Exhibit 10.9

Landry’s Restaurants, Inc. 2003 Equity Incentive Plan

 

The Landry’s Restaurants, Inc. 2003 Equity Incentive Plan (the “Plan”) was
adopted by the Board of Directors of Landry’s Restaurants, Inc., a Delaware
corporation (the “Company”), on June 23, 2003.

 

ARTICLE 1

PURPOSE

 

The purposes of the Plan are to foster and promote the long-term financial
success of the Company and its Subsidiaries and materially increase the value of
the Company and its Subsidiaries by (a) encouraging the long-term commitment of
the Employees of the Company and its Subsidiaries, (b) motivating performance of
the Employees of the Company and its Subsidiaries by means of long-term
performance related incentives, (c) encouraging and providing Employees of the
Company and its Subsidiaries with an opportunity to obtain an ownership interest
in the Company, (d) attracting and retaining outstanding Employees by providing
incentive compensation opportunities, and (e) enabling participation by
Employees in the long-term growth and financial success of the Company and its
Subsidiaries.

 

With respect to Reporting Participants, the Plan and all transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Securities Exchange Act of 1934 (the “1934 Act”). To the
extent any provision of the Plan or action by the Committee fails to so comply,
it shall be deemed null and void ab initio, to the extent permitted by law and
deemed advisable by the Committee.

 

ARTICLE 2

DEFINITIONS

 

For the purpose of the Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated:

 

2.1    “Award” means the grant of any Restricted Stock, Incentive Stock Option,
or Nonqualified Stock Option, with or without a CEV feature (referred to herein
sometimes as an “Incentive”).

 

2.2    “Award Agreement” means a written agreement between a Participant and the
Company which sets out the terms of the grant of an Award.

 

2.3    “Award Period” means the period set forth in the Award Agreement with
respect to a Stock Option during which the Stock Option may be exercised, which
shall commence on the Date of Grant and expire at the time set forth in the
Award Agreement.

 

2.4    “Board” means the board of directors of the Company.

 

2.5    “CEV” or “Cash Equivalent Value” means the feature consisting of a
payment in cash equal to the excess of the Fair Market Value of a specified
number of shares of Common Stock on the date the Stock Option is exercised over
the CEV Price for such shares.

 

2.6    “CEV Price” means the exercise price of each share of Common Stock
covered by a CEV feature, determined on the Date of Grant of the Stock Option
containing the CEV.

 

2.7    “Code” means the Internal Revenue Code of 1986, as amended.

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2.8      “Committee” means the committee appointed or designated by the Board to
administer the Plan in accordance with Article 3 of this Plan.

 

2.9      “Common Stock” means the common stock, par value $0.01 per share, which
the Company is currently authorized to issue or may in the future be authorized
to issue, or any securities into which or for which the common stock of the
Company may be converted or exchanged, as the case may be, pursuant to the terms
of this Plan.

 

2.10    “Company” means Landry’s Restaurants, Inc., a Delaware corporation, and
any successor entity.

 

2.11    “Corporation” means any entity that (i) is defined as a corporation
under Code Section 7701 and (ii) is the Company or is in an unbroken chain of
corporations (other than the Company) beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing a majority of the total combined voting power of all classes of stock
in one of the other corporations in the chain. For purposes of clause (ii)
hereof, an entity shall be treated as a “corporation” if it satisfies the
definition of a corporation under Section 7701 of the Code.

 

2.12    “Date of Grant” means the effective date on which an Award is made to a
Participant as set forth in the applicable Award Agreement.

 

2.13    “Employee” means common law employee (as defined in accordance with the
Regulations and Revenue Rulings then applicable under Section 3401(c) of the
Code) of the Company or any Subsidiary of the Company.

 

2.14    “Fair Market Value” means, as of a particular date, (i) if the shares of
Common Stock are listed on a national securities exchange, the closing sales
price per share of Common Stock on the consolidated transaction reporting system
for the principal securities exchange for the Common Stock on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (ii) if the shares of
Common Stock are not so listed but are quoted on the Nasdaq National Market
System, the closing sales price per share of Common Stock on the Nasdaq National
Market System on that date, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale was so
reported, (iii) if the Common Stock is not so listed or quoted, the mean between
the closing bid and asked price on that date, or, if there are no quotations
available for such date, on the last preceding date on which such quotations
shall be available, as reported by Nasdaq, or, if not reported by Nasdaq, by the
National Quotation Bureau, Inc., or (iv) if none of the above is applicable,
such amount as may be determined by the Board (acting on the advice of an
Independent Third Party, should the Board elect in its sole discretion to
utilize an Independent Third Party for this purpose), in good faith, to be the
fair market value per share of Common Stock.

 

2.15    “Independent Third Party” means an individual or entity independent of
the Company having experience in providing investment banking or similar
appraisal or valuation services and with expertise generally in the valuation of
securities or other property for purposes of this Plan. The Board may utilize
one or more Independent Third Parties.

 

2.16    “Incentive Stock Option” means an incentive stock option within the
meaning of Section 422 of the Code, granted pursuant to this Plan.

 

2.17    “Nonqualified Stock Option” means a nonqualified stock option, granted
pursuant to this Plan, to which Section 421 of the Code does not apply.

 

2.18    “Option Price” means the price which must be paid by a Participant upon
exercise of a Stock Option to purchase a share of Common Stock.

 

2.19    “Participant” means an Employee of the Company or a Subsidiary to whom
an Award is granted under this Plan.

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2.20    “Plan” means this Landry’s Restaurants, Inc. 2003 Equity Incentive Plan,
as amended from time to time.

 

2.21    “Reporting Participant” means a Participant who is subject to the
reporting requirements of Section 16 of the 1934 Act.

 

2.22    “Restricted Stock” means shares of Common Stock issued or transferred to
a Participant pursuant to Section 6.5 of this Plan which are subject to
restrictions or limitations set forth in this Plan and in the related Award
Agreement.

 

2.23    “Stock Option” means a Nonqualified Stock Option or an Incentive Stock
Option.

 

2.24    “Subsidiary” means (i) any corporation in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing a majority of
the total combined voting power of all classes of stock in one of the other
corporations in the chain, (ii) any limited partnership, if the Company or any
corporation described in item (i) above owns a majority of the general
partnership interest and a majority of the limited partnership interests
entitled to vote on the removal and replacement of the general partner, and
(iii) any partnership or limited liability company, if the partners or members
thereof are composed only of the Company, any corporation listed in item (i)
above or any limited partnership listed in item (ii) above. “Subsidiaries” means
more than one of any such corporations, limited partnerships, partnerships or
limited liability companies.

 

2.25    “Termination of Service” occurs when a Participant who is an Employee of
the Company or any Subsidiary shall cease to serve as an Employee of the Company
and its Subsidiaries, for any reason; provided, however, if any Termination of
Service provided for herein shall fall on a Saturday, Sunday or legal holiday,
then such date of Termination of Service shall be deemed to be the first normal
business day of the Company, at its office in Houston, Texas, before such
Saturday, Sunday or legal holiday. If, however, a Participant who is an Employee
and who has an Incentive Stock Option ceases to be an Employee but does not
suffer a Termination of Service, and if that Participant does not exercise the
Incentive Stock Option within the time required under Code section 422 upon
ceasing to be an Employee, the Incentive Stock Option shall thereafter become a
Nonqualified Stock Option.

 

2.26    “Total and Permanent Disability” means a Participant is qualified for
long-term disability benefits under the Company’s or Subsidiary’s disability
plan or insurance policy; or, if no such plan or policy is then in existence or
if the Participant is not eligible to participate in such plan or policy, that
the Participant, because of a physical or mental condition resulting from bodily
injury, disease, or mental disorder which prevents the Participant from
performing his or her duties of employment for a period of six (6) continuous
months, as determined in good faith by the Committee, based upon medical reports
or other evidence satisfactory to the Committee; provided that, with respect to
any Incentive Stock Option, Total and Permanent Disability shall have the
meaning given it under the rules governing Incentive Stock Options under the
Code.

 

ARTICLE 3

ADMINISTRATION

 

Subject to the terms of this Article 3, the Plan shall be administered by the
Board or such committee of the Board as is designated by the Board to administer
the Plan (the “Committee”). The Committee shall consist of not fewer than two
persons. Any member of the Committee may be removed at any time, with or without
cause, by resolution of the Board. Any vacancy occurring in the membership of
the Committee may be filled by appointment by the Board. At any time there is no
Committee to administer the Plan, any references in this Plan to the Committee
shall be deemed to refer to the Board. If the Compensation Committee of the
Board is not responsible for administering the Plan, the Compensation

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Committee shall have the right to exercise any of its responsibilities with
respect to the Plan as set forth in its Charter.

 

If necessary to satisfy the requirements of Section 162(m) of the Code and/or
Rule 16b-3 promulgated under the 1934 Act, membership on the Committee shall be
limited to those members of the Board who are “outside directors” under Section
162(m) of the Code and/or “non-employee directors” as defined in Rule 16b-3
promulgated under the 1934 Act. The Committee shall select one of its members to
act as its Chairman. A majority of the Committee shall constitute a quorum, and
the act of a majority of the members of the Committee present at a meeting at
which a quorum is present shall be the act of the Committee.

 

The Committee shall determine and designate from time to time the eligible
persons to whom Awards will be granted and shall set forth in each related Award
Agreement, where applicable, the Award Period, the Date of Grant, and such other
terms, provisions, limitations, and performance requirements, as are approved by
the Committee, but not inconsistent with the Plan (subject to the Compensation
Committee of the Board’s responsibility to determine the Chief Executive
Officer’s compensation). The Committee shall determine whether an Award shall
include one type of Incentive or two or more Incentives granted in tandem (that
is, a joint grant where, under the terms of the Award Agreement, exercise of one
Incentive results in cancellation of all or a portion of the other Incentive).
Although the members of the Committee shall be eligible to receive Awards, no
member of the Committee shall participate in any decisions regarding any Award
granted hereunder to such member. All decisions with respect to any Award, and
the terms and conditions thereof, to be granted under the Plan to any member of
the Committee shall be made solely and exclusively by the other members of the
Committee, or if such member is the only member of the Committee, by the Board.

 

Notwithstanding the provisions of the preceding paragraph, the Board may, in its
discretion and by a resolution adopted by the Board, authorize one or more
officers of the Company (an “Authorized Officer”) to (i) designate one or more
Employees as eligible persons to whom Awards will be granted under the Plan and
(ii) determine the number of shares of Common Stock that will be subject to such
Awards; provided, however, that the resolution of the Board granting such
authority shall (x) specify the total number of shares of Common Stock that may
be made subject to the Awards, (y) set forth the price or prices (or a formula
by which such price or prices may be determined) to be paid for the purchase of
the Common Stock subject to such Awards, and (z) not authorize an officer to
designate himself as a recipient of any Award. The Authorized Officer shall
notify the Committee in writing of the persons designated to receive such
Awards, the type of Award or the type of Incentives subject to the Award, the
Date of Grant, the number of shares of Common Stock that will be subject to such
Awards, and the purchase price to be paid for such shares. If authorized to do
so in the Board’s written resolution, the Authorized Officer shall cause the
Company to execute an Award Agreement with the Participant, subject to the
Committee’s ratification of such terms of an Award as required by law.

 

Within an administratively reasonable time after receipt of the Authorized
Officer’s written notice of one or more Awards, the Committee shall authorize or
ratify the grant of such Awards and shall prescribe all other terms of such
Awards pursuant to its authority set forth in the preceding paragraphs of this
Article 3.

 

The Committee, in its discretion, shall (i) interpret the Plan, (ii) prescribe,
amend, and rescind any rules and regulations necessary or appropriate for the
administration of the Plan, (iii) establish performance goals for an Award and
certify the extent of their achievement, and (iv) make such other determinations
or certifications and take such other action as it deems necessary or advisable
in the administration of the Plan. Any interpretation, determination, or other
action made or taken by the Committee shall be final, binding, and conclusive on
all interested parties. The Committee’s discretion set forth herein shall not be
limited by any provision of the Plan, including any provision which by its terms
is applicable notwithstanding any other provision of the Plan to the contrary.

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The Committee may delegate to officers of the Company, pursuant to a written
delegation, the authority to perform specified functions under the Plan. Any
actions taken by any officers of the Company pursuant to such written delegation
of authority shall be deemed to have been taken by the Committee.

 

With respect to restrictions in the Plan that are based on the requirements of
Rule 16b-3 promulgated under the 1934 Act, the Sarbanes-Oxley Act of 2002,
Section 422 of the Code, Section 162(m) of the Code, the rules of any exchange
or inter-dealer quotation system upon which the Company’s securities are listed
or quoted, or any other applicable law, rule or restriction (collectively,
“applicable law”), to the extent that any such restrictions are no longer
required by applicable law, the Committee shall have the sole discretion and
authority to grant Awards that are not subject to such mandated restrictions
and/or to waive any such mandated restrictions with respect to outstanding
Awards. To the extent there are restrictions of applicable law that would affect
the actions of the Committee or the composition of the Committee as otherwise
provided for under the terms of the Plan, then notwithstanding the terms and
provisions of the Plan, those restrictions of applicable law shall apply under
the Plan as if those restrictions were fully set forth in the Plan.

 

ARTICLE 4

ELIGIBILITY

 

Any Employee (including an Employee who is also an officer) of the Company whose
judgment, initiative, and efforts contributed or may be expected to contribute
to the successful performance of the Company is eligible to participate in the
Plan. The Committee, upon its own action, may grant, but shall not be required
to grant, an Award to any Employee of the Company or any Subsidiary. Awards may
be granted by the Committee at any time and from time to time to new
Participants, or to then Participants, or to a greater or lesser number of
Participants, and may include or exclude previous Participants, as the Committee
shall determine. Except as required by this Plan, Awards granted at different
times need not contain similar provisions. The Committee’s determinations under
the Plan (including without limitation determinations of which Employees are to
receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the agreements evidencing same) need not be
uniform and may be made by the Committee selectively among Participants who
receive, or are eligible to receive, Awards under the Plan.

 

ARTICLE 5

SHARES SUBJECT TO PLAN

 

5.1    Number Available for Awards. Subject to adjustment as provided in
Articles 11 and 12, the maximum number of shares of Common Stock that may be
delivered pursuant to Awards granted under the Plan is seven hundred thousand
(700,000) shares. Shares to be issued shall be solely from Common Stock held by
the Company in its treasury. During the term of this Plan, the Company will at
all times reserve and keep available the number of shares of Common Stock that
shall be sufficient to satisfy the requirements of this Plan.

 

5.2    Reuse of Shares. Subject to Section 5.2(c), if, and to the extent:

 

(a)    A Stock Option shall expire or terminate for any reason without having
been exercised in full, or in the event that a Stock Option is exercised or
settled in a manner such that some or all of the shares of Common Stock relating
to the Stock Option are not issued to the Participant (or beneficiary)
(including as the result of the use of shares for withholding taxes), the shares
of Common Stock subject thereto which have not become outstanding shall (unless
the Plan shall have sooner terminated) become available for issuance under the
Plan; in addition, with respect to any share-for-share exercise or cashless
exercise pursuant to Section 8.3 or otherwise, only the “net” shares issued
shall be deemed to have become outstanding for purposes of the Plan as a result
thereof. Notwithstanding the foregoing provisions of this paragraph (a), shares
which

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were not issued because they were used for withholding taxes are not available
for issuance for purposes of granting Incentive Stock Options.

 

(b)    If shares of Restricted Stock under the Plan are forfeited for any
reason, such shares of Restricted Stock shall (unless the Plan shall have sooner
terminated) become available for issuance under the Plan; provided, however,
that if any dividends paid with respect to shares of Restricted Stock were paid
to the Participant prior to the forfeiture thereof, such shares shall not be
reused for grants or awards.

 

ARTICLE 6

GRANT OF AWARDS

 

6.1    In General. The Company shall execute an Award Agreement with a
Participant after the Committee approves the issuance of an Award. Any Award
granted pursuant to this Plan must be granted within ten (10) years after the
date of adoption of this Plan of, if later and so required, the date of
stockholder approval for the Plan. If required by rules or regulations of the
New York Stock Exchange or otherwise required by applicable law, or if desired
by the Board, the Plan shall be submitted to the Company’s stockholders for
approval; however, the Committee may grant Awards under the Plan prior to the
time of any required or desired stockholder approval. Any such Award granted
prior to such stockholder approval, if required or desired by the Board, shall
be made subject to such stockholder approval. The grant of an Award to a
Participant shall not be deemed either to entitle the Participant to, or to
disqualify the Participant from, receipt of any other Award under the Plan.

 

6.2    Stock Options. The grant of an Award of Stock Options shall be authorized
by the Committee and shall be evidenced by an Award Agreement setting forth: (i)
the Incentive being granted, (ii) the total number of shares of Common Stock
subject to the Incentive(s), (iii) the Option Price, (iv) the Award Period, (v)
the Date of Grant, and (vi) such other terms, provisions, limitations, and
performance objectives, as are approved by the Committee, but not inconsistent
with the Plan.

 

6.3    Option Price. The Option Price for any share of Common Stock which may be
purchased under a Nonqualified Stock Option for any share of Common Stock may be
equal to, less than, or greater than the Fair Market Value of the share on the
Date of Grant. The Option Price for any share of Common Stock which may be
purchased under an Incentive Stock Option must be at least equal to the Fair
Market Value of the share on the Date of Grant; if an Incentive Stock Option is
granted to an Employee who owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than ten percent (10%) of
the combined voting power of all classes of stock of the Company (or any parent
or Subsidiary), the Option Price shall be at least 110% of the Fair Market Value
of the Common Stock on the Date of Grant.

 

6.4    Maximum ISO Grants. The Committee may not grant Incentive Stock Options
under the Plan to any Employee which would permit the aggregate Fair Market
Value (determined on the Date of Grant) of the Common Stock with respect to
which Incentive Stock Options (under this and any other plan of the Company and
its Subsidiaries) are exercisable for the first time by such Employee during any
calendar year to exceed $100,000. To the extent any Stock Option granted under
this Plan which is designated as an Incentive Stock Option exceeds this limit or
otherwise fails to qualify as an Incentive Stock Option, such Stock Option (or
any such portion thereof) shall be a Nonqualified Stock Option. In such case,
the Committee shall designate which stock will be treated as Incentive Stock
Option stock by causing the issuance of a separate stock certificate and
identifying such stock as Incentive Stock Option stock on the Company’s stock
transfer records.

 

6.5    Restricted Stock. If Restricted Stock is granted to or received by a
Participant under an Award (including a Stock Option), the Committee shall set
forth in the related Award Agreement: (i) the number of shares of Common Stock
awarded, (ii) the price, if any, to be paid by the Participant for such
Restricted Stock and the method of payment of the price, (iii) the time or times
within which such Award may be subject to forfeiture, (iv) specified performance
goals of the Company, a Subsidiary, any division thereof or any group of
Employees of the Company, or other criteria, which the Committee determines

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must be met in order to remove any restrictions (including vesting) on such
Award, and (v) all other terms, limitations, restrictions, and conditions of the
Restricted Stock, which shall be consistent with this Plan. The provisions of
Restricted Stock need not be the same with respect to each Participant. If the
Committee establishes a purchase price for an Award of Restricted Stock, the
Participant must accept such Award within a period of thirty (30) days (or such
shorter period as the Committee may specify) after the Date of Grant by
executing the applicable Award Agreement and paying such purchase price.

 

(a)    Legend on Shares. Each Participant who is awarded or receives Restricted
Stock shall be issued a stock certificate or certificates in respect of such
shares of Common Stock. Such certificate(s) shall be registered in the name of
the Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock, substantially
as provided in Section 15.9 of the Plan.

 

(b)    Restrictions and Conditions. Shares of Restricted Stock shall be subject
to the following restrictions and conditions:

 

(i)    Subject to the other provisions of this Plan and the terms of the
particular Award Agreements, during such period as may be determined by the
Committee commencing on the Date of Grant or the date of exercise of an Award
(the “Restriction Period”), the Participant shall not be permitted to sell,
transfer, pledge or assign shares of Restricted Stock. Except for these
limitations, the Committee may in its sole discretion, remove any or all of the
restrictions on such Restricted Stock whenever it may determine that, by reason
of changes in applicable laws or other changes in circumstances arising after
the date of the Award, such action is appropriate.

 

(ii)    Except as provided in sub-paragraph (i) above or in the applicable Award
Agreement, the Participant shall have, with respect to his or her Restricted
Stock, all of the rights of a stockholder of the Company, including the right to
vote the shares, and the right to receive any dividends thereon. Certificates
for shares of Common Stock free of restriction under this Plan shall be
delivered to the Participant promptly after, and only after, the Restriction
Period shall expire without forfeiture in respect of such shares of Common Stock
or after any other restrictions imposed in such shares of Common Stock by the
applicable Award Agreement or other agreement have expired. Certificates for the
shares of Common Stock forfeited under the provisions of the Plan and the
applicable Award Agreement shall be promptly returned to the Company by the
forfeiting Participant. Each Award Agreement shall require that each
Participant, in connection with the issuance of a certificate for Restricted
Stock, shall endorse such certificate in blank or execute a stock power in form
satisfactory to the Company in blank and deliver such certificate and executed
stock power to the Company.

 

(iii)    The Restriction Period of Restricted Stock shall commence on the Date
of Grant or the date of exercise of an Award, as specified in the Award
Agreement, and, subject to Article 12 of the Plan, unless otherwise established
by the Committee in the Award Agreement setting forth the terms of the
Restricted Stock, shall expire upon satisfaction of the conditions set forth in
the Award Agreement; such conditions may provide for vesting based on (i) length
of continuous service, (ii) achievement of specific business objectives, (iii)
increases in specified indices, (iv) attainment of specified growth rates, or
(v) other comparable measurements of Company performance, as may be determined
by the Committee in its sole discretion.

 

(iv)    Except as otherwise provided in the particular Award Agreement, upon
Termination of Service for any reason during the Restriction Period, the
nonvested shares of Restricted Stock shall be forfeited by the Participant. In
the event a Participant has paid any consideration to the Company for such
forfeited Restricted Stock, the Committee shall specify in the Award Agreement
that either (i) the Company shall be obligated to, or (ii) the Company may, in
its sole discretion, elect to, pay to the

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Participant, as soon as practicable after the event causing forfeiture, in cash,
an amount equal to the lesser of the total consideration paid by the Participant
for such forfeited shares or the Fair Market Value of such forfeited shares as
of the date of Termination of Service, as the Committee, in its sole discretion
shall select. Upon any forfeiture, all rights of a Participant with respect to
the forfeited shares of the Restricted Stock shall cease and terminate, without
any further obligation on the part of the Company.

 

6.6    Maximum Individual Grants. No Participant may receive during any fiscal
year of the Company Awards covering an aggregate of more than seven hundred
thousand (700,000) shares of Common Stock.

 

6.7    CEV. A CEV feature of an Award shall entitle the Participant, at the
discretion of the Committee, to receive from the Company cash in an amount equal
to the excess (if any) of the Fair Market Value (as of the date of exercise by
the Committee of the CEV feature) per share over the CEV Price per share
specified for such CEV, multiplied by the total number of shares of the CEV
being granted by the Committee.

 

6.8    Tandem Awards. The Committee may grant two or more Incentives in one
Award in the form of a “tandem Award,” so that the right of the Participant to
exercise one Incentive shall be canceled if, and to the extent, the other
Incentive is exercised. For example, if a Stock Option and a CEV are issued in a
tandem Award, and the Committee determines to exercise the CEV with respect to
100 shares of Common Stock, the right of the Participant to exercise the related
Stock Option shall be canceled to the extent of 100 shares of Common Stock.

 

6.9    CEV Price. The CEV Price for any share of Common Stock subject to a CEV
shall be equal to the Fair Market Value of the share on the Date of Grant of the
grant which contains the CEV.

 

ARTICLE 7

AWARD PERIOD; VESTING

 

7.1    Award Period.

 

(a)    Subject to the other provisions of this Plan, the Committee shall specify
in the Award Agreement the Award Period. No Stock Option granted under the Plan
may be exercised at any time after the end of its Award Period. The Award Period
for any Stock Option shall be no more than ten (10) years from the Date of Grant
of the Stock Option. However, if an Employee owns or is deemed to own (by reason
of the attribution rules of Section 424(d) of the Code) more than ten percent
(10%) of the combined voting power of all classes of stock of the Company (or
any parent or Subsidiary) and an Incentive Stock Option is granted to such
Employee, the Award Period of such Incentive Stock Option (to the extent
required by the Code at the time of grant) shall be no more than five (5) years
from the Date of Grant.

 

(b)    In the event of a Termination of Service of a Participant, the Award
Period for a Stock Option shall be reduced or terminated in accordance with the
Award Agreement.

 

7.2    Vesting. The Committee, in its sole discretion, may determine that an
Incentive will be immediately vested in whole or in part, or that all or any
portion may not be vested until a date, or dates, subsequent to its Date of
Grant, or until the occurrence of one or more specified events, subject in any
case to the terms of the Plan. If the Committee imposes conditions upon vesting,
then, subsequent to the Date of Grant, the Committee may, in its sole
discretion, accelerate the date on which all or any portion of the Incentive may
be vested.

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ARTICLE 8

EXERCISE OF INCENTIVE

 

8.1    In General. The Committee, in its sole discretion, may determine that a
Stock Option will be immediately exercisable, in whole or in part, or that all
or any portion may not be exercised until a date, or dates, subsequent to its
Date of Grant, or until the occurrence of one or more specified events, subject
in any case to the terms of the Plan. If a Stock Option is exercisable prior to
the time it is vested, the Common Stock obtained on the exercise of the Stock
Option shall be Restricted Stock which is subject to the applicable provisions
of the Plan and the Award Agreement. If the Committee imposes conditions upon
exercise, then subsequent to the Date of Grant, the Committee may, in its sole
discretion, accelerate the date on which all or any portion of the Stock Option
may be exercised. No Stock Option may be exercised for a fractional share of
Common Stock. The granting of a Stock Option shall impose no obligation upon the
Participant to exercise that Stock Option.

 

8.2    Securities Law and Exchange Restrictions. In no event may an Incentive be
exercised or shares of Common Stock be issued pursuant to an Award if a
necessary listing or quotation of the shares of Common Stock on a stock exchange
or inter-dealer quotation system or any registration under state or federal
securities laws required under the circumstances has not been accomplished.

 

8.3    Exercise of Stock Option.

 

(a)    Notice and Payment. Subject to such administrative regulations as the
Committee may from time to time adopt, a Stock Option may be exercised by the
delivery of written notice to the Committee or other designated person setting
forth the number of shares of Common Stock with respect to which the Stock
Option is to be exercised and the date of exercise thereof (the “Exercise
Date”). Unless otherwise provided in the Award Agreement, on the Exercise Date,
the Participant shall deliver to the Company consideration with a value equal to
the total Option Price of the shares to be purchased, payable as provided in the
Award Agreement, which may provide for payment in any one or more of the
following ways: (a) cash or check, bank draft, or money order payable to the
order of the Company, (b) Common Stock (including Restricted Stock) owned by the
Participant on the Exercise Date, valued at its Fair Market Value on the
Exercise Date, and which the Participant has not acquired from the Company
within six (6) months prior to the Exercise Date, (c) to the extent otherwise
permitted by applicable law, by delivery (including by FAX) to the Company or
its designated agent of an executed irrevocable option exercise form together
with irrevocable instructions from the Participant to a broker or dealer,
reasonably acceptable to the Company, to sell certain of the shares of Common
Stock purchased upon exercise of the Stock Option or to pledge such shares as
collateral for a loan and promptly deliver to the Company the amount of sale or
loan proceeds necessary to pay such purchase price, and/or (d) in any other form
of valid consideration that is permitted by applicable law and acceptable to the
Committee in its sole discretion. In the event that shares of Restricted Stock
are tendered as consideration for the exercise of a Stock Option, a number of
shares of Common Stock issued upon the exercise of the Stock Option with an
Option Price equal to the value of Restricted Stock used as consideration
therefor shall be subject to the same restrictions and provisions as the
Restricted Stock so tendered.

 

(b)    Issuance of Certificate. Except as otherwise provided in Section 6.5
hereof (with respect to shares of Restricted Stock) or in the applicable Award
Agreement, upon payment of all amounts due from the Participant, the Company
shall cause certificates for the Common Stock then being purchased to be
delivered as directed by the Participant (or the person exercising the
Participant’s Stock Option in the event of his death) at its principal business
office promptly after the Exercise Date; provided that if the Participant has
exercised an Incentive Stock Option, the Company may at its option retain
physical possession of the certificate evidencing the shares acquired upon
exercise until the expiration of the holding periods described in Section
422(a)(1) of the Code. The obligation of the Company to deliver shares of Common
Stock shall, however, be subject to the condition that, if at any time the
Committee shall determine in its discretion that the listing or registration of
the Stock Option or the Common Stock upon any securities exchange or

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inter-dealer quotation system or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary as a condition of,
or in connection with, the Stock Option or the issuance or purchase of shares of
Common Stock thereunder, the Stock Option may not be exercised in whole or in
part unless such listing, registration, consent, or approval shall have been
effected or obtained free of any conditions not reasonably acceptable to the
Committee.

 

(c)    Failure to Pay. If the Participant fails to pay for any of the Common
Stock specified in such notice or fails to accept delivery thereof, that portion
of the Participant’s Stock Option and right to purchase such Common Stock may be
forfeited by the Company.

 

8.4    CEVs. Subject to the conditions of Section 6.4, this Section 8.4, the
Award Agreement and such administrative regulations as the Committee may from
time to time adopt, a CEV may be exercised by the delivery (including by FAX) to
the Participant of written notice by the Committee or other designated person
setting forth the number of shares of Common Stock with respect to which the CEV
is to be exercised and the date of exercise thereof (the “Exercise Date”). On
the Exercise Date, the Participant shall receive from the Company cash in an
amount equal to the excess (if any) of the Fair Market Value (as of the date of
the Participant’s exercise of the Stock Option) per share of Common Stock over
the CEV Price per share specified in such CEV, multiplied by the total number of
shares of Common Stock covered by the exercised CEV.

 

8.5    Disqualifying Disposition of Incentive Stock Option. If shares of Common
Stock acquired upon exercise of an Incentive Stock Option are disposed of by a
Participant prior to the expiration of either two (2) years from the Date of
Grant of such Stock Option or one (1) year from the transfer of shares of Common
Stock to the Participant pursuant to the exercise of such Stock Option, or in
any other disqualifying disposition within the meaning of Section 422 of the
Code, such Participant shall notify the Company in writing of the date and terms
of such disposition. A disqualifying disposition by a Participant shall not
affect the status of any other Stock Option granted under the Plan as an
Incentive Stock Option within the meaning of Section 422 of the Code.

 

ARTICLE 9

AMENDMENT OR DISCONTINUANCE

 

Subject to the limitations set forth in this Article 9, the Board may at any
time and from time to time, without the consent of the Participants, alter,
amend, revise, suspend, or discontinue the Plan in whole or in part; provided,
however, that no amendment which requires stockholder approval in order for the
Plan and Incentives awarded under the Plan to comply with applicable law,
including Section 162(m), 421 and 422 of the Code, to the extent the Board
intends for those provisions to apply, shall be effective unless such amendment
shall be approved by the requisite vote of the stockholders of the Company
entitled to vote thereon. Any such amendment shall, to the extent deemed
necessary or advisable by the Committee, be applicable to any outstanding
Incentives theretofore granted under the Plan, notwithstanding any contrary
provisions contained in any Award Agreement. In the event of any such amendment
to the Plan, the holder of any Incentive outstanding under the Plan shall, upon
request of the Committee and as a condition to the exercisability thereof,
execute a conforming amendment in the form prescribed by the Committee to any
Award Agreement relating thereto. Notwithstanding anything contained in this
Plan to the contrary, unless required by applicable law, no action contemplated
or permitted by this Article 9 shall adversely affect any rights of Participants
or obligations of the Company to Participants with respect to any Incentive
theretofore granted under the Plan without the consent of the affected
Participant.

 

ARTICLE 10

TERM

 

The Plan shall be effective from the date that this Plan is approved by the
Board. Unless sooner terminated by action of the Board, the Plan will terminate
on June 23, 2013, but Incentives granted before that date will continue to be
effective in accordance with their terms and conditions.

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ARTICLE 11

CAPITAL ADJUSTMENTS

 

In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Common Stock, other securities, or
other property), recapitalization, stock split, reverse stock split, rights
offering, reorganization, merger, consolidation, split-up, spin-off, split-off,
combination, subdivision, repurchase, or exchange of Common Stock or other
securities of the Company, issuance of warrants or other rights to purchase
Common Stock or other securities of the Company, or other similar corporate
transaction or event affects the Common Stock such that an adjustment is
determined by the Committee to be appropriate to prevent the dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of the (i) the number of shares and type of Common
Stock (or the securities or property) which thereafter may be made the subject
of Awards, (ii) the number of shares and type of Common Stock (or other
securities or property) subject to outstanding Awards, (iii) the number of
shares and type of Common Stock (or other securities or property) specified as
the annual per-participant limitation under Section 6.6 of the Plan, (iv) the
Option Price of each outstanding Award, (v) the amount, if any, the Company pays
for forfeited shares of Common Stock in accordance with Section 6.5, and (vi)
the number of or CEV Price of shares of Common Stock then subject to outstanding
CEV’s previously granted and unexercised under the Plan to the end that the same
proportion of the Company’s issued and outstanding shares of Common Stock in
each instance shall remain subject to exercise at the same aggregate CEV Price;
provided however, that the number of shares of Common Stock (or other securities
or property) subject to any Award shall always be a whole number. In lieu of the
foregoing, if deemed appropriate, the Committee may make provision for a cash
payment to the holder of an outstanding Award. Notwithstanding the foregoing, no
such adjustment or cash payment shall be made or authorized to the extent that
such adjustment or cash payment would cause the Plan or any Stock Option to
violate Code Section 422. Such adjustments shall be made in accordance with
applicable law and the rules of any securities exchange, stock market, or stock
quotation system to which the Company is subject.

 

Upon the occurrence of any such adjustment or cash payment, the Company shall
provide notice to each affected Participant of its computation of such
adjustment or cash payment which shall be conclusive and shall be binding upon
each such Participant.

 

ARTICLE 12

RECAPITALIZATION, MERGER AND CONSOLIDATION

 

12.1    No Effect on Company’s Authority. The existence of this Plan and
Incentives granted hereunder shall not affect in any way the right or power of
the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company’s capital
structure and its business, or any merger or consolidation of the Company, or
any issuance of bonds, debentures, preferred or preference stocks ranking prior
to or otherwise affecting the Common Stock or the rights thereof (or any rights,
options, or warrants to purchase same), or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.

 

12.2    Conversion of Incentives Where Company Survives. Subject to any required
action by the stockholders, if the Company shall be the surviving or resulting
corporation in any merger, consolidation or share exchange, any Incentive
granted hereunder shall pertain to and apply to the securities or rights
(including cash, property, or assets) to which a holder of the number of shares
of Common Stock subject to the Incentive would have been entitled.

 

12.3    Exchange or Cancellation of Incentives Where Company Does Not Survive.
In the event of any merger, consolidation or share exchange pursuant to which
the Company is not the surviving or resulting corporation, there shall be
substituted for each share of Common Stock subject to the

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unexercised portions of outstanding Stock Options or CEVs, that number of shares
of each class of stock or other securities or that amount of cash, property, or
assets of the surviving, resulting or consolidated company which were
distributed or distributable to the stockholders of the Company in respect to
each share of Common Stock held by them, such outstanding Stock Options or CEVs
to be thereafter exercisable for such stock, securities, cash, or property in
accordance with their terms.

 

Notwithstanding the foregoing, however, all Stock Options or CEVs may be
canceled by the Company, in its sole discretion, as of the effective date of any
such reorganization, merger, consolidation, or share exchange, or of any
proposed sale of all or substantially all of the assets of the Company, or of
any dissolution or liquidation of the Company, by either:

 

(a)    giving notice to each holder thereof or his personal representative of
its intention to cancel such Stock Options or CEVs and permitting the purchase
during the thirty (30) day period next preceding such effective date of any or
all of the shares subject to such outstanding Stock Options or CEVs, including
in the Board’s discretion some or all of the shares as to which such Stock
Options or CEVs would not otherwise be vested and exercisable; or

 

(b)    paying the holder thereof an amount equal to a reasonable estimate of the
difference between the net amount per share payable in such transaction or as a
result of such transaction, and the exercise price per share of such Stock
Option (hereinafter the “Spread”), multiplied by the number of shares subject to
the Stock Option. In cases where the shares constitute, or would after exercise,
constitute Restricted Stock, the Company, in its discretion may include some or
all of those shares in the calculation of the amount payable hereunder. In
estimating the Spread, appropriate adjustments to give effect to the existence
of the Stock Options shall be made, such as deeming the Stock Options to have
been exercised, with the Company receiving the exercise price payable
thereunder, and treating the shares receivable upon exercise of the Options as
being outstanding in determining the net amount per share. In cases where the
proposed transaction consists of the acquisition of assets of the Company, the
net amount per share shall be calculated on the basis of the net amount
receivable with respect to shares of Common Stock upon a distribution and
liquidation by the Company after giving effect to expenses and charges,
including but not limited to taxes, payable by the Company before such
liquidation could be completed.

 

(c)    An Award that by its terms would be fully vested or exercisable upon such
a reorganization, merger, consolidation, share exchange, proposed sale of all or
substantially all of the assets of the Company or dissolution or liquidation of
the Company will be considered vested or exercisable for purposes of Section
12.3(a) hereof.

 

ARTICLE 13

LIQUIDATION OR DISSOLUTION

 

Subject to Section 12.3 hereof, in case the Company shall, at any time while any
Incentive under this Plan shall be in force and remain unexpired, (i) sell all
or substantially all of its property, or (ii) dissolve, liquidate, or wind up
its affairs, then each Participant shall be entitled to receive, in lieu of each
share of Common Stock of the Company which such Participant would have been
entitled to receive under the Incentive, the same kind and amount of any
securities or assets as may be issuable, distributable, or payable upon any such
sale, dissolution, liquidation, or winding up with respect to each share of
Common Stock of the Company. If the Company shall, at any time prior to the
expiration of any Incentive, make any partial distribution of its assets, in the
nature of a partial liquidation, whether payable in cash or in kind (but
excluding the distribution of a cash dividend payable out of earned surplus and
designated as such) then in such event the Option Prices or CEV Prices then in
effect with respect to each Stock Option or CEV shall be reduced, on the payment
date of such distribution, in proportion to the percentage reduction in the
tangible book value of the shares of the Company’s Common Stock (determined in
accordance with generally accepted accounting principles) resulting by reason of
such distribution.

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ARTICLE 14

INCENTIVES IN SUBSTITUTION FOR

INCENTIVES GRANTED BY OTHER ENTITIES

 

Incentives may be granted under the Plan from time to time in substitution for
similar instruments held by employees or directors of a corporation,
partnership, or limited liability company who become or are about to become
Employees of the Company or any Subsidiary as a result of a merger or
consolidation of the employing corporation with the Company, the acquisition by
the Company of equity of the employing entity, or any other similar transaction
pursuant to which the Company becomes the successor employer. The terms and
conditions of the substitute Incentives so granted may vary from the terms and
conditions set forth in this Plan to such extent as the Committee at the time of
grant may deem appropriate to conform, in whole or in part, to the provisions of
the Incentives in substitution for which they are granted.

 

ARTICLE 15

MISCELLANEOUS PROVISIONS

 

15.1    Investment Intent. The Company may require that there be presented to
and filed with it by any Participant under the Plan, such evidence as it may
deem necessary to establish that the Incentives granted or the shares of Common
Stock to be purchased or transferred are being acquired for investment and not
with a view to their distribution.

 

15.2    No Right to Continued Employment. Neither the Plan nor any Incentive
granted under the Plan shall confer upon any Participant any right with respect
to continuance of employment by the Company or any Subsidiary.

 

15.3    Indemnification of Board and Committee. No member of the Board or the
Committee, nor any officer or Employee of the Company acting on behalf of the
Board or the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board and the Committee, each officer of the
Company, and each Employee of the Company acting on behalf of the Board or the
Committee shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination, or
interpretation.

 

15.4    Effect of the Plan. Neither the adoption of this Plan nor any action of
the Board or the Committee shall be deemed to give any person any right to be
granted an Award or any other rights except as may be evidenced by an Award
Agreement, or any amendment thereto, duly authorized by the Committee and
executed on behalf of the Company, and then only to the extent and upon the
terms and conditions expressly set forth therein.

 

15.5    Governing Law and Compliance With Other Laws and Regulations. The
validity, construction and effect of the Plan, any Award Agreement and any rules
and regulations relating to the Plan shall be determined in accordance with the
laws of the State of Delaware. Notwithstanding anything contained herein to the
contrary, the Company shall not be required to sell or issue shares of Common
Stock under any Incentive if the issuance thereof would constitute a violation
by the Participant or the Company of any provisions of any law (including
without limitation Section 16 of the 1934 Act, Section 162(m) of the Code and
the Sarbanes-Oxley Act of 2002) or regulation of any governmental authority or
any national securities exchange or inter-dealer quotation system or other forum
in which shares of Common Stock are quoted or traded; and, as a condition of any
sale or issuance of shares of Common Stock under an Incentive, the Committee may
require such agreements or undertakings, if any, as the Committee may deem
necessary or advisable to assure compliance with any such law or regulation. The
Plan, the grant and exercise of Incentives hereunder, and the obligation of the
Company to sell and deliver shares of Common Stock, shall be subject to all
applicable laws, rules and regulations and to such approvals by any government
or regulatory agency as may be required.

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15.6    Tax Requirements. The Company shall have the right to deduct from all
amounts hereunder paid in cash or other form, any Federal, state, or local taxes
required by law to be withheld with respect to such payments. The Participant
receiving shares of Common Stock issued under the Plan, unless otherwise
provided in the Award Agreement, shall be required to pay the Company the amount
of any taxes which the Company is required to withhold with respect to such
shares of Common Stock. Notwithstanding the foregoing, in the event of an
assignment of a Nonqualified Stock Option pursuant to Section 15.7, the
Participant who assigns the Nonqualified Stock Option shall remain subject to
withholding taxes upon exercise of the Nonqualified Stock Option by the
transferee to the extent required by the Code or the rules and regulations
promulgated thereunder. Such payments shall be required to be made prior to the
delivery of any certificate representing such shares of Common Stock. Such
payment may be made, unless otherwise provided in the Award Agreement, (i) by
the delivery of cash to the Company in an amount that equals or exceeds (to
avoid the issuance of fractional shares under (iii) below) the required tax
withholding obligation of the Company; (ii) if the Company, in its sole
discretion, so consents in writing, the actual delivery by the exercising
Participant to the Company of shares of Common Stock that the Participant has
not acquired from the Company within six months prior to the date of exercise,
which shares so delivered have an aggregate Fair Market Value that equals or
exceeds (to avoid the issuance of fractional shares under (iii) below) the
required tax withholding payment; (iii) if the Company, in its sole discretion,
so consents in writing, the Company’s withholding of a number of shares to be
delivered upon the exercise of the Stock Option, which shares so withheld have
an aggregate fair market value that equals (but does not exceed) the required
tax withholding payment; or (iv) any combination of (i), (ii), or (iii). The
Company may, in its sole discretion, withhold any such taxes from any other cash
remuneration otherwise paid by the Company to the Participant. The Committee may
in the Award Agreement impose any additional tax requirements or provisions that
the Committee deems necessary or desirable.

 

15.7    Stock Option Assignability. Incentive Stock Options may not be
transferred, assigned, pledged, hypothecated or otherwise conveyed or encumbered
other than by will or the laws of descent and distribution and may be exercised
during the lifetime of the Participant only by the Participant or the
Participant’s legally authorized representative, and each Award Agreement in
respect of an Incentive Stock Option shall so provide. The designation by a
Participant of a beneficiary will not constitute a transfer of the Stock Option.
The Committee may waive or modify any limitation contained in the preceding
sentences of this Section 15.9 that is not required for compliance with Section
422 of the Code.

 

Except as otherwise provided herein, Nonqualified Stock Options may not be
transferred, assigned, pledged, hypothecated or otherwise conveyed or encumbered
other than by will or the laws of descent and distribution. The Committee may,
in its discretion, authorize all or a portion of a Nonqualified Stock Option
granted to a Participant to be on terms which permit transfer by such
Participant, or by a Permitted Transferee, to (i) the Company, (ii) the spouse
(or former spouse), children or grandchildren of the Participant (“Immediate
Family Members”), (iii) a trust or trusts for the exclusive benefit of such
Immediate Family Members, or (iv) a partnership in which the only partners are
(1) such Immediate Family Members and/or (2) entities which are controlled by
Immediate Family Members (“Permitted Transferees”), provided that (x) there
shall be no consideration for any such transfer, (y) the Award Agreement
pursuant to which such Nonqualified Stock Option is granted must be approved by
the Committee and must expressly provide for transferability in a manner
consistent with this Section, and (z) except for transfers between Permitted
Transferees, subsequent transfers of transferred Nonqualified Stock Options
shall be prohibited except those by will or the laws of descent and
distribution.

 

Following any transfer, any such Nonqualified Stock Option shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of Articles 8, 9, 11, 13 and 15 hereof the
term “Participant” shall be deemed to include the transferee. The events of
Termination of Service shall continue to be applied with respect to the original
Participant, following which the Nonqualified Stock Options shall be exercisable
by the transferee only to the extent and for the periods specified in the Award
Agreement. The Committee and the Company shall have no obligation to inform any
transferee of a Nonqualified Stock Option of any expiration, termination, lapse
or acceleration of such Stock Option. Except as otherwise provided in the Award
Agreement, the Company

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shall have no obligation to register with any federal or state securities
commission or agency any Common Stock issuable or issued under a Nonqualified
Stock Option that has been transferred by a Participant under this Section 15.7.

 

15.8    Use of Proceeds. Proceeds from the sale of shares of Common Stock
pursuant to Incentives granted under this Plan shall constitute general funds of
the Company.

 

15.9    Legend. Each certificate representing shares of Restricted Stock issued
to a Participant shall bear the following legend, or a similar legend deemed by
the Company to constitute an appropriate notice of the provisions hereof (any
such certificate not having such legend shall be surrendered upon demand by the
Company and so endorsed):

 

On the face of the certificate:

 

“Transfer of this stock is restricted in accordance with conditions printed on
the reverse of this certificate.”

 

On the reverse:

 

“The shares of stock evidenced by this certificate are subject to and
transferable only in accordance with that certain Landry’s Restaurants, Inc 2003
Equity Incentive Plan, a copy of which is on file at the principal office of the
Company in Houston, Texas. No transfer or pledge of the shares evidenced hereby
may be made except in accordance with and subject to the provisions of said
Plan. By acceptance of this certificate, any holder, transferee or pledgee
hereof agrees to be bound by all of the provisions of said Plan.”

 

The following legend shall be inserted on a certificate evidencing Common Stock
issued under the Plan if the shares were not issued in a transaction registered
under the applicable federal and state securities laws:

 

“Shares of stock represented by this certificate have been acquired by the
holder for investment and not for resale, transfer or distribution, have been
issued pursuant to exemptions from the registration requirements of applicable
state and federal securities laws, and may not be offered for sale, sold or
transferred other than pursuant to effective registration under such laws, or in
transactions otherwise in compliance with such laws, and upon evidence
satisfactory to the Company of compliance with such laws, as to which the
Company may rely upon an opinion of counsel satisfactory to the Company.”

 

A copy of this Plan shall be kept on file in the principal office of the Company
in Houston, Texas.

 

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