ex4_1.htm


    
      

    


    Exhibit
4.1

     

    BLAST
ENERGY SERVICES, INC.

    2009
STOCK INCENTIVE PLAN

    


    ARTICLE
I -- PREAMBLE

    


    1.1  This 2009 Stock
Incentive Plan of Blast Energy Services, Inc. (the "Company") is intended to
secure for the Company and its Affiliates the benefits arising from ownership of
the Company's Common Stock by the Employees, Officers, Directors and Consultants
of the Company and its Affiliates, all of whom are and will be responsible for
the Company's future growth.  The Plan is designed to help attract and
retain for the Company and its Affiliates personnel of superior ability for
positions of exceptional responsibility, to reward Employees, Officers,
Directors and Consultants for their services and to motivate such individuals
through added incentives to further contribute to the success of the Company and
its Affiliates. With respect to persons subject to Section 16 of the Act,
transactions under this Plan are intended to satisfy the requirements of Rule
16b-3 of the Act.

    


    1.2  Awards under the Plan
may be made to an Eligible Person in the form of (i) Incentive Stock Options (to
Eligible Employees only); (ii) Nonqualified Stock Options; (iii) Restricted
Stock; (iv) Stock Awards; (v) Performance Shares; or (vi) any combination of the
foregoing.

    


    1.3  The Company’s board of
directors adopted the Plan on March 30, 2009.  The Plan shall be
effective April 1, 2009, (the "Effective Date"), subject to approval by the
shareholders of the Company to the extent necessary to satisfy the requirements
of the Code, the Act, or other applicable federal or state
law.  Unless sooner terminated as provided elsewhere in this Plan,
this Plan shall terminate upon the close of business on the day next preceding
the tenth (10th) anniversary of the Effective Date.  Award Agreements
outstanding on such date shall continue to have force and effect in accordance
with the provisions thereof.

    


    1.4  The Plan shall be
governed by, and construed in accordance with, the laws of the State of Texas
(except its choice-of-law provisions).

    


    1.5 Capitalized terms shall have the
meaning provided in Article II unless otherwise provided in this Plan or any
related Award Agreement.

    


    ARTICLE
II -- DEFINITIONS

    


    DEFINITIONS.  Except where
the context otherwise indicates, the following definitions apply:

    


    2.1  "Act" means the
Securities Exchange Act of 1934, as now in effect or as hereafter
amended.

    


    2.2  "Affiliate" means any
parent corporation or subsidiary corporation of the Company, whether now or
hereinafter existing, as those terms are defined in Sections 424(e) and (f),
respectively, of the Code.

    


    2.3  "Award" means an award
granted to a Participant in accordance with the provisions of the Plan,
including, but not limited to, Stock Options, Restricted Stock, Stock Awards,
Performance Shares, or any combination of the foregoing.

    


    2.4  "Award Agreement" means
the separate written agreement evidencing each Award granted to a Participant
under the Plan.

    


    2.5  "Board of Directors" or
"Board" means the Board of Directors of the Company, as constituted from time to
time.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    2.7  "Change of Control"
means (i) the adoption of a plan of merger or consolidation of the Company with
any other corporation or association as a result of which the holders of the
voting capital stock of the Company as a group would receive less than 50% of
the voting capital stock of the surviving or resulting corporation; (ii) the
approval by the Board of Directors of an agreement providing for the sale or
transfer (other than as security for obligations of the Company) of
substantially all of the assets of the Company; or (iii) in the absence of a
prior expression of approval by the Board of Directors, the acquisition of more
than 20% of the Company's voting capital stock by any person within the meaning
of Rule 13d-3 under the Act (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company).

    


    2.8  "Code" means the
Internal Revenue Code of 1986, as amended, and the regulations and
interpretations promulgated thereunder.

    


    2.9  "Committee" means a
committee of two or more members of the Board appointed by the Board in
accordance with Section 3.2 of the Plan.

    


    2.10  "Common Stock" means
the Company’s common stock.

    


    2.11  "Company" means Blast
Energy Services, Inc., a Texas corporation.

    


    2.12.  "Consultant" means any
person, including an advisor engaged by the Company or an Affiliate to render
bona fide consulting or advisory services to the Company or an Affiliate, other
than as an Employee, Director or Non-Employee Director.

    


    2.13  "Director" means a
member of the Board of Directors of the Company.

    


    2.14  "Disability" means the
permanent and total disability of a person within the meaning of Section
22(e)(3) of the Code.

    


    2.15  "Effective Date" shall
be the date set forth in Section 1.3 of the Plan.

    


    2.16  "Eligible Employee"
means an Eligible Person who is an Employee of the Company or any
Affiliate.

    


    2.17  "Eligible Person" means
any Employee, Officer, Director, Non-Employee Director or Consultant of the
Company or any Affiliate, except for instances where services are in connection
with the offer or sale of securities in a capital-raising transaction, or they
directly or indirectly promote or maintain a market for the Company’s
securities, subject to any other limitations as may be provided by the Code, the
Act, or the Board.  In making such determinations, the Board may take
into account the nature of the services rendered by such person, his or her
present and potential contribution to the Company’s success, and such other
factors as the Board in its discretion shall deem relevant.

    


    2.19  “Employee” means an
individual who is a common-law employee of the Company or an Affiliate including
employment as an Officer.  Mere service as a Director or payment of a
director's fee by the Company or an Affiliate shall not be sufficient to
constitute "employment" by the Company or an Affiliate.

    


    2.20  "ERISA" means the
Employee Retirement Income Security Act of 1974, as now in effect or as
hereafter amended.

    


    2.21  "Fair Market Value"
means:

    


    (a) for
purposes of an Incentive Stock Option, if there is a market for the Company’s
stock, on a stock exchange or in an over-the-counter market, or otherwise, the
Fair Market Value shall be the mean between the highest and lowest quoted
selling prices on the valuation date of the Incentive Stock Option, or if there
were no sales of the Company’s Common Stock on the valuation date, the Fair
Market Value shall be the weighted average of the means between the highest and
lowest sales on the nearest date before and the nearest date after the valuation
date.  If a valuation pursuant to this paragraph is not available, the
appropriate method described in Section 20.2031-2 of the Treasury Regulations
adopted under the Code shall be used for the Fair Market Value,
and


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    (b) for
all other purposes, the mean between the highest and lowest quoted selling
prices of the Common Stock (if actual sales price information on such trading
day is not available, the mean between the bona fide bid and asked prices on
such trading day shall be used) on the trading day immediately prior to the date
on which a determination is being made pursuant to this Section 2.21 (the “Mean
Selling Price”), as reported by the National Association of Securities Dealers
Automated Quotation System (“NASDAQ”), or if the Common Stock is not traded on
NASDAQ, the Mean Selling Price in the over-the-counter market; provided,
however, that if the Common Stock is listed on a stock exchange, the Fair Market
Value shall be the Mean Selling Price on such exchange; and, provided further,
that if the Common Stock is not quoted or listed by any organization, the fair
value of the Common Stock, as determined by the Board, whose determination shall
be conclusive, shall be used.  In no event shall the Fair Market Value
of any share of Common Stock be less than its par value.

    


    2.22  "Grant Date" means, as
to any Award, the latest of:

    


    (a) the date on which the Board
authorizes the grant of the Award; or

    


    (b) the date the Participant receiving
the Award becomes an Employee or a Director of the Company or its Affiliate, to
the extent employment status is a condition of the grant or a requirement of the
Code or the Act; or

    


                          (c)
such other date (later than the dates described in (a) and (b) above) as the
Board may designate and as set forth in the Participant's Award
Agreement.

    


    2.23  "Immediate Family"
means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law and shall include adoptive
relationships.

    


    2.24  "Incentive Stock
Option" means a Stock Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and is granted under Article IV of
the Plan and designated as an Incentive Stock Option in a Participant's Award
Agreement.

    


    2.25  "Non-Employee Director"
shall have the meaning set forth in Rule 16b-3 under the Act.

    


    2.26  "Nonqualified Stock
Option" means a Stock Option not intended to qualify as an Incentive Stock
Option and is not so designated in the Participant's Award
Agreement.

    


    2.27  “Officer” means a
person who is an officer of the Company within the meaning of Section 16 of the
Act.

    


    2.28  "Option Period" means
the period during which a Stock Option may be exercised from time to time, as
established by the Board and set forth in the Award Agreement for each
Participant who is granted a Stock Option.

    


    2.29  "Option Price" means
the purchase price for a share of Common Stock subject to purchase pursuant to a
Stock Option, as established by the Board and set forth in the Award Agreement
for each Participant who is granted a Stock Option.

    


    2.30  “Outside Director”
means a Director who either (i) is not a current employee of the Company or an
"affiliated corporation" (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an
"affiliated corporation" receiving compensation for prior services (other than
benefits under a tax qualified pension plan), was not an officer of the Company
or an "affiliated corporation" at any time and is not currently receiving direct
or indirect remuneration from the Company or an "affiliated corporation" for
services in any capacity other than as a Director or (ii) is otherwise
considered an "outside director" for purposes of Section 162(m) of the
Code.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    2.31  "Participant" means an
Eligible Person to whom an Award has been granted and who has entered into an
Award Agreement evidencing the Award or, if applicable, such other person who
holds an outstanding Award.

    


    2.32  "Performance
Objectives" shall have the meaning set forth in Article IX of the
Plan.

    


    2.33  "Performance Period"
shall have the meaning set forth in Article IX of the Plan.

    


    2.34  "Performance Share"
means an Award under Article IX of the Plan of a unit valued by reference to the
Common Stock, the payout of which is subject to achievement of such Performance
Objectives, measured during one or more Performance Periods, as the Board, in
its sole discretion, shall establish at the time of such Award and set forth in
a Participant's Award Agreement.

    


    2.35  "Plan" means this Blast
Energy Services, Inc. 2009 Stock Incentive Plan, as it may be amended from time
to time.

    


    2.36  “Reporting Person”
means a person required to file reports under Section 16(a) of the
Act.

    


    2.37  "Restricted Stock"
means an Award under Article VII of the Plan of shares of Common Stock that are
at the time of the Award subject to restrictions or limitations as to the
Participant's ability to sell, transfer, pledge or assign such shares, which
restrictions or limitations may lapse separately or in combination at such time
or times, in installments or otherwise, as the Board, in its sole discretion,
shall determine at the time of such Award and set forth in a Participant's Award
Agreement.

    


    2.38  "Restriction Period"
means the period commencing on the Grant Date with respect to such shares of
Restricted Stock and ending on such date as the Board, in its sole discretion,
shall establish and set forth in a Participant's Award Agreement.

    


    2.39  "Retirement" means
retirement as determined under procedures established by the Board or in any
Award, as set forth in a Participant's Award Agreement.

    


    2.40  “Rule 16b-3” means Rule
16b-3 promulgated under the Act or any successor to Rule 16b-3, as in effect
from time to time.  Those provisions of the Plan which make express
reference to Rule 16b-3, or which are required in order for certain option
transactions to qualify for exemption under Rule 16b-3, shall apply only to a
Reporting Person.

    


    2.41  "Stock Award" means an
Award of shares of Common Stock under Article VIII of the Plan.

    


    2.42  "Stock Option" means an
Award under Article IV or Article V of the Plan of an option to purchase Common
Stock. A Stock Option may be either an Incentive Stock Option or a Nonqualified
Stock Option.

    


    2.43  "Ten Percent
Stockholder" means an individual who owns (or is deemed to own pursuant to
Section 424(d) of the Code), at the time of grant, stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any of its Affiliates.

    


    2.44  "Termination of
Service" means (i) in the case of an Eligible Employee, the discontinuance of
employment of such Participant with the Company or its Subsidiaries for any
reason other than a transfer to another member of the group consisting of the
Company and its Affiliates and (ii) in the case of a Director who is not an
Employee of the Company or any Affiliate, the date such Participant ceases to
serve as a Director. The determination of whether a Participant has discontinued
service shall be made by the Board in its sole discretion. In determining
whether a Termination of Service has occurred, the Board may provide that
service as a Consultant or service with a business enterprise in which the
Company has a significant ownership interest shall be treated as employment with
the Company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    ARTICLE
III – ADMINISTRATION

    


    3.1  The Plan shall be
administered by the Board of Directors of the Company.  The Board
shall have the exclusive right to interpret and construe the Plan, to select the
Eligible Persons who shall receive an Award, and to act in all matters
pertaining to the grant of an Award and the determination and interpretation of
the provisions of the related Award Agreement, including, without limitation,
the determination of the number of shares subject to Stock Options and the
Option Period(s) and Option Price(s) thereof, the number of shares of Restricted
Stock or shares subject to Stock Awards or Performance Shares subject to an
Award, the vesting periods (if any) and the form, terms, conditions and duration
of each Award, and any amendment thereof consistent with the provisions of the
Plan.  The Board may adopt, establish, amend and rescind such rules,
regulations and procedures as it may deem appropriate for the proper
administration of the Plan, make all other determinations which are, in the
Board’s judgment, necessary or desirable for the proper administration of the
Plan, amend the Plan or a Stock Award as provided in Article XI, and terminate
or suspend the Plan as provided in Article XI.  All acts,
determinations and decisions of the Board made or taken pursuant to the Plan or
with respect to any questions arising in connection with the administration and
interpretation of the Plan or any Award Agreement, including the severability of
any and all of the provisions thereof, shall be conclusive, final and binding
upon all persons.

    


    3.2  The
Board may, to the full extent permitted by and consistent with applicable law
and the Company’s Bylaws, and subject to Subparagraph 3.2(b) hereinbelow,
delegate any or all of its powers with respect to the administration of the Plan
to a Committee consisting of not fewer than two members of the Board each of
whom shall qualify (at the time of appointment to the Committee and during all
periods of service on the Committee) in all respects as a Non-Employee Director
and as an Outside Director.

    


    (a)  If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in
the Plan to the Board shall thereafter be to the Committee or subcommittee),
subject, however, to such resolutions, not consistent with the provisions of the
Plan, as may be adopted from time to time by the Board.

    


    


    (b)  The
Board may abolish the Committee at any time and reassume all powers and
authority previously delegated to the Committee.

    


    (c)  In
addition to, and not in limitation of, the right of any Committee so designated
by the Board to administer this Plan to grant Awards to Eligible Persons under
this Plan, the full Board of Directors may from time to time grant Awards to
Eligible Persons pursuant to the terms and conditions of this Plan, subject to
the requirements of the Code, Rule 16b-3 under the Act or any other applicable
law, rule or regulation. In connection with any such grants, the Board of
Directors shall have all of the power and authority of the Committee to
determine the Eligible Persons to whom such Awards shall be granted and the
other terms and conditions of such Awards.

    


    3.3  Without limiting the
provisions of this Article III, and subject to the provisions of Article X, the
Board is authorized to take such action as it determines to be necessary or
advisable, and fair and equitable to Participants and to the Company, with
respect to an outstanding Award in the event of a Change of Control as described
in Article X or other similar event. Such action may include, but shall not be
limited to, establishing, amending or waiving the form, terms, conditions and
duration of an Award and the related Award Agreement, so as to provide for
earlier, later, extended or additional times for exercise or payments, differing
methods for calculating payments, alternate forms and amounts of payment, an
accelerated release of restrictions or other modifications. The Board may take
such actions pursuant to this Section 3.3 by adopting rules and regulations of
general applicability to all Participants or to certain categories of
Participants, by including, amending or waiving terms and conditions in an Award
and the related Award Agreement, or by taking action with respect to individual
Participants from time to time.

    


    3.4  Subject to the
provisions of Section 3.9 and Section 3.4(a), the initial maximum aggregate
number of shares of Common Stock which may be issued pursuant to Awards under
the Plan shall be 5,000,000 shares. Such shares of Common Stock shall be made
available from authorized and unissued shares of the Company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    (a)  The
number of shares available for issuance under the Plan will be increased on the
first day of each Fiscal Year beginning with the Company’s 2010 Fiscal Year, in
an amount equal to the greater of (i) 2,000,000 shares; or (ii) three percent
(3%) of the number of issued and outstanding shares of the Company’s Common
Stock as reported on the Company’s shareholders list as prepared by the
Company’s Transfer Agent on the first day of such Fiscal Year.  For
the purposes of this Section, the Company’s “Fiscal Year” shall be defined as
the twelve month accounting period which the Company has designated for its
public accounting purposes, which shall initially be the period from January 1
to December 31, and shall thereafter be such Fiscal Year as the Company shall
adopt from time to time.

    


    (b) For all purposes under the Plan,
each Performance Share awarded shall be counted as one share of Common Stock
subject to an Award.

    


    (c) If, for any reason, any shares of
Common Stock (including shares of Common Stock subject to Performance Shares)
that have been awarded or are subject to issuance or purchase pursuant to Awards
outstanding under the Plan are not delivered or purchased, or are reacquired by
the Company, for any reason, including but not limited to a forfeiture of
Restricted Stock or failure to earn Performance Shares or the termination,
expiration or cancellation of a Stock Option, or any other termination of an
Award without payment being made in the form of shares of Common Stock (whether
or not Restricted Stock), such shares of Common Stock shall not be charged
against the aggregate number of shares of Common Stock available for Award under
the Plan and shall again be available for Awards under the Plan. In no event,
however, may Common Stock that is surrendered or withheld to pay the exercise
price of a Stock Option or to satisfy tax withholding requirements be available
for future grants under the Plan.

    


    (d) The foregoing subsections (a) and
(c) of this Section 3.4 shall be subject to any limitations provided by the Code
or by Rule 16b-3 under the Act or by any other applicable law, rule or
regulation.

    


    3.5  Each Award granted under
the Plan shall be evidenced by a written Award Agreement, which shall be subject
to and shall incorporate (by reference or otherwise) the applicable terms and
conditions of the Plan and shall include any other terms and conditions (not
inconsistent with the Plan) required by the Board.

    


    3.6  The Company shall not be
required to issue or deliver any certificates for shares of Common Stock under
the Plan prior to:

    


    (a) any required approval of the Plan
by the shareholders of the Company; and

    


    (b) the completion of any registration
or qualification of such shares of Common Stock under any federal or state law,
or any ruling or regulation of any governmental body that the Company shall, in
its sole discretion, determine to be necessary or advisable.

    


    3.7  The Board may require
any Participant acquiring shares of Common Stock pursuant to any Award under the
Plan to represent to and agree with the Company in writing that such person is
acquiring the shares of Common Stock for investment purposes and without a view
to resale or distribution thereof.  Shares of Common Stock issued and
delivered under the Plan shall also be subject to such stop-transfer orders and
other restrictions as the Board may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed and any applicable federal
or state laws, and the Board may cause a legend or legends to be placed on the
certificate or certificates representing any such shares to make appropriate
reference to any such restrictions. In making such determination, the Board may
rely upon an opinion of counsel for the Company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    3.8  Except as otherwise
expressly provided in the Plan or in an Award Agreement with respect to an
Award, no Participant shall have any right as a shareholder of the Company with
respect to any shares of Common Stock subject to such Participant's Award except
to the extent that, and until, one or more certificates representing such shares
of Common Stock shall have been delivered to the Participant. No shares shall be
required to be issued, and no certificates shall be required to be delivered,
under the Plan unless and until all of the terms and conditions applicable to
such Award shall have, in the sole discretion of the Board, been satisfied in
full and any restrictions shall have lapsed in full, and unless and until all of
the requirements of law and of all regulatory bodies having jurisdiction over
the offer and sale, or issuance and delivery, of the shares shall have been
fully complied with.

    


    3.9  The total amount of
shares with respect to which Awards may be granted under the Plan and rights of
outstanding Awards (both as to the number of shares subject to the outstanding
Awards and the Option Price(s) or other purchase price(s) of such shares, as
applicable) shall be appropriately adjusted for any increase or decrease in the
number of outstanding shares of Common Stock of the Company resulting from
payment of a stock dividend on the Common Stock, a stock split or subdivision or
combination of shares of the Common Stock, or a reorganization or
reclassification of the Common Stock, or any other change in the structure of
shares of the Common Stock. The foregoing adjustments and the manner of
application of the foregoing provisions shall be determined by the Board in its
sole discretion. Any such adjustment may provide for the elimination of any
fractional shares which might otherwise become subject to an Award. All
adjustments made as the result of the foregoing in respect of each Incentive
Stock Option shall be made so that such Incentive Stock Option shall continue to
be an Incentive Stock Option, as defined in Section 422 of the
Code.

    


    3.10  No director or person
acting pursuant to authority delegated by the Board shall be liable for any
action or determination under the Plan made in good faith.  The
members of the Board shall be entitled to indemnification by the Company in the
manner and to the extent set forth in the Company's Articles of Incorporation,
as amended, Bylaws or as otherwise provided from time to time regarding
indemnification of Directors.

    


    3.11  The Board shall be
authorized to make adjustments in any performance based criteria or in the other
terms and conditions of outstanding Awards in recognition of unusual or
nonrecurring events affecting the Company (or any Affiliate, if applicable) or
its financial statements or changes in applicable laws, regulations or
accounting principles. The Board may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award Agreement in the manner and
to the extent it shall deem necessary or desirable to reflect any such
adjustment. In the event the Company (or any Affiliate, if applicable) shall
assume outstanding employee benefit awards or the right or obligation to make
future such awards in connection with the acquisition of another corporation or
business entity, the Board may, in its sole discretion, make such adjustments in
the terms of outstanding Awards under the Plan as it shall deem
appropriate.

    


    3.12  Subject to the express
provisions of the Plan, the Board shall have full power and authority to
determine whether, to what extent and under what circumstances any outstanding
Award shall be terminated, canceled, forfeited or suspended. Notwithstanding the
foregoing or any other provision of the Plan or an Award Agreement, all Awards
to any Participant that are subject to any restriction or have not been earned
or exercised in full by the Participant shall be terminated and canceled if the
Participant is terminated for cause, as determined by the Board in its sole
discretion.

    


    ARTICLE
IV -- INCENTIVE STOCK OPTIONS

    


    4.1  The Board, in its sole
discretion, may from time to time on or after the Effective Date grant Incentive
Stock Options to Eligible Employees, subject to the provisions of this Article
IV and Articles III and VI and subject to the following conditions:

    


    (a) Incentive Stock Options shall be
granted only to Eligible Employees, each of whom may be granted one or more of
such Incentive Stock Options at such time or times determined by the
Board.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    (b) The Option Price per share of
Common Stock for an Incentive Stock Option shall be set in the Award Agreement,
but shall not be less than (i) one hundred percent (100%) of the Fair Market
Value of the Common Stock at the Grant Date, or (ii) in the case of an Incentive
Stock Option granted to a Ten Percent Stockholder, one hundred ten percent
(110%) of the Fair Market Value of the Common Stock at the Grant
Date.

    


    (c) An Incentive Stock Option may be
exercised in full or in part from time to time within ten (10) years from the
Grant Date, or such shorter period as may be specified by the Board as the
Option Period and set forth in the Award Agreement; provided, however, that, in
the case of an Incentive Stock Option granted to a Ten Percent Stockholder, such
period shall not exceed five (5) years from the Grant Date; and further,
provided that, in any event, the Incentive Stock Option shall lapse and cease to
be exercisable upon a Termination of Service or within such period following a
Termination of Service as shall have been determined by the Board and set forth
in the related Award Agreement; and provided, further, that such period shall
not exceed the period of time ending on the date three (3) months following a
Termination of Service, unless employment shall have terminated:

    


    (i) as a result of Disability, in
which event such period shall not exceed the period of time ending on the date
twelve (12) months following a Termination of Service; or

    


    (ii) as a result of death, or if death
shall have occurred following a Termination of Service (other than as a result
of Disability) and during the period that the Incentive Stock Option was still
exercisable, in which event such period may not exceed the period of time ending
on the earlier of the date twelve (12) months after the date of
death;

    


    and
provided, further, that such period following a Termination of Service or death
shall in no event extend beyond the original Option Period of the Incentive
Stock Option.

    


    (d) The aggregate Fair Market Value of
the shares of Common Stock with respect to which any Incentive Stock Options
(whether under this Plan or any other plan established by the Company) are first
exercisable during any calendar year by any Eligible Employee shall not exceed
one hundred thousand dollars ($100,000), determined based on the Fair Market
Value(s) of such shares as of their respective Grant Dates; provided, however,
that to the extent permitted under Section 422 of the Code, if the aggregate
Fair Market Values of the shares of Common Stock with respect to which Stock
Options intended to be Incentive Stock Options are first exercisable by any
Eligible Employee during any calendar year (whether such Stock Options are
granted under this Plan or any other plan established by the Company) exceed one
hundred thousand dollars ($100,000), the Stock Options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be
treated as  Nonqualified Stock Options.

    


    (e) No Incentive Stock Options may be
granted more than ten (10) years from the Effective Date.

    


    (f) The Award Agreement for each
Incentive Stock Option shall provide that the Participant shall notify the
Company if such Participant sells or otherwise transfers any shares of Common
Stock acquired upon exercise of the Incentive Stock Option within two (2) years
of the Grant Date of such Incentive Stock Option or within one (1) year of the
date such shares were acquired upon the exercise of such Incentive Stock
Option.

    


    4.2  Subject to the
limitations of Section 3.4, the maximum aggregate number of shares of Common
Stock subject to Incentive Stock Option Awards shall be the maximum aggregate
number of shares available for Awards under the Plan.

    


    4.3  The Board may provide
for any other terms and conditions which it determines should be imposed for an
Incentive Stock Option to qualify under Section 422 of the Code, as well as any
other terms and conditions not inconsistent with this Article IV or Articles III
or VI, as determined in its sole discretion and set forth in the Award Agreement
for such Incentive Stock Option.

    


    4.4  Each provision of this
Article IV and of each Incentive Stock Option granted hereunder shall be
construed in accordance with the provisions of Section 422 of the Code, and any
provision hereof that cannot be so construed shall be
disregarded.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    ARTICLE
V -- NONQUALIFIED STOCK OPTIONS

    


    5.1  The Board, in its sole
discretion, may from time to time on or after the Effective Date grant
Nonqualified Stock Options to Eligible Persons, subject to the provisions of
this Article V and Articles III and VI and subject to the following
conditions:

    


    (a) Nonqualified Stock Options may be
granted to any Eligible Person, each of whom may be granted one or more of such
Nonqualified Stock Options, at such time or times determined by the
Board.

    


    (b) The Option Price per share of
Common Stock for a Nonqualified Stock Option shall be set in the Award Agreement
and may be less than one hundred percent (100%) of the Fair Market Value of the
Common Stock at the Grant Date; provided, however, that the exercise price of
each Nonqualified Stock Option granted under the Plan shall in no event be less
than the par value per share of the Company’s Common Stock.

    


    (c) A Nonqualified Stock Option may be
exercised in full or in part from time to time within the Option Period
specified by the Board and set forth in the Award Agreement; provided, however,
that, in any event, the Nonqualified Stock Option shall lapse and cease to be
exercisable upon a Termination of Service or within such period following a
Termination of Service as shall have been determined by the Board and set forth
in the related Award Agreement.

    


    5.2  The Board may provide
for any other terms and conditions for a Nonqualified Stock Option not
inconsistent with this Article V or Articles III or VI, as determined in its
sole discretion and set forth in the Award Agreement for such Nonqualified Stock
Option.

    


    ARTICLE
VI -- INCIDENTS OF STOCK OPTIONS

    


    6.1  Each Stock Option shall
be granted subject to such terms and conditions, if any, not inconsistent with
this Plan, as shall be determined by the Board and set forth in the related
Award Agreement, including any provisions as to continued employment as
consideration for the grant or exercise of such Stock Option and any provisions
which may be advisable to comply with applicable laws, regulations or rulings of
any governmental authority.

    


    6.2  Except as hereinafter
described, a Stock Option shall not be transferable by the Participant other
than by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the Participant only by the Participant or
the Participant's guardian or legal representative.  In the event of
the death of a Participant, any unexercised Stock Options may be exercised to
the extent otherwise provided herein or in such Participant's Award Agreement by
the executor or personal representative of such Participant's estate or by any
person who acquired the right to exercise such Stock Options by bequest under
the Participant's will or by inheritance. The Board, in its sole discretion, may
at any time permit a Participant to transfer a Nonqualified Stock Option for no
consideration to or for the benefit of one or more members of the Participant's
Immediate Family (including, without limitation, to a trust for the benefit of
the Participant and/or one or more members of such Participant's Immediate
Family or a corporation, partnership or limited liability company established
and controlled by the Participant and/or one or more members of such
Participant's Immediate Family), subject to such limits as the Board may
establish. The transferee of such Nonqualified Stock Option shall remain subject
to all terms and conditions applicable to such Nonqualified Stock Option prior
to such transfer. The foregoing right to transfer the Nonqualified Stock Option,
if granted by the Board shall apply to the right to consent to amendments to the
Award Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    6.3  Shares of Common Stock
purchased upon exercise of a Stock Option shall be paid for in such amounts, at
such times and upon such terms as shall be determined by the Board, subject to
limitations set forth in the Stock Option Award Agreement. The Board may, in its
sole discretion, permit the exercise of a Stock Option by payment in cash or by
tendering shares of Common Stock (either by actual delivery of such shares or by
attestation), or any combination thereof, as determined by the Board. In the
sole discretion of the Board, payment in shares of Common Stock also may be made
with shares received upon the exercise or partial exercise of the Stock Option,
whether or not involving a series of exercises or partial exercises and whether
or not share certificates for such shares surrendered have been delivered to the
Participant. The Board also may, in its sole discretion, permit the payment of
the exercise price of a Stock Option by the voluntary surrender of all or a
portion of the Stock Option. Shares of Common Stock previously held by the
Participant and surrendered in payment of the Option Price of a Stock Option
shall be valued for such purpose at the Fair Market Value thereof on the date
the Stock Option is exercised.

    


    6.4  The holder of a Stock
Option shall have no rights as a shareholder with respect to any shares covered
by the Stock Option (including, without limitation, any voting rights, the right
to inspect or receive the Company’s balance sheets or financial statements or
any rights to receive dividends or non-cash distributions with respect to such
shares) until such time as the holder has exercised the Stock Option and then
only with respect to the number of shares which are the subject of the
exercise.  No adjustment shall be made for dividends or other rights
for which the record date is prior to the date such stock certificate is
issued.

    


    6.5  The Board may permit the
voluntary surrender of all or a portion of any Stock Option granted under the
Plan to be conditioned upon the granting to the Participant of a new Stock
Option for the same or a different number of shares of Common Stock as the Stock
Option surrendered, or may require such voluntary surrender as a condition
precedent to a grant of a new Stock Option to such Participant. Subject to the
provisions of the Plan, such new Stock Option shall be exercisable at such
Option Price, during such Option Period and on such other terms and conditions
as are specified by the Board at the time the new Stock Option is granted. Upon
surrender, the Stock Options surrendered shall be canceled and the shares of
Common Stock previously subject to them shall be available for the grant of
other Stock Options.

    


    6.6  The Board may at any
time offer to purchase a Participant's outstanding Stock Option for a payment
equal to the value of such Stock Option payable in cash, shares of Common Stock
or Restricted Stock or other property upon surrender of the Participant's Stock
Option, based on such terms and conditions as the Board shall establish and
communicate to the Participant at the time that such offer is made.

    


    6.7  The
Board shall have the discretion, exercisable either at the time the Award is
granted or at the time the Participant discontinues employment, to establish as
a provision applicable to the exercise of one or more Stock Options that, during
a limited period of exercisability following a Termination of Service, the Stock
Option may be exercised not only with respect to the number of shares of Common
Stock for which it is exercisable at the time of the Termination of Service but
also with respect to one or more subsequent installments for which the Stock
Option would have become exercisable had the Termination of Service not
occurred.

    


    ARTICLE
VII -- RESTRICTED STOCK

    


    7.1  The Board, in its sole
discretion, may from time to time on or after the Effective Date award shares of
Restricted Stock to Eligible Persons as a reward for past service and an
incentive for the performance of future services that will contribute materially
to the successful operation of the Company an its Affiliates, subject to the
terms and conditions set forth in this Article VII.

    


    7.2  The Board shall
determine the terms and conditions of any Award of Restricted Stock, which shall
be set forth in the related Award Agreement, including without
limitation:

    


    (a) the purchase price, if any, to be
paid for such Restricted Stock, which may be zero, subject to such minimum
consideration as may be required by applicable law;


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    (b) the duration of the Restriction
Period or Restriction Periods with respect to such Restricted Stock and whether
any events may accelerate or delay the end of such Restriction
Period(s);

    


    (c) the circumstances upon which the
restrictions or limitations shall lapse, and whether such restrictions or
limitations shall lapse as to all shares of Restricted Stock at the end of the
Restriction Period or as to a portion of the shares of Restricted Stock in
installments during the Restriction Period by means of one or more vesting
schedules;

    


    (d) whether such Restricted Stock is
subject to repurchase by the Company or to a right of first refusal at a
predetermined price or if the Restricted Stock may be forfeited entirely under
certain conditions;

    


    (e) whether any performance goals may
apply to a Restriction Period to shorten or lengthen such period;
and

    


    (f) whether dividends and other
distributions with respect to such Restricted Stock are to be paid currently to
the Participant or withheld by the Company for the account of the
Participant.

    


    7.3  Awards of Restricted
Stock must be accepted within a period of thirty (30) days after the Grant Date
(or such shorter or longer period as the Board may specify at such time) by
executing an Award Agreement with respect to such Restricted Stock and tendering
the purchase price, if any. A prospective recipient of an Award of Restricted
Stock shall not have any rights with respect to such Award, unless such
recipient has executed an Award Agreement with respect to such Restricted Stock,
has delivered a fully executed copy thereof to the Board and has otherwise
complied with the applicable terms and conditions of such Award.

    


    7.4  In the sole discretion
of the Board and as set forth in the Award Agreement for an Award of Restricted
Stock, all shares of Restricted Stock held by a Participant and still subject to
restrictions shall be forfeited by the Participant upon the Participant's
Termination of Service and shall be reacquired, canceled and retired by the
Company. Notwithstanding the foregoing, unless otherwise provided in an Award
Agreement with respect to an Award of Restricted Stock, in the event of the
death, Disability or Retirement of a Participant during the Restriction Period,
or in other cases of special circumstances (including hardship or other special
circumstances of a Participant whose employment is involuntarily terminated),
the Board may elect to waive in whole or in part any remaining restrictions with
respect to all or any part of such Participant's Restricted Stock, if it finds
that a waiver would be appropriate.

    


    7.5  Except as otherwise
provided in this Article VII, no shares of Restricted Stock received by a
Participant shall be sold, exchanged, transferred, pledged, hypothecated or
otherwise disposed of during the Restriction Period.

    


    7.6  Upon an Award of
Restricted Stock to a Participant, a certificate or certificates representing
the shares of such Restricted Stock will be issued to and registered in the name
of the Participant. Unless otherwise determined by the Board, such certificate
or certificates will be held in custody by the Company until (i) the Restriction
Period expires and the restrictions or limitations lapse, in which case one or
more certificates representing such shares of Restricted Stock that do not bear
a restrictive legend (other than any legend as required under applicable federal
or state securities laws) shall be delivered to the Participant, or (ii) a prior
forfeiture by the Participant of the shares of Restricted Stock subject to such
Restriction Period, in which case the Company shall cause such certificate or
certificates to be canceled and the shares represented thereby to be retired,
all as set forth in the Participant's Award Agreement.  It shall be a
condition of an Award of Restricted Stock that the Participant deliver to the
Company a stock power endorsed in blank relating to the shares of Restricted
Stock to be held in custody by the Company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    7.7  Except as provided in
this Article VII or in the related Award Agreement, a Participant receiving an
Award of shares of Restricted Stock Award shall have, with respect to such
shares, all rights of a shareholder of the Company, including the right to vote
the shares and the right to receive any distributions, unless and until such
shares are otherwise forfeited by such Participant; provided, however, the Board
may require that any cash dividends with respect to such shares of Restricted
Stock be automatically reinvested in additional shares of Restricted Stock
subject to the same restrictions as the underlying Award, or may require that
cash dividends and other distributions on Restricted Stock be withheld by the
Company or its Affiliates for the account of the Participant. The Board shall
determine whether interest shall be paid on amounts withheld, the rate of any
such interest, and the other terms applicable to such withheld
amounts.

    


    ARTICLE
VIII -- STOCK AWARDS

    


    8.1  The Board, in its sole
discretion, may from time to time on or after the Effective Date grant Stock
Awards to Eligible Persons in payment of compensation that has been earned or as
compensation to be earned, including without limitation compensation awarded or
earned concurrently with or prior to the grant of the Stock Award, subject to
the terms and conditions set forth in this Article VIII.

    


    8.2  For the purposes of this
Plan, in determining the value of a Stock Award, all shares of Common Stock
subject to such Stock Award shall be set in the Award Agreement and may be less
than one hundred percent (100%) of the Fair Market Value of the Common Stock at
the Grant Date.

    


    8.3  Unless otherwise
determined by the Board and set forth in the related Award Agreement, shares of
Common Stock subject to a Stock Award will be issued, and one or more
certificates representing such shares will be delivered, to the Participant as
soon as practicable following the Grant Date of such Stock Award. Upon the
issuance of such shares and the delivery of one or more certificates
representing such shares to the Participant, such Participant shall be and
become a shareholder of the Company fully entitled to receive dividends, to vote
and to exercise all other rights of a shareholder of the Company.
Notwithstanding any other provision of this Plan, unless the Board expressly
provides otherwise with respect to a Stock Award, as set forth in the related
Award Agreement, no Stock Award shall be deemed to be an outstanding Award for
purposes of the Plan.

    


    ARTICLE
IX -- PERFORMANCE SHARES

    


    9.1  The Board, in its sole
discretion, may from time to time on or after the Effective Date award
Performance Shares to Eligible Persons as an incentive for the performance of
future services that will contribute materially to the successful operation of
the Company and its Affiliates, subject to the terms and conditions set forth in
this Article IX.

    


    9.2  The Board shall
determine the terms and conditions of any Award of Performance Shares, which
shall be set forth in the related Award Agreement, including without
limitation:

    


    (a) the purchase price, if any, to be
paid for such Performance Shares, which may be zero, subject to such minimum
consideration as may be required by applicable law;

    


    (b) the performance period (the
"Performance Period") and/or performance objectives (the "Performance
Objectives") applicable to such Awards;

    


    (c) the number of Performance Shares
that shall be paid to the Participant if the applicable Performance Objectives
are exceeded or met in whole or in part; and

    


    (d) the form of settlement of a
Performance Share.

    


    9.3  At any date, each
Performance Share shall have a value equal to the Fair Market Value of a share
of Common Stock.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    9.4  Performance Periods may
overlap, and Participants may participate simultaneously with respect to
Performance Shares for which different Performance Periods are
prescribed.

    


    9.5  Performance Objectives
may vary from Participant to Participant and between Awards and shall be based
upon such performance criteria or combination of factors as the Board may deem
appropriate, including, but not limited to, minimum earnings per share or return
on equity. If during the course of a Performance Period there shall occur
significant events which the Board expects to have a substantial effect on the
applicable Performance Objectives during such period, the Board may revise such
Performance Objectives.

    


    9.6  In the sole discretion
of the Board and as set forth in the Award Agreement for an Award of Performance
Shares, all Performance Shares held by a Participant and not earned shall be
forfeited by the Participant upon the Participant's Termination of Service.
Notwithstanding the foregoing, unless otherwise provided in an Award Agreement
with respect to an Award of Performance Shares, in the event of the death,
Disability or Retirement of a Participant during the applicable Performance
Period, or in other cases of special circumstances (including hardship or other
special circumstances of a Participant whose employment is involuntarily
terminated), the Board may determine to make a payment in settlement of such
Performance Shares at the end of the Performance Period, based upon the extent
to which the Performance Objectives were satisfied at the end of such period and
pro rated for the portion of the Performance Period during which the Participant
was employed by the Company or an Affiliate; provided, however, that the Board
may provide for an earlier payment in settlement of such Performance Shares in
such amount and under such terms and conditions as the Board deems appropriate
or desirable.

    


    9.7  The settlement of a
Performance Share shall be made in cash, whole shares of Common Stock or a
combination thereof and shall be made as soon as practicable after the end of
the applicable Performance Period.  Notwithstanding the foregoing, the
Board in its sole discretion may allow a Participant to defer payment in
settlement of Performance Shares on terms and conditions approved by the Board
and set forth in the related Award Agreement entered into in advance of the time
of receipt or constructive receipt of payment by the Participant.

    


    9.8  Performance Shares shall
not be transferable by the Participant. The Board shall have the authority to
place additional restrictions on the Performance Shares including, but not
limited to, restrictions on transfer of any shares of Common Stock that are
delivered to a Participant in settlement of any Performance Shares.

    


    ARTICLE
X -- CHANGES OF CONTROL OR OTHER FUNDAMENTAL CHANGES

    


    10.1  Upon the occurrence of
a Change of Control and unless otherwise provided in the Award Agreement with
respect to a particular Award:

    


    (a) all outstanding Stock Options shall
become immediately exercisable in full, subject to any appropriate adjustments
in the number of shares subject to the Stock Option and the Option Price, and
shall remain exercisable for the remaining Option Period, regardless of any
provision in the related Award Agreement limiting the exercisability of such
Stock Option or any portion thereof for any length of time;

    


    (b) all outstanding Performance Shares
with respect to which the applicable Performance Period has not been completed
shall be paid out as soon as practicable as follows:

    


    (i) all Performance Objectives
applicable to the Award of Performance Shares shall be deemed to have been
satisfied to the extent necessary to earn one hundred percent (100%) of the
Performance Shares covered by the Award;

    


    (ii) the applicable Performance Period
shall be deemed to have been completed upon occurrence of the Change of
Control;


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    (iii) the payment to the Participant
in settlement of the Performance Shares shall be the amount determined by the
Board, in its sole discretion, or in the manner stated in the Award Agreement,
as multiplied by a fraction, the numerator of which is the number of full
calendar months of the applicable Performance Period that have elapsed prior to
occurrence of the Change of Control, and the denominator of which is the total
number of months in the original Performance Period; and

    


    (iv) upon the making of any such
payment, the Award Agreement as to which it relates shall be deemed terminated
and of no further force and effect.

    


    (c) all outstanding shares of
Restricted Stock with respect to which the restrictions have not lapsed shall be
deemed vested, and all such restrictions shall be deemed lapsed and the
Restriction Period ended.

    


    10.2  Anything contained
herein to the contrary notwithstanding, upon the dissolution or liquidation of
the Company, each Award granted under the Plan and then outstanding shall
terminate; provided, however, that following the adoption of a plan of
dissolution or liquidation, and in any event prior to the effective date of such
dissolution or liquidation, each such outstanding Award granted hereunder shall
be exercisable in full and all restrictions shall lapse, to the extent set forth
in Section 10.1(a), (b) and (c) above.

    


    10.3  After the merger of one
or more corporations into the Company or any Affiliate, any merger of the
Company into another corporation, any consolidation of the Company or any
Affiliate of the Company and one or more corporations, or any other corporate
reorganization of any form involving the Company as a party thereto and
involving any exchange, conversion, adjustment or other modification of the
outstanding shares of the Common Stock, each Participant shall, at no additional
cost, be entitled, upon any exercise of such Participant's Stock Option, to
receive, in lieu of the number of shares as to which such Stock Option shall
then be so exercised, the number and class of shares of stock or other
securities or such other property to which such Participant would have been
entitled to pursuant to the terms of the agreement of merger or consolidation or
reorganization, if at the time of such merger or consolidation or
reorganization, such Participant had been a holder of record of a number of
shares of Common Stock equal to the number of shares as to which such Stock
Option shall then be so exercised. Comparable rights shall accrue to each
Participant in the event of successive mergers, consolidations or
reorganizations of the character described above. The Board may, in its sole
discretion, provide for similar adjustments upon the occurrence of such events
with regard to other outstanding Awards under this Plan. The foregoing
adjustments and the manner of application of the foregoing provisions shall be
determined by the Board in its sole discretion. Any such adjustment may provide
for the elimination of any fractional shares which might otherwise become
subject to an Award. All adjustments made as the result of the foregoing in
respect of each Incentive Stock Option shall be made so that such Incentive
Stock Option shall continue to be an Incentive Stock Option, as defined in
Section 422 of the Code.

    


    ARTICLE XI -- AMENDMENT AND
TERMINATION

    


    11.1  Subject to the
provisions of Section 11.2, the Board of Directors at any time and from time to
time may amend or terminate the Plan as may be necessary or desirable to
implement or discontinue the Plan or any provision hereof.  To the
extent required by the Act or the Code, however, no amendment, without approval
by the Company's shareholders, shall:

    


    (a) materially alter the group of
persons eligible to participate in the Plan;

    


    (b) except as provided in Section 3.4,
change the maximum aggregate number of shares of Common Stock that are available
for Awards under the Plan;

    


    (c) alter the class of individuals
eligible to receive an Incentive Stock Option or increase the limit on Incentive
Stock Options set forth in Section 4.1(d) or the value of shares of Common Stock
for which an Eligible Employee may be granted an Incentive Stock
Option.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    11.2  No amendment to or
discontinuance of the Plan or any provision hereof by the Board of Directors or
the shareholders of the Company shall, without the written consent of the
Participant, adversely affect (in the sole discretion of the Board) any Award
theretofore granted to such Participant under this Plan; provided, however, that
the Board retains the right and power to:

    


    (a) annul any Award if the Participant
is terminated for cause as determined by the Board; and

    


    (b) convert any outstanding Incentive
Stock Option to a Nonqualified Stock Option.

    


    11.3  If a Change of Control
has occurred, no amendment or termination shall impair the rights of any person
with respect to an outstanding Award as provided in Article X.

    


    ARTICLE
XII -- MISCELLANEOUS PROVISIONS

    


    12.1  Nothing in the Plan or
any Award granted hereunder shall confer upon any Participant any right to
continue in the employ of the Company or its Affiliates or to serve as a
Director or shall interfere in any way with the right of the Company or its
Affiliates or the shareholders of the Company, as applicable, to terminate the
employment of a Participant or to release or remove a Director at any
time.  Unless specifically provided otherwise, no Award granted under
the Plan shall be deemed salary or compensation for the purpose of computing
benefits under any employee benefit plan or other arrangement of the Company or
its Affiliates for the benefit of their respective employees unless the Company
shall determine otherwise.  No Participant shall have any claim to an
Award until it is actually granted under the Plan and an Award Agreement has
been executed and delivered to the Company.  To the extent that any
person acquires a right to receive payments from the Company under the Plan,
such right shall, except as otherwise provided by the Board, be no greater than
the right of an unsecured general creditor of the Company. All payments to be
made hereunder shall be paid from the general funds of the Company, and no
special or separate fund shall be established and no segregation of assets shall
be made to assure payment of such amounts, except as provided in Article VII
with respect to Restricted Stock and except as otherwise provided by the
Board.

    


    12.2  The Plan and the grant
of Awards shall be subject to all applicable federal and state laws, rules, and
regulations and to such approvals by any government or regulatory agency as may
be required. Any provision herein relating to compliance with Rule 16b-3 under
the Act shall not be applicable with respect to participation in the Plan by
Participants who are not subject to Section 16 of the Act.

    


    12.3  The terms of the Plan
shall be binding upon the Company, its successors and assigns.

    


    12.4  Neither a Stock Option
nor any other type of equity-based compensation provided for hereunder shall be
transferable except as provided for in Section 6.2. In addition to the transfer
restrictions otherwise contained herein, additional transfer restrictions shall
apply to the extent required by federal or state securities laws.  If
any Participant makes such a transfer in violation hereof, any obligation
hereunder of the Company to such Participant shall terminate
immediately.

    


    12.5  This Plan and all
actions taken hereunder shall be governed by the laws of the State of
Texas.

    


    12.6  Each Participant
exercising an Award hereunder agrees to give the Board prompt written notice of
any election made by such Participant under Section 83(b) of the Code, or any
similar provision thereof.

    


    12.7  If any provision of
this Plan or an Award Agreement is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan or any Award
Agreement under any law deemed applicable by the Board, such provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Board,
materially altering the intent of the Plan or the Award Agreement, it shall be
stricken, and the remainder of the Plan or the Award Agreement shall remain in
full force and effect.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    12.8  The grant of an Award
pursuant to this Plan shall not affect in any way the right or power of the
Company or any of its Affiliates to make adjustments, reclassification,
reorganizations, or changes of its capital or business structure, or to merge or
consolidate, or to dissolve, liquidate or sell, or to transfer all or part of
its business or assets.

    


    12.9  The Plan is not subject
to the provisions of ERISA or qualified under Section 401(a) of the
Code.

    


    12.10  If a Participant is
required to pay to the Company an amount with respect to income and employment
tax withholding obligations in connection with (i) the exercise of a
Nonqualified Stock Option, (ii) certain dispositions of Common Stock acquired
upon the exercise of an Incentive Stock Option, or (iii) the receipt of Common
Stock pursuant to any other Award, then the issuance of Common Stock to such
Participant shall not be made (or the transfer of shares by such Participant
shall not be required to be effected, as applicable) unless such withholding tax
or other withholding liabilities shall have been satisfied in a manner
acceptable to the Company.  To the extent provided by the terms of an
Award Agreement, the Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Common Stock
under an Award by any of the following means (in addition to the Company's right
to withhold from any compensation paid to the Participant by the Company) or by
a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock
otherwise issuable to the Participant as a result of the exercise or acquisition
of Common Stock under the Award, provided, however, that no shares of Common
Stock are withheld with a value exceeding the minimum amount of tax required to
be withheld by law; or (iii) delivering to the Company owned and unencumbered
shares of Common Stock.