opticons8ex10_11232009.htm


     

    
      Exhibit
10.E

      


      OPTICON
SYSTEMS, INC.

      2009
EMPLOYEES AND CONSULTANTS STOCK COMPENSATION PLAN

      OCTOBER
2, 2009

      


      1.
Purposes of the Plan. The purposes of this Stock Compensation Plan
are:

      


                   •
to attract and retain the best available personnel for positions of substantial
responsibility,

                   •
to provide additional incentive to Employees and Consultants, including board
members,

          and providing
services to the Company and/or any of its subsidiaries.

                   •
to promote the success of the Company’s business.

      


      2.
Definitions. As used herein, the following definitions shall apply:

      


                      (a)
“Administrator” means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.

      


                      (b)
“Applicable Laws” means the requirements relating to the administration of the
stock compensation plan under U.S. state corporate laws, U.S. Federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the  applicable laws of any foreign country or
jurisdiction where shares are, or will be, granted under the Plan.

      


                      (c)
“Board” means the Board of Directors of the Company.

      


                      (d)
“Code” means the Internal Revenue Code of 1986, as amended.

      


                      (e)
“Committee” means a committee of Directors appointed by the Board in accordance
with Section 4 of the Plan.

      


                      (f)
“Common Stock” means the Common Stock of the Company.

      


                      (g)
“Company” means Opticon Systems Inc.

      


                      (h)
“Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiaries to render services to such entity.

      


                      (i)
“Director” means a member of the Board.

      


                      (j)
“Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code.

      


                      (k)
“Employee” means any individual, including Officers, employed by the Company or
any Parent or Subsidiaries of the Company. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual (i) is on any bona fide leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiaries, or any successor. Neither service as a Director nor
payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.


      
        
           


        

        
          Exhibit
10.E -- Page 1

          
            

          

        

        
           


        

      


      


      


                      (l)
“Exchange Act” means the Securities Exchange Act of 1934, as
amended.

      


                      (m)
“Fair Market Value” means, as of any date, the value of Common Stock determined
as follows:

      


                           (i)
If the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such  stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day on the date of such determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

      


                           (ii)
If the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, the Fair Market Value of a Share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable;

      


                           (iii)
In the absence of an established market for the Common Stock, the Fair Market
Value shall be determined in good faith by the Administrator.

      


                      (n)
“Notice of Grant” means a written or electronic notice evidencing certain terms
and conditions of an individual grant. The Notice of Grant is part of the Common
Stock Agreement.

      


                      (o)
“Officer” means a person who is an officer of the Company within the meaning of
Nasdaq guidelines, including all employees with the corporate rank of
vice-president or higher, and employees with lesser rank but comparable
authority.

      


                      (p)
“Common Stock Agreement” means an agreement between the Company and a Grantee
evidencing the terms and conditions of an individual Common Stock grant. The
Stock Grant agreement is subject to the terms and conditions of the
Plan.

      


                      (q)
“Grantee” means the holder of an outstanding Common Stock granted under the
Plan.

      


                      (r)
“Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

      


                      (s)
“Plan” means this 2009 Employees and Consultants Stock Compensation
Plan.

      


                      (t)
“Service Provider” means an Employee, Consultant or Director.

      


                      (u)
“Share” means a share of the Common Stock, as adjusted in accordance with
Section 12 of the Plan.

      


                      (v)
“Subsidiaries” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.


      
        
           


        

        
          Exhibit
10.E -- Page 2

          
            

          

        

        
           


        

      


      


                 3.
Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan,
the maximum aggregate number of Shares, which may be available for grants under
the Plan, is five million (5,000,000) Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.

      


                 4.
Administration of the Plan.

      


                      (a)
Administration. The Plan shall be administered by (i) the Board or (ii) a
Committee, which Committee shall be constituted to satisfy Applicable
Laws.

      


                      (b)
Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to
such Committee, the Administrator shall have the authority, in its
discretion:

      


                           (i)
to determine the Fair Market Value of the Common Stock;

                           (ii)
to select the Service Providers to whom Common Stock may be granted
hereunder;

                           (iii)
to determine whether and to what extent Common Stock are granted
hereunder;

                           (iv)
to approve forms of agreement for use under the Plan;

                           (v)
to determine the terms and conditions, not inconsistent with the terms of the
Plan, of any award granted hereunder. Such terms and conditions include, but are
not limited to, the time or times when Common Stock are granted (which may be
based on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                           (vii)
to construe and interpret the terms of the Plan and awards granted pursuant to
the Plan;

                           (viii)
to prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax
laws;

                           (ix)
to modify or amend each grant (subject to Section 14(b) of the
Plan);

                           (x)
to authorize any person to execute on behalf of the Company any instrument
required to effect the Common Stock grant previously granted by the
Administrator;

                           (xi)
to determine the terms and restrictions applicable to the grant;

                           (xii)
to allow Grantee to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares to be issued having a Fair Market Value equal
to the amount required to be withheld (but not more than the amount required to
be withheld). The Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined. All elections by an Grantee to have Shares withheld for this purpose
shall be made in such form and under such conditions as the Administrator may
deem necessary or advisable; and

                           (xiii)
to make all other determinations deemed necessary or advisable for administering
the Plan.

      


                      (c)
Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Grantees
and any other holders of Options.


      
        
           


        

        
          Exhibit
10.E -- Page 3

          
            

          

        

        
           


        

      


      


      Opticon
Systems, Inc. is required to withhold any federal and state income taxes and
employee participant’s social security and medicare contributions from
compensation. Normally, there is no income tax, social security or medicare
withholding requirement for independent consultants, including board members.
The Company is to provide the employee-participant with  the number of
shares an employee-participant is eligible to purchase on any compensation
payment date. The employee shall be solely responsible for payment of applicable
federal and state taxes computed on income and social security and medicare
contributions. The Company is to provide the employee-participant with a
computation of federal and state taxes, and social security and medicare
contributions on all shares eligible to purchase by the employee-participant on
any compensation date.  It is the employee-participant’s
responsibility to reimburse the Company for any federal and state tax
withholding no later than the due date for the payment of withholding taxes by
the Company. Any gain or loss on the sale of the common stock, as compared to
the tax basis, will be short or long term capital gain, as appropriate. The
employee’s tax basis for the common stock will be the greater of the market
value of the shares on the date of issue or the value pursuant to the Employment
Agreement

      


      


      5.
Eligibility. Stock Grants may be granted to Service Providers, Officers and
employees.

       
 

                 6.
Limitation. Neither the Plan nor any Option shall confer upon a Grantee any
right with respect to continuing the Grantee’s relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Grantee’s right or the Company’s right to terminate
such       relationship at any time, with or
without cause.

      


                 7.
Term of Plan. The Plan shall become effective upon its adoption by the Board. It
shall continue in effect for ten (10) years, unless sooner terminated under
Section 14 of the Plan.

      


                 8.
Term of Option. The term of each Option shall be stated in the Option
Agreement.

      


                 9.
Option Exercise Price and Consideration.

      


                      (a)
Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be determined by the
Administrator.

      


                      (b)
Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and
shall determine any conditions which must be satisfied before the Option may be
exercised.


      
        
           


        

        
          Exhibit
10.E -- Page 4

          
            

          

        

        
           


        

      


      


                      (c)
Form of Consideration. The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. Such
consideration may consist entirely of:

      


                           (i)
cash;

                           (ii)
check;

                           (iii)
other Shares which (A) in the case of Shares acquired upon exercise of an
option, have been owned by the Grantee for more than six months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said Option shall be
exercised;

                           (iv)
consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan;

                           (v)
such other consideration and method of payment for the issuance of Shares to the
extent permitted by Applicable Laws; or

                           (vi)
any combination of the foregoing methods of payment.

      


                 10.
Exercise of Option.

      


                      (a)
Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder
shall be exercisable according to the terms of the Plan and at such times and
under such conditions as determined by the Administrator and set forth in the
Option Agreement. An Option may not
be       exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:

       (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and

      (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Grantee or, if
requested by the Grantee, in the name of the Grantee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the
Plan.               Exercising
an Option in any manner shall decrease the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.


      
        
           


        

        
          Exhibit
10.E -- Page 5

          
            

          

        

        
           


        

      


      


                      (b)
Termination of Relationship as a Service Provider. If an Grantee ceases to be a
Service Provider, other than upon the Grantee’s death or Disability, the Grantee
may exercise his or her Option, but only within such period of time as is
specified in the Option Agreement,
and       only to the extent that the Option
is vested on the date of termination (but in no event later than the expiration
of the term of such Option as set forth in the Option Agreement). In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Grantee’s termination. If, on the date of
termination, the Grantee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the
Option       shall revert to the Plan. If,
after termination, the Grantee does not exercise his or her Option within the
time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

      


                      (c)
Disability of Grantee. If an Grantee ceases to be a Service Provider as a result
of the Grantee’s Disability, the Grantee may exercise his or her Option within
such period of time as is specified in the Option Agreement, to the extent the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Grantee’s termination. If, on
the date of termination, the Grantee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Grantee does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

      


                      (d)
Death of Grantee. If an Grantee dies while a Service Provider, the Option may be
exercised within such period of time as is specified in the Option Agreement
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant), by the Grantee’s estate or by a person who
acquires the right to exercise the Option by bequest or inheritance, but only to
the extent that the Option is vested on the date of death. In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Grantee’s termination. If, at the time of
death, the Grantee is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option shall immediately revert to the
Plan. The Option may be exercised by the executor or administrator of the
Grantee’s estate or, if none, by the person(s) entitled to exercise the Option
under the Grantee’s will or the laws
of       descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.

      


                      (e)
Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares, an Option previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Grantee
at the time that such offer is made.

      


                 11.
Assignability. A Common Stock Grant may not be assigned without the approval of
the administrator.

      


                 12.
Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.


      
        
           


        

        
          Exhibit
10.E -- Page 6

          
            

          

        

        
           


        

      


      


                      (a)
Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which have yet been granted, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration.” Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to the
Plan.

      


                      (b)
Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Grantee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide
for       an Grantee to have the right to
exercise his or her Option until ten (10) days prior to such transaction as to
all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may
provide that any Company       repurchase
option applicable to any Shares purchased upon exercise of an Option shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option will
terminate       immediately prior to the
consummation of such proposed action.

      


                      (c)
Merger or Asset Sale. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option shall be assumed or an equivalent option or
right substituted by the successor corporation or a Parent or Subsidiaries of
the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the Option, the Grantee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Grantee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock, immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a       choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or
sale of assets is not solely common stock of the successor corporation or its
Parent, the Administrator       may, with the
consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.


      
        
           


        

        
          Exhibit
10.E -- Page 7

          
            

          

        

        
           


        

      


      


                 13.
Date of Grant. The date of grant of an Option shall be, for all purposes, the
date on which the Administrator makes the determination granting such Option, or
such other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Grantee within a reasonable time after
the date of such grant.

      


                 14.
Amendment and Termination of the Plan.

      


                      (a)
Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

      


                      (b)
Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Grantee, unless mutually
agreed otherwise between the Grantee and the Administrator, which agreement must
be in writing and signed by the       Grantee
and the Company. Termination of the Plan shall not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to grants
under the Plan prior to the date of such termination.

      


                 15.
Conditions Upon Issuance of Shares.  Legal Compliance. Shares shall
not be issued pursuant to the exercise of an Option unless the exercise of such
Option and the   issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

      


                 16.
Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of      any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

      


                 17.
Reservation of Shares. The Company, during the term of this Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

       
 

                  18.  Notice
of Grant of Stock Options and Option Agreement

      


      
        	
                                       Company:

              	
                Opticon
      Systems Inc.

              
	
                 

              	
                449
      Central Avenue, Suite 105

              
	
                 

              	
                St.
      Petersburg, Florida 33701

              
	 
      	 
      
	
                Grantee:

              	
                Name:
      ________________________________

              
	
                 

              	
                Address:
      ______________________________

              


      

       
 

      


            Effective
[DATE], you have been granted a(n) Non-Qualified Stock Option to buy [SHARES]
shares of Opticon Systems Inc. (the Company) stock at $[PRICE] per
share.

      


            The
total option price of the shares granted is $[PRICE]. Shares in each period will
become fully vested on the date shown.

       
 


      
        
           


        

        
          Exhibit
10.E -- Page 8

          
            

          

        

        
           


        

      


      


            Shares
Vest Type Full Vest  [months] Term of Expiration [months]

      


            By
your signature and the Company’s signature below, you and the Company agree that
these Common Stock shares were granted under and governed by the terms and
conditions of the Company’s 2009 Employees and Consultants Stock Compensation
Plan and the Common Stock Agreement, all of which are attached and made a part
of this document.

       
 

      Opticon
Systems Inc.

      


      


      _______________________________

      Date

       
 

       
 

       
 

      [GRANTEE]

      


      


      ____________________________

      Date

      


       
 


      
        
           


        

        
          Exhibit
10.E -- Page 9

          
            

          

        

        
           


        

      


      OPTICON
SYSTEMS INC.

      2009
EMPLOYEES AND CONSULTANTS STOCK COMPENSATION PLAN

      


       
 

      Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Option Agreement.

      


      
        	
                I.  

              	
                NOTICE
      OF STOCK OPTION GRANT

              


      

            You
have been granted an option to purchase Common Stock of the Company, subject to
the terms and conditions of the Plan and this Option Agreement, as indicated on
this “Notice of Grant of Stock Options and Option Agreement.”

      


            Vesting
Schedule: Subject to the Grantee continuing to be a Service Provider on such
dates, this Option shall vest and become exercisable in accordance with the
provisions indicated on the attached “Notice of Grant of Stock Options and
Option Agreement,” subject to Grantee remaining a Service Provider on such
vesting dates.

      


            Termination
Period: This Option may be exercised for three months after Grantee ceases to be
a Service Provider. Upon the death or Disability of the Grantee, this Option may
be exercised for twelve months following Grantee’s termination as a Service
Provider. In no event shall this      Option be
exercised later than the Term/Expiration Date as provided on the attached
“Notice of Grant of Stock Options and Option Agreement.”

      


            II.
AGREEMENT

      


            1.
Grant of Option. The Plan Administrator of the Company hereby grants to the
Grantee named in the Notice of Grant attached as Part I of this Agreement (the
“Grantee”) an option (the “Option”) to purchase the number of Shares, as set
forth in the Notice of Grant, at the exercise price per share set forth in the
Notice of Grant (the “Exercise Price”), for the exercise
period,   subject to the terms and conditions of the Plan, which
is incorporated herein by reference. Subject to Section 14(b) of the Plan, in
the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Option Agreement, the terms and conditions of the
Plan shall prevail.

      


            2.
Exercise of Option:

      


                 (a)
Right to Exercise. This Option is exercisable during its term in accordance with
the Vesting Schedule set in the Notice of Grant and the applicable provisions of
the Plan and this Option Agreement.

      


                 (b)
Method of Exercise. This Option is exercisable by delivery of an exercise
notice, in the form attached as Exhibit A (the “Exercise Notice”, which shall
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be completed by the Grantee
and delivered to the Stock Option Administrator. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by such aggregate Exercise
Price.


      
        
           


        

        
          Exhibit
10.E -- Page 10

          
            

          

        

        
           


        

      


      


      


                 No
Shares shall be issued pursuant to the exercise of this Option unless such
issuance and exercise complies with Applicable Laws. Assuming such compliance,
for income tax purposes the Exercised Shares shall be considered transferred to
the Grantee on the date the Option is
exercised       with respect to such
Exercised Shares.

      


            3.
Method of Payment. Payment of the aggregate Exercise Price shall be by any of
the following, or a combination thereof, at the election of the
Grantee:

      


                   (a)
cash;

                  (b)
check;

                   (c)
consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan; or

                   (d)
surrender of other Shares which (i) in the case of Shares acquired upon exercise
of an option, have been owned by the Grantee for more than six (6) months of the
date of surrender, and (ii) have a Fair Market Value on the date of surrender
equal to the aggregate Exercise Price of the Exercised Shares.

      


            4.
Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Grantee only by the Grantee. The terms of the
Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Grantee.

      


            5.
Term of Option. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with
the Plan and the terms of this Option Agreement.

      


            6.
Tax Consequences. Some of the federal tax consequences relating to this Option,
as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE
SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

      


                 (a)
Exercising the Option. The Grantee may incur regular federal income tax
liability upon exercise of an NSO. The Grantee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Exercised Shares on the date of
exercise over their aggregate Exercise Price. If the Grantee is an Employee of a
former Employee, the Company will be required to withhold from his or her
compensation or collect from Grantee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.

      


                 (b)
Disposition of Shares. If the Grantee holds NSO Shares for at least one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes.


      
        
           


        

        
          Exhibit
10.E -- Page 11

          
            

          

        

        
           


        

      


      


            7.
Entire Agreement: Governing Law. The Plan is incorporated herein by reference.
The Plan and this Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirely all prior undertakings and agreements of the Company and Grantee with
respect to the subject matter hereof, and may not be modified adversely to the
Grantee’s interest except by means of a writing signed by the Company and
Grantee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of Texas.

      


            8.
NO GUARENTEE OF CONTINUED SERVICE: GRANTEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER).
GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
COMTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE WITH GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE GRANTEE’S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

      


                 By
your signature and the signature of the Company’s representative on the attached
“Notice of Grant of Stock Options and Option Agreement” of this Option
Agreement, you and the Company agree that this Option is granted under and
governed by the terms and conditions of the Plan
and       this Option Agreement. Grantee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Grantee hereby agrees to       accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Option Agreement.
Grantee further agrees to notify the Company upon any change  in the
residence address indicated on the attached “Notice of Grant of Stock Options
and Option Agreement.”

       
 

      


      



      
        
           


        

        
          Exhibit
10.E -- Page 12