Employee Stock Discount Plan - The Men's Wearhouse Inc.
<DESCRIPTION>EMPLOYEE STOCK DISCOUNT PLAN - JANUARY 1, 2001
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EXHIBIT 10.1
THE MEN'S WEARHOUSE, INC.
EMPLOYEE STOCK DISCOUNT PLAN
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TABLE OF CONTENTS
SECTION
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ARTICLE I - PURPOSE, COMMITMENT AND INTENT
Purpose................................................................................................1.1
Share Commitment.......................................................................................1.2
Intent.................................................................................................1.3
Shareholder Approval...................................................................................1.4
ARTICLE II - DEFINITIONS
Affiliate..............................................................................................2.1
Beneficiary............................................................................................2.2
Board of Directors.....................................................................................2.3
Code...................................................................................................2.4
Committee..............................................................................................2.5
Company................................................................................................2.6
Employee...............................................................................................2.7
Employer...............................................................................................2.8
Exercise Date..........................................................................................2.9
Fair Market Value.....................................................................................2.10
Five Percent Owner....................................................................................2.11
Grant Date............................................................................................2.12
Offering Period.......................................................................................2.13
Option................................................................................................2.14
Option Price..........................................................................................2.15
Participant...........................................................................................2.16
Plan..................................................................................................2.17
Share.................................................................................................2.18
Stock.................................................................................................2.19
Trading Day...........................................................................................2.20
ARTICLE III - ELIGIBILITY
General Requirements...................................................................................3.1
Limitations Upon Participation.........................................................................3.2
ARTICLE IV - PARTICIPATION
Grant of Option........................................................................................4.1
Payroll Deduction......................................................................................4.2
Payroll Deductions Continuing..........................................................................4.3
Right to Stop Payroll Deductions.......................................................................4.4
Accounting for Funds...................................................................................4.5
Employer's Use of Funds................................................................................4.6
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ARTICLE V - IN SERVICE WITHDRAWAL, TERMINATION OR DEATH
In Service Withdrawal..................................................................................5.1
Termination of Employment for any Reason Other Than Death..............................................5.2
Death..................................................................................................5.3
ARTICLE VI - EXERCISE OF OPTION
Purchase of Stock......................................................................................6.1
Accounting for Stock...................................................................................6.2
Issuance of Shares.....................................................................................6.3
ARTICLE VII - ADMINISTRATION
Appointment, Term of Service & Removal.................................................................7.1
Powers.................................................................................................7.2
Quorum and Majority Action.............................................................................7.3
Standard of Judicial Review of Committee Actions.......................................................7.4
ARTICLE VIII - ADOPTION OF PLAN BY OTHER EMPLOYERS
Adoption Procedure.....................................................................................8.1
No Joint Venture Implied...............................................................................8.2
ARTICLE IX - TERMINATION AND AMENDMENT OF THE PLAN
Termination............................................................................................9.1
Amendment..............................................................................................9.2
ARTICLE X - MISCELLANEOUS
Designation of Beneficiary............................................................................10.1
Plan Not An Employment Contract.......................................................................10.2
All Participants' Rights Are Equal....................................................................10.3
Options Are Not Transferable..........................................................................10.4
Voting of Stock.......................................................................................10.5
No Rights of Stockholder..............................................................................10.6
Governmental Regulations..............................................................................10.7
Notices...............................................................................................10.8
Indemnification of Committee..........................................................................10.9
Tax Withholding......................................................................................10.10
Gender and Number....................................................................................10.11
Severability.........................................................................................10.12
Governing Law; Parties to Legal Actions..............................................................10.13
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ARTICLE I
PURPOSE, COMMITMENT AND INTENT
1.1 PURPOSE. The purpose of this Plan is to provide Employees of the
Company and its Affiliates that adopt the Plan with an opportunity to purchase
Stock of the Company through quarterly offerings of options at a discount on the
first day of each calendar quarter and thus develop a stronger incentive to work
for the continued success of the Company and its Affiliates. Therefore, this
Plan is available to all Employees of every Employer upon their fulfilling the
eligibility requirements of Section 3.1. It is sponsored by the Company. Any
Affiliate may adopt it with the approval of the Committee by fulfilling the
requirements of Section 8.1.
1.2 SHARE COMMITMENT. The aggregate number of Shares authorized to be
sold pursuant to Options granted under this Plan is 950,000, subject to
adjustment as provided in this Section. In computing the number of Shares
available for grant, any Shares relating to Options which are granted, but which
subsequently lapse, are cancelled or are otherwise not exercised by the final
date for exercise, shall be available for future grants of Options.
In the event of any stock dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares of Stock, or the like, as a
result of which shares shall be issued in respect of the outstanding Shares, or
the Shares shall be changed into the same or a different number of the same or
another class of stock, the total number of shares of Stock authorized to be
committed to this Plan, the number of Shares subject to each outstanding Option,
the Option Price applicable to each Option, and/or the consideration to be
received upon exercise of each Option shall be appropriately adjusted by the
Committee. In addition, the Committee shall, in its sole discretion, have
authority to provide, in appropriate cases, for (a) acceleration of the Exercise
Date of outstanding Options or (b) the conversion of outstanding Options into
cash or other property to be received in certain of the transactions specified
in this paragraph above upon the completion of the transaction.
1.3 INTENT. It is the intention of the Company to have the Plan qualify
as an "employee stock purchase plan" under section 423 of the Code. Therefore,
the provisions of the Plan are to be construed to govern participation in a
manner consistent with the requirements of section 423 of the Code.
1.4 SHAREHOLDER APPROVAL. To be effective, this Plan must be approved
by the stockholders of each of the Employers within 12 months after the Plan is
adopted. The approval of stockholders must comply with all applicable provisions
of the corporate charter, bylaws and applicable laws of the jurisdiction
prescribing the method and degree of stockholder approval required for the
issuance of corporate stock or options.
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ARTICLE II
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in these definitions throughout this Plan, unless the context in which
any word or phrase appears reasonably requires a broader, narrower, or different
meaning.
2.1 "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations (other than the
Company) owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
2.2 "BENEFICIARY" means the person who is entitled to receive amounts
under the Plan upon the death of a Participant.
2.3 "BOARD OF DIRECTORS" means the board of directors of the Company.
2.4 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
2.5 "COMMITTEE" means the committee appointed by the Board of
Directors.
2.6 "COMPANY" means The Men's Wearhouse, Inc., a Texas corporation.
2.7 "EMPLOYEE" means any person who is a common-law employee of the
Company or any Affiliate.
2.8 "EMPLOYER" means the Company and all Affiliates that have adopted
the Plan.
2.9 "EXERCISE DATE" means the last day of each Offering Period, which
is the day that all Options that eligible Employees have elected to exercise are
to be exercised.
2.10 "FAIR MARKET VALUE" of the Stock as of any date means the average
of the high and low sale prices of the Stock on a given date (or if there was no
sale on that date, the next preceding date on which there was a sale) on the
principal securities exchange on which the Stock is listed.
2.11 "FIVE PERCENT OWNER" means an owner of five percent or more of the
total combined voting power of all classes of stock of the Company or any
Affiliate. An individual is
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considered to own any stock that is owned directly or indirectly by or for his
brothers and sisters (whether by whole or half-blood), spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust is considered as owned proportionately
by or for its shareholders, partners, or beneficiaries. An individual is
considered to own stock that he may purchase under outstanding options. The
determination of the percentage of the total combined voting power of all
classes of stock of the Company or any Affiliate that is owned by an individual
is made by comparing the voting power or value of the shares owned (or treated
as owned) by the individual to the aggregate voting power of all shares actually
issued and outstanding immediately after the grant of the option to the
individual. The aggregate voting power or value of all shares actually issued
and outstanding immediately after the grant of the option does not include the
voting power or value of treasury shares or shares authorized for issue under
outstanding options held by the individual or any other person.
2.12 "GRANT DATE" means the first day of each Offering Period, which is
the day the Committee grants all eligible Employees an Option under this Plan.
2.13 "OFFERING PERIOD" means the period beginning on the Grant Date and
ending on the Exercise Date. The Offering Period shall commence on the first day
of each calendar quarter and shall end on the last Trading Day on or before the
last day of each calendar quarter, unless the Committee specifies another
Offering Period (which may not exceed 27 months).
2.14 "OPTION" means an option granted under this Plan to purchase
shares of Stock at the Option Price on the Exercise Date.
2.15 "OPTION PRICE" means the price to be paid for each Share upon
exercise of an Option, which shall be 85% of the lesser of (a) the Fair Market
Value of a Share on the Grant Date or (b) the Fair Market Value of a Share on
the Exercise Date.
2.16 "PARTICIPANT" means a person who is eligible to be granted an
Option under this Plan and who elects to have payroll deductions withheld under
the Plan for the purpose of exercising that Option on the Exercise Date.
2.17 "PLAN" means The Men's Wearhouse, Inc. Employee Stock Discount
Plan, as set out in this document and as it may be amended from time to time.
2.18 "SHARE" means a share of Stock.
2.19 "STOCK" means the Company's common stock, $.01 par value.
2.20 "TRADING DAY" shall mean a day on which the principal securities
exchange on which the Stock is listed is open for trading.
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ARTICLE III
ELIGIBILITY
3.1 GENERAL REQUIREMENTS. Subject to Section 3.2, each Employee of each
Employer is eligible to participate in the Plan for a given Offering Period if,
prior to the Grant Date, he has completed three months of employment for the
Company and/or its Affiliates, he is in the employ of an Employer on the Grant
Date and he completes a subscription form authorizing payroll deductions and
files it with the Employer's benefit office prior to the Grant Date. For
purposes of this Plan, an Employee's employment service with TMWI Texas Retail
L.P. shall be treated as employment service for the Company.
3.2 LIMITATIONS UPON PARTICIPATION. No Employee shall be granted an
Option to the extent that the Option would:
(a) cause the Employee to be a Five Percent Owner immediately after
the grant;
(b) permit the Employee to purchase Stock under all employee stock
purchase plans, as defined in section 423 of the Code, of the Company
and all Affiliates at a rate which exceeds $25,000 in Fair Market Value
of the Stock (determined at the time the Option is granted) for each
calendar year in which the option granted to the Employee is
outstanding at any time as provided in sections 423 and 424 of the
Code; or
(c) permit the Employee to purchase Stock in excess of the number
of Shares determined under Section 4.1.
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ARTICLE IV
PARTICIPATION
4.1 GRANT OF OPTION. Effective as of the Grant Date of each Offering
Period, the Committee shall grant an Option to each Participant which shall be
exercisable on the Exercise Date only through funds accumulated by the Employee
through payroll deductions made during the Offering Period together with any
funds remaining in the Participant's payroll deduction account at the beginning
of the Offering Period. The Option shall be for that number of whole Shares that
may be purchased by the amount in the Participant's payroll deduction account on
the Exercise Date at the Option Price. Except as may be otherwise determined by
the Committee and announced to Employees prior to an Offering Period, the
maximum number of Shares that a Participant may buy under the Plan during an
Offering Period is that number of Shares that could be purchased with $2,500,
assuming that the purchase price of the Shares is equal to 85% of the FMV of the
Shares on the Grant Date.
4.2 PAYROLL DEDUCTION. For an Employee to participate during a given
Offering Period, he must complete a payroll deduction form and file it with his
Employer no earlier than 60 days prior to the beginning of the Offering Period
and he must be employed by an Employer on the day before the start of the
Offering Period. The payroll deduction form shall permit a Participant to elect
to have withheld from his cash compensation a specified dollar amount each pay
period during the Offering Period. Payroll deductions shall normally begin with
the first pay date of the Offering Period. However, if a Participant files his
subscription agreement with the Employer less than ten calendar days before the
Grant Date, his payroll deductions shall begin with the second pay date during
the Offering Period. Payroll deductions shall continue through the last pay date
prior to the Exercise Date. A Participant may not make additional payments to
his Plan account.
4.3 PAYROLL DEDUCTIONS CONTINUING. A Participant's payroll deduction
election shall remain in effect for all ensuing Offering Periods until changed
by him by filing an appropriate amended payroll deduction form no earlier than
60 days prior to the commencement of the Offering Period for which it is to be
effective.
4.4 RIGHT TO STOP PAYROLL DEDUCTIONS. A Participant shall have the
right to discontinue payroll deductions by filing a subscription cancellation
form with the Company. The payroll deduction cancellation shall become effective
with the first full payroll period following ten business days after the
Company's receipt of the subscription cancellation agreement unless the Company
elects to process a given cancellation in participation more quickly. With the
exception of a complete discontinuance of payroll deductions, a Participant may
not change his participation rate during an Offering Period.
4.5 ACCOUNTING FOR FUNDS. As of each payroll deduction period, the
Employer shall cause to be credited to the Participant's payroll deduction
account in a ledger established for that purpose the funds withheld from and
attributable to the Employee's cash compensation for that period. No interest
shall be credited to the Participant's payroll deduction account at any time.
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The obligation of the Employer to the Participant for this account shall be a
general corporate obligation and shall not be funded through a trust nor secured
by any assets which would cause the Participant to be other than a general
creditor of the Employer.
4.6 EMPLOYER'S USE OF FUNDS. All payroll deductions received or held by
an Employer may be used by the Employer for any corporate purpose, and the
Employer shall not be obligated to segregate such payroll deductions.
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ARTICLE V
IN SERVICE WITHDRAWAL, TERMINATION OR DEATH
5.1 IN SERVICE WITHDRAWAL. A Participant may, at any time on or before
15 days prior to the Exercise Date, or such other date as shall be selected by
the Committee from time to time, elect to withdraw all or a portion of the funds
and Stock then credited to his Plan account by giving notice in accordance with
the rules established by the Committee. The amount elected to be withdrawn by
the Participant shall be paid to him as soon as administratively feasible. Any
election by a Participant to withdraw all or a portion of his cash balance under
the Plan terminates his right to exercise his Option on the Exercise Date and
his entitlement to elect any further payroll deductions for the then-current
Offering Period. If the Participant wishes to participate in any future Offering
Period, he must file a new payroll deduction election within the time frame
required by the Committee for participation for that Offering Period.
5.2 TERMINATION OF EMPLOYMENT FOR ANY REASON OTHER THAN DEATH. If a
Participant's employment is terminated for any reason other than death prior to
the Exercise Date, the Option granted to the Participant for that Offering
Period shall lapse. The Participant's funds and Stock then credited to his Plan
Account shall be returned to him as soon as administratively feasible.
5.3 DEATH. If a Participant dies before the Exercise Date, the Option
granted to the Participant for that Offering Period shall lapse. The
Participant's Shares and funds then credited to his Plan account shall be
delivered to his Beneficiary (or to his estate if he has no Beneficiary) as soon
as administratively feasible. If the Participant dies after the Exercise Date
but prior to the delivery of his certificate, the Stock and funds credited to
the Participant's account shall be delivered to his Beneficiary (or to his
estate if he has no Beneficiary). If there is no Beneficiary, the Stock and
funds credited to a Participant's account may be held in the Participant's Plan
account until the representative of the estate has been appointed and provides
such evidence as may be required by the Committee.
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ARTICLE VI
EXERCISE OF OPTION
6.1 PURCHASE OF STOCK. Subject to Section 3.2, on the Exercise Date of
each Offering Period, each Participant's payroll deduction account shall be used
to purchase the maximum number of whole shares of Stock that can be purchased at
the Option Price for that Offering Period. Any funds remaining in a
Participant's payroll deduction account after the exercise of his Option for the
Offering Period shall remain in the Participant's account to be used in the
ensuing Offering Period, together with new payroll deductions, if any, for that
Offering Period to exercise the next succeeding Option which is to be exercised.
If in any Offering Period the total number of shares of Stock to be purchased by
all Participants exceeds the number of shares of Stock committed to the Plan,
then each Participant shall be entitled to purchase only his pro rata portion of
the shares of Stock remaining available under the Plan based on the balances in
each Participant's payroll deduction account as of the Exercise Date. No
fractional shares of Stock shall be purchased under this Plan. After the
purchase of all shares of Stock available on the Exercise Date, all Options
granted for the Offering Period to the extent not used are terminated because no
Option shall remain exercisable after one calendar quarter from the date of
Grant.
6.2 ACCOUNTING FOR STOCK. After the Exercise Date of each Offering
Period, a report shall be given to each Participant stating the amount of his
payroll deduction account, the number of shares of Stock purchased and the
Option Price.
6.3 ISSUANCE OF SHARES. As soon as administratively feasible after the
end of the Offering Period, the Committee shall advise the appropriate officer
of the Company that the terms of the Plan have been complied with and that it is
appropriate for the officer to cause to be issued the shares of Stock upon which
Options have been exercised under the Plan. The Committee may determine in its
discretion the manner of delivery of the shares of Stock purchased under the
Plan, which may be by electronic account entry into new or existing accounts,
delivery of Stock certificates or any other means as the Committee, in its
discretion, deems appropriate. The Committee may, in its discretion, hold the
Stock certificate for any shares of Stock or cause it to be legended in order to
comply with the securities laws of the applicable jurisdiction.
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ARTICLE VII
ADMINISTRATION
7.1 APPOINTMENT, TERM OF SERVICE & REMOVAL. The Board of Directors
shall appoint a Committee to administer this Plan. The members shall serve until
their resignation, death or removal. Any member may resign at any time by
mailing a written resignation to the Board of Directors. Any member may be
removed by the Board of Directors, with or without cause. Vacancies may be
filled by the Board of Directors from time to time.
7.2 POWERS. The Committee has the exclusive responsibility for the
general administration of the Plan, and has all powers necessary to accomplish
that purpose, including but not limited to the following rights, powers, and
authorities:
(a) to make rules for administering the Plan so long as they are
not inconsistent with the terms of the Plan;
(b) to construe all provisions of the Plan;
(c) to correct any defect, supply any omission, or reconcile any
inconsistency which may appear in the Plan;
(d) to select, employ, and compensate at any time any consultants,
accountants, attorneys, and other agents the Committee believes
necessary or advisable for the proper administration of the Plan;
(e) to determine all questions relating to eligibility, Fair Market
Value, Option Price and all other matters relating to benefits or
Participants' entitlement to benefits;
(f) to determine all controversies relating to the administration
of the Plan, including but not limited to any differences of opinion
arising between an Employer and a Participant, and any questions it
believes advisable for the proper administration of the Plan; and
(g) to delegate any clerical or recordation duties of the Committee
as the Committee believes is advisable to properly administer the Plan.
7.3 QUORUM AND MAJORITY ACTION. A majority of the Committee constitutes
a quorum for the transaction of business. The vote of a majority of the members
present at any meeting shall decide any question brought before that meeting. In
addition, the Committee may decide any question by a vote, taken without a
meeting, of a majority of its members via telephone, computer, fax or any other
media of communication.
7.4 STANDARD OF JUDICIAL REVIEW OF COMMITTEE ACTIONS. The Committee has
full and absolute discretion in the exercise of each and every aspect of its
authority under the Plan. Notwithstanding anything to the contrary, any action
taken, or ruling or decision made by the
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Committee in the exercise of any of its powers and authorities under the Plan
shall be final and conclusive as to all parties other than the Company,
including without limitation all Participants and their beneficiaries,
regardless of whether the Committee or one or more of its members may have an
actual or potential conflict of interest with respect to the subject matter of
the action, ruling, or decision. No final action, ruling, or decision of the
Committee shall be subject to de novo review in any judicial proceeding; and no
final action, ruling, or decision of the Committee may be set aside unless it is
held to have been arbitrary and capricious by a final judgment of a court having
jurisdiction with respect to the issue.
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ARTICLE VIII
ADOPTION OF PLAN BY OTHER EMPLOYERS
8.1 ADOPTION PROCEDURE. With the approval of the Committee, any
Affiliate may adopt this Plan for all or any classification of its Employees by
depositing with the Sponsor:
(a) a duly executed adoption agreement setting forth agreement to
be bound as an Employer by all the terms, provisions, conditions and
limitations of the Plan except those, if any, specifically set forth in
the adoption agreement;
(b) all other information required by the Sponsor; and
(c) the written consent of the Sponsor to the adoption of the Plan.
8.2 NO JOINT VENTURE IMPLIED. The document which evidences the adoption
of the Plan by an Affiliate shall become a part of this Plan. However, neither
the adoption of this Plan by an Affiliate nor any act performed by it in
relation to this Plan shall create a joint venture or partnership relation
between it and the Company or any other Affiliate.
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ARTICLE IX
TERMINATION AND AMENDMENT OF THE PLAN
9.1 TERMINATION. The Company may, by action of the Board of Directors,
terminate the Plan at any time and for any reason. The Plan shall automatically
terminate upon the purchase by Participants of all shares of Stock committed to
the Plan, unless the number of Shares committed to the Plan is increased by the
Board of Directors and approved by the shareholders of the Company. Upon
termination of the Plan, as soon as administratively feasible there shall be
refunded to each Participant the remaining funds in his payroll deduction
account, and there shall be forwarded to the Participants certificates for all
shares of Stock held under the Plan for the account of Participants. The
termination of this Plan shall not affect the current Options already
outstanding under the Plan to the extent there are Shares committed, unless the
Participants agree.
9.2 AMENDMENT. The Board of Directors reserves the right to modify,
alter or amend the Plan at any time and from time to time to any extent that it
deems advisable, including, without limiting the generality of the foregoing,
any amendment deemed necessary to ensure compliance of the Plan with section 423
of the Code. The Board of Directors may suspend the operation of the Plan for
any period as it may deem advisable. However, no amendment or suspension shall
operate to reduce any amounts previously allocated to a Participant's payroll
deduction account, to reduce a Participant's rights with respect to shares of
Stock previously purchased and held on his behalf under the Plan nor to affect
the current Option a Participant already has outstanding under the Plan without
the Participant's agreement. Any amendment changing the aggregate number of
shares to be committed to the Plan, the class of employees eligible to receive
Options under the Plan or the description of the group of corporations eligible
to adopt this Plan must have stockholder approval as set forth in Section 1.4.
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ARTICLE X
MISCELLANEOUS
10.1 DESIGNATION OF BENEFICIARY.
(a) A Participant may file a written designation of a Beneficiary
who is to receive any cash and Shares credited to the Participant's
account under the Plan. If a Participant is married and the designated
Beneficiary is not the Participant's spouse, written spousal consent
shall be required for the designation to be effective.
(b) A Participant may change his designation of a Beneficiary at
any time by written notice. If a Participant dies when he has not
validly designated a Beneficiary under the Plan, the Company shall
deliver such Shares and cash to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such Shares and cash to the spouse or to any
one or more dependents or relatives of the Participant, or if no
spouse, dependent or relative is known to the Company, then to such
other person as the Company may designate.
10.2 PLAN NOT AN EMPLOYMENT CONTRACT. The adoption and maintenance of
this Plan is not a contract between any Employer and its Employees which gives
any Employee the right to be retained in its employment. Likewise, it is not
intended to interfere with the rights of any Employer to discharge any Employee
at any time or to interfere with the Employee's right to terminate his
employment at any time.
10.3 ALL PARTICIPANTS' RIGHTS ARE EQUAL. All Participants will have the
same rights and privileges under this Plan as required by section 423 of the
Code and Department of Treasury Regulation section 1.423-2(f).
10.4 OPTIONS ARE NOT TRANSFERABLE. No Option granted a Participant
under this Plan is transferable by the Participant otherwise than by will or the
laws of descent and distribution, and must be exercisable, during his lifetime,
only by him. In the event any Participant attempts to violate the terms of this
Section, any Option held by the Participant shall be terminated by the Company
and, upon return to the Participant of the remaining funds in his payroll
deduction account, all of his rights under the Plan will terminate.
10.5 VOTING OF STOCK. Shares of Stock held under the Plan for the
account of each Participant shall be voted by the holder of record of those
Shares in accordance with the Participant's instructions.
10.6 NO RIGHTS OF STOCKHOLDER. No eligible Employee or Participant
shall by reason of participation in the Plan have any rights of a stockholder of
the Company until he acquires Shares of Stock as provided in this Plan.
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10.7 GOVERNMENTAL REGULATIONS. The obligation to sell or deliver the
shares of Stock under this Plan is subject to the approval of all governmental
authorities required in connection with the authorization, purchase, issuance or
sale of that Stock.
10.8 NOTICES. All notices and other communication in connection with
the Plan shall be in the form specified by the Committee and shall be deemed to
have been duly given when sent to the Participant at his last known address or
to his designated personal representative or beneficiary, or to the Employer or
its designated representative, as the case may be.
10.9 INDEMNIFICATION OF COMMITTEE. In addition to all other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal, to which they or any of them may be a party by
reason of any action taken or failure to act under or in connection with the
Plan or any Option granted under the Plan, and against all amounts paid in
settlement (provided the settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
action, suit or proceeding, except in relation to matters as to which it is
adjudged in the action, suit or proceeding, that the Committee member is liable
for gross negligence or willful misconduct in the performance of his duties.
10.10 TAX WITHHOLDING. At the time a Participant's Option is exercised
or at the time a Participant disposes of some or all of the Stock purchased
under the Plan, the Participant must make adequate provision for the Employer's
federal, state or other tax withholding obligations, if any, which arise upon
the exercise of the Option or the disposition of the Stock. At any time, the
Employer may, but shall not be obligated to, withhold from the Participant's
compensation the amount necessary for the Employer to meet applicable
withholding obligations.
10.11 GENDER AND NUMBER. If the context requires it, words of one
gender when used in this Plan shall include the other genders, and words used in
the singular or plural shall include the other.
10.12 SEVERABILITY. Each provision of this Plan may be severed. If any
provision is determined to be invalid or unenforceable, that determination shall
not affect the validity or enforceability of any other provision.
10.13 GOVERNING LAW; PARTIES TO LEGAL ACTIONS. The provisions of this
Plan shall be construed, administered, and governed under the laws of the State
of Texas and, to the extent applicable, by the securities, tax, employment and
other laws of the United States.
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