exh10_51.htm


    
      Exhibit
10.51

      


      MAXXAM
2002 OMNIBUS EMPLOYEE INCENTIVE PLAN

      


      


      SECTION
1.           ESTABLISHMENT,
PURPOSE, AND LEGAL COMPLIANCE.

      


      1.1           Establishment.  MAXXAM
Inc., a Delaware corporation (the "Company"), hereby establishes the "MAXXAM
2002 OMNIBUS EMPLOYEE INCENTIVE PLAN" (the "Plan"). The Plan permits the grant
of certain rights in respect of or measured by the value of the Stock of the
Company, including stock options, stock appreciation rights, performance units,
performance shares, restricted stock, or unrestricted stock, to certain officers
and selected key employees of the Company and its subsidiaries.

      


      1.2           Purpose.  The
purpose of the Plan is to advance the interests of the Company, by encouraging
and providing for the acquisition of equity interests (or rights measured by the
market value of the equity) in the success of the Company by key employees, by
providing additional incentives and motivation toward enhancing the long-term
performance of the Company, and by enabling the Company to attract and retain
the services of key employees upon whose judgment, interest, skills and special
efforts the successful conduct of its operations is largely
dependent.

      


      1.3           Compliance
Intention.  In formulating and adopting the Plan, in submitting it for
approval of the stockholders of the Company and in the administration of the
Plan, it is the intention of the Board of Directors of the Company that the Plan
comply with the provisions of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 or any successor rule (hereafter "Rule 16b-3") as it may
apply to any Grantee, and that certain Awards may be structured so that they
comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). It is also the intention of the Board that grants identified as
"Incentive Stock Options" shall qualify for treatment as "incentive stock
options" under the provisions of Section 422 of the Code.

      


      SECTION
2.           DEFINITIONS.

      


      2.1           Definitions
of Certain Terms.  Whenever used herein, the following terms shall
have the respective meanings set forth below unless the context clearly requires
otherwise:

      


      (a)           "Award"
means any Option, Stock Appreciation Right, Performance Unit, Performance Share,
Restricted Stock, or Unrestricted Stock granted under this Plan. An Award may
also be called a "Grant."

      


      (b)           "Board"
means the Board of Directors of the Company.

      


      (c)           "Code"
has the meaning assigned to such term in Section 1.3.

      


      (d)           "Committee"
means the committee of the Board designated to administer the Plan.

      


      (e)           "Common
Stock" means the Common Stock, par value $0.50 per share, of the
Company.

      


      (f)           "Company"
means MAXXAM Inc., a Delaware corporation.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (g)           "Consent"
has the meaning assigned to such term in Section 19.3.

      


      (h)           "Disability"
means disability as defined in the Company's pension plan for salaried
employees.

      


      (i)           "Employee"
means a regular full time salaried employee (including an officer or director
who is also an employee other than a director who serves on the Committee) of
the Company or a subsidiary (other than Kaiser Aluminum Corporation and its
subsidiaries).

      


      (j)           "Fair
Market Value" means the closing price of the Common Stock or Preferred Stock, as
the case may be, as reported by the American Stock Exchange on a particular
date. In the event that there are no transactions in such Stock on such date,
the Fair Market Value shall be determined as of the immediately preceding date
on which there were such transactions, provided that such date is not more than
ten (10) business days preceding the applicable date. If there were no such
transactions within such period or the Common Stock or Preferred Stock is not
then trading on the American Stock Exchange, the Fair Market Value (or
methodology for determining same from time to time) shall be determined by the
Committee.

      


      (k)           "Grant"
shall have the same meaning as "Award."

      


      (l)           "Grantee"
means an individual who holds an Award that has not expired or been exercised or
cancelled.

      


      (m)           "Incentive
Stock Option" has the meaning set forth under the definition of
"Option."

      


      (n)           "Option"
means the right to purchase Stock at a stated price for a specified period of
time. For purposes of the Plan an Option may be either (i) an "incentive stock
option" within the meaning of Section 422 of the Code (herein called an
"Incentive Stock Option") or (ii) a nonstatutory or non-qualified stock
option.

      


      (o)           "Participant"
shall have the same meaning as "Grantee."

      


      (p)           "Performance
Unit" means a right to receive a payment related to the performance of the
Company, as determined by the Committee.

      


      (q)           "Performance
Share" means a right, related to the performance of the Company, to receive a
payment equal to the value of a share of Stock, as determined by the
Committee.

      


      (r)           "Period
of Restriction" means the period during which shares of Restricted Stock are
restricted pursuant to Section 10.2 or 10.3 of the Plan.

      


      (s)           "Plan"
has the meaning set forth in Section 1.1.

      


      (t)           "Plan
Action" has the meaning set forth in Section 19.2.

      


      (u)           "Plan
Agreement" has the meaning set forth in Section 5.6.

      


      (v)           "Preferred
Stock" has the meaning set forth under the definition of
"Stock."


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (w)           "Restricted
Stock" means Stock granted to a Participant pursuant to Section 10.1 of the
Plan.

      


      (x)           "Retirement"
(including "Early Retirement" and "Normal Retirement") means termination of
employment for retirement under the terms of the Company's pension plan for
salaried employees.

      


      (y)           "Rule
16b-3" has the meaning set forth in Section 1.3.

      


      (z)           "Stock"
means the capital stock of the Company, consisting of the Common Stock and Class
A $.05 Non Cumulative Participating Convertible Preferred Stock.

      


      (aa)         "Stock
Appreciation Right" and "SAR" mean the right to receive a payment in respect of
the appreciation on a stated number of shares of Stock, as more fully set forth
in Section 8.

      


      (bb)        "Unrestricted
Stock" means Stock sold or granted to a Participant which, although its resale
may be subject to legal restrictions or reporting requirements, is free of any
legend on its face and is not subject to transfer restrictions imposed by the
Company.

      


      SECTION
3.           ELIGIBILITY.

      


      3.1           Eligibility
for Awards.  Grants or Awards under the Plan may be made to such
Employees and directors of the Company and its subsidiaries and consultants to
the Company and its subsidiaries as may be selected by the Committee in its sole
discretion. Notwithstanding any other provision of the Plan, the Committee or
the Board may delegate to one or more officers of the Company the authority to
designate the individuals (other than any such officer), from among those
eligible to receive awards under the Plan, who will receive an award and the
size of such award, to the fullest extent permitted by Delaware law, provided
that the Committee shall itself grant Awards to those individuals whom it
reasonably believes are (or may be) covered by Rule 16b-3 or Section 162(m) of
the Code.

      


      3.2           No
Right to Participate.  No Employee, regardless of position or
responsibility, shall have any entitlement or right to cause any Award or Grant
under this Plan to be made to such Employee. The making of an Award or Grant to
an Employee under this Plan shall not entitle such Employee to any subsequent or
additional Award or Grant.

      


      SECTION
4.          
ADMINISTRATION.

      


      4.1           Administration.  The
Committee shall be responsible for the administration of the Plan. The
Committee, by majority action thereof, is authorized to interpret the Plan, to
prescribe, amend, and rescind rules and regulations relating to the Plan, to
provide for conditions and assurances deemed necessary or advisable to protect
the interests of the Company, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan (except that the Committee may
correct any defect, supply any omission and reconcile any inconsistency in the
Plan). Determinations, interpretations, or other actions made or taken by the
Committee pursuant to the provisions of the Plan shall be final and binding and
conclusive for all purposes and upon all persons whomsoever. The Board, from
which the Committee derives its authority hereunder, may act as to any matter
concerning the Plan, in the place of the Committee at any time.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      4.2           Committee
Membership.  The Committee, either by designation by the Board or by
abstention or recusal, shall consist solely of at least two members of the Board
each of whom qualify as non-employee directors within the meaning of Rule 16b-3
and outside directors within the meaning of Section 162(m) of the Code.
Notwithstanding the foregoing, the failure of the Committee to be so constituted
shall not invalidate any grant hereunder.

      


      4.3           Non-Uniform
Determinations.  The Committee's determinations under the Plan need
not be uniform and may be made by it selectively among persons who receive, or
are eligible to receive, Awards under the Plan (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the
Committee shall be entitled, among other things, to make non-uniform and
selective determinations, and to enter into non-uniform and selective Plan
Agreements, as to (a) the persons to receive Awards under the Plan or (b) the
terms and provisions of Awards under the Plan.

      


      4.4           Authority
to Direct Issuance of Stock.  By its ratification of adoption of this
Plan, the Board does authorize and direct the Committee to issue the Stock
pursuant to the terms of such Grants and Awards as may be made under this
Plan.

      


      4.5           Evidence
of Committee Action.  Any action of the Committee may be taken by a
writing signed by a majority of the Committee members. Any such written action
shall be as effective as if taken at a meeting of the Committee by resolution
duly adopted upon a vote of the Committee.

      


      SECTION
5.           STOCK
SUBJECT TO PLAN; TYPES AND NATURE OF AWARDS.

      


      5.1           Maximum
Grant Limitations.  The total number of shares of Stock subject to
issuance in respect of Awards of any kind (including Incentive Stock Options)
under the Plan may not exceed 700,000 shares of Common Stock and 70,000 shares
of Preferred Stock, calculated in accordance with Section 5.3 and subject to
adjustment upon occurrence of any of the events indicated in Section 5.4. The
shares to be delivered under the Plan may consist, in whole or in part, of
shares reserved for issuance under this Plan or authorized but unissued shares
not reserved for any other purpose or Stock acquired by the Company for purposes
of the Plan.

      


      The maximum number of shares of Common
Stock for which Awards may be granted under this Plan to any one Participant
during any calendar year period is 350,000, subject to adjustment in accordance
with the provisions of Section 5.4 hereof. The maximum number of shares of
Preferred Stock for which Awards may be granted under this Plan to any one
Participant during any calendar year period is 70,000, subject to adjustment in
accordance with the provisions of Section 5.4 hereof; provided that Awards made
in respect of Preferred Stock may not at any time exceed 10% of Awards
previously made in respect of Common Stock.

      


      5.2           Minimum
Pricing.  No Award or Grant of any Option, SAR, share, unit, or other
rights made pursuant to this Plan may establish a price for the Stock (including
but not limited to an Option exercise price, a SAR appreciation base, or a
valuation of the Stock for payout purposes) which is less than the par value of
the Stock.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      5.3           Lapsed
Awards and Other Adjustments.  Subject to the provisions of Section
5.1 above relating to individual limits, if any Award granted under the Plan
terminates (other than by reason of exercise for Stock), expires or lapses for
any reason, any shares subject to such Award again shall be available for the
grant of an Award. In addition, any shares of Stock in respect of which an SAR
or Performance Share is settled for cash, and any shares (however acquired) that
are withheld, applied or deemed to be delivered as payment by a Grantee for the
exercise of all or any portion of an Award or the payment of withholding of
taxes related to such exercise shall become available for Awards (other than
Incentive Stock Options) under the Plan.

      


      5.4           Change
in Capitalization.  In the event of any change in the outstanding
shares of Stock that occurs after ratification of the Plan by the stockholders
of the Company by reason of a Stock dividend or split, recapitalization, merger,
consolidation, combination, exchange of shares, or other similar corporate
change, the number of shares of Stock available for issuance hereunder in the
aggregate and subject to each outstanding Award the individual maximum set forth
in Section 5.1, and the exercise or base price of each outstanding Award, shall
be equitably adjusted (provided, however, that fractional shares shall be
rounded to the nearest whole share) by the Committee as appropriate to reflect
such changed capitalization. The Committee's determination shall be conclusive.
In the event of any such adjustment in capitalization, the number and type of
shares of Restricted Stock or Unrestricted Stock subject to Grants then
outstanding under the Plan shall be subject to the same changes and adjustments,
if any, as affect other holders of the Company's Stock.

      


      5.5           Types
of Awards Under Plan.  Awards may be made under the Plan in the form
of (a) Incentive Stock Options, (b) nonstatutory or nonqualified Stock Options,
(c) Stock Appreciation Rights or SARs, (d) Performance Units or Performance
Shares, (e) Restricted Stock, and (f) Unrestricted Stock.

      


      5.6           Evidence
of Awards.  Each Award or Grant made under the Plan shall be evidenced
by a writing ("Plan Agreement") in the form of an agreement with the Grantee
which shall set forth the number of shares of Stock subject to the Award, the
restrictions, vesting rate or schedule, exercise or base price, and such other
conditions or terms of the Award as the Committee may in its sole discretion
deem necessary or desirable. By acceptance of an Award, the Grantee thereby
agrees to such terms and conditions and to the terms of this Plan thereto
pertaining.

      


      5.7           Nature
of Payments.  Any and all Grants or Awards and issuances of shares of
Stock under the Plan shall be in consideration of services performed for the
Company by the Grantee. All such Grants and issuances shall constitute a special
incentive payment to the Grantee and shall not be taken into account in
computing the amount of salary or compensation of the Grantee for the purpose of
determining any benefits under any pension, retirement, supplemental retirement,
bonus, life insurance or other benefit plan of the Company or under any
agreement between the Company and the Grantee, unless such plan or agreement
specifically provides otherwise.

      


      5.8           Other
Payments or Awards.  Nothing contained in the Plan shall be deemed in
any way to limit or restrict the Company from making any award or payment to any
person under any other plan, arrangement or understanding, whether now existing
or hereafter in effect.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      5.9           Performance
Based Awards.  The Committee, in its discretion, may determine that it
is desirable to grant an Award to an individual whose compensation may be
subject to the deduction limits under Section 162(m) of the Code in a manner
that satisfies the requirements for qualified performance-based compensation
within the meaning of Section 162(m). In making such a grant the Committee shall
establish performance measure(s) based upon one or more of the following on a
corporate, divisional or other appropriate basis: (a) earnings per share, (b)
net income (before or after taxes), (c) return measure (including but not
limited to return on assets, revenue, equity or sales), (d) cash flow return on
investments, (e) earnings before or after taxes, (f) measures of gross sales,
gross revenues, or growth in sales or revenues, (g) share price, including but
not limited to growth measures and total shareholder return, and (h) operating
measures, including but not limited to operating margin and operating
costs.

      


      SECTION
6.           EFFECTIVE
DATE AND PLAN LIFE.

      


      6.1           Effective
Date and Effectiveness of Initial Grants.  The Plan was adopted by the
Section 162(m) Compensation Committee of the Board on April 30, 2002 and
ratified by the Board as of the same date, subject to approval by the Company's
stockholders. All Awards made under the Plan prior to such approval are subject
in their entirety to such approval. If stockholder approval is not obtained
within one year from adoption by the Section 162(m) Compensation Committee of
the Board, the Plan shall terminate on such date and no Awards shall be deemed
to have been made under the Plan. In such event, to the extent provided in the
applicable Plan Agreement an Award may be deemed to have been made as an ad hoc
grant by the Board.

      


      6.2           Plan
Life.  The Plan shall remain in effect, subject to the right of the
Board to earlier terminate the Plan pursuant to Section 15 hereof, until March
31, 2012, and no Grant or Award hereunder may thereafter be made.
Notwithstanding the termination of the Plan, all Awards made under the Plan
prior to its termination shall remain in effect until such Awards shall have
been exercised, satisfied or terminated in accordance with the terms and
provisions of the Plan and the terms of such Awards as set forth in the
applicable Plan Agreements evidencing the Awards.

      


      SECTION
7.           STOCK
OPTIONS.

      


      7.1           Grant
of Options.  Options may be granted to Participants at any time and
from time to time as shall be determined by the Committee. The Committee shall
have complete discretion in determining the number of Options granted to any
Participant and the terms thereof, subject to the provisions of the Plan. The
Committee may grant any type of Option to purchase Stock that is permitted by
law at the time of grant. However, no Incentive Stock Options shall be granted
to any person who owns, directly or indirectly, Stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company except as provided in Section 422(c)(5) of the Code. To the extent that
the aggregate Fair Market Value (determined as of the time the Option is
granted) of the Stock with respect to which Incentive Stock Options are first
exercisable by any Employee during any calendar year shall exceed $100,000, or
such higher amount as may be permitted from time to time under Section 422 of
the Code, such options shall be treated as nonqualified stock options. Nothing
in this Section 7 of the Plan shall be deemed to prevent the Grant of
nonstatutory or non-qualified stock options in amounts which exceed the maximum
established by Section 422 of the Code.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      7.2           Option
Price.  No Incentive Stock Option shall be granted pursuant to the
Plan at an option price that is less than the Fair Market Value of the Stock on
the date the Incentive Stock Option is granted.

      


      7.3           Duration
of Options.  Each Option shall expire at such time as the Committee
shall determine at the time it is granted, provided, however, that no Incentive
Stock Option shall be exercisable later than ten years from the date of
grant.

      


      7.4           Exercise
of Options.  Options granted under the Plan shall vest and become
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for all
Participants. However, unless a Plan Agreement specifies otherwise, no portion
of any Option shall vest before the first anniversary of the date of grant. Each
Option which is intended to qualify as an Incentive Stock Option shall comply
with the applicable provisions of the Code pertaining to such
Options.

      


      7.5           Payment.  Any
written notice of exercise of an Option shall be accompanied by payment for the
shares being purchased. Such payment shall be made: (a) by certified or official
bank check (or the equivalent thereof acceptable to the Company) for the full
option exercise price; or (b) with the consent of the Committee, by delivery of
shares of Capital Stock acquired at least six months prior to the option
exercise date and having a Fair Market Value (determined as of the exercise
date) equal to all or part of the Option exercise price and a certified or
official bank check (or the equivalent thereof acceptable to the Company) for
any remaining portion of the full Option exercise price; or (c) at the
discretion of the Committee and to the extent permitted by law, by such other
provision, consistent with the terms of the Plan, as the Committee may from time
to time prescribe. Shares of Stock owned through employee benefit plans of the
Company may be used to make purchase payments if no adverse tax consequences to
either the Company or such plans would result. The proceeds from payment of
Option exercise prices shall be added to the general funds of the Company and
shall be used for general corporate purposes.

      


      7.6           Restrictions
on Stock Transferability.  In addition to the provisions of Section
18.1, the Committee may impose such restrictions on any shares of Stock acquired
pursuant to the exercise of an Option under the Plan as it shall deem advisable,
which may be in addition to any such restrictions required by law.

      


      7.7           Termination
of Employment.  In the event the employment of a Participant is
terminated for cause, as determined by the Committee in its discretion, any
Option held by such Participant shall terminate immediately. In the event
employment terminates for any other reason, the exercisability of any Option
held by the Participant shall be governed by the applicable Plan Agreement,
subject to the Committee's authority to amend such Agreement as set forth in
Section 14.2. If an Incentive Stock Option is not exercised within the period
prescribed in Section 422 of the Code, it shall be treated and honored by the
Company as a nonstatutory stock option for the remainder of its allowable
exercise period.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      SECTION
8.           STOCK
APPRECIATION RIGHTS.

      


      8.1           Grant
of Stock Appreciation Rights.  Stock Appreciation Rights (or "SARs")
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have complete discretion in
determining the number of SARs granted to any Participant and the terms thereof,
subject to the provisions of the Plan.

      


      A SAR may be granted at the discretion
of the Committee either in connection with or independently of a grant of
Options, including in connection with previously awarded Options to which SARs
did not relate at the time ofgrant. A SAR granted in connection with an
Incentive Option shall satisfy the provisions of Section 422 of the
Code.

      


      8.2           Value
of SARs.  The Grantee of a SAR shall have the right, subject to the
terms of the Plan and the applicable Plan Agreement, to receive from the Company
an amount equal to (a) the excess of the Fair Market Value of a share of Stock
on the date of exercise of the SAR over (b) the Fair Market Value of a share of
Stock on the date of grant (or over the Option exercise price if the Stock
Appreciation Right is granted in connection with an Option), multiplied by (c)
the number of shares of Stock with respect to which the SAR is exercised. The
Committee in its discretion shall determine whether payment upon exercise of a
SAR will be made in cash or Stock, or in a combination thereof.

      


      8.3           Effect
of Exercise.  Upon the exercise of a SAR granted in connection with an
Option, the number of shares subject to the Option shall be reduced by the
number of shares with respect to which the SAR is exercised. Upon the exercise
of an Option in connection with which a SAR has been granted, the number of
shares subject to the SAR shall be reduced by the number of shares with respect
to which the Option is exercised.

      


      8.4           Exercise
of SARs.  SARs granted in connection with Options may be exercised for
all or part of the shares of Stock subject to the related Option. The SAR may be
exercised only with respect to the shares of Stock for which its related Option
is then exercisable. Option shares with respect to which the SAR shall have been
exercised, shall not be deemed to have lapsed and may not be subject again to an
Award under this Plan. SARs granted independent of Options may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon each grant; provided, however, that no SAR may be exercisable wholly or in
part before the first anniversary of the date of grant.

      


      8.5           Limit
on Appreciation.  At the time of Grant, but not thereafter, the
Committee may establish in its sole discretion, a maximum amount per share which
will be payable upon exercise of a SAR.

      


      8.6           Rule
16b-3 Requirements.  Notwithstanding any other provision of the Plan,
the Committee may impose such conditions on exercise of a SAR (including,
without limitation, by limiting the time of exercise to specified periods) as
may be required to satisfy any requirement, from time to time existing, of Rule
16b-3.

      


      8.7           Termination
of Employment.  In the event the employment of a Participant is
terminated for cause, as determined by the Committee in its discretion, any SAR
held by such Participant shall terminate immediately. In the event employment
terminates for any other reason (including retirement),


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      the
exercisability of any SAR held by the Participant shall be governed by the
applicable Plan Agreement, subject to Section 8.4 and to the Committee's
authority to amend such Agreement as set forth in Section 14.2.

      


      SECTION
9.           PERFORMANCE
UNITS AND PERFORMANCE SHARES.

      


      9.1           Grant
of Performance Units or Performance Shares.  Performance Units or
Performance Shares may be granted to Participants at any time and from time to
time as shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Performance Units or\ Performance Shares
granted to any Participant and the terms thereof, subject to the provisions of
the Plan.

      


      9.2           Value
of Performance Units and Performance Shares.  Each Performance Unit
shall have such initial value, if any, as may be specified by the Committee at
the time the grant is made and each Performance Share initially shall represent
one share of Stock or such other unit or value provided by the Committee at the
time the Performance Share is awarded. The Committee shall set performance goals
in its discretion which, depending on the extent to which they are met, will
determine the ultimate value of the Performance Unit or Performance Share to the
Participant. The time period during which the performance goals must be met
shall be called a performance period, and also is to be determined by the
Committee. After a performance period has ended, the holder of a Performance
Unit or Performance Share shall be entitled to receive the value thereof as
determined by the extent to which such performance goals have been
met.

      


      9.3           Form
and Timing of Payment.  Payment pursuant to Section 9.2 shall be in
cash, Stock (restricted or unrestricted), or a combination thereof as determined
by the Committee. Payment may be made in a lump sum or installments as
prescribed by the Committee at the time of grant. If any payment is to be made
on a deferred basis, the Committee may provide for the accrual of dividend
equivalents or interest during the deferral period.

      


      9.4           Termination
of Employment.  In the event the employment of a Participant is
terminated for cause, as determined by the Committee in its discretion, any
Performance Unit or Performance Share held by such Participant shall terminate
immediately. In the event employment terminates for any other reason, the
exercisability of any Performance Unit or Performance Share held by the
Participant shall be governed by the applicable Plan Agreement, subject to the
Committee's authority to amend such Agreement as set forth in Section
14.2.

      


      SECTION
10.         RESTRICTED
STOCK.

      


      10.1         Grant
of Restricted Stock.  The Committee, at any time and from time to
time, may grant shares of Restricted Stock under the Plan to such Participants
and in such amounts as it shall determine. The Committee shall have complete
discretion in determining the number of such shares granted to any Participant
and the terms of such Grant, subject to the provisions of the Plan. In the event
that the shares granted are newly issued, the Participant shall pay to the
Company an amount no less than the par value thereof.

      


      10.2         Transferability.  The
shares of Restricted Stock granted hereunder may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated prior to the passage
of such period of time, or the satisfaction


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      of such
conditions, as may be specified by the Committee in its sole discretion and set
forth in the applicable Plan Agreement.

      


      10.3         Other
Restrictions.  The Committee may impose such other restrictions on any
shares of Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, restrictions intended to comply with applicable
Federal or state securities law, and may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions. Unless the
Committee shall otherwise determine, any certificate evidencing shares of
Restricted Stock shall be held by the Company until such shares are free of all
restrictions specified in the applicable Plan Agreement.

      


      10.4         Rights
of Grantee.  A Grantee of Restricted Stock shall have the rights of a
stockholder with respect thereto, subject to the nontransferability and
forfeiture provisions set forth in the applicable Plan Agreement; provided,
however, that any ordinary dividends which become payable during the Period of
Restriction shall be paid to the Company.

      


      10.5         Termination
of Employment.  In the event the employment of a Participant is
terminated for cause, as determined by the Committee in its discretion, any
shares of Restricted Stock held by such Participant shall be forfeited and
returned to the Company immediately. In the event employment terminates for any
other reason, the vesting of shares of Restricted Stock held by the Participant
shall be governed by the applicable Plan Agreement, subject to the Committee's
authority to amend such Plan Agreement as set forth in Section 14.2. Upon the
forfeiture of any Restricted Shares other than for termination for cause, the
Company shall repay to the Participant any amount paid for such
shares.

      


      SECTION
11.         UNRESTRICTED
STOCK.

      


      11.1         Grant
of Unrestricted Stock.  The Committee may grant (either directly, as a
payout medium for other rights granted under the Plan or in exchange for other
rights relinquished by a Participant) shares of Stock free of restrictions under
the Plan, to such Participants and in such amounts as the Committee shall
determine in its sole discretion. In the event that the shares granted are newly
issued, the Participant shall pay to the Company an amount no less than the par
value thereof.

      


      SECTION
12.         BENEFICIARY
DESIGNATION.

      


      12.1         Beneficiary
Designation.  Each Participant under the Plan may name, from time to
time, any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of
his/her death before he/she receives any or all of such benefit. Each
designation will revoke all prior designations by the same Participant, shall be
in a form prescribed by the Committee, and will be effective only when filed by
the Participant in writing with the Company during his/her lifetime. In the
absence of any such designation, benefits remaining unpaid at the Participant's
death shall be paid to his/her estate.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      SECTION
13.         RIGHTS OF
EMPLOYEES.

      


      13.1         Employment.  Nothing
in the Plan shall interfere with or limit in any way the right of the Company to
terminate any Participant's employment at any time, nor confer upon any
Participant any right to continue in the employ of the Company.

      


      SECTION
14.         AMENDMENT, MODIFICATION, AND
TERMINATION OF PLAN.

      


      14.1         Amendment,
Modification, and Termination of Plan.  The Board at any time may
suspend, discontinue or terminate, and from time to time may amend, revise or
modify the Plan.

      


      14.2         Amendment
of Plan Agreements.  The Committee may amend any outstanding Plan
Agreement, including, without limitation, by amendment which would (a)
accelerate the time or times at which an Award becomes unrestricted or may be
exercised, or (b) waive or amend any goals, restrictions or conditions set forth
in the Plan Agreement, or (c) extend the scheduled expiration date of the
Award.

      


      14.3         Rights
of Grantees.  No amendment, revision, modification, suspension,
discontinuance or termination of the Plan shall in any manner adversely affect
any Award theretofore granted under the Plan, without the consent of the
Grantee.

      


      SECTION
15.         TAX
WITHHOLDING.

      


      15.1         Tax
Withholding.  The Company shall have the power to withhold from an
Award or from any other payment otherwise due the Grantee, or to require a
Participant to remit to the Company, an amount sufficient to satisfy Federal,
state, and local withholding tax requirements on any Award under the Plan. To
the extent permissible under applicable tax, securities, and other laws, the
Committee may, in its sole discretion, permit the Participant to satisfy a tax
withholding requirement by directing the Company to apply shares of Stock to
which the Participant is entitled pursuant to an Award. The Committee may impose
such conditions on such withholding (including, without limitation, by limiting
the time of exercise to specific periods) as may be necessary to satisfy the
requirements of Rule 16b-3.

      


      SECTION
16.         REQUIRED NOTIFICATIONS
BY GRANTEE.

      


      16.1         Notification
by Grantee of Election Under Section 83(b) of the Code.  If any
Grantee shall, in connection with an Award, make an election permitted under
Section 83(b) of the Code (i.e., an election to include in gross income in the
year of transfer the amounts specified in Section 83(b) of the Code), such
Grantee shall notify the Company of such election within 10 days of filing such
election with the Internal Revenue Service, in addition to any filing and
notification required pursuant to regulations issued under the authority of Code
Section 83.

      


      16.2         Notification
by Grantee Upon Disqualifying Disposition Prior to Expiration of Holding Periods
Under Section 421(b) of the Code.  Each Plan Agreement with respect to
an Incentive Stock Option shall require the Grantee to notify the Company of any
disposition of shares of Common Stock issued pursuant to the exercise of such
Option under the circumstances described in Section 421(b) of the Code (relating
to certain disqualifying dispositions of shares acquired by exercise of the
Option before expiration of the applicable holding periods), within 10 days of
such disposition.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      SECTION
17.         INDEMNIFICATION.

      


      17.1         
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 any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him/her in connection with or resulting
from any claim, action, suit, or proceeding to which he/she may be a party or in
which he/she may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him/her in
settlement thereof, with the Company's approval, or paid by him/her in
satisfaction of any judgment in any such action, suit, or proceeding against
him/her, provided he/she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he/she undertakes to handle and
defend it on his/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 Articles of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.

      


      SECTION
18.         NONASSIGNABILITY.

      


      18.1         Nonassignability.  To
the extent necessary to comply with Rule 16b-3 and with Section 422 of the Code,
no Award or right granted to any person under the Plan or under any Plan
Agreement shall be assignable or transferable other than by will or by the laws
of descent and distribution. All rights granted under the Plan or any Plan
Agreement shall be exercisable during the life of the Grantee only by the
Grantee or the Grantee's legal representative.

      


      SECTION
19.         REQUIREMENTS OF LAW;
CONSENTS.

      


      19.1         Requirements
of Law.  The granting of Awards and the issuance of shares of Stock
upon the exercise of an Option shall be subject to all applicable laws, rules,
and regulations, such approvals by any governmental agencies or national
securities exchanges as may be required.

      


      19.2         Consents
to Plan Actions.  If the Committee shall at any time determine that
any Consent (as hereinafter defined) is necessary or desirable as a condition
of, or in connection with, the granting of any Award under the Plan, the
issuance or purchase of shares or other rights thereunder, or the taking of any
other action thereunder (each such action being hereinafter referred to as a
"Plan Action"), then such Plan Action shall not be taken, in whole or in part,
unless and until such Consent shall have been effected or obtained to the full
satisfaction of the Committee.

      


      19.3         Nature
of Consents.  The term "Consent" as used herein with respect to any
Plan Action means (a) any and all listings, registrations or qualifications in
respect thereof upon any securities exchange or under any Federal, state or
local law, rule or regulation, (b) any and all written agreements and
representations by the Grantee with respect to the disposition of shares, or
with respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and , (c) any and all
consents, clearances and approvals in respect of a Plan action by any
governmental or other regulatory bodies.

        


        19.4         Governing
Law.  The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the internal laws of the State of
Texas.