Exhibit 10.5
KINDER MORGAN, INC.
EMPLOYEES STOCK PURCHASE PLAN
 
 
1. Introduction.  The purpose of this Employees Stock Purchase Plan is to
encourage and enable eligible employees of Kinder Morgan, Inc. and its
designated Subsidiaries to acquire proprietary interests in the Company (as
defined below) through the ownership of Stock (as defined below) in order to
establish a closer identification of their interests with those of the Company
by providing them with another and more direct means of participating in its
growth and earnings which, in turn, will provide motivation for participating
employees to remain in the employ of and to give greater effort on behalf of
their Employers (as defined below).  The Plan does not qualify as an "employee
stock purchase plan" under Section 423 of the Code (as defined below); provided,
however, that if the Plan subsequently satisfies the requirements under Section
423 of the Code or a successor provision, the Board (as defined below) shall
have the discretion to determine whether the Plan shall be administered as an
"employee stock purchase plan."
 
     The Plan consists of two sub-plans:  the Direct Purchase Plan (as described
in Section 8) and the Market Purchase Plan (as described in Section 9).  For any
particular Purchase Period, Eligible Employees may have the opportunity to
purchase Stock under one of the sub-plans or neither sub-plan, as determined by
the Board.
 
2. Definitions.  Unless the context clearly requires a different meaning, the
following words or terms, when used herein, shall have the following respective
meanings:
 
      2.1 "Account" means the separate book entry account(s) maintained for each
Participant under the Plan by the Plan Administrator.
 
      2.2 "Active Participant" means an Eligible Employee who enrolls in the
Plan in accordance with the provisions of Section 7.1 herein and who is
currently making payroll deductions for the purchase of Stock.  "Active
Participant" shall also include an individual on a long-term leave of absence
who has made arrangements to continue payment of contributions as described in
Section 10.
 
2.3 "Board" means the Board of Directors of the Company.
 
      2.4 "Closing Price" on a particular date means the closing price of a
share of Stock on the New York Stock Exchange composite tape on such date, or if
no such prices are reported on that date, on the preceding day on which such
prices of the Stock are so reported. If the Stock is not listed on the New York
Stock Exchange at the time a determination of its Closing Price is requested to
be made hereunder, then the determination of Closing Price shall be made by the
ESPP Committee in such a manner as its deems appropriate.
 
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
 
2.6 "Company" means Kinder Morgan, Inc., a Delaware corporation, and its
successors.

 
 

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2.7 "Date of Purchase" means, for purposes of the Direct Purchase Plan, the last
trading day of the Purchase Period, on which date Stock for such Purchase Period
shall be purchased.
 
2.8 "Direct Purchase Plan" means the sub-plan of this Plan as described in
Section 8.
 
2.9 "Eligible Employee" means any Employee, provided, however, that the
following shall not be an "Eligible Employee" for purposes of this Plan:
 
(a) an individual whose customary employment is for less than thirty (30) hours
per week;
(b) any individual who is subject to a collective bargaining agreement unless
such agreement specifically provides for participation in this Plan;
(c) an individual whom the Company excludes from participation in the Plan for
purposes of applicable securities laws; and
(d) an individual included in a group of employees specifically identified by
the Board and excluded from participation in the Plan.
 
2.10 "Employee" means an individual regularly employed by the Company or one of
its Subsidiaries designated from time to time by the Board, provided, however,
that any individual who is not on the Employer's payroll or who is not
classified by the Employer as an employee, even if such individual is
retroactively or prospectively classified as a common law employee by any state
or federal governmental agency or court, shall not be an "Employee" for purposes
of this Plan.
 
2.11 "Employer" means the Company and its Subsidiaries designated from time to
time by the Board, as the employer of an Employee.  As used in this Plan, the
term "Employer" means collectively the Company and all such Subsidiaries, unless
the context requires a different meaning.
 
2.12 "Enrollment Form" means a statement signed by an Eligible Employee on a
form provided by the Plan Administrator, or an election made through applicable
electronic procedures, indicating the Eligible Employee elects to become a
Participant and authorizing a payroll deduction for the purchase of Stock
pursuant to the Plan.
 
2.13 "ESPP Committee" means the committee appointed by the Board to interpret
and oversee the administration of this Plan.
 
2.14 "Inactive Participant" means an Eligible Employee who has purchased Stock
pursuant to the Plan and who has an Account to which shares of Stock are
credited, but who is not currently making payroll deductions for the purchase of
Stock under the Plan (other than an individual on a long-term leave of absence
who has made arrangements to continue payment of contributions as described in
Section 10).

 
 
 
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2.15 "Initial Purchase Period" means the calendar quarter set forth in Section
5.
 
2.16 "IPO" means the initial underwritten public offering of Stock for cash
pursuant to a registration statement filed under the Securities Act of 1933, as
amended.
 
2.17 "Market Purchase Plan" means the sub-plan of this Plan as described in
Section 9.
 
2.18 "Participant" means an Active Participant or an Inactive Participant.
 
2.19 "Plan" means this Kinder Morgan, Inc. Employees Stock Purchase Plan, as it
may be amended from time to time.
 
2.20 Plan Administrator" means the Plan Administrator appointed by the ESPP
Committee to administer this Plan.  The Plan Administrator shall initially be
Computershare, Inc. and certain of its affiliates.
 
2.21 "Plan Supervisor" means the person(s) designated pursuant to Section 3
herein to assist Employees and/or Participants in Plan matters.
 
2.22 "Purchase Period" means the period set forth in Section 5.
 
2.23 "Purchase Price" means, for purposes of the Direct Purchase Plan, the price
at which Stock shall be purchased, as set forth in Section 8.3.
 
2.24 "Stock" means shares of Class P common stock of the Company, par value
$0.01.
 
2.25 "Subsidiary" means an entity in which the Company has a direct or indirect
ownership interest.
 
3. Administration of the Plan.  This Plan shall be administered by a Plan
Administrator appointed from time to time by the ESPP Committee.  The Plan
Administrator is vested with full authority to administer the Plan with respect
to Participants' Accounts.  In addition to other powers vested in the ESPP
Committee under the terms of the Plan, the ESPP Committee is vested with full
authority to administer payroll deductions under the Plan, to interpret the
Plan, to make, interpret, amend and rescind such equitable rules and regulations
regarding this Plan as it may deem advisable, and to make all other
deter­minations deemed necessary or advisable for the operation of this Plan.
 
To aid in fulfilling its responsibilities, the ESPP Committee may appoint one or
more Plan Supervisors and the ESPP Committee may allocate to each person so
appointed certain limited responsibilities to carry out the directives of the
ESPP Committee in all phases of the operation of the Plan.  Specifically, the
ESPP Committee may delegate to such agent or agents any of its responsibilities
under the Plan except its responsibilities to establish the maximum and minimum

 
 
 
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dollar amounts to be paid by any single Eligible Employee for the purchase of
Stock during any Purchase Period, allocations of available Stock, and its
authority to construe and interpret the provisions of the Plan.
 
All actions taken by the Plan Administrator, and all actions taken, and all
interpretations and determinations made by the ESPP Committee and the Plan
Supervisor (including determinations of fair market value) shall be final and
binding upon Eligible Employees, Participants, the Company and all other
interested persons.  Neither the Plan Administrator nor any member of the ESPP
Committee nor the Plan Supervisor shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan, and
all members of the ESPP Committee and the Plan Supervisor shall be fully
protected by the Company with respect to any such action, determination or
interpretation.
 
The ESPP Committee may act by a majority vote at a regular or special meeting of
the ESPP Committee or by decision reduced to writing and signed by a majority of
the ESPP Committee without holding a formal meeting.
 
Vacancies in the membership of the ESPP Committee arising from death,
resignation or other inability to serve shall be filled by appointment by the
Board.
 
The Company will pay all expenses incident to establishing and administering the
Plan and purchasing or issuing shares of Stock, provided that Participants will
pay all costs associated with the issuance of certificates for shares of Stock
and all costs incurred in selling, disposing of, or transferring shares of Stock
acquired under the Plan, including transfers to a brokerage account or a direct
registration system.
 
4. Designation of Sub-Plan.  For each Purchase Period, the Board shall designate
whether Stock may be purchased under the Direct Purchase Plan, the Market
Purchase Plan, or neither sub-plan.  Stock may not be purchased under both the
Direct Purchase Plan and the Market Purchase Plan for the same Purchase
Period.  The sub-plan designated by the Board for a Purchase Period (or the
determination that no Stock may be purchased under the Plan for a Purchase
Period) shall remain in effect for subsequent Purchase Periods until the Board
determines otherwise.  For the Initial Purchase Period, Stock may be purchased
under the Market Purchase Plan.
 
5. Purchase Periods.  Purchases of Stock under the Plan will be implemented by
Purchase Periods of calendar quarters.  Unless the Board by resolution
determines otherwise, each Purchase Period shall end on the last New York Stock
Exchange trading day of each calendar quarter, and the next Purchase Period
shall commence on the next calendar day.  The Initial Purchase Period shall
commence on the first day of the first calendar quarter following the
IPO.  Participation in any Purchase Period under the Plan shall neither limit
nor require participation in any other Purchase Period.  The Board may, at any
time and for any reason, (i) terminate a Purchase Period, in which case all
accumulated payroll deductions during such Purchase Period shall be refunded to
the Participants, or (ii) determine that purchases under the Plan will be
suspended for one or more calendar quarters.

 
 
 
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6. Number of Shares of Stock Which May be Purchased.  Each Eligible Employee
shall be allowed to purchase as many shares of Stock as the amount of his
accrued payroll deductions at the end of any Purchase Period can purchase, based
on the price at which shares of Stock are purchased for such Purchase Period
under Section 8.3 or Section 9, as applicable.  The ESPP Committee may determine
that no Employee shall be allowed to purchase a number of shares of Stock which
permits his rights to purchase equity under all similar plans of the Company and
its Subsidiaries to accrue at a rate which exceeds in any one calendar year a
fixed dollar amount (which limit, if imposed, shall not exceed $50,000) of the
fair market value of the Stock determined as of the date the right to purchase
is granted.  Subject to the limits set forth in this paragraph, the Board may
establish for any Purchase Period a maximum number of shares of Stock that a
Participant may purchase.
 
7. Participation in the Plan; Payroll Deductions.
 
7.1 An Eligible Employee may become a Participant by completing an Enrollment
Form and filing it with the Plan Administrator.  The Eligible Employee will
become an Active Participant and payroll deductions shall commence as soon as
administratively practicable following the Eligible Employee's completion and
filing of the Enrollment Form. Once an Eligible Employee has enrolled in the
Plan, he will remain an Active Participant and will participate in subsequent
Purchase Periods until (i) he discontinues his payroll deductions as provided
below, or (ii) he ceases to be an Eligible Employee.  A Participant who has
discontinued his payroll deductions will be an Inactive Participant and will not
participate in subsequent Purchase Periods until he re-enrolls in the Plan in
accordance with this Section.
 
7.2 Payroll deductions for an Active Participant shall be made through the end
of a Purchase Period unless sooner discontinued or terminated as provided in
Sections 5, 7.5, 10, or 25 herein.  Payroll deductions shall be specified in
whole dollar, after-tax amounts up to a maximum per pay period as may be
established by the ESPP Committee.  Such deductions shall be in uniform amounts
in conformity with the Employer's payroll deduction schedule.  Except as
provided in Section 10, there shall be no rights of prepayment or payment of
funds to be used for the purchase of Stock pursuant to the Plan through means
other than payroll deductions.
 
7.3 Payroll deductions for each Active Participant shall be made by the Employer
and provided to the Plan Administrator as provided herein.
 
7.4 An Active Participant may, at any time during a Purchase Period, increase or
decrease the amount of his payroll deductions under his Enrollment Form, but not
to an amount greater than any maximum dollar amount determined under Section 7.2
above, by completing and filing a new Enrollment Form with the Plan
Administrator.  Such change shall be prospective only and effective as soon as
practicable.
 
7.5 An Active Participant may discontinue his payroll deduction at any time
during a Purchase Period by filing the prescribed form with the Plan
Administrator.  Such change shall be prospective only and effective as soon as
practicable.  Once discontinued,

 
 
 
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payroll deductions may not be resumed during the remainder of the Purchase
Period.  All amounts deducted to the date of discontinuance will be applied to
the purchase of Stock at the end of the Purchase Period.  An Active Participant
who has discontinued his payroll deductions (other than a Participant on a
long-term leave of absence who has made arrangements to continue payment of
contributions as described in Section 10) will be an Inactive Participant and
will not participate in subsequent Purchase Periods until he re-enrolls in the
Plan in accordance with this Section.
 
7.6 If an Eligible Employee makes a hardship withdrawal from any plan with a
cash or deferred arrangement qualified under Section 401(k) of the Code
(including, but not limited to, the Kinder Morgan, Inc. Savings Plan) which is
sponsored, or participated in, by the Company or a Subsidiary, such Eligible
Employee shall be automatically prohibited from making or electing to make
payroll deductions under the Plan for a six (6) month period.  All amounts
deducted prior to such date will be applied to the purchase of Stock at the end
of the Purchase Period in which the hardship withdrawal occurs.  After the
expiration of such six (6) month period, the Eligible Employee may re-enroll in
the Plan by filing a new Enrollment Form.
 
8. Direct Purchase Plan.
 
8.1 Number of Shares of Stock Under the Direct Purchase Plan.  Subject to
adjustment in accordance with Section 16, a total of 2,500,000 shares of Stock
may be sold by the Company to Eligible Employees under the Direct Purchase
Plan.  The Stock that may be sold under the Direct Purchase Plan shall consist
of authorized but unissued shares of Stock or previously issued shares of Stock
reacquired and held by the Company, and such number of shares of Stock shall be
and is hereby reserved for sale for such purpose.
 
8.2 Purchase of Stock.  For any Purchase Period under which Stock may be
purchased under the Direct Purchase Plan, at the end of such Purchase Period,
accrued payroll deductions made for each Participant during such Purchase Period
will be applied to the purchase of Stock, including fractional shares of Stock,
at the Purchase Price determined under Section 8.3.  In no event shall any right
to purchase Stock under the Plan be exercised for more than the available number
of shares of Stock, and, after the available shares of Stock have been
purchased, any remaining balance of any amount previously collected from the
Participant shall be refunded. The shares of Stock purchased by a Participant
shall be allocated to the Participant's Account.  In the event the total number
of shares of Stock to be purchased pursuant to all Enrollment Forms with respect
to any Purchase Period exceeds the available shares of Stock pursuant to Section
8.1, the ESPP Committee reserves the right to allocate the number of shares of
Stock which Participants may purchase in such manner as it deems fair and
equitable, and notify each Participant of such allocation.
 
8.3 Purchase Price.  The Purchase Price per share of Stock shall be a percentage
of the Closing Price on the Date of Purchase, which percentage shall be
established by the Board in its discretion prior to the beginning of the
Purchase Period; provided, however, that such percentage may not be less than
85% of the Closing Price on the Date of Purchase.  The

 
 
 
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percentage established by the Board for a Purchase Period shall remain in effect
for subsequent Purchase Periods under the Direct Purchase Plan until the Board
establishes a different percentage in accordance with the preceding
sentence.  The Purchase Price per share of Stock for the first Purchase Period
under which Stock may be sold under the Direct Purchase Plan shall be 100% of
the Closing Price on the Date of Purchase.
 
9. Market Purchase Plan.  For any Purchase Period under which Stock may be
purchased under the Market Purchase Plan, as soon as administratively
practicable on or after the last day of such Purchase Period, the Company shall
remit to the Plan Administrator the aggregate payroll deductions of Active
Participants for such Purchase Period.  The Plan Administrator shall purchase
Stock on behalf of Active Participants in the open market at the market price at
the time of purchase.  The Plan Administrator shall purchase the maximum number
of Stock purchasable with the funds remitted by the Company.  Purchases may be
made over a number of days to satisfy the requirements of the Market Purchase
Plan.  The Stock shall be purchased on an aggregate basis rather than on a
per-Participant basis.  The Stock purchased by the Plan Administrator shall be
allocated to the Participants' Accounts as soon as administratively practicable
after all Stock for a Purchase Period is purchased.  For purposes of allocations
to Participants' Accounts, the price of shares of Stock purchased will be the
weighted average price of all shares of Stock purchased by the Plan
Administrator with respect to a Purchase Period.  Fractional shares may be
allocated to a Participant's Account.  The Stock that the Plan Administrator may
purchase for Participants under the Market Purchase Plan shall consist entirely
of Stock purchased by the Plan Administrator on the open market.
 
10. Termination of Employment; Leave of Absence.  If, prior to the last day of a
Purchase Period, a Participant ceases to be an Eligible Employee or ceases to be
employed by the Employer for any reason (including death, voluntary resignation,
retirement or involuntary termination, with or without cause), his Enrollment
Form shall be deemed to have been canceled, effective immediately.  The
Participant's only right with respect to payroll deductions made but not yet
used for purchases will be to receive in cash the total amount of such payroll
deductions under the Plan during such Purchase Period as soon as practicable
after his termination of employment or of his status as an Eligible
Employee.  Within sixty (60) days after the date of termination of a
Participant's employment or of his status as an Eligible Employee, the
Participant may instruct the Plan Administrator to (i) transfer the shares of
Stock in his or her Account to a brokerage account specified by the Participant,
(ii) issue a certificate or certificates for such shares of Stock to the
Participant, (iii) transfer such shares of Stock to a direct registration system
through the Plan Administrator, (iv) sell such shares of Stock for the
Participant, or (v) any combination of the foregoing.  If the Participant fails
to instruct the Plan Administrator within such sixty (60) day period, the shares
of Stock in the Participant's Account shall be transferred to a direct
registration system through the Plan Administrator.  For any of such actions,
the Participant will pay the Plan Administrator's fees established under the
Plan.
 
If, prior to the last day of a Purchase Period, a Participant ceases to be
actively employed because he commences a long-term leave of absence permitted by
law or as may be approved by the Employer, then the Participant will have the
right to elect either to receive in cash any accrued payroll deductions under
the Plan during the Purchase Period to the date the Participant ceases to be
actively employed, if administratively practicable, or to have such amount
applied to the purchase of

 
 
 
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Stock for such Purchase Period.  In the absence of an election, or if it is not
administratively practicable to honor a Participant's election to receive the
accrued payroll deduction in cash, accrued payroll deductions will be applied to
the purchase of Stock.  Subject to any applicable rules or regulations
established by the Plan Administrator, the Participant shall be entitled to
elect to continue to participate in the Plan until his employment terminates,
provided the Participant makes the necessary arrangements with the Employer
and/or the Plan Administrator to pay the requisite amounts that would, but for
the leave of absence, be paid under the Plan through the Participant's payroll
deductions.
 
11. Interest.  No interest shall accrue or be paid on sums withheld from a
Participant's pay for the purchase of Stock or with respect to any amount
credited to a Participant's Account.
 
12. Dividend Reinvestment.  On each date that a dividend is made on shares of
Stock, the Company will pay to the Plan Administrator the total amount of
dividends payable on each Participant's shares of Stock in his Account, and the
Plan Administrator shall use that amount for the purchase of shares of Stock in
the open market.  The price per share of Stock purchased will be the weighted
average price of all shares of Stock purchased by the Plan Administrator for
each aggregate order placed by the Plan Administrator.  Purchases will be made
as soon as possible after the applicable distribution date, but no more than
five (5) days after such date.  The shares of Stock (and fractional shares of
Stock) purchased on behalf of each Participant shall be allocated to his Account
as soon as administratively practicable after the date on which the Plan
Administrator has purchased sufficient shares of Stock to cover purchases for
all Participants and former Participants.  If purchases occur at different
prices, the purchase price per share of Stock to all Participants will be based
upon the average of the prices of all shares of Stock purchased.
 
A Participant may request, by notice delivered to the Plan Administrator in the
method prescribed by the Plan Administrator, that dividends payable on shares of
Stock in his Account be paid in cash rather than reinvested in accordance with
this Section 12.  If a Participant makes such a request, dividends on shares of
Stock in his Account will continue to be paid in cash until the Participant
requests, by notice delivered to the Plan Administrator in the method prescribed
by the Plan Administrator, that distributions payable on shares of Stock in his
Account be reinvested in shares of Stock.
 
13. Rights as Shareholder.  No Participant shall have any rights of a
shareholder with respect to any shares of Stock until the shares have been
purchased in accordance with Section 8 or 9 and issued by the Company, at which
time the Participant will be treated as the owner of such shares.  With respect
to any shares of Stock in a Participant's Account, the Plan Administrator will
(i) with respect to any matter on which record holders of Stock may vote, vote
such shares of Stock as directed by the Participant, and (ii) with respect to
dividends on such shares of Stock, deal with such dividends as provided in
Section 12.  At any time after the expiration of 180 days (or such other period
as may be determined by the ESPP Committee and the Plan Administrator) after a
Date of Purchase, a Participant may, subject to payment by the Participant of
the Plan Administrator's fees therefor, instruct the Plan Administrator, in
accordance with its policies, to (i) transfer the shares of Stock in his or her
Account that were purchased on behalf of the Participant on the Date of Purchase
to a brokerage account specified by the Participant, (ii) issue a certificate or
certificates for such

 
 
 
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shares of Stock to the Participant, (iii) transfer such shares of Stock to the
Participant's account in a direct registration system through the Plan
Administrator, (iv) sell such shares of Stock for the Participant or (v) any
combination of the foregoing.  When the Plan Administrator takes any of the
actions in clauses (i) through (v) in accordance with this paragraph, the shares
of Stock involved shall be removed from the Participant's Account.
 
14. Rights Not Transferable.  A Participant's rights to purchase Stock pursuant
to this Plan may not be sold, pledged, assigned or transferred in any
manner.  If this provision is violated, the right of the Participant to purchase
Stock shall terminate and the only right remaining to such Participant under the
Plan will be to have paid over to the person entitled thereto the amount of
accrued payroll deductions then credited to such Participant and to give
instructions to the Plan Administrator with respect to shares of Stock in such
Participant's Account in the same manner as provided in Section 13.
 
15. Purchase Period Limitation.  In no event shall a Participant be permitted to
complete payment for shares of Stock after the expiration of the Purchase Period
with respect to which such shares of Stock are purchased.
 
16. Changes in Capitalization.
 
16.1 The existence of the Plan and the rights to purchase Stock hereunder shall
not affect in any way the right or power of the Board or the Company's
shareholders to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of debt or
equity securities ahead of or affecting Stock or the rights thereof, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
 
16.2 The shares of Stock subject to this Plan are shares of Stock as presently
constituted, but if, and whenever, prior to the expiration of a Purchase Period,
the Company shall effect a Stock dividend, Stock split, combination of Stock,
recapitalization or reorganization, the number and kind of shares of Stock or
other securities which are subject to this Plan, and the number of shares of
Stock to be purchased, shall be appropriately and equitably adjusted so as to
maintain the proportionate number of shares of Stock or other securities without
changing the aggre­gate Purchase Price.
 
16.3 Except as hereinbefore expressly provided, the issuance by the Company of
shares of Stock of any class or securities convertible into Stock of any class,
for cash, property, labor or services, upon direct sale, upon the exercise of
rights or warrants to subscribe therefor, or upon conversion of shares of Stock
or obligations of the Company convertible into Stock or other securities, and in
any case whether or not for fair value, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of shares of Stock to
be purchased for a Purchase Period or the Purchase Price per share of Stock.

 
 
 
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17. Application of Funds.
 
17.1 The Company will maintain payroll deduction records for each Eligible
Employee who elects pursuant to the provisions of Section 7 herein to
participate in a Purchase Period under the Plan on which all payroll deductions
attributable to that Participant with respect to a Purchase Period will be
accounted for.
 
17.2 Amounts thus accounted for will be under the control of the Company, need
not be set apart from other funds of the Company, and, so long as funds in the
applicable amount are provided to the Plan Administrator for each Purchase
Period, may be used for any corporate purpose.  Amounts credited for employees
of Subsidiaries will be remitted to the Company from time to time by such
Subsidiaries.
 
17.3 In the event that any law or regulation, in the opinion of counsel for the
Company, may prohibit the handling or use of all or any part of the funds in the
manner contemplated by the Plan, the Company may deal with such funds in any
lawful manner it may deem advisable, including the deposit of any such funds in
a bank account(s) opened for Participants.
 
18. Governmental Approvals or Consents; Amendments or Termination.  This Plan
and any purchases by Participants under it are subject to any governmental
approvals or consents that may be or become applicable in connection
therewith.  The Board may make such changes in the Plan and its administration
as may be necessary to desirable, in the opinion of the Company's counsel, to
comply with the rules or regulations of any governmental authority or any
national securities exchange.
 
19. Notices.  All notices or other communications by an Employee or Participant
to the Company or the Plan Administrator under or in connection with the Plan
shall be deemed to have been duly given when received by the Company or the Plan
Administrator in the form specified by the Company or the Plan
Administrator.  Any notice given by the Company or the Plan Administrator to an
Employee or Participant directed to such individual at the address on file with
the Company or the Plan Administrator shall be effective to bind the Employee or
Participant and any other person who shall acquire rights hereunder.
 
20. Effective Date.  The Plan shall be effective on the first day following the
IPO.
 
21. Word Usage.  Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of the Plan dictates, the plural shall be
read as the singular and the singular as the plural.  Unless the context
otherwise requires, the words "include," "includes" and "including" when used in
this Plan shall be deemed to be followed by the phrase "without limitation."
 
22. Headings.  Headings at the beginning of paragraphs are for the convenience
of reference, shall not be construed as a part of the Plan, and shall not
influence its construction.
 
23. Employment Not Guaranteed; No Other Rights.  Nothing contained in this Plan,
or the granting or exercise of any right to purchase Stock, or the payment of
any other benefit hereunder,

 
 
 
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shall give any Employee, Participant or any beneficiary of an Employee or
Participant any right to continue employment with the Employer, or any legal or
equitable right against the Employer, its directors, officers, employees or
agents, the Plan Administrator, or any other persons, except as expressly
provided by the Plan.
 
24. Tax Withholding.  The Employer shall have the right to require payment by a
Participant of any federal, state, provincial or local taxes which may be
required to be withheld or paid in connection with a purchase hereunder.  The
Employer shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant.  The
Plan Administrator shall have the right to require payment by the Participant of
any federal, state, provincial or local taxes which may be required to be
withheld or paid in connection with any of the actions described in clauses
(i)-(v) of Sections 10 or 13.
 
25. Amendment and Termination.  The Board may at any time and for any reason
terminate, withdraw, suspend, modify, or amend the Plan; provided that the Board
may not make any amendment which would require the approval of the Company's
shareholders to comply with any rule promulgated by the New York Stock Exchange,
or any applicable laws, without approval of the shareholders of the Company. The
Company shall not be obligated to any Employee, Participant or other person
whatsoever to continue the Plan or the ability to purchase Stock
hereunder.  Upon termination of the Plan, (i) certificates representing the
number of full shares of Stock held for each Participant's benefit shall be
delivered as soon as practicable to such Participant, and (ii) the cash, if any,
(A) deducted from a Participant's pay but not yet expended on purchases of Stock
under the Plan, or (B) relating to fractional shares of Stock, shall be paid to
such Participant as soon as practicable.
 
26. Governing Law.  The Plan and all determinations made hereunder and actions
taken pursuant hereto, to the extent not otherwise governed by the laws of the
United States, shall be governed by the laws of the State of Texas and construed
in accordance therewith without giving effect to principles of conflicts of law.
 
27. Severability.  The provisions of this Plan shall be severable.  If any
provision is found to be unenforceable, the balance of the Plan shall remain in
full force and effect.
 
28. Foreign Employees.  Without the amendment of this Plan, the Board may
provide for the participation in the Plan by employees who are subject to the
laws of foreign countries or jurisdictions, and such participation may be on
such terms and conditions different from those specified in this Plan as may be
administratively necessary or necessary or desirable to foster and promote
achievement of the purposes of this Plan and, in furtherance of such purposes
the Board or its designee may make such modifications, amendments, procedures,
sub-plans and the like as may be necessary or advisable to comply with the
provisions of laws of other countries or jurisdictions in which participating
Employers operate or have employees.
 

 
 
 
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