claim against the
Company or any subsidiary as a result of any such action.
17. MISCELLANEOUS
Whenever the context so requires, words of the masculine gender used
herein shall include the feminine and neuter, and words used in the singular
shall include the plural. Section headings as used herein are inserted solely
for convenience and reference and constitute no part of the interpretation or
construction of the Plan.
The Plan shall be interpreted, construed and constructed in accordance
with the laws of the State of Texas, without regard to its conflicts of law
provisions, except as superseded by applicable the laws of the United States.
If any date of purchase or other date defined herein upon which action is
to be taken by the Company, the Committee or a participant shall fall on a
Saturday, Sunday or holiday, then such action may be taken by the respective
party on the first business day following.
9
EXHIBIT 5.1
November 25, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Allstar Services, Inc. - Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Allstar Systems, Inc., a Delaware corporation
(the "Company"), in connection with the registration on Form S-8 under the
Securities Act of 1933, as amended, of 617,500 shares (the "Shares") of the
Company's common stock, par value $.01 per share (the "Common Stock"). In such
capacity, we have examined the certificate of incorporation, as amended, the
bylaws, and corporate proceedings of the Company, and based on such examination
and having regard for applicable legal principles, it is our opinion the Shares
to be offered and sold pursuant to the Registration Statement will be validly
issued, fully-paid and nonassessable outstanding shares of Common Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the Registration Statement.
Very truly yours,
/s/ Porter & Hegdes, L.L.P.
PORTER & HEDGES, L.L.P.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Allstar Systems, Inc. on Form S-8 of our report dated March 26, 1997 on the
financial statements of Allstar Systems, Inc. for the three years in the period
ended December 31, 1996 appearing in Registration Statement No. 333-09789 on
Form S-1 of Allstar Systems, Inc.
Deloitte & Touche LLP
Houston, Texas
November 24, 1997
