Exhibit
10.13


COPART,
INC.


EXECUTIVE
BONUS PLAN


(Effective
October 28, 2005)









 



 


TABLE OF CONTENTS


	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  SECTION 1 BACKGROUND, PURPOSE
  AND DURATION

  	
   

  	
  1

  	
   

  
	
  1.1

  	
   

  	
  Effective Date

  	
   

  	
  1

  	
   

  
	
  1.2

  	
   

  	
  Purpose of the Plan

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2 DEFINITIONS

  	
   

  	
  1

  	
   

  
	
  2.1

  	
   

  	
  “1934 Act”

  	
   

  	
  1

  	
   

  
	
  2.2

  	
   

  	
  “Actual Award”

  	
   

  	
  1

  	
   

  
	
  2.3

  	
   

  	
  “Affiliate”

  	
   

  	
  1

  	
   

  
	
  2.4

  	
   

  	
  “Base Salary”

  	
   

  	
  1

  	
   

  
	
  2.5

  	
   

  	
  “Board”

  	
   

  	
  1

  	
   

  
	
  2.6

  	
   

  	
  “Code”

  	
   

  	
  2

  	
   

  
	
  2.7

  	
   

  	
  “Committee”

  	
   

  	
  2

  	
   

  
	
  2.8

  	
   

  	
  “Company”

  	
   

  	
  2

  	
   

  
	
  2.9

  	
   

  	
  “Determination Date”

  	
   

  	
  2

  	
   

  
	
  2.10

  	
   

  	
  “Disability”

  	
   

  	
  2

  	
   

  
	
  2.11

  	
   

  	
  “Earnings Per Share”

  	
   

  	
  2

  	
   

  
	
  2.12

  	
   

  	
  “Employee”

  	
   

  	
  2

  	
   

  
	
  2.13

  	
   

  	
  “Fair Market Value”

  	
   

  	
  2

  	
   

  
	
  2.14

  	
   

  	
  “Fiscal Year”

  	
   

  	
  2

  	
   

  
	
  2.15

  	
   

  	
  “Maximum Award”

  	
   

  	
  2

  	
   

  
	
  2.16

  	
   

  	
  “Operating Cash Flow”

  	
   

  	
  2

  	
   

  
	
  2.17

  	
   

  	
  “Operating Income”

  	
   

  	
  2

  	
   

  
	
  2.18

  	
   

  	
  “Participant”

  	
   

  	
  3

  	
   

  
	
  2.19

  	
   

  	
  “Payout Formula”

  	
   

  	
  3

  	
   

  
	
  2.20

  	
   

  	
  “Performance Period”

  	
   

  	
  3

  	
   

  
	
  2.21

  	
   

  	
  “Performance Goals”

  	
   

  	
  3

  	
   

  
	
  2.22

  	
   

  	
  “Plan”

  	
   

  	
  3

  	
   

  
	
  2.23

  	
   

  	
  “Profit After-Tax”

  	
   

  	
  3

  	
   

  
	
  2.24

  	
   

  	
  “Profit Before-Tax”

  	
   

  	
  3

  	
   

  
	
  2.25

  	
   

  	
  “Retirement”

  	
   

  	
  3

  	
   

  
	
  2.26

  	
   

  	
  “Return on Assets”

  	
   

  	
  3

  	
   

  
	
  2.27

  	
   

  	
  “Return on Equity”

  	
   

  	
  3

  	
   

  
	
  2.28

  	
   

  	
  “Return on Sales”

  	
   

  	
  4

  	
   

  
	
  2.29

  	
   

  	
  “Revenue”

  	
   

  	
  4

  	
   

  
	
  2.30

  	
   

  	
  “Shares”

  	
   

  	
  4

  	
   

  
	
  2.31

  	
   

  	
  “Target Award”

  	
   

  	
  4

  	
   

  
	
  2.32

  	
   

  	
  “Termination of
  Employment”

  	
   

  	
  4

  	
   

  



 



 ii
 






 



 


	
  2.33

  	
   

  	
  “Total Shareholder
  Return”

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3 SELECTION OF
  PARTICIPANTS AND DETERMINATION OF AWARDS

  	
   

  	
  4

  	
   

  
	
  3.1

  	
   

  	
  Selection of
  Participants

  	
   

  	
  4

  	
   

  
	
  3.2

  	
   

  	
  Determination of
  Performance Goals

  	
   

  	
  4

  	
   

  
	
  3.3

  	
   

  	
  Determination of Target
  Awards

  	
   

  	
  4

  	
   

  
	
  3.4

  	
   

  	
  Determination of Payout
  Formula or Formulae

  	
   

  	
  4

  	
   

  
	
  3.5

  	
   

  	
  Date for Determinations

  	
   

  	
  5

  	
   

  
	
  3.6

  	
   

  	
  Determination of Actual
  Awards

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4 PAYMENT OF AWARDS

  	
   

  	
  5

  	
   

  
	
  4.1

  	
   

  	
  Right to Receive
  Payment

  	
   

  	
  5

  	
   

  
	
  4.2

  	
   

  	
  Timing of Payment

  	
   

  	
  5

  	
   

  
	
  4.3

  	
   

  	
  Form of Payment

  	
   

  	
  5

  	
   

  
	
  4.4

  	
   

  	
  Payment in the Event of
  Death

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5 ADMINISTRATION

  	
   

  	
  6

  	
   

  
	
  5.1

  	
   

  	
  Committee is the
  Administrator

  	
   

  	
  6

  	
   

  
	
  5.2

  	
   

  	
  Committee Authority

  	
   

  	
  6

  	
   

  
	
  5.3

  	
   

  	
  Decisions Binding

  	
   

  	
  6

  	
   

  
	
  5.4

  	
   

  	
  Delegation by the
  Committee

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6 GENERAL PROVISIONS

  	
   

  	
  6

  	
   

  
	
  6.1

  	
   

  	
  Tax Withholding

  	
   

  	
  6

  	
   

  
	
  6.2

  	
   

  	
  No Effect on Employment

  	
   

  	
  6

  	
   

  
	
  6.3

  	
   

  	
  Participation

  	
   

  	
  7

  	
   

  
	
  6.4

  	
   

  	
  Indemnification

  	
   

  	
  7

  	
   

  
	
  6.5

  	
   

  	
  Successors

  	
   

  	
  7

  	
   

  
	
  6.6

  	
   

  	
  Beneficiary
  Designations

  	
   

  	
  7

  	
   

  
	
  6.7

  	
   

  	
  Nontransferability of
  Awards

  	
   

  	
  7

  	
   

  
	
  6.8

  	
   

  	
  Deferrals

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7 AMENDMENT,
  TERMINATION AND DURATION

  	
   

  	
  8

  	
   

  
	
  7.1

  	
   

  	
  Amendment, Suspension
  or Termination

  	
   

  	
  8

  	
   

  
	
  7.2

  	
   

  	
  Duration of the Plan

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8 LEGAL CONSTRUCTION

  	
   

  	
  8

  	
   

  
	
  8.1

  	
   

  	
  Gender and Number

  	
   

  	
  8

  	
   

  
	
  8.2

  	
   

  	
  Severability

  	
   

  	
  8

  	
   

  
	
  8.3

  	
   

  	
  Requirements of Law

  	
   

  	
  8

  	
   

  
	
  8.4

  	
   

  	
  Governing Law

  	
   

  	
  8

  	
   

  
	
  8.5

  	
   

  	
  Captions

  	
   

  	
  8

  	
   

  



 



 iii















 


COPART, INC.


EXECUTIVE BONUS PLAN


SECTION 1

BACKGROUND, PURPOSE AND DURATION


1.1  Effective Date.  The Plan is effective as of October 28, 2005,
subject to ratification by an affirmative vote of the holders of a majority of
the Shares that are present in person or by proxy and entitled to vote at the
2005 Annual Meeting of Stockholders of the Company.


1.2  Purpose of the Plan.  The Plan is intended to increase shareholder
value and the success of the Company by motivating key executives (1) to
perform to the best of their abilities, and (2) to achieve the Company’s
objectives. The Plan’s goals are to be achieved by providing such executives
with incentive awards based on the achievement of goals relating to the
performance of the Company. The Plan is intended to permit the grant of awards
that qualify as performance-based compensation under section 162(m) of the
Code.


SECTION 2

DEFINITIONS


The following
words and phrases shall have the following meanings unless a different meaning
is plainly required by the context:


2.1  “1934 Act” means the Securities
Exchange Act of 1934, as amended. Reference to a specific section of the 1934
Act or regulation thereunder shall include such section or regulation, any
valid regulation promulgated under such section, and any comparable provision
of any future legislation or regulation amending, supplementing or superseding
such section or regulation.


2.2  “Actual Award”means as to any
Performance Period, the actual award (if any) payable to a Participant for the
Performance Period. Each Actual Award is determined by the Payout Formula for
the Performance Period, subject to the Committee’s authority under Section 3.6
to eliminate or reduce the award otherwise determined by the Payout Formula.


2.3  “Affiliate”means any corporation or
other entity (including, but not limited to, partnerships and joint ventures)
controlled by the Company.


2.4  “Base Salary”means as to any
Performance Period, the Participant’s annualized salary rate on the last day of
the Performance Period. Such Base Salary shall be before both (a) deductions
for taxes or benefits, and (b) deferrals of compensation pursuant to
Company-sponsored plans.


2.5  “Board”means the Board of Directors of
the Company.











 


2.6  “Code” means the Internal Revenue Code
of 1986, as amended. Reference to a specific section of the Code or regulation
thereunder shall include such section or regulation, any valid regulation
promulgated thereunder, and any comparable provision of any future legislation
or regulation amending, supplementing or superseding such section or
regulation.


2.7  “Committee”means the committee
appointed by the Board (pursuant to Section 5.1) to administer the Plan.


2.8  “Company”means Copart, Inc., a
California corporation, or any successor thereto.


2.9  “Determination Date”means the latest
possible date that will not jeopardize a Target Award or Actual Award’s
qualification as performance-based compensation under section 162(m) of the
Code.


2.10  “Disability”means a permanent and
total disability determined in accordance with uniform and nondiscriminatory
standards adopted by the Committee from time to time.


2.11  “Earnings Per Share”means as to any
Performance Period, the Company’s or a business unit’s Profit After-Tax,
divided by a weighted average number of common shares outstanding and dilutive
common equivalent shares deemed outstanding, determined in accordance with
generally accepted accounting principles.


2.12  “Employee”means any employee of the
Company or of an Affiliate, whether such employee is so employed at the time
the Plan is adopted or becomes so employed subsequent to the adoption of the
Plan.


2.13  “Fair Market Value”means the closing
per share selling price for Shares, as quoted on the Nasdaq National Market for
the date in question.


2.14  “Fiscal Year”means the fiscal year of
the Company.


2.15  “Maximum Award”means as to any
Participant for any Performance Period, $2,000,000.


2.16  “Operating Cash Flow”means as to any
Performance Period, the Company’s or a business unit’s sum of Profit After-Tax
plus depreciation and amortization less capital expenditures plus changes in
working capital comprised of accounts receivable, inventories, other current
assets, trade accounts payable, accrued expenses, advance payments from
customers and long-term accrued expenses, determined in accordance with
generally acceptable accounting principles.


2.17  “Operating Income”means as to any
Performance Period, the Company’s or a business unit’s income from operations
but excluding any unusual items, determined in accordance with generally
accepted accounting principles.



 2
 








 


2.18  “Participant”means as to any
Performance Period, an Employee who has been selected by the Committee for
participation in the Plan for that Performance Period.


2.19  “Payout Formula”means as to any Performance
Period, the formula or payout matrix established by the Committee pursuant to
Section 3.4 in order to determine the Actual Awards (if any) to be paid to
Participants. The formula or matrix may differ from Participant to Participant.


2.20  “Performance Period”means any Fiscal
Year or such other period longer than a Fiscal Year but not in excess of three
Fiscal Years, as determined by the Committee in its sole discretion.


2.21  “Performance Goals”means the goal(s)
(or combined goal(s)) determined by the Committee (in its discretion) to be
applicable to a Participant for a Target Award for a Performance Period. As
determined by the Committee, the Performance Goals for any Target Award
applicable to a Participant may provide for a targeted level or levels of
achievement using one or more of the following measures: (a) Earnings per
Share, (b) Operating Cash Flow, (c) Operating Income, (d) Profit After-Tax, (e)
Profit Before-Tax, (f) Return on Assets, (g) Return on Equity, (h) Return on
Sales, (i)  Revenue, and (j) Total
Shareholder Return. The Performance Goals may differ from Participant to
Participant and from award to award. Prior to the Determination Date, the
Committee shall determine whether any significant element(s) shall be included
in or excluded from the calculation of any Performance Goal with respect to any
Participants.


2.22  “Plan”means the Copart, Inc. Executive
Bonus Plan, as set forth in this instrument and as hereafter amended from time
to time.


2.23  “Profit After-Tax”means as to any Performance
Period, the Company’s or a business unit’s income after taxes, determined in
accordance with generally accepted accounting principles.


2.24  “Profit Before-Tax”means as to any
Performance Period, the Company’s or a business unit’s income before taxes,
determined in accordance with generally accepted accounting principles.


2.25  “Retirement”means, with respect to any
Participant, a Termination of Employment after attaining at least age 65.


2.26  “Return on Assets”means as to any
Performance Period, the percentage equal to the Company’s or a business unit’s
Operating Income before incentive compensation, divided by average net Company
or business unit, as applicable, assets, determined in accordance with
generally accepted accounting principles.


2.27  “Return on Equity”means as to any
Performance Period, the percentage equal to the Company’s Profit After-Tax
divided by average stockholder’s equity, determined in accordance with
generally accepted accounting principles.



 3
 








 


2.28  “Return on Sales”means as to any
Performance Period, the percentage equal to the Company’s or a business unit’s
Operating Income before incentive compensation, divided by the Company’s or the
business unit’s, as applicable, Revenue, determined in accordance with
generally accepted accounting principles.


2.29  “Revenue”means as to any Performance
Period, the Company’s or business unit’s net sales, determined in accordance
with generally accepted accounting principles.


2.30  “Shares”means shares of the Company’s
common stock.


2.31  “Target Award”means the target award
payable under the Plan to a Participant for the Performance Period, expressed
as a percentage of his or her Base Salary, as determined by the Committee in
accordance with Section 3.3.


2.32  “Termination of Employment”means a
cessation of the employee-employer relationship between an Employee and the
Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability,
Retirement, or the disaffiliation of an Affiliate, but excluding any such
termination where there is a simultaneous reemployment by the Company or an
Affiliate.


2.33  “Total Shareholder Return”means as to
any Performance Period, the total return (change in share price plus
reinvestment of any dividends) of a Share.


SECTION 3

SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS


3.1    Selection of Participants.  The Committee, in its sole discretion, shall
select the Employees of the Company who shall be Participants for any
Performance Period. Participation in the Plan is in the sole discretion of the
Committee, and on a Performance Period by Performance Period basis.
Accordingly, an Employee who is a Participant for a given Performance Period in
no way is guaranteed or assured of being selected for participation in any
subsequent Performance Period.


3.2    Determination of Performance Goals.  The Committee, in its sole discretion, shall
establish the Performance Goals for each Participant for the Performance
Period. Such Performance Goals shall be set forth in writing.


3.3    Determination of Target Awards.  The Committee, in its sole discretion, shall
establish a Target Award for each Participant. Each Participant’s Target Award
shall be determined by the Committee in its sole discretion, and each Target
Award shall be set forth in writing.


3.4    Determination of Payout Formula or
Formulae.  On or prior to the
Determination Date, the Committee, in its sole discretion, shall establish a
Payout Formula or Formulae for purposes of determining the Actual Award (if
any) payable to each Participant. Each Payout Formula shall (a) be in writing,
(b) be based on a comparison of actual performance to the Performance Goals,



 4
 








 


(c) provide for the
payment of a Participant’s Target Award if the Performance Goals for the
Performance Period are achieved, and (d) provide for an Actual Award greater
than or less than the Participant’s Target Award, depending upon the extent to
which actual performance exceeds or falls below the Performance Goals.
Notwithstanding the preceding, in no event shall a Participant’s Actual Award
for any Performance Period exceed his or her Maximum Award.


3.5    Date for Determinations.  The Committee shall make all determinations
under Section 3.1 through 3.4 on or before the Determination Date.


3.6    Determination of Actual Awards.  After the end of each Performance Period, the
Committee shall certify in writing the extent to which the Performance Goals
applicable to each Participant for the Performance Period were achieved or
exceeded. The Actual Award for each Participant shall be determined by applying
the Payout Formula to the level of actual performance that has been certified
by the Committee. Notwithstanding any contrary provision of the Plan, the
Committee, in its sole discretion, may (a) eliminate or reduce the Actual Award
payable to any Participant below that which otherwise would be payable under
the Payout Formula, and (b) determine what Actual Award, if any, will be paid
in the event of a Termination of Employment prior to the end of the Performance
Period.


SECTION 4

PAYMENT OF AWARDS


4.1    Right to Receive Payment.  Each Actual Award that may become payable
under the Plan shall be paid solely from the general assets of the Company.
Nothing in this Plan shall be construed to create a trust or to establish or
evidence any Participant’s claim of any right to payment of an Actual Award
other than as an unsecured general creditor with respect to any payment to
which he or she may be entitled.


4.2    Timing of Payment.  Payment of each Actual Award shall be made as
soon as administratively practicable, but in no event later than 90 days after
the end of the Performance Period during which the Award was earned.


4.3    Form of Payment.  Each Actual Award normally shall be paid in
cash (or its equivalent) in a single lump sum. However, the Committee, in its
sole discretion, may declare any Actual Award, in whole or in part, payable in
restricted Shares. The number of Shares of restricted stock granted shall be
determined by dividing the cash amount foregone by the Fair Market Value of a
Share on the date that the cash payment otherwise would have been made. Any
such restricted stock shall be subject to the vesting schedule (not to exceed
two calendar years) as may be determined by the Committee, provided that
accelerated vesting automatically shall occur upon death, Retirement or
involuntary Termination of Employment without cause. No more than 100,000
restricted Shares may be issued under Plan.


4.4    Payment in the Event of Death.  If a Participant dies prior to the payment of
an Actual Award earned by him or her prior to death for a prior Performance
Period, the Award shall be paid to his or her estate.



 5
 








 


SECTION 5

ADMINISTRATION


5.1    Committee is the Administrator.  The Plan shall be administered by the
Committee. The Committee shall consist of not less than two (2) members of the
Board. The members of the Committee shall be appointed from time to time by,
and serve at the pleasure of, the Board. Each member of the Committee shall
qualify as an “outside director” under section 162(m) of the Code. If it is
later determined that one or more members of the Committee do not so qualify,
actions taken by the Committee prior to such determination shall be valid
despite such failure to qualify.


5.2    Committee Authority.  It shall be the duty of the Committee to
administer the Plan in accordance with the Plan’s provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees shall be granted awards, (b) prescribe the terms
and conditions of awards, (c) interpret the Plan and the awards, (d) adopt such
procedures and subplans as are necessary or appropriate to permit participation
in the Plan by Employees who are foreign nationals or employed outside of the
United States, (e) adopt rules for the administration, interpretation and
application of the Plan as are consistent therewith, and (f) interpret, amend
or revoke any such rules.


5.3    Decisions Binding.  All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.


5.4    Delegation by the Committee.  The Committee, in its sole discretion and on
such terms and conditions as it may provide, may delegate all or part of its
authority and powers under the Plan to one or more directors and/or officers of
the Company; provided, however, that the Committee may delegate its authority
and powers only with respect to awards that are not intended to qualify as
performance-based compensation under section 162(m) of the Code.


SECTION 6

GENERAL PROVISIONS


6.1    Tax Withholding.  The Company shall withhold all applicable
taxes from any Actual Award, including any federal, state and local taxes
(including, but not limited to, the Participant’s FICA and SDI obligations).


6.2    No Effect on Employment.  Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant’s
employment or service at any time, with or without cause. For purposes of the
Plan, transfer of employment of a Participant between the Company and any one
of its Affiliates (or between Affiliates) shall not be deemed a Termination of
Employment. Employment with the Company and its Affiliates is on an at-will
basis only. The Company expressly reserves the right, which may be exercised at
any time and without regard to when during a Performance Period such exercise
occurs, to terminate any individual’s employment



 6
 








 


with or without cause,
and to treat him or her without regard to the effect which such treatment might
have upon him or her as a Participant.


6.3    Participation.  No Employee shall have the right to be
selected to receive an award under this Plan, or, having been so selected, to
be selected to receive a future award.


6.4    Indemnification.  Each person who is or shall have been a member
of the Committee, or of the Board, shall be indemnified and held harmless by
the Company against and from (a) any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any award, and (b) from any and all amounts
paid by him or her in settlement thereof, with the Company’s approval, or paid
by him or her in satisfaction of any judgment in any such claim, action, suit,
or proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.


6.5    Successors.  All obligations of the Company under the Plan,
with respect to awards granted hereunder, shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the Company.


6.6    Beneficiary Designations.  If permitted by the Committee, a Participant
under the Plan may name a beneficiary or beneficiaries to whom any vested but
unpaid award shall be paid in the event of the Participant’s death. Each such
designation shall revoke all prior designations by the Participant and shall be
effective only if given in a form and manner acceptable to the Committee. In
the absence of any such designation, any vested benefits remaining unpaid at
the Participant’s death shall be paid to the Participant’s estate.


6.7    Nontransferability of Awards.  No award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, by the laws of descent and distribution, or to the limited extent
provided in Section 6.6. All rights with respect to an award granted to a
Participant shall be available during his or her lifetime only to the
Participant.


6.8    Deferrals.  The Committee, in its sole discretion, may
permit a Participant to defer receipt of the payment of cash that would
otherwise be delivered to a Participant under the Plan. Any such deferral
elections shall be subject to such rules and procedures as shall be determined
by the Committee in its sole discretion.



 7
 








 


SECTION 7

AMENDMENT, TERMINATION AND DURATION


7.1    Amendment, Suspension or Termination.
 The Board, in its sole discretion, may
amend or terminate the Plan, or any part thereof, at any time and for any
reason. The amendment, suspension or termination of the Plan shall not, without
the consent of the Participant, alter or impair any rights or obligations under
any Target Award theretofore granted to such Participant. No award may be
granted during any period of suspension or after termination of the Plan.


7.2    Duration of the Plan.  The Plan shall commence on the date specified
herein, and subject to Section 7.1 (regarding the Board’s right to amend or
terminate the Plan), shall remain in effect thereafter.


SECTION 8

LEGAL CONSTRUCTION


8.1    Gender and Number.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.


8.2    Severability.  In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.


8.3    Requirements of Law.  The granting of awards under the Plan shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required.


8.4    Governing Law.  The Plan and all awards shall be construed in
accordance with and governed by the laws of the State of California, but
without regard to its conflict of law provisions.


8.5    Captions.  Captions are provided herein for convenience
only, and shall not serve as a basis for interpretation or construction of the
Plan.



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