UNIVIEW TECHNOLOGIES CORPORATION
1999 EQUITY INCENTIVE PLAN
1. Purpose. The purpose of the uniView Technologies Corporation 1999
Equity Incentive Plan (the "Plan") is to further and promote the
interests of uniView Technologies Corporation (the "Company"), its
affiliates and its shareholders by enabling the Company and its
affiliates to attract, retain and motivate officers, directors and
employees, and to align the interests of such individuals with the
Company's shareholders. To do this, the Plan offers equity-based
incentive awards and opportunities to provide such individuals with a
proprietary interest in maximizing the growth, profitability and overall
success of the Company and its affiliates.
2. Definitions. In addition to any other defined terms herein, the
following terms shall have the meanings set forth below when used in this
Plan:
"Award" means an award or grant made to a Participant under Sections 6
and/or 7 of the Plan.
"Award Agreement" means the agreement executed by a Participant pursuant
to Sections 3.2 and 15.6 of the Plan in connection with the granting of
an Award.
"Board" means the Board of Directors of the Company, as constituted from
time to time.
"Code" means the Internal Revenue Code of 1986, as in effect and as
amended from time to time, or any successor statute thereto, together
with any rules, regulations and interpretations promulgated thereunder or
with respect thereto.
"Committee" means the Compensation Committee of the Board.
"Common Stock" means the Common Stock, par value $.10 per share, of the
Company or any security of the Company issued by the Company in
substitution or exchange therefor.
"Company" means uniView Technologies Corporation, a Texas corporation, or
any successor corporation to uniView Technologies Corporation
"Disability" means disability as defined in the Participant's then
effective employment agreement, or if the Participant is not then a party
to an effective employment agreement with the Company, "Disability" means
disability as determined by the Committee in accordance with standards
and procedures similar to those under the Company's long-term disability
plan, if any. Subject to the foregoing sentence, at any time that the
Company does not maintain a long-term disability plan, "Disability" shall
mean disability which, at least six months after its commencement, is
determined to be total and permanent by a physician mutually selected by
the Company and the Participant (or the Participant's legal
representative).
"Exchange Act" means the Securities Exchange Act of 1934, as in effect
and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated
thereunder or with respect thereto.
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"Fair Market Value" means on, or with respect to, any given date, the
closing sale price of the Common Stock on such date (or, if the Common
Stock was not traded on such date, then the next preceding day on which
the Common Stock was traded) as reported on the NASDAQ composite tape or,
if the Common Stock is not traded on such exchange, as reported on any
other national securities exchange on which the Common Stock may be
traded. If the Common Stock is trading Over-The-Counter (OTC), the "fair
market value" will be the average between the closing bid and asked price
for the stock on the relevant date.
"Incentive Stock Option" means any stock option granted pursuant to the
provisions of Section 6 of the Plan (and the relevant Award Agreement)
that is intended to be, and is specifically designated as, an "incentive
stock option" within the meaning of Section 422 of the Code.
"Non-employee Director" means a member of the Board who qualifies, at all
relevant times, as an "Outside Director" under Section 162 (m) of the
Code and as a "Non-employee Director" under Rule 16b-3 promulgated under
the Exchange Act.
"Non-Qualified Stock Option" means any stock option granted pursuant to
the provisions of Section 6 of the Plan (and the relevant Award
Agreement) that is not an Incentive Stock Option.
"Parent(s)" means any corporation (other than the Company) in an unbroken
chain of corporations including and ending with the Company, if each of
such corporations, other than the Company, owns, directly or indirectly,
fifty percent (50%) or more of the voting stock of one of the other
corporations in such chain.
"Participant" means an officer, director or employee of the Company or
any Subsidiary who is selected by the Committee under Section 5 to
receive an Award under the Plan.
"Plan" means the uniView Technologies Corporation 1999 Equity Incentive
Plan, as set forth herein and as in effect and as amended from time to
time (together with any rules and regulations promulgated by the
Committee with respect thereto).
"Restricted Stock" means the restricted shares of Common Stock granted
pursuant to the provisions of Section 7 of the Plan and the relevant
Award Agreement.
"Retirement" means retirement from active employment with the Company and
its Subsidiaries on or after the normal retirement date specified in the
Company's qualified retirement plans or such other date as approved in
writing by the Committee for the purposes of this Plan.
"Stock Option(s)" means a Non-Qualified Stock Option and/or an Incentive
Stock Option.
"Subsidiary(ies)" means any corporation (other than the Company) in an
unbroken chain of corporations, including and beginning with the Company,
if each of such corporations, other than the last corporation in the
unbroken chain, owns, directly or indirectly, fifty percent (50%) or more
of the voting stock in one of the other corporations in such chain.
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3. Administration.
3.1. The Committee. The Plan shall be administered by the Committee.
The Committee shall be appointed from time to time by the Board and shall
be comprised of not less than two (2) of the then members of the Board
who qualify to administer the Plan as Non-employee Directors. Consistent
with the Bylaws of the Company, members of the Committee shall serve at
the pleasure of the Board and the Board, subject to the immediately
preceding sentence, may at any time and from time to time remove members
from, or add members to, the Committee. During all periods in which a
Committee is not in existence the Board shall administer the Plan, and
the term "Committee" shall refer to the Board during such periods.
3.2. Plan Administration and Plan Rules. The Committee is authorized
to construe and interpret the Plan and to promulgate, amend and rescind
rules and regulations relating to the implementation, administration and
maintenance of the Plan. Subject to the terms and conditions of the
Plan, the Committee shall make all determinations necessary or advisable
for the implementation, administration and maintenance of the Plan
including, without limitation, (a) selecting the Plan's Participants, (b)
making Awards in such amounts and form as the Committee shall determine,
(c) imposing such restrictions, terms and conditions upon such Awards as
the Committee shall deem appropriate, and (d) correcting any technical
defect or technical omission or reconciling any technical inconsistency,
in the Plan and/or any Award Agreement. The Committee may designate
persons other than members of the Committee to carry out the day-to-day
administration of the Plan under such conditions and limitations as it
may prescribe, except that the Committee shall not delegate its authority
with regard to selection for participation in the Plan and/or the
granting of any Awards to Participants. The Committee's determinations
under the Plan need not be uniform and may be made selectively among
Participants, whether or not such Participants are similarly situated.
Any determination, decision or action of the Committee in connection with
the construction, interpretation, administration, implementation or
maintenance of the Plan shall be final, conclusive and binding upon all
Participants and any person(s) claiming under or through any
Participants. The foregoing provisions of this Section 3.2
notwithstanding, the Committee may not exercise discretion to increase
the amount of compensation payable pursuant to the Plan contrary to the
requirements for qualified performance based compensation under Section
162 (m) of the Code.
3.3. Liability Limitation. Neither the Board nor the Committee, nor
any member of either, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the
Plan (or any Award Agreement), and the members of the Board and the
Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including,
without limitation, attorneys' fees) arising or resulting therefrom to
the fullest extent permitted by law and/or under any directors and
officers liability insurance coverage which may be in effect from time to
time.
4. Term of Plan/Common Stock Subject to Plan.
4.1. Term. The Plan shall terminate on October 24, 2009, except with
respect to Awards then outstanding. After such date no further Awards
shall be granted under the Plan.
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4.2. Common Stock. The maximum number of shares of Common Stock in
respect for which Awards may be granted under the Plan, subject to
adjustment as provided in Section 12 of the Plan, shall be 4.5 million
(4,500,000) shares. In the event of a change in the Common Stock of the
Company that is limited to a change in the designation thereof to
"Capital Stock" or other similar designation, or to a change in the par
value thereof, or from par value to no par value, without increase or
decrease in the number of issued shares, the shares resulting from any
such change shall be deemed to be the Common Stock for purposes of the
Plan. Common Stock which may be issued under the Plan may be either
authorized and unissued shares or issued shares which have been
reacquired by the Company and which are being held as treasury shares.
No fractional shares of Common Stock shall be issued under the Plan,
unless the Committee determines otherwise. No Participant may receive
over the term of the Plan Awards to acquire more than 2 million
(2,000,000) shares of Common Stock.
4.3. Computation of Available Shares. For the purpose of computing
the total number of shares of Common Stock available for Awards under the
Plan, there shall be counted against the limitations set forth in Section
4.2 of the Plan the maximum number of shares of Common Stock potentially
subject to issuance upon exercise or settlement of Awards granted under
Section 6 of the Plan and the number of shares of Common Stock issued or
subject to potential issuance under grants of Restricted Stock pursuant
to Section 7 of the Plan, in each case determined as of the date on which
such Awards are granted. If any Awards expire unexercised or are
forfeited, surrendered, canceled, terminated or settled in cash in lieu
of Common Stock, the shares of Common Stock which were theretofore
subject (or potentially subject) to such Awards shall again be available
for Awards under the Plan to the extent of such expiration, forfeiture,
surrender, cancellation, termination or settlement of such Awards;
provided, however, that forfeited Awards shall not again be available for
Awards under the Plan if the Participant received, directly or
indirectly, any of the benefits of ownership of the securities of the
Company underlying such Award, including, without limitation, the right
to receive dividend or dividend equivalent payments, as described in
Sections 7.5 and 9 of the Plan.
5. Eligibility. Participants eligible for Awards under the Plan shall
consist of officers, directors and employees of the Company and/or its
Subsidiaries.
6. Stock Options.
6.1. Terms and Conditions. Stock options granted under the Plan may
be in the form of Incentive Stock Options or Non-Qualified Stock Options.
Such Stock Options shall be subject to the terms and conditions set forth
in this Section 6 and any additional terms and conditions, not
inconsistent with the express terms and provisions of the Plan, as the
Committee shall set forth in the relevant Award Agreement.
6.2. Grant. Stock Options may be granted under the Plan in such form
as the Committee may from time to time approve. Stock Options may be
granted alone or in addition to other Awards under the Plan. Incentive
Stock Options shall be granted solely to Participants who are employees.
Notwithstanding the above, no Incentive Stock Options shall be granted to
any employee who owns more than 10% of the combined total voting power of
all classes of stock of the Company or any Parent or Subsidiary.
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6.3. Exercise Price. The exercise price per share of Common Stock
subject to a Stock Option shall be determined by the Committee at the
time of grant; provided, however, that the exercise price of an Incentive
Stock Option shall not be less than one hundred percent (100%) of the
Fair Market Value of the Common Stock on the date of the grant of such
Incentive Stock Option.
6.4. Term. The term of each Stock Option shall be such period of
time as is fixed by the Committee at the time of grant; provided, however, that
the term of any Incentive Stock Option shall not exceed ten (10) years
after the date immediately preceding the date on which the Incentive
Stock Option is granted.
6.5. Method of Exercise. A Stock Option may be exercised, in whole
or in part, by giving written notice of exercise to the Secretary of the
Company, or the Secretary's designee, specifying the number of shares to
be purchased. Such notice shall be accompanied by payment in full of the
exercise price by any method that is approved by the Committee and that
will cause the shares to be issued to be fully paid and non-assessable,
including without limitation payment in cash, by certified check, bank
draft or money order payable to the order of the Company or, if permitted
by the terms of the relevant Award Agreement and applicable law, by
delivery of, alone or in connection with a partial cash or instrument
payment, shares of Common Stock already owned by the Participant.
6.5.1. The Committee may, in Award Agreements, permit a
Participant or the Participant's heirs or other legal representatives (to
the extent entitled to exercise the Stock Option under the terms of this
Plan), in lieu of purchasing the entire number of shares subject to
purchase pursuant to such Option, the right to relinquish all or any part
of the unexercised portion of the Option (such portion of the Option
relinquished being hereinafter referred to as the "Relinquished Option")
for a number of whole shares of Common Stock equal to the product of (i)
the number of shares of Common Stock subject to the Relinquished Option
and (ii) a fraction, the numerator of which is the excess of (A) the
current Fair Market Value per share of Common Stock covered by the
Relinquished Option over (B) the Option Price of such Relinquished
Option, and the denominator of which is the then current Fair Market
Value per share of such Common Stock. No fractional shares of Common
Stock will be issued pursuant to the exercise of Relinquished Options.
Rather, cash equal to the fractional amount of such share multiplied by
the fair market value per share will be paid to the Participant, subject
to the federal income and other tax withholding requirements of Section
15.1 hereof. The Committee shall have discretion to determine the terms
upon which Stock Options shall be relinquishable, subject to the
applicable provisions of the Plan. Outstanding Award Agreements may be
amended, if necessary, to permit relinquishment.
6.5.2. The Committee may, in Award Agreements, also permit
Participants (either on a selective or group basis) to simultaneously
exercise Stock Options and sell the shares of Common Stock thereby
acquired, pursuant to a brokerage "cashless exercise" arrangement,
selected by and approved of in all respects in advance by the Committee,
and use the proceeds from such sale as payment of the exercise price of
such Stock Options. Payment instruments shall be received by the Company
subject to collection.
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6.5.3. The proceeds received by the Company upon exercise of
any Stock Option may be used by the Company for general corporate
purposes.
6.6. Date of Exercise. A Stock Option may be exercised during its
specified term as provided in the Award Agreement, provided that no
option granted under the Plan will be exercisable until shareholder
approval of the Plan has been obtained.
7. Restricted Stock.
7.1. Terms and Conditions. Grants of Restricted Stock shall be
subject to the terms and conditions set forth in this Section 7 and any
additional terms and conditions, not inconsistent with the express terms
and provisions of the Plan, as the Committee shall set forth in the
relevant Award Agreement. Restricted Stock may be granted alone or in
addition to any other Awards under the Plan. Subject to the terms of the
Plan, the Committee shall determine the number of shares of Restricted
Stock to be granted to a Participant and the Committee may impose
different terms and conditions on any particular Restricted Stock grant
made to any Participant. With respect to each Participant receiving an
Award of Restricted Stock, there shall be issued a stock certificate (or
certificates) in respect of such shares of Restricted Stock. Such stock
certificate(s) shall be registered in the name of such Participant, shall
be accompanied by a stock power duly executed by such Participant, and
shall bear, among other required legends, the following legend referring
to certain terms, conditions and restrictions applicable to such Award:
The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including, without limitation, forfeiture events) contained in
the uniView Technologies Corporation Equity Incentive Plan and
an Award Agreement entered into between the registered owner
hereof and uniView Technologies Corporation. Copies of such
Plan and Award Agreement are on file in the office of the
Secretary of uniView Technologies Corporation, and uniView
Technologies Corporation will furnish to the recordholder of
the certificate, without charge, upon written request at its
principal place of business a copy of such Plan and Award
Agreement.
Such stock certificate evidencing such shares shall be deposited with and
held in custody by the Company until the restrictions thereon shall have
lapsed and all of the terms and conditions applicable to such grant shall
have been satisfied.
7.2. Restricted Stock Grants. A grant of Restricted Stock is an
Award of shares of Common Stock granted to a Participant, subject to such
restrictions, terms and conditions as the Committee deems appropriate,
including, without limitation, (a) restrictions on the sale, assignment,
transfer, hypothecation or other disposition of such shares, (b) the
requirement that the Participant deposit such shares with the Company
while such shares are subject to such restrictions, and (c) the
requirement that such shares be forfeited upon termination of employment
for specified reasons within a specified period of time.
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7.3. Restriction Period. In accordance with Sections 7.1 and 7.2 of
the Plan, Restricted Stock shall only become unrestricted and vest in the
Participant in accordance with such vesting schedule relating to the
restriction applicable to such Restricted Stock, if any, as the Committee
may establish at the time of the Award in the relevant Award Agreement
(the "Restriction Period"). Notwithstanding the immediately preceding
sentence, in no event shall the Restriction Period expire until
shareholder approval of the Plan has been obtained. During the
Restriction Period, such stock shall be and remain unvested and a
Participant may not sell, assign, transfer, pledge, encumber or otherwise
dispose of or hypothecate such Award. Upon satisfaction of the vesting
schedule and any other applicable restrictions, terms and conditions, the
Participant shall be entitled to receive payment of the Restricted Stock
or a portion thereof, as the case may be, as provided in Section 7.4 of
the Plan.
7.4. Payment of Restricted Stock Grants. After the satisfaction
and/or lapse of the restrictions, terms and conditions established by the
Committee in respect of a grant of Restricted Stock, a new certificate,
without the legend set forth in Section 7.1 of the Plan, for the number
of shares of Common Stock which are no longer subject to such
restrictions, terms and conditions shall, as soon as practicable
thereafter, be delivered to the Participant.
7.5. Shareholder Rights. A Participant shall have, with respect to
the shares of Common Stock received under a grant of Restricted Stock, all of
the rights of a shareholder of the Company, including, without
limitation, the right to vote the shares and to receive any cash
dividends. Stock dividends issued with respect to such Restricted Stock
shall be treated as additional Restricted Stock grants and shall be
subject to the same restrictions and other terms and conditions that
apply to the shares of Restricted Stock with respect to which such stock
dividends are issued.
8. Deferral Elections. The Committee may permit a Participant to elect
to defer receipt of any delivery of shares of Common Stock that would
otherwise be due to such Participant by virtue of the exercise or
settlement of any Award under the Plan. If any such election is
permitted, the Committee shall establish rules and procedures for such
deferrals, including, without limitation, the payment or crediting of
dividend equivalents in respect of deferrals credited in shares of Common
Stock.
9. Dividend Equivalents. In addition to the provisions of Section 7.5
of the Plan, Awards of Stock Options may, in the sole discretion of the
Committee and if provided for in the relevant Award Agreement, earn
dividend equivalents. In respect of any such Award which is outstanding
on a dividend record date for Common Stock, the Participant shall be
credited with an amount equal to the amount of cash or stock dividends
that would have been paid on the shares of Common Stock covered by such
Award had such covered shares been issued and outstanding on such
dividend record date. The Committee shall establish such rules and
procedures governing the crediting of such dividend equivalents,
including, without limitation, the amount, the timing, form of payment
and payment contingencies and/or restrictions of such dividend
equivalents, as it deems appropriate or necessary.
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10. Termination of Employment.
10.1. General. Subject to the terms and conditions of Section 13
of the Plan, if, and to the extent that, the terms and conditions under
which an Award may be exercised or settled after a Participant's
termination of employment for any particular reason shall not have been
set forth (a) in the Participant's employment agreement, if any, or (b)
in the relevant Award Agreement, by and as determined by the Committee in
its sole discretion, the following terms and conditions shall apply as
appropriate and as not inconsistent with the terms and conditions, if
any, contained in such employment agreement and/or Award Agreement:
10.1.1. Except as otherwise provided in this Section 10.1.1,
if a Participant's employment with the Company and its Subsidiaries is
terminated for any reason, such Participant's rights, if any, to exercise
any then exercisable Stock Options, if any, shall terminate ninety (90)
days after the date of such termination and thereafter the Participant
(and such Participant's estate, designated beneficiary or other legal
representative) shall forfeit any rights or interests in or with respect
to any such Stock Options. The Committee, in its sole discretion, may
determine that such Participant's Stock Options (other than Incentive
Stock Options), if any, to the extent exercisable immediately prior to
any termination of employment (other than a termination due to death,
Retirement or Disability), may remain exercisable for an additional
specified time period after such ninety (90) day period expires (subject
to any other applicable terms and provisions of the Plan (and any rules
or procedures thereunder) and the relevant Award Agreement). If any
termination of employment is due to Retirement or Disability, a
Participant shall have the right, subject to the applicable terms and
provisions of the Plan (and any rules or procedures thereunder) and the
relevant Award Agreement, (a) to exercise Non-Qualified Stock Options, if
any, at any time within one year following such termination due to
Retirement or Disability (to the extent such Participant was entitled to
exercise any such Awards immediately prior to such termination) and (b)
to exercise Incentive Stock Options, if any, at any time within ninety
(90) days following a termination due to Retirement and one year
following a termination due to Disability (to the extent such Participant
was entitled to exercise any such Awards immediately prior to such
termination). If any Participant dies while entitled to exercise a Stock
Option, if any, such Participant's estate, designated beneficiary or
other legal representative, as the case may be, shall have the right,
subject to the applicable provisions of the Plan (and any rules or
procedures thereunder) and the relevant Award Agreement, to exercise such
then exercisable Stock Options, if any, at any time within one year from
the date of such Participant's death (but in no event more than one (1)
year from the date of such Participant's termination due to Retirement or
Disability, except, in the case of Incentive Stock Options, in no event
more than ninety (90) days from the date of such Participant's
termination due to Retirement). The foregoing notwithstanding, nothing
in this Section 10.1.1 shall permit the exercise of a Stock Option after
the expiration of its term.
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10.1.2. If a Participant's employment with the Company and its
Subsidiaries is terminated for any reason (including, without limitation,
Disability, Retirement or death) prior to the actual or deemed (under
Section 13 of the Plan) satisfaction and/or lapse of the restrictions,
terms and conditions applicable to a grant of Restricted Stock, such
Restricted Stock shall immediately be canceled and the Participant (and
such other Participant's estate, designated beneficiary or other legal
representative) shall forfeit any rights or interests in and with respect
to any such Restricted Stock.
11. Non-transferability of Awards. Except as may otherwise be provided
in an Award Agreement, no Award under the Plan or any Award Agreement,
and no rights or interests herein or therein, shall or may be assigned,
transferred, sold, exchanged, pledged, disposed of or otherwise
hypothecated or encumbered by a Participant or any beneficiary hereof or
thereof, except by testamentary disposition or the laws of descent and
distribution. No such interest shall be subject to seizure for the
payment of the Participant's (or any beneficiary's) debts, judgments,
alimony, or separate maintenance or be transferable by operation of law
in the event of the Participant's (or any beneficiary's) bankruptcy or
insolvency. During the lifetime of a Participant Stock Options are
exercisable only by the Participant.
12. Changes in Capitalization and Other Matters.
12.1. No Corporate Action Restriction. The existence of the Plan,
any Award Agreement and/or the Awards granted hereunder shall not limit,
affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company's or any
Subsidiary's capital structure or its business, (b) any merger,
consolidation or change in the ownership of the Company or any
Subsidiary, (c) any issue of bonds, debentures, capital, preferred or
prior preference stock ahead of or affecting the Company's or any
Subsidiary's capital stock or the rights thereof, (d) any dissolution or
liquidation of the Company or any Subsidiary, (e) any sale or transfer of
all or any part of the Company's or any Subsidiary's assets or business,
or (f) any other corporate act or proceeding by the Company or any
Subsidiary. No Participant, beneficiary or any other person shall have
any claim against any member of the Board or the Committee, the Company
or any Subsidiary as a result of any such action.
12.2. Recapitalization Adjustments. In the event of any change in
capitalization affecting the Common Stock of the Company, including,
without limitation, a stock dividend or other distribution, stock split,
reverse stock split, recapitalization, consolidation, subdivision, split-
up, spin-off, split-off, combination or exchange of shares or other form
of reorganization, or any other change affecting the Common Stock, the
Board shall authorize and make such proportionate adjustments, if any, as
the Board deems appropriate to reflect such change, including, without
limitation, with respect to the aggregate number of shares of the Common
Stock for which Awards in respect thereof may be granted under the Plan,
the maximum number of shares of the Common Stock which may be sold or
awarded to any Participant, the number of shares of the Common Stock
covered by each outstanding Award, and the exercise price or other price
per share of Common Stock in respect of outstanding Awards.
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12.3. Reorganizations. The foregoing provisions of Section 12
notwithstanding, the following provisions of Section 12 shall control,
where applicable except as may otherwise be provided in an Award
Agreement:
12.3.1. If the Company shall at any time participate in a
reorganization of a type described in Section 424(a) of the Code and in
which (A) either (1) the Company is not the surviving entity, or (2) the
Company is the surviving entity and the shareholders of Common Stock are
required to exchange their shares for property and/or securities, and (B)
the shareholders of the Company prior to such reorganization hold less
than 50% of the Company or surviving entity after such reorganization,
the Company shall give the Participants written notice of any such
proposed reorganization on or before thirty (30) days before such
reorganization, and any outstanding Stock Options shall be fully vested
and exercisable after receipt of such notice and prior to such
reorganization in full for all of the shares of Common Stock covered by
the Stock Options; provided, however, either the Participant or the
Company may make the exercise of outstanding Stock Options after
Participant's receipt of such notice effective only immediately prior to
the consummation of such reorganization. To the extent not exercised
prior to such reorganization, the Stock Options shall expire on the
occurrence of such reorganization. A sale of all or substantially all
the assets of the Company for a consideration (apart from the assumption
of obligations) consisting primarily of securities shall be deemed a
reorganization for the foregoing purposes. Notwithstanding the
foregoing, the provisions of this Section shall be subject to Section
6.4.
12.3.2. In the event of the proposed dissolution or liquidation
of the Company, the Stock Options granted hereunder shall terminate as of a
date to be fixed by the Board, provided that not less than thirty (30)
days' prior written notice of the date so fixed shall be given to the
Participants, all Stock Options held by the Participants shall be fully
vested and the Participants shall have the right, during the period of
thirty (30) days preceding such termination, to exercise their Stock
Options in full for all of the shares of Common Stock covered by the
Stock Options; provided, however, either the Participant or the Company
may make the exercise of the outstanding Stock Options after
Participant's receipt of such notice effective only immediately prior to
the consummation of such dissolution. Notwithstanding the foregoing, the
provisions of this Section shall be subject to Section 6.4 and shall be
subject to Section 12.3.1 if the optionee received notice under Section
12.3.1 at a time earlier than the notice provided for herein.
13. Change of Control.
13.1. Acceleration of Awards Vesting. Except as otherwise
provided in an Award Agreement if a Change of Control of the Company occurs
(a) all Stock Options then unexercised and outstanding shall become fully
vested and exercisable as of the date of the Change of Control and (b)
all restrictions, terms and conditions applicable to all Restricted Stock
then outstanding shall be deemed lapsed and satisfied as of the date of
the Change of Control.
13.2. Payment After Change of Control. Within thirty (30) days
after a Change of Control occurs, the holder of an Award of Restricted Stock
shall receive a new certificate for such shares without the legend set
forth in Section 7 of the Plan.
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13.3. Change of Control. Unless otherwise provided in an
employment agreement or an Award Agreement, "Change of Control" shall mean:
13.3.1. The acquisition, after the Effective Date (as defined
in Section 15.10 of the Plan), by an individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (a) the shares of the Common
Stock, or (b) the combined voting power of the voting securities of the
Company entitled to vote generally in the election of directors (the
"Voting Securities"); provided, however, that the following acquisitions
shall not constitute a Change of Control: (x) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, or (y) any acquisition by any corporation if,
immediately following such acquisition, more than 80% of the then
outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such
corporation (entitled to vote generally in the election of directors), is
beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who, immediately prior to such
acquisition, were the beneficial owners of the Common Stock and the
Voting Securities in substantially the same proportions, respectively, as
their ownership, immediately prior to such acquisition, of the Common
Stock and Voting Securities; or
13.3.2. Individuals who, as of the day after the first annual
meeting of the Company's shareholders following the Effective Date,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the day after the first annual
meeting of the Company's shareholders following the Effective Date hereof
whose election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the directors then serving
and comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as
a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents; or
13.3.3. Approval by the shareholders of the Company of a
reorganization, merger or consolidation, other than a reorganization,
merger or consolidation with respect to which all or substantially all of
the individuals and entities who where the beneficial owners, immediately
prior to such reorganization, merger or consolidation, of the Common
Stock and Voting Securities beneficially own, directly or indirectly,
immediately after such reorganization, merger or consolidation more than
80% of the then outstanding common stock and voting securities (entitled
to vote generally in the election of directors) of the corporation
resulting from such reorganization, merger or consolidation in
substantially the same proportions as their respective ownership,
immediately prior to such reorganization, merger or consolidation, of the
Common Stock and the Voting Securities; or
13.3.4. Approval by the shareholders of the Company of (a) a
complete liquidation or dissolution of the Company, or (b) the sale or
other disposition of all or substantially all of the assets of the Company,
other than to a Subsidiary, by the Company.
<PAGE>
14. Amendment, Suspension and Termination.
14.1. In General. The Plan and any Awards granted under it will
terminate if shareholder approval is not received for the Plan within
twelve (12) months after adoption of the Plan by the Board. The Board
may suspend or terminate the Plan (or any portion thereof) at any time
and may amend the Plan at any time and from time to time in such respects
as the Board may deem advisable to insure that any and all Awards conform
to or otherwise reflect any change in applicable laws or regulations, or
to permit the Company or the Participants to benefit from any change in
applicable laws or regulations, or in any other respect the Board may
deem to be in the best interests of the Company or any Subsidiary;
provided, however, that no such amendment shall, without shareholder
approval (a) except as provided in Section 12 of the Plan, materially
increase the number of shares of Common Stock which may be issued under
the Plan, (b) materially modify the requirements as to eligibility for
participation in the Plan, (c) materially increase the benefits accruing
to Participants under the Plan, or (d) extend the termination date of the
Plan. No such amendment, suspension or termination shall (x) materially
adversely affect the rights of any Participant under any outstanding
Stock Options or Restricted Stock Awards, without the consent of such
Participant, or (y) make any change that would disqualify the Plan, or
any other plan of the Company or any Subsidiary intended to be so
qualified, from (i) the exemption provided by Rule 16b-3, promulgated
under the Exchange Act, or any successor rule or regulation to such Rule
16b-3, as such rule is applicable from time to time, or (ii) the benefits
provided under Section 422 of the Code, or any successor thereto.
14.2. Award Agreements. The Committee may amend or modify at any
time and from time to time any outstanding Stock Options or Restricted
Stock grants, in any manner to the extent that the Committee would have
had the authority under the Plan to initially determine the restrictions,
terms and provisions of such Stock Options and/or Restricted Stock
grants, including, without limitation, to change the date or dates as of
which such Stock Options may be exercised. No such amendment or
modification shall, however, materially adversely affect the rights of
any Participant under any such Award without the consent of such
Participant.
15. Miscellaneous.
15.1. Tax Withholding. With respect to any Award the Company
shall have the right to withhold or cause to be withheld by any lawful means
any federal, state, local or other taxes, assessments or amounts of any
kind which the Committee, in its sole discretion, deems necessary to be
withheld to comply with the Code and/or any other applicable law, rule or
regulation. If the Committee, in its sole discretion, permits shares of
Common Stock to be used to satisfy any such withholding, such Common
Stock shall be valued based on the Fair Market Value of such stock as of
the date the withholding is required to be made, such date to be
determined by the Committee. The Committee may establish rules limiting
the use of Common Stock to meet withholding requirements by Participants
who are subject to Section 16 of the Exchange Act.
<PAGE>
15.2. No Right to Employment. Neither the adoption of the Plan,
the granting of any Award, nor the execution of any Award Agreement, shall
confer upon any employee of the Company or any Subsidiary any right to
continued employment with the Company or any Subsidiary, as the case may
be, nor shall it interfere in any way with the right, if any, of the
Company or any Subsidiary to terminate the employment of any employee at
any time for any reason.
15.3. Unfunded Plan. The Plan shall be unfunded and the Company
shall not be required to segregate any assets in connection with any
Awards under the Plan. Any liability of the Company to any person with
respect to any Award under the Plan or any Award Agreement shall be based
solely upon the contractual obligations that may be created as a result
of the Plan or any such award or agreement. No such obligation of the
Company shall be deemed to be secured by any pledge of, encumbrance on,
or other interest in, any property or asset of the Company or any
Subsidiary. Nothing contained in the Plan or any Award Agreement shall
be construed as creating in respect of any Participant (or beneficiary
thereof or any other person) any equity or other interest of any kind in
any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any
Subsidiary and/or any such Participant, any beneficiary thereof or any
other person.
15.4. Other Company Benefit and Compensation Programs. Payments
and other benefits received by a Participant under an Award made pursuant to
the Plan shall not be deemed a part of a Participant's compensation for
purposes of the determination of benefits under any other employee
welfare or benefit plans or arrangements, if any, provided by the Company
or any Subsidiary unless expressly provided in such other plans or
arrangements, or except where the Board expressly determines in writing
that inclusion of an Award or portion of an Award should be included to
accurately reflect competitive compensation practices or to recognize
that an Award has been made in lieu of a portion of competitive annual
base salary or other cash compensation. Awards under the Plan may be
made in addition to, in combination with, or as alternatives to, grants,
awards or payments under any other plans or arrangements of the Company
or its Subsidiaries. The existence of the Plan notwithstanding, the
Company or any Subsidiary may adopt such other compensation plans or
programs and additional compensation arrangements as it deems necessary
to attract, retain and motivate employees.
15.5. Listing, Registration and Other Legal Compliance. No shares
of the Common Stock shall be issued under the Plan unless legal counsel
for the Company shall be satisfied that such issuance will be in
compliance with all applicable federal and state securities laws and
regulations and any other applicable laws or regulations. The Committee
may require, as a condition of any payment or share issuance, that
certain agreements, undertakings, representations, certificates, and/or
information, as the Committee may deem necessary or advisable, be
executed or provided to the Company to assure compliance with all such
applicable laws or regulations. Certificates for shares of the
Restricted Stock and/or Common Stock delivered under the Plan may be
subject to such stock-transfer orders and such other restrictions as the
Committee may deem advisable under the rules, regulations, or other
requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable
federal or state securities law. The Committee may cause a legend or
legends to be put on any such share certificates to make appropriate
<PAGE>
reference to such restrictions. In addition, if, at any time specified
herein (or in any Award Agreement) for (a) the making of any
determination or (b) the issuance or other distribution of Restricted
Stock and/or Common Stock to or through a Participant with respect to any
Award, any law, rule, regulation or other requirement of any governmental
authority or agency shall require either the Company, any Subsidiary or
any Participant (or any estate, designated beneficiary or other legal
representative thereof) to take any action in connection with any such
determination, any such shares to be issued or distributed, or the making
of any such determination, as the case may be, shall be deferred until
such required action is taken.
15.6. Award Agreements. Each Participant receiving an Award under
the Plan shall enter into an Award Agreement with the Company in a form
not inconsistent with the Plan or any determinations made by the
Committee. Each such Participant shall agree to the restrictions, terms
and conditions of the Award set forth therein.
15.7. Designation of Beneficiary. Each Participant to whom an
Award has been made under the Plan may designate a beneficiary or beneficiaries
to receive any payment which under the terms of the Plan and the relevant
Award Agreement may become payable on or after the Participant's death.
At any time, and from time to time, any such designation may be changed
or canceled by the Participant without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a
form provided for that purpose by the Committee and shall not be
effective until received by the Committee. If no beneficiary has been
designated by a deceased Participant, or if the designated beneficiaries
have predeceased the Participant, the beneficiary shall be the
Participant's estate. If the Participant designates more than one
beneficiary, any payments under the Plan to such beneficiaries shall be
made in equal shares unless the Participant has expressly designated
otherwise, in which case the payments shall be made in the shares
designated by the Participant.
15.8. Leaves of Absence/Transfers. The Committee shall have the
power to promulgate rules and regulations and to make determinations, as
it deems appropriate, under the Plan in respect of any leave of absence
from the Company or any Subsidiary granted to a Participant. Without
limiting the generality of the foregoing, the Committee may determine
whether any such leave of absence shall be treated as if the Participant
has terminated employment with the Company or any such Subsidiary. If a
Participant transfers within the Company, or to or from any Subsidiary,
such Participant shall not be deemed to have terminated employment as a
result of such transfers.
15.9. Governing Law. The Plan and all actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
Texas, without regard to principles of conflict of laws thereunder. Any
titles and headings herein are for reference purposes only, and shall in
no way limit, define or otherwise affect the meaning, construction or
interpretation of any provisions of the Plan.
15.10. Effective Date. The Plan shall be effective as of October
25, 1999 (the "Effective Date"), subject to the approval by the Company's
shareholders in accordance with Section 422 of the Code.
<PAGE>
