3.   Exercise During Employment. Except as provided in Section 2 hereof, this optionmay not be exercised unless Employee is at the time of exercise an employee of the Company or anAffiliate.     4.   Vesting. Subject to the provisions of Sections 2 and 3 hereof, this option mayonly be exercised in accordance with the following: (a) a number of whole shares of Common Stock which does not exceed twenty percentof the shares of Common Stock in respect of which this option is granted may bepurchased in whole at any time, or in part from time to time, on or after the firstanniversary of the date of this Agreement;  (b) an additional number of whole shares of Common Stock which does not exceedtwenty percent of the shares of Common Stock in respect of which this option is grantedmay be purchased in whole at any time, or in part from time to time, on or after thesecond anniversary of the date of this Agreement;  (c) an additional number of whole shares of Common Stock which does not exceedtwenty percent of the shares of Common Stock in respect of which this option is grantedmay be purchased in whole at any time, or in part from time to time, on or after thethird anniversary of the date of this Agreement;  (d) an additional number of whole shares of Common Stock which does not exceedtwenty percent of the shares of Common Stock in respect of which this option is grantedmay be purchased in whole at any time, or in part from time to time, on or after thefourth anniversary of the date of this Agreement; and  (e) the remaining shares of Common Stock in respect of which this option is grantedmay be purchased in whole at any time, or in part from time to time, on or after thefifth anniversary of the date of this Agreement;provided, however, that notwithstanding the foregoing, all shares of Common Stockin respect of which this option is granted shall become immediately purchasable upon a Change inControl, as defined below.     For purposes of this Agreement, “Change in Control” means a change in control of theCompany after the date of this Agreement in any one of the following circumstances: (i) any personshall have become the beneficial owner of or shall have acquired, directly or indirectly,securities of the Company representing 50% or more (in addition to his current holdings) of thecombined voting power of the Company’s then outstanding voting securities without prior approval ofat least two-thirds of the members of the Board of Directors of the Company in office immediatelyprior to such person’s attaining such percentage interest; (ii) the Company is a party to a merger,consolidation, sale of assets, or other reorganization, or a proxy contest, as a consequence ofwhich the members of the Board of Directors of the Company in office immediately prior to suchtransaction or event constitute less than a majority of the Board thereafter; or (iii) during anyperiod of two consecutive years, individuals who at the beginning of such period constituted theBoard of Directors of the Company (including for this purpose any new director whose election ornomination for election by the Company’s shareholders was approved by a vote of at least two-thirdsof the directors then still in office who were directors at the beginning of such period) cease forany reason to constitute at least a majority of the Board.
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     Notwithstanding the foregoing, if Employee terminates employment with the Company and itsAffiliates on or after the date Employee reaches age 60 and following the 10thanniversary of Employee’s most recent date of hire with the Company or one of its Affiliates, allremaining shares ofCommon Stock in respect of which this option is granted that have not otherwise vestedpursuant to this Section 4 shall immediately vest on the date Employee’s employment terminates andmay be purchased in whole at any time, or in part from time to time, within the time periodspermitted under Section 2.     5.   Manner of Exercise. This option may be exercised by written notice signed by theperson entitled to exercise the same and delivered to the President of the Company or sent byUnited States registered mail addressed to the Company (for the attention of the President) at itscorporate office in McKinney, Texas. Such notice shall state the number of shares of Common Stockas to which the option is exercised and shall be accompanied by the full amount of the purchaseprice of such shares.     6.   Payment. The purchase price for the option shares may be paid in cash or, in wholeor in part, by the surrender of issued and outstanding shares of Common Stock of the Company whichshall be credited against the purchase price at the Fair Market Value of the shares surrendered onthe date of exercise of the option.     7.   Delivery of Shares. Delivery of the certificates representing the shares of CommonStock purchased upon exercise of this option shall be made promptly after receipt of notice ofexercise and payment of the purchase price and the amount of any withholding taxes to the Company,if required, provided that the Company shall have such time as it reasonably deems necessary toqualify or register such shares under any law or governmental rule or regulation that it deemsnecessary or desirable.     8.   Adjustments. In the event that, before delivery by the Company of all the sharesof Common Stock in respect of which this option is granted, the Company shall have effected aCommon Stock split or dividend payable in Common Stock, or the outstanding Common Stock of theCompany shall have been combined into a smaller number of shares, the shares of Common Stock stillsubject to this option shall be increased or decreased to reflect proportionately the increase ordecrease in the number of shares outstanding, and the purchase price per share shall be decreasedor increased to make the aggregate purchase price for all the shares then subject to this optionthe same as immediately prior to such stock split, stock dividend or combination. In the event ofa reclassification of the shares of Common Stock not covered by the foregoing, or in the event of aliquidation or reorganization (including a merger, consolidation, spin-off or sale of assets) ofthe Company or an Affiliate, the Board of Directors of the company shall make such adjustments, ifany, as it may deem appropriate in the number, purchase price and kind of shares still subject tothis option.     9.   Transferability. This option is not transferable otherwise than by will and thelaws of descent and distribution and during the lifetime of Employee is exercisable only byEmployee or, if Employee is legally incompetent, by Employee’s legal representative.     10.   Employment. As consideration for the Company’s grant of this option,Employee agrees not to leave the employ of the Company or any Affiliate voluntarily for a period ofone year after the date of this Agreement. Nothing in this Agreement, however, confers uponEmployee any right to continue in the employ of the Company or any Affiliate, nor shall thisAgreement interfere in any manner with the right of the Company or any Affiliate to terminate theemployment of Employee with or without cause at any time.
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     11.   Notice of Disposition. As consideration for the Company’s grant of this option,Employee agrees that if and when Employee disposes of any shares of Common Stock purchased byEmployee pursuant to this option, Employee shall promptly notify the Company of such disposition,including the identity of the transferee of such shares of Common Stock and the considerationreceived for the transfer of such shares.     12.   Option Subject to Plan. By execution of this Agreement, Employee agrees that thisoption and the shares of Common Stock to be received upon exercise hereof shall be governed by andsubject to all applicable provisions of the Plan.     13.   Construction. This Agreement is governed by, and shall be construed and enforcedin accordance with, the laws of the State of Texas. Words of any gender used in this Agreementshall be construed to include any other gender, unless the context requires otherwise. Theheadings of the various sections of this Agreement are intended for convenience of reference onlyand shall not be used in construing the terms hereof.     14.   Application of Section 409A of the Internal Revenue Code. Options grantedpursuant to this Agreement are intended to be exempt from the requirements of Section 409A of theInternal Revenue Code of 1986, as amended, and this Agreement shall be interpreted in a mannerconsistent with that intent; however, the Company makes no representation or guarantee as to thetax consequences of this Agreement.     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first abovewritten.     **The “Company”**