Form 12-9

See Tex. Bus. Orgs. Code §§ 21.168–.170 regarding stock rights, options, and convertible indebted­ness.

[Name of corporation]
[year] Stock Incentive Plan

A.Purpose and Eligibility

The purpose of this [year] Stock Incentive Plan (the “Plan”) of [name of corporation], a Texas corporation (the “Corporation”), is to provide stock options and other equity interests in the Corporation (each an “Award”) to employees, officers, directors, consultants, and advisors of the Corporation and its Subsidiaries, all of whom are eligible to receive Awards under the Plan. Any person to whom an Award has been granted under the Plan is called a “Participant.” Additional definitions are contained in section B below and throughout the Plan.

B.Definitions

1.“IRC” means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

2.“Corporation,” for purposes of eligibility under the Plan, will include any present or future subsidiary corporations of the Corporation, as defined in section 424(f) of the IRC (a “Subsidiary”), and any present or future parent corporation of the Corporation, as defined in section 424(e) of the IRC. For purposes of Awards other than Incentive Stock Options (as defined in section E(2) below), the term “Corporation” will include any other business venture in which the Corporation has a direct or indirect significant interest, as determined by the Board in its sole discretion, but only to the extent that, with respect to such an Award, the Cor­poration’s Common Stock constitutes “service recipient stock” under Treas. Reg.
§ 1.409A–1(b)(5)(iii)(E).

3.“Employee” for purposes of eligibility under the Plan (but not for purposes of sec­tion E(2) below) will include a person to whom an offer of employment has been extended by the Corporation.

C.Administration

1.Administration by Board of Directors. The Plan will be administered by the board of directors of the Corporation (the “Board”). The Board, in its sole discretion, will have the authority to grant and amend Awards, to adopt, amend, and repeal rules relating to the Plan, and to interpret and correct the provisions of the Plan and any Award. All decisions by the Board will be final and binding on all Participants and other interested persons. Neither the Corporation nor any member of the Board will be liable for any action or determination relating to the Plan.

2.Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or sub­committees of the Board (a “Committee”). All references in the Plan to the Board will mean any such Committee or the Board. The provisions of this section C(2) will not amend or limit the applicability of any agreement pursuant to which the Corporation has agreed to limit the grant of Awards or to subject the grant of Awards to the approval of persons other than the Board.

3.Delegation to Executive Officers. To the extent permitted by applicable law, the Board may delegate to one or more executive officers of the Corporation the power to grant Awards and exercise such other powers under the Plan as the Board may determine, provided that the Board will fix the maximum number of Awards to be granted and the maximum num­ber of shares issuable to any one Participant pursuant to Awards granted by such executive officers.

D.Stock Available for Awards

1.Number of Shares. Subject to adjustment under section D(3) below, the aggre­gate number of shares of Common Stock of the Corporation (the “Common Stock”) that may be issued pursuant to the Plan is [number] shares, of which [number] shares may be issued pursuant to incentive stock options as defined in section 422 of the IRC. If any Award expires or is terminated, surrendered, or forfeited, in whole or in part, the shares of Common Stock covered by that Award will again be available for the grant of Awards under the Plan, pro­vided, however, that only shares forfeited back to the Corporation, shares canceled on account of termination, expiration, or lapse of an Award, shares surrendered in payment of the exer­cise price of an option, or shares withheld for payment of applicable employment taxes and/or withholding obligations resulting from the exercise of an option will again be available for grant of Incentive Stock Options under the Plan but will not increase the maximum number of shares that may be delivered pursuant to Incentive Stock Options. If shares of Common Stock issued under the Plan are repurchased by or surrendered or forfeited to the Corporation at no more than the Participant’s cost, those shares of Common Stock will again be available for the grant of Awards under the Plan, provided, however, that the cumulative number of such shares that may be so reissued under the Plan will not exceed [number]. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

2.Per-Participant Limit. Subject to adjustment under section D(3) below, no Par­ticipant may be granted Awards during any one fiscal year to purchase more than [number] shares of Common Stock. Subject to adjustment under section D(3), no Participant may receive in any calendar year (a) Options relating to more than [number] shares of Common Stock or (b) Restricted Stock or Other Stock-Based Awards relating to more than [number] shares of Common Stock.

3.Adjustment to Common Stock. Upon any stock split, stock dividend, extraordi­nary cash dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off, split-up, or other similar change in capitalization or event, (a) the number and class of securities available for Awards under the Plan and the per-Participant share limit, (b) the number and class of securities, vesting schedule, and exer­cise price per share subject to each outstanding Option, (c) the repurchase price per security subject to repurchase, and (d) the terms of each other outstanding Award will be adjusted by the Corporation (or substituted Awards may be made) to the extent the Board will determine, in good faith, that such an adjustment (or substitution) is appropriate. If section H(5)(a) applies to any event, however, this section D(3) will not apply to that event.

E.Stock Options

1.General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option, the conditions and limitations applicable to the exercise of each Option, and the shares of Common Stock issued upon the exercise of each Option, including, without limitation, vesting provisions, repurchase provisions, and restric­tions relating to applicable federal or state securities laws, as it considers advisable. Without limiting the generality of the foregoing, the Board may make the exercise of any Option sub­ject to an agreement by the holder thereof to be a party to any other agreement, including, without limitation, an agreement not to engage in competition with the Corporation following termination of employment.

2.Incentive Stock Options. An Option that the Board intends to be an incentive stock option as defined in section 422 of the IRC (an “Incentive Stock Option”) will be granted only to Employees of the Corporation and will be subject to and construed consis­tently with the requirements of section 422 of the IRC. The Board and Corporation will have no liability if an Option or any part thereof intended to be an Incentive Stock Option does not qualify as such. An Option or any part thereof that does not qualify as an Incentive Stock Option is referred to herein as a “Nonstatutory Stock Option.” The Board may not grant Incentive Stock Options under the Plan to any Employee that would permit the aggregate fair market value (determined on the date of grant of the Award) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by the Employee during any calendar year to exceed $100,000. To the extent any Option granted under this Plan that is designated as an Incentive Stock Option exceeds this limit or otherwise fails to qualify as an Incentive Stock Option, that Option (or any such portion thereof) will be a non­qualified Option.

3.Exercise Price. The Board will establish the exercise price (or determine the method by which the exercise price will be determined) at the time each Option is granted and specify it in the applicable option agreement. [Include if applicable: The exercise price will in no event be less than the fair market value of the Corporation’s Common Stock on the date of the grant of the Option.]

4.Duration of Options. Each Option will be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement.

5.Exercise of Option. Options may be exercised only by delivery to the Corpora­tion of a written notice of exercise signed by the proper person together with payment in full as specified in section E(6) below for the number of shares for which the Option is exercised.

6.Payment upon Exercise. Shares of Common Stock purchased on the exercise of an Option will be paid for by one or any combination of—

a.check payable to the order of the Corporation;

b.except as otherwise explicitly provided in the applicable option agreement, and only if the Common Stock is then publicly traded, delivery of an irrevo­cable and unconditional undertaking by a creditworthy broker to deliver promptly to the Corporation sufficient funds to pay the exercise price, or delivery by the Participant to the Corporation of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Corporation cash or a check sufficient to pay the exercise price; or

c.to the extent explicitly permitted in the applicable option agreement, (1) delivery of shares of Common Stock owned by the Participant valued at fair market value (as determined by the Board or as determined under the applica­ble option agreement), (2) delivery to the Corporation by the Participant of a check in an amount equal to the par value of the shares purchased and deliv­ery to the Corporation of a promissory note of the Participant in the principal amount of the rest of the aggregate exercise price, or (3) payment of other lawful consideration as the Board may determine.

F.Restricted Stock

1.Grants. The Board may grant Awards entitling recipients to acquire shares of Common Stock, subject to (a) delivery to the Corporation by the Participant of cash or other lawful consideration in an amount at least equal to the par value of the shares purchased and (b) the right of the Corporation to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant if the conditions specified by the Board in the applicable Award are not satisfied before the end of any applicable restriction periods established by the Board for that Award (each, a “Restricted Stock Award”).

2.Terms and Conditions. The Board will determine the terms and conditions of any Restricted Stock Award. Any stock certificates issued under a Restricted Stock Award will be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Corporation (or its designee). After the expiration of any applicable restriction periods, the Corporation (or its designee) will deliver the certificates no longer subject to restrictions to the Participant or, if the Participant has died, to the beneficiary designated by a Participant, in a manner determined by the Board, to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective designation by a Participant, the Designated Beneficiary will be the Participant’s estate.

G.Other Stock-Based Awards

The Board will have the right to grant other Awards based on the Common Stock hav­ing the terms and conditions the Board determines, including, without limitation, the grant of shares based on certain conditions, the grant of securities convertible into Common Stock, and the grant of stock appreciation rights, phantom stock awards, or stock units.

H.General Provisions Applicable to Awards

1.Transferability of Awards. Except as the Board may otherwise determine, Awards may not be sold, assigned, transferred, pledged, or otherwise encumbered by the Par­ticipant, either voluntarily or by operation of law, except by will or the laws of descent and distribution and, during the life of the Participant, will be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, will include references to authorized transferees.

2.Documentation. Each Award under the Plan will be evidenced by a written instrument in the form the Board determines or executed by an officer of the Corporation under authority delegated by the Board. Each Award may contain terms and conditions in addition to those set forth in the Plan, provided that such terms and conditions do not contra­vene the provisions of the Plan.

3.Board Discretion. The terms of each type of Award need not be identical and the Board need not treat Participants uniformly.

4.Termination of Status. The Board will determine the effect on an Award of the disability, death, retirement, authorized leave of absence, or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Par­ticipant or the Participant’s legal representative, conservator, guardian, or Designated Benefi­ciary may exercise rights under the Award.

5.Acquisition of the Corporation.

a.Consequences of an Acquisition. On the consummation of an Acquisition (as defined in section H(5)(b) below), the Board or the board of directors of the surviving or acquiring entity (as used in this section H(5)(a), also referred to as the Board) will, as to outstanding Awards (on the same terms or on such different terms as the Board will specify), make appropriate provision for the continuation of such Awards by the Corporation or the assumption of such Awards by the surviving or acquiring entity. The continuation or assumption of Awards in the event of Acquisition will be made by substituting on an equitable basis for the shares then subject to such Awards either (1) the con­sideration payable for outstanding shares of Common Stock in connection with the Acquisition, (2) shares of stock or other ownership interests of the surviving or acquiring entity, or (3) other securities or consideration that the Board deems appropriate, the fair market value of which (as determined by the Board in its sole discretion) will not materially differ from the fair market value of the shares of Common Stock subject to such Awards immediately before the Acquisition. In addition to or in lieu of the foregoing, with respect to outstanding Options, the Board, on the same terms or on such different terms as the Board specifies, on written notice to the affected Participants, may provide that one or more Options then outstanding (1) must be exer­cised, in whole or in part, within a specified number of days of the date of the notice, at the end of which period the Options will terminate; or (2) will be terminated, in whole or in part, in exchange for a cash payment equal to the excess of the fair market value (as determined by the Board in its sole discre­tion) for the shares subject to such Options over the exercise price thereof. However, before terminating any Option or portion of an Option that is not vested or exercisable (other than in exchange for a cash payment), the Board must first accelerate in full the exercisability of the portion that is to be termi­nated. Unless otherwise determined by the Board (on the same terms or on such different terms as the Board specifies), any repurchase rights or other rights of the Corporation that relate to an Option or other Award will con­tinue to apply to consideration, including, without limitation, cash, that has been substituted, assumed, or amended for an Option or other Award under this section H(5)(a). The Corporation may hold in escrow all or any portion of any such consideration to effectuate any continuing restrictions.

b.Acquisition Defined. “Acquisition” means (1) the sale of the Corporation by merger, consolidation, or reorganization in which the shareholders of the Corporation immediately before that transaction in their capacity as share­holders no longer own a majority of the outstanding equity securities of the Corporation (or its successor) entitling them to cast a majority of the votes entitled to be cast in the election of directors; (2) any sale of all or substan­tially all of the outstanding capital stock of the Corporation or any sale of all or substantially all of the assets of the Corporation requiring shareholder approval (in either case, other than in a spin-off or similar transaction); or (3) any other acquisition of the business of the Corporation, as determined by the Board.

c.Assumption of Awards on Certain Events. In connection with a merger or consolidation of an entity with the Corporation or the acquisition by the Cor­poration of property or stock of an entity, the Board may grant Awards under the Plan in substitution for stock and stock-based awards issued by such an entity or its affiliates. The substitute Awards will be granted on the terms and conditions the Board considers appropriate in the circumstances.

6.Withholding. Each Participant will pay to the Corporation, or make provisions satisfactory to the Corporation for payment of, any taxes required by law to be withheld in connection with Awards to the Participant no later than the date of the event creating the tax liability. The Board may allow Participants to satisfy such tax obligations in whole or in part by transferring shares of Common Stock, including, without limitation, shares retained from the Award creating the tax obligation, valued at their fair market value (as determined by the Board or the applicable Award agreement). The Corporation may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due a Partici­pant.

7.Amendment of Awards. The Board may amend, modify, or terminate any out­standing Award, including, without limitation, substituting another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant’s consent to such action will be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

8.Conditions on Delivery of Stock. The Corporation will not be obligated to deliver any shares of Common Stock under the Plan or to remove restrictions from shares pre­viously delivered under the Plan until (a) all conditions of the Award have been met or removed to the satisfaction of the Corporation; (b) in the opinion of the Corporation’s counsel, all legal matters in connection with the issuance and delivery of the shares have been satisfied, including, without limitation, any applicable securities laws and any applicable stock exchange or stock market rules and regulations; and (c) the Participant has executed and delivered to the Corporation all representations or agreements the Corporation considers appropriate to satisfy the requirements of any applicable laws, rules, or regulations.

9.Acceleration. The Board may at any time provide that any Options will become immediately exercisable in full or in part, that any Restricted Stock Awards will be free of some or all restrictions, or that any other stock-based Awards may become exercisable in full or in part or free of some or all restrictions or conditions or otherwise realizable in full or in part, as the case may be, despite the fact that the foregoing actions may (a) cause the applica­tion of the golden parachute provisions found in sections 280G and 4999 of the IRC if a change in control of the Corporation occurs or (b) disqualify all or part of the Option as an Incentive Stock Option. On the acceleration of the exercisability of one or more outstanding Options, including, without limitation, pursuant to section H(5)(a) above, the Board may pro­vide, as a condition of full exercisability of any or all such Options, that the Common Stock or substituted consideration, including, without limitation, cash, as to which exercisability has been accelerated will be restricted and subject to forfeiture back to the Corporation at the option of the Corporation at the cost of the Common Stock or substituted consideration on ter­mination of employment or other relationship, with the timing and other terms of vesting of the restricted stock or other consideration being equivalent to the timing and other terms of the superseded exercise schedule of the accelerated Option.

I.Miscellaneous

1.No Right to Employment or Other Status. No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Partici­pant the right to continued employment or any other relationship with the Corporation. The Corporation expressly reserves the right at any time to dismiss or otherwise terminate its rela­tionship with a Participant free from any liability or claim under the Plan.

2.No Rights as Shareholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary will have any rights as a shareholder with respect to any shares of Common Stock to be distributed under an Award until becoming the record holder of those shares of Common Stock.

3.Effective Date and Term of Plan. The Plan will become effective on the date on which it is adopted by the Board. No Awards will be granted under the Plan after ten years from the date on which the Plan was adopted by the Board, but Awards previously granted may extend beyond that date.

4.Amendment of Plan. The Board may amend, suspend, or terminate the Plan or any portion of the plan at any time; provided, however, that no amendment for which share­holder approval is required either (a) by any securities exchange or interdealer quotation sys­tem on which the Common Stock is listed or traded or (b) in order for the Plan and Options awarded under the Plan to continue to comply with sections 162(m), 421, and 422 of the IRC, including any successors to such sections, will be effective unless such amendment is approved by the requisite vote of the shareholders of the Corporation entitled to vote thereon.

5.Governing Law. The provisions of the Plan and all Awards made under the Plan will be governed by, enforced under, and interpreted in accordance with the laws of the state of Texas, without regard to any applicable conflict-of-laws principles that would apply the laws of any other jurisdiction.

6.Section Headings. The headings contained in this Plan are for reference pur­poses only and will not affect in any way the meaning or interpretation of this Plan.

7.Gender and Number of Words. When the context requires, the gender of all words used in this Plan includes the masculine, feminine, and neuter, and the number of all words includes the singular and the plural.