Exhibit 10.1

HEXION LLC

2007 Long-Term Incentive Plan

Effective 4/30/2007

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ARTICLE I

PURPOSE OF THE PLAN

The purpose of the HEXION LLC 2007 LONG-TERM INCENTIVE PLAN (the “Plan”) is
(a) to further the growth and success of Hexion LLC, a Delaware limited
liability company (the “Company”), and its Subsidiaries (as hereinafter defined)
by enabling eligible directors and employees of the Company or any of its
Subsidiaries to acquire LLC Units (as hereinafter defined), thereby increasing
their personal interest in such growth and success, and (b) to provide a means
of rewarding outstanding performance by such persons for the Company and/or its
Subsidiaries. Awards granted under the Plan (the “Awards”) shall be nonqualified
options to purchase LLC Units (referred to herein as “Options”) and restricted
units that are payable upon vesting in an equal number of LLC Units (“Restricted
Units”). An Award may consist of only Options, only Restricted Units, or a
combination of Options and Restricted Units.

ARTICLE II

DEFINITIONS

As used in the Plan, the following terms shall have the meanings set forth
below:

“Acquiring Entity” means an Independent Third Party that is either (a) an
individual, (b) an investment fund, or (c) another Independent Third Party the
majority of the ordinary voting power in electing the board of directors,
managers, general partners or similar governing Persons of which (or of a direct
or indirect Parent of such Independent Third Party) is owned by one individual
or investment fund.

“Adoption Agreement” means an agreement between the Company and a holder of LLC
Units, pursuant to which such holder agrees to become a party to the Investor
Rights Agreement.

“Affiliate” means with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with, such Person and/or one or more Affiliates thereof. As
used in this definition, the term “control”, including the correlative terms
“controlling”, “controlled by” and “under common control with,” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies (whether through the ownership of
securities or any partnership or other ownership interests, by contract or
otherwise) of a Person. The term “Affiliate” shall not include at any time any
portfolio companies of Apollo Holdings, L.P. or any of its Affiliates.

“Award” has the meaning set forth in Article I.

“Award Agreement” means any writing setting forth the terms of an Award that has
been duly authorized and approved by the Board which may, but need not (unless
otherwise provided by the Board), be executed or acknowledged by a Participant.

“Board” means the Board of Managers or equivalent governing board of the Company
or any duly authorized committee thereof.

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“Cause” means, with respect to the termination of relationship of any
Participant by the Company or any of its Subsidiaries (unless otherwise
expressly provided in the applicable Award Agreement): (i) if such Participant
is at the time of termination a party to an employment agreement with the
Company or any of its Subsidiaries that defines such term (or a similar term),
the meaning given to such term therein, and (ii) in all other cases, the
termination by the Company or any of its Subsidiaries of the Participant’s
relationship with the Company or Subsidiary based on such Participant’s
(a) commission of a crime of moral turpitude or a felony that involves financial
misconduct or moral turpitude or has resulted, or reasonably could be expected
to result, in any adverse publicity regarding the Participant or the Company or
any of its Subsidiaries or economic injury to the Company or any of its
Subsidiaries, (b) dishonesty or willful commission or omission of any action
that has resulted, or reasonably could be expected to result, in any adverse
publicity regarding the Participant or the Company or any of its Subsidiaries or
has caused, or reasonably could be expected to cause, demonstrable and serious
economic injury to the Company or any of its Subsidiaries, (c) material breach
of any agreement entered into between the Participant and the Company or any of
its Subsidiaries after notice and a reasonable opportunity to cure (if such
breach can be cured), (d) willful misconduct or gross negligence, or breach of a
fiduciary duty, (e) failure to perform the duties required by the Participant’s
employment, or (f) breach or violation of any of the Participant’s employer’s
policies in effect from time to time that by their terms may result in
termination of employment. For purposes hereof, no act or omission shall be
considered willful unless committed in bad faith or without a reasonable belief
that the act or omission was in the best interests of the Company or any of its
Subsidiaries.

“Change in Control Event” means the consummation of any transaction or series of
related transactions (including, without limitation, any merger or
consolidation) the result of which is that an Acquiring Entity becomes the
beneficial owner, directly or indirectly, of (a) more than 50% of the voting
interests in the Company or (b) all or substantially all of the assets of the
Company on a consolidated basis; provided, however, that in no event shall a
Public Offering constitute a Change in Control Event.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in Article I.

“Disability” means, with respect to any Participant, such Participant’s
inability to perform the duties and obligations required by such Participant’s
job by reason of any medically determined physical or mental impairment, as
determined in accordance with the provisions of long term disability coverage
under the Borden Chemical, Inc. Total Family Protection Plan; provided, however,
that if such Participant has not elected long term disability coverage under the
Total Family Protection Plan, then “Disability” shall mean, with respect to such
Participant, any medically determined physical or mental impairment (as
determined by a physician selected by the Company or its insurers and acceptable
to such Participant or such Participant’s legal representative (such agreement
as to acceptability not to be withheld unreasonably)) that prevents such
Participant from performing the duties and obligations required by such
Participant’s job for more than 180 consecutive days.

“Dividend Equivalents” has the meaning set forth in Section 6.3(b).

 

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“Effective Date” means the date the Plan is adopted by the Board.

“Equity Value” means the aggregate fair market value of the Investor Investments
as of the Effective Date and, as to any Investor Investment made after the
Effective Date, the aggregate fair market value of such investment at the time
when made, each as determined by the Board.

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

“Exercise Notice” has the meaning set forth in Section 5.6.

“Fair Market Value” as of a given date means, (a) if there is a public market
for the LLC Units on such date, the closing bid price of the LLC Units on such
stock exchange on which the LLC Units are principally trading on the day in
question, or, if there were no sales on such date, on the closest preceding date
on which there were sales of LLC Units or (b) if there is no public market for
the LLC Units on such date, the fair market value of the LLC Units as determined
in good faith by the Board. Neither the Company, nor any of its directors,
officers, members, employees or agents, shall have any liability with respect to
valuation of the LLC Units even though the Fair Market Value as determined by
the Board may be more or less than the actual fair market value.

“Grant Date” as to an Award means the date on which the Board approves such
Award, unless the Board provides for a later Grant Date at the time of such
approval.

“Independent Third Party” means any Person other than Apollo Investment Fund IV,
L.P., Apollo Overseas Partners IV, L.P., Apollo Investment Fund V, L.P., Apollo
Overseas Partners V, L.P., each of their respective Affiliates, and any other
investment fund or vehicle managed by Apollo Management IV, L.P. or Apollo
Management V, L.P. or any of their respective Affiliates (including any
successors or assigns of any such manager).

“Investor” means, collectively, Apollo Investment Fund IV, L.P., Apollo Overseas
Partners IV, L.P., Apollo Investment Fund V, L.P., Apollo Overseas Partners V,
L.P., each of their respective Affiliates, and any other investment fund or
vehicle managed by Apollo Management IV, L.P. or Apollo Management V, L.P. or
any of their respective Affiliates (including any successors or assigns of any
such manager).

“Investor Investment” means direct or indirect investments in LLC Units of the
Company owned by the Investor on or after the Effective Date.

“Investor IRR” means the pretax compounded annual internal rate of return
calculated on a quarterly basis realized to the Investor on the Investor
Investments, based on the aggregate Equity Value of the Investor Investments as
of the Effective Date (or, as to any Investor Investment made after the
Effective Date, at the time of such investment) and the aggregate amount
received by the Investor in respect of all Investor Investments, assuming all
Investor Investments were held continuously by the same Person until sold by the
Investor in exchange for cash to one or more Independent Third Parties. The
Investor IRR shall be determined based on the actual time of each Investor
Investment and actual cash received by the Investor in respect of all Investor
Investments and including, as a return on each Investor Investment, any cash

 

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dividends, cash distributions or cash interest made by the Company or any
Subsidiary in respect of such Investor Investment during such period, but
excluding any other amounts payable that are not directly attributable to an
Investor Investment.

“Investor Rights Agreement” means the Amended and Restated Investor Rights
Agreement, dated as of May 31, 2005, among the Company and the holders party
thereto, as it is amended, supplemented, restated or otherwise modified from
time to time.

“LLC Units” means units of the Company.

“Option” has the meaning set forth in Article I.

“Option Price” has the meaning set forth in Section 5.1.

“Parent” as to any particular corporation or other entity means any corporation
or other entity which owns or controls securities or interests having a
majority, directly or indirectly, of the ordinary voting power in electing the
board of directors, managers, general partners or similar governing Persons of
that particular corporation or entity.

“Participant” has the meaning set forth in Article IV.

“Person” shall be construed broadly and shall include, without limitation, an
individual, a partnership, a corporation, an association, a joint stock company,
a limited liability company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.

“Plan” has the meaning set forth in Article I.

“Public Offering” means the sale, occurring simultaneously with or after an
initial public offering of LLC Units to the public pursuant to an offering
registered under the Securities Act or to a minimum of 5 investors in the manner
described by the provisions of Rule 144A and Regulation S under the Securities
Act or other private placement.

“Realization Event” means any transaction or series of related transactions with
one or more Independent Third Parties (which may include a Public Offering other
than an offering made primarily in connection with an employee benefit plan of
the Company or made primarily to employees or consultants of the Company) the
result of which leaves the Investor with less than 50% of the LLC Units directly
or indirectly acquired by it (from the Company or otherwise) which were held by
the Investor at the Effective Date and less than 50% of the aggregate of all
Investor Investments.

“Reserved LLC Units” means, at any time, an aggregate of 1,700,000 LLC Units, as
the same may be adjusted at or prior to such time in accordance with
Section 7.1.

“Restricted Units” has the meaning set forth in Article I.

“Restricted Unit Award” means an Award of Restricted Units granted under the
Plan.

 

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“Securities Act” means the Securities Act of 1933, as amended.

“Severance Date” means

 

  (a) if the Participant is an employee of the Company or any Subsidiary and the
Participant’s employment with the Company and its Subsidiaries terminates
(regardless of the reason), the last day of the Participant’s active and actual
employment with the Company and its Subsidiaries (unless, immediately following
such termination of employment, the Participant is a member of the Board or, by
express written agreement with the Company or any of its Subsidiaries, continues
to provide other services to the Company or any Subsidiary, in which case the
Participant’s Severance Date shall not be the date of such termination of
employment but shall be the first day that the Participant is not employed by
the Company or any of its Subsidiaries, is not a member of the Board, and does
not provide any such other services); or

 

  (b) if the Participant is a member of the Board, and the Participant ceases to
be a member of the Board (regardless of the reason), the last day that the
Participant is actually a member of the Board (unless, immediately following
such termination, the Participant is an employee of the Company or any of its
Subsidiaries or, by express written agreement with the Company or any of its
Subsidiaries, continues to provide other services to the Company or any
Subsidiary, in which the case the Participant’s Severance Date shall not be the
date of such termination but shall be the first day that the Participant is not
employed by the Company or any of its Subsidiaries, is not a member of the
Board, and does not provide any such other services).

For purposes of the Plan and any Award, if an entity ceases to be a Subsidiary,
a termination of employment or service will be deemed to have occurred with
respect to each Participant who is employed by or provides services to such
Subsidiary and who does not, immediately after giving effect to the change in
status of that former Subsidiary, otherwise continue to be employed by or
provide services to the Company or another Subsidiary. For purposes of
Section 6.4 only, in the event a Participant’s Severance Date occurs in
connection with an event that does not constitute the Participant’s “separation
from service” within the meaning of Section 409A of the Code, the Participant’s
Severance Date for purposes of Section 6.4 shall be deemed to be the date on
which the Participant incurs such a separation from service with the Company.

“Subsidiary” means any corporation or other entity of which the Company owns or
controls securities or interests having a majority, directly or indirectly, of
the ordinary voting power in electing the board of directors, managers, general
partners or similar governing Persons thereof.

 

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ARTICLE III

ADMINISTRATION OF THE PLAN; SHARES SUBJECT TO THE PLAN

 

3.1 Administration.

The Plan shall be administered by and all Awards under the Plan shall be
authorized by the Board. The Board may delegate some or all of its authority
under the Plan to one or more committees appointed by the Board to administer
all or certain aspects of the Plan. Any such committee shall be comprised solely
of one or more Board members. The Board may delegate different levels of
authority to different committees with administrative and grant authority under
the Plan. The Board may take any action designated to a committee.

 

3.2 Procedures.

Unless otherwise provided in the Operating Agreement of the Company or the
applicable charter of any committee acting within its delegated authority: (a) a
majority of the members of the acting Board or committee shall constitute a
quorum, and (b) the vote of a majority of the members present (assuming the
presence of a quorum) or the unanimous written consent of the members of the
acting Board or committee shall constitute action by that body.

 

3.3 Interpretation; Powers of the Board.

Subject to the express provisions of the Plan, the Board is authorized and
empowered to do all things necessary or desirable in connection with the
authorization of Awards and the administration of the Plan (in the case of a
committee, within the authority delegated to that committee), including, without
limitation, the authority to:

 

  (a) determine eligibility and the particular persons who will receive Awards;

 

  (b) grant Awards to eligible persons, determine the price and number of
securities to be offered or awarded to any of such persons, determine the other
specific terms and conditions of Awards consistent with the express limits of
the Plan, establish the installments (if any) in which such Awards will become
exercisable or will vest (which may include, without limitation, performance
and/or time-based schedules) or determine that no delayed exercisability or
vesting is required, establish any applicable performance targets, and establish
the events of termination or reversion of such Awards;

 

  (c) approve the forms of Award Agreements, which need not be identical either
as to type of Award or among Participants;

 

  (d) construe and interpret the provisions of the Plan and any Award Agreement
or other agreement defining the rights and obligations of the Company, its
Subsidiaries, and Participants under the Plan, make factual determinations with
respect to the administration of the Plan, further define the terms used in the
Plan, and prescribe, amend and rescind rules and regulations relating to the
administration of the Plan;

 

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  (e) cancel, modify, or waive the Company’s rights with respect to, or modify,
discontinue, suspend, or terminate any or all outstanding Awards held by
Participants, subject to any required consent under Article X;

 

  (f) accelerate or extend the exercisability or extend the term of any or all
outstanding Awards (within the maximum term of such Awards) in such
circumstances as the Board may deem appropriate (including, without limitation,
in connection with a termination of employment or services or other events of a
personal nature);

 

  (g) determine Fair Market Value for purposes of the Plan and Awards;

 

  (h) determine the duration and purposes of leaves of absence that may be
granted to Participants without constituting a termination of their employment
for purposes of the Plan;

 

  (i) determine whether, and the extent to which, adjustments are required
pursuant to Section 7.1 and authorize the termination, conversion, substitution
or succession of awards upon the occurrence of an event of the type described in
Section 7.2; and

 

  (j) make all other determinations and take such other action as contemplated
by the Plan or as may be necessary or advisable for the administration of the
Plan and the effectuation of its purposes.

 

3.4 Binding Determinations.

Any action taken by, or inaction of, the Company, any Subsidiary, the Board or
any committee of the Board relating or pursuant to the Plan and within its
authority hereunder or under applicable law shall be within the absolute
discretion of that entity or body and shall be conclusive and binding upon all
persons. Neither the Board nor any committee thereof (acting within the
authority delegated to it by the Board), nor any member thereof or person acting
at the direction thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan (or
any Award), and all such persons shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including, without limitation, attorneys’ fees) arising or resulting therefrom
to the fullest extent permitted by law and/or under any directors and officers
liability insurance coverage that may be in effect from time to time.

 

3.5 Reliance on Experts.

In making any determination or in taking or not taking any action under the
Plan, the Board may obtain and may rely upon the advice of experts, including
employees of and professional advisors to the Company. No director, officer or
agent of the Company or any of its Subsidiaries shall be liable for any such
action or determination taken or made or omitted in good faith.

 

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3.6 Delegation.

The Board may delegate ministerial, non-discretionary functions to individuals
who are officers or employees of the Company or any of its Subsidiaries or
Affiliates or to third parties.

 

3.7 Number of LLC Units.

Subject to the provisions of Article VII (relating to adjustments upon changes
in capital structure and other corporate transactions), the aggregate number of
LLC Units with respect to which Awards may be granted under the Plan shall not
exceed the Reserved LLC Units. LLC Units that are subject to or underlie Awards
granted under the Plan that expire or for any reason are canceled or terminated,
are forfeited, fail to vest, or for any other reason are not paid or delivered
under the Plan will again, except to the extent prohibited by law or applicable
listing or regulatory requirements, be available for subsequent Award grants
under the Plan. To the extent that an Award is settled in cash or a form other
than LLC Units, the units that would have been delivered had there been no such
cash or other settlement shall be counted against the units available for
issuance under the Plan.

 

3.8 Reservation of LLC Units.

The number of LLC Units reserved for issuance with respect to Awards granted
under the Plan shall at no time be less than the maximum number of LLC Units
which may be issued or delivered at any time pursuant to outstanding Awards.

ARTICLE IV

ELIGIBILITY; AWARD AGREEMENTS

 

4.1 Eligibility.

Awards may be granted under the Plan only to persons who are employees or
directors of the Company or any of its Subsidiaries on the date of the grant;
provided that Awards may be granted under the Plan to directors only if such
directors are not employees of Apollo Management V, L.P. or any Affiliate
thereof. A person’s eligibility to be granted an Award under the Plan is not a
commitment that any Award will be granted to that person under the Plan.
Furthermore, a Participant who has been granted an Option under the Plan is not
necessarily entitled to a Restricted Unit Award under the Plan, or vice versa,
unless otherwise expressly determined by the Board. Each person to whom an Award
is granted under the Plan is referred to herein as a “Participant.”

 

4.2 Award Grants.

Each Award granted under the Plan shall be evidenced by an Award Agreement in
the form approved by the Board. The Award Agreement shall contain the terms
established by the Board for that Award, as well as any other terms, provisions,
or restrictions that the Board may impose on the Award or any LLC Units subject
to the Award, in each case subject to the applicable provisions and limitations
of the Plan. The Board may require that the recipient of an Award promptly
execute and return to the Company his or her Award Agreement evidencing the

 

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Award. In addition, the Board may require that the spouse of any married
recipient of an Award also promptly execute and return to the Company the Award
Agreement evidencing the Award granted to the recipient or such other spousal
consent form that the Board may require in connection with the grant of the
Award.

ARTICLE V

OPTIONS

 

5.1 General.

The Award Agreement shall specify the number of LLC Units for which an Option
granted under the Plan shall be exercisable and the per-unit exercise price for
such LLC Units (the “Option Price”). In no case will the Option Price be less
than 100% of the Fair Market Value of an LLC Unit on the Grant Date. Unless
otherwise expressly provided in the Award Agreement, each Option shall be
subject to the terms and conditions of this Article V and the Plan as a whole.
Each Option granted under the Plan shall be a nonqualified option and shall not
be an incentive stock option within the meaning of Section 422 of the Code.

 

5.2 Vesting.

Subject to earlier termination pursuant to Section 5.3 or 5.4 or Article IX of
the Plan, each Option shall be eligible to become vested and exercisable as
provided in this Section 5.2:

 

  (a) As of the occurrence of a Realization Event, the Investor IRR shall be
calculated after giving effect to such Realization Event and the vesting of the
Option shall be determined as follows:

 

  • If the Investor IRR equals or exceeds 25%, the Option shall become vested
and exercisable with respect to 100% of the LLC Units subject thereto;

 

  • If the Investor IRR equals 15%, the Option shall become vested and
exercisable with respect to 50% of the LLC Units subject thereto;

 

  • If the Investor IRR exceeds 15% but is less than 25%, the portion of the
Option that shall become vested and exercisable shall be determined by linear
interpolation between 50% and 100%; and

 

  • If the Investor IRR upon the Realization Event is less than 15%, the Option
shall terminate.

In the event that the LLC Units sold by the Investor in the Realization Event
are not sold entirely for cash, the Investor IRR shall be recalculated as the
property received by the Investor in such sale for such LLC Units is realized in
cash by the Investor, and any resulting additional Options deemed vested in
connection with such recalculation shall be deemed to be vested as of the date
of such recalculation. For purposes of clarity, during any period the Investor
holds any

 

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such property, the Options eligible for vesting remain subject to termination as
provided in Sections 5.3, 5.4 and 7.2. Each calculation of Investor IRR and each
such vesting determination shall be made by the Board.

 

  (b) If the Investor IRR in connection with the Realization Event equals or
exceeds 15%, any portion of the Option that is not vested and exercisable after
giving effect to the foregoing provisions of Section 5.2(a) shall terminate.

 

  (c) In all events, the vesting of the Options and the rights and benefits
thereunder are conditioned on the Participant’s continued employment or service
through the applicable vesting date. Employment or service for only a portion of
the vesting period, even if a substantial portion, will not entitle the
Participant to any proportionate vesting or avoid or mitigate a termination of
rights and benefits upon or following a termination of employment or services as
provided in Section 5.4 below.

 

5.3 Term.

The term of each Option granted under the Plan shall commence on the Grant Date
and expire on the eighth anniversary of the Grant Date, unless the Option shall
have sooner been terminated in accordance with the terms of the Plan (including,
without limitation, Section 5.4 or Section 7.2) or the applicable Award
Agreement.

 

5.4 Termination of Employment or Service.

 

  (a) Termination of Unvested Options. Each Option granted to a Participant
under the Plan that has not vested pursuant to Section 5.2 as of the
Participant’s Severance Date shall automatically terminate and shall become null
and void and be of no further force or effect upon such date.

 

  (b) Exercise or Termination of Vested Options. Subject to earlier termination
pursuant to Section 5.3 or Section 7.2, the following rules shall apply to each
Option granted to a Participant under the Plan that has vested pursuant to
Section 5.2 as of the Participant’s Severance Date:

 

  • if the Participant’s employment with or service to the Company or any of its
Subsidiaries is terminated by such entity for Cause, the Option will terminate
on the Participant’s Severance Date;

 

  • if the Participant’s employment with or service to the Company or any of its
Subsidiaries is terminated (i) by such entity without Cause or (ii) by the
Participant for any reason other than the Participant’s death or Disability, the
Participant will have until the date that is 90 days after the Participant’s
Severance Date to exercise the Option, and the Option, to the extent exercisable
for the 90-day period following the Severance Date and not exercised during such
period, shall terminate at the close of business on the last day of the 90-day
period;

 

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  • if the Participant’s employment with or service to the Company or any of its
Subsidiaries terminates due to the Participant’s death or Disability, the
Participant (or his beneficiary or personal representative, as the case may be)
will have until the date that is 6 months after the Participant’s Severance Date
to exercise the Option, and the Option, to the extent exercisable for the
6-month period following the Severance Date and not exercised during such
period, shall terminate at the close of business on the last day of the 6-month
period.

 

5.5 Payment of Option Price.

The aggregate Option Price to be paid on exercise of an Option shall be paid in
cash (by wire transfer of immediately available funds to a bank account of the
Company designated by the Board or by delivery of a personal or certified check
payable to the Company); provided, however, that the Board may, in its sole
discretion, permit a Participant to exercise his or her Option by one or more of
the following other forms of payment (but only to the extent permitted by
applicable law and subject to such procedures as the Board may require):

 

  (a) by cancellation of indebtedness of the Company owed to the Participant;

 

  (b) by surrender of LLC Units which either (i) have been paid for within the
meaning of Rule 144 under the Securities Act (and, if such LLC Units were
purchased from the Company or any Subsidiary thereof by means of a promissory
note, such note has been fully paid with respect to such shares); or (ii) were
obtained by the Participant in the public market (but, subject in any case, to
the applicable limitations of Rule 16b-3 under the Exchange Act);

 

  (c) by waiver of compensation due or accrued to the Participant for services
rendered to the Company or any of its Subsidiaries;

 

  (d) if the LLC Units are a class of securities then listed or admitted to
trading on any national securities exchange or traded on any national market
system (including, but not limited to, The Nasdaq Global Market), in compliance
with any broker-assisted cashless exercise program authorized by the Board for
use in connection with the Plan at the time of such exercise (but, subject in
any case, to the applicable limitations of Rule 16b-3 under the Exchange Act);
or

 

  (e) a combination of the methods set forth in this Section 5.5.

 

5.6 Notice of Exercise.

In order for a Participant (or other person, as provided in Section 8.2) to
exercise an Option granted under the Plan in whole or in part (but for the
purchase of whole LLC Units only), the Participant must: (a) pay the applicable
Option Price; (b) to the extent the Participant is not then a party to the
Investor Rights Agreement (and the Investor Rights Agreement has not been
terminated prior to such date), the Participant must become a party of the
Investor Rights Agreement by returning to the Company an Adoption Agreement, in
form and substance satisfactory to the Board; and (c) deliver a written notice
(the “Exercise Notice”) to the Secretary of the Company. The Notice shall state:

 

  (a) That the Participant elects to exercise the Option;

 

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  (b) The number of LLC Units with respect to which the Option is being
exercised;

 

  (c) The method of payment for such LLC Units (which method must be available
to the Participant under the terms of the Plan and/or his or her Award
Agreement);

 

  (d) The date upon which the Participant desires to consummate the purchase of
the LLC Units (which date must be prior to the termination of such Option); and

 

  (e) Any additional provisions consistent with the Plan as the Board may from
time to time require.

The exercise date of an Option shall be the latest of (a) the date on which the
Company receives the Exercise Notice, (b) the date on which the Company receives
payment of the applicable Option Price, and (c) the date on which the Company
receives the fully executed Adoption Agreement from the Participant, in form and
substance satisfactory to the Board.

 

5.7 Issuance of Certificates.

The Company shall issue certificates or other written evidences of ownership in
the name of the Participant (or other person exercising the Option in accordance
with the provisions of Section 8.2) representing the LLC Units purchased upon
exercise of the Option as soon as practicable after receipt of the Exercise
Notice and payment of the aggregate Option Price for such LLC Units; provided
that the Company, in its sole discretion, may elect to not issue any fractional
LLC Units upon the exercise of an Option (determining the fractional LLC Units
after aggregating all LLC Units issuable to a single holder as a result of an
exercise of an Option for more than one LLC Unit) and may settle such fractional
LLC Unit interest in cash. Neither the Participant nor any person exercising an
Option in accordance with the provisions of Section 8.2 shall have any
privileges as a securityholder of the Company with respect to any LLC Units
issuable upon exercise of an Option granted under the Plan until the date of
exercise of the Option (with such date of exercise determined in accordance with
the provisions of Section 8.2).

ARTICLE VI

RESTRICTED UNIT AWARDS

 

6.1 General.

The Award Agreement shall specify the number of Restricted Units subject to any
Restricted Unit Award granted under the Plan. As used herein, the term
“Restricted Unit” shall mean a non-voting unit of measurement which is deemed
for bookkeeping purposes to be equivalent to one outstanding LLC Unit (subject
to adjustment as provided in Section 7.1 of the Plan) solely for purposes of the
Plan and Restricted Unit Awards granted under the Plan. The Restricted Units
shall be used solely as a device for the determination of the number of LLC
Units to eventually be distributed to the Participant if such Restricted Units
vest pursuant to

 

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Section 6.2. The Restricted Units shall not be treated as property or as a trust
fund of any kind. Unless otherwise expressly provided in the Award Agreement,
each Restricted Unit Award shall be subject to the terms and conditions of this
Article VI and the Plan as a whole.

 

6.2 Vesting; Change in Control Event.

 

  (a) Subject to Section 6.5 below, each Restricted Unit Award shall vest and
become nonforfeitable with respect to one hundred percent (100%) of the total
number of Restricted Units covered by the Award (subject to adjustment under
Section 7.1 of the Plan) on the date determined by the Board and set forth in
the Award Agreement with respect to that Award (which date shall be deemed to be
the third anniversary of the Grant Date of the Award in the absence of a
different date in the applicable Award Agreement). The vesting schedule requires
continued employment or service through the applicable vesting date as a
condition to the vesting of the Award and the rights and benefits thereunder.
Employment or service for only a portion of the vesting period, even if a
substantial portion, will not entitle the Participant to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment or services as provided in Section 6.5
below.

 

  (b) Notwithstanding Section 6.2(a) but subject to Section 6.5, each Restricted
Unit Award, to the extent then outstanding and not previously vested, shall vest
and become nonforfeitable with respect to one hundred percent (100%) of the
total number of Restricted Units covered by the Award (subject to adjustment
under Section 7.1 of the Plan) upon the occurrence of a Change in Control Event.

 

6.3 Dividend and Voting Rights.

 

  (a) Limitations on Rights Associated with Units. A Participant who has
received a Restricted Unit Award shall not have any rights as a securityholder
of the Company, any dividend rights (except as expressly provided in
Section 6.3(b) with respect to Dividend Equivalents) or any voting rights with
respect to the Restricted Units and any LLC Units underlying or issuable in
respect of such Restricted Units until such LLC Units are actually issued to and
held of record by the Participant. No adjustments will be made for dividends or
other rights of a holder for which the record date is prior to the date of
issuance of the certificate representing such LLC Units.

 

  (b) Dividend Equivalent Rights Distributions. As of any date that the Company
pays a cash dividend on its LLC Units, the Company shall credit the Participant
with an amount equal to the per-unit cash dividend paid by the Company on its
LLC Units on such date multiplied by the number of Restricted Units remaining
subject to this Award as of the related dividend payment record date (“Dividend
Equivalents”). Any Dividend Equivalents credited pursuant to the foregoing
provisions of this Section 6.3(b) shall be subject to the same vesting, payment
and other terms, conditions and restrictions as the Restricted Units to which
they relate No Dividend Equivalents shall be credited with respect to any
Restricted Units which, as of such record date, have either been paid pursuant
to Section 6.4 or terminated pursuant to Section 6.5.

 

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6.4 Timing and Manner of Payment of Restricted Units.

On or as soon as administratively practical following a Participant’s Severance
Date (regardless of the reason for the termination of such Participant’s
employment or services, except as provided in Section 6.5 with respect to a
termination for Cause), the Company shall (a) issue certificates in the name of
the Participant representing the number of LLC Units equal to the number of
Restricted Units subject to any Restricted Unit Award granted to the Participant
that had vested as of the Participant’s Severance Date, and (b) pay to the
Participant in cash (without interest) the amount of any Dividend Equivalents
credited under Section 6.3(b) in respect of such vested Restricted Units;
provided, however, that as a condition precedent to the issuance of any LLC
Units to any person who is not already a party to the Investor Rights Agreement,
such person shall provide the Company with an Adoption Agreement executed by
such person. Neither the Participant nor any other person entitled pursuant to
Section 8.2 to receive LLC Units in respect of any Restricted Unit Award shall
have any privileges as a securityholder of the Company with respect to such LLC
Units until the date of issuance of certificates representing such LLC Units
pursuant to this Section 6.4. The Participant shall have no further rights with
respect to any Restricted Units and/or Dividend Equivalents that are paid or
that terminate pursuant to Section 6.5.

 

6.5 Termination of Employment or Service.

A Participant’s Restricted Units shall terminate to the extent such units have
not become vested prior to the Participant’s Severance Date, regardless of the
reason for the termination of the Participant’s employment or service, whether
with or without cause, voluntarily or involuntarily, or due to the Participant’s
death or Disability. If any unvested Restricted Units are terminated hereunder,
such Restricted Units shall automatically terminate and be cancelled as of the
applicable Severance Date without payment of any consideration by the Company
and without any other action by the Participant, or the Participant’s
beneficiary or personal representative, as the case may be, and the Participant
(or his beneficiary or personal representative) shall have no further rights
with respect thereto. Notwithstanding any other provision hereunder, in the
event of a termination of the Participant’s employment or services by the
Company or a Subsidiary for Cause, the Participant’s Restricted Units (whether
or not vested) shall terminate as of the Participant’s Severance Date, and the
Participant shall not be entitled to any payment with respect to such terminated
units.

ARTICLE VII

ADJUSTMENTS

 

7.1 Adjustments.

Upon (or, as may be necessary to effect the adjustment, immediately prior to):
any reclassification, recapitalization, unit split (including a unit split in
the form of a unit dividend) or reverse unit split; any merger, combination,
consolidation, or other reorganization; any split-

 

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up, spin-off, or similar extraordinary non-cash dividend distribution in respect
of the LLC Units; or any exchange of LLC Units or other securities of the
Company, or any similar, unusual or extraordinary corporate transaction in
respect of the LLC Units; then the Board shall equitably and proportionately
adjust (1) the number and type of LLC Units (or other securities) that
thereafter may be made the subject of Awards (including the specific unit
limits, maximums and numbers of units set forth elsewhere in the Plan), (2) the
number, amount and type of LLC Units (or other securities or property) subject
to any outstanding Awards, (3) the grant, purchase, or exercise price of any
outstanding Awards, and/or (4) the securities, cash or other property
deliverable upon exercise or vesting of any outstanding Awards, in each case to
the extent necessary to preserve (but not increase) the level of incentives
intended by the Plan and the then-outstanding Awards.

Unless otherwise expressly provided in the applicable Award Agreement, upon (or,
as may be necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale of all or
substantially all of the business or assets of the Company as an entirety, the
Board shall equitably and proportionately adjust the performance standards set
forth in Section 5.2 applicable to any then-outstanding performance-based Awards
to the extent necessary to preserve (but not increase) the level of incentives
by the Plan and the then-outstanding performance-based Awards.

It is intended that, if possible, any adjustments contemplated by the preceding
two paragraphs be made in a manner that satisfies applicable legal, tax
(including, without limitation and as applicable in the circumstances,
Section 424 of the Code and Section 409A of the Code) and accounting (so as to
not trigger any charge to earnings with respect to such adjustment)
requirements.

Without limiting the generality of Section 3.4, any good faith determination by
the Board as to whether an adjustment is required in the circumstances pursuant
to this Section 7.1, and the extent and nature of any such adjustment, shall be
conclusive and binding on all persons.

Unless otherwise expressly provided by the Board: (a) in no event shall a
conversion of one or more outstanding shares of the Company’s preferred
securities (if any) or any new issuance of securities by the Company for
consideration be deemed, in and of itself, to require an adjustment pursuant to
this Section 7.1, and (b) in no event shall a cash dividend with respect to
which dividend equivalents are paid or credited pursuant to Section 6.3(b) be
deemed, in and of itself, to require an adjustment pursuant to this Section 7.1.

 

7.2 Early Termination of Awards.

Upon the occurrence of any of the following: any merger, combination,
consolidation, or other reorganization; any exchange of LLC Units or other
securities of the Company; a sale of all or substantially all the business,
stock or assets of the Company; a dissolution of the Company; or any other event
in which the Company does not survive (any such event, a “Terminating
Transaction”); each then-outstanding Option (whether or not vested and/or
exercisable, but after giving effect to any accelerated vesting required in the
circumstances pursuant to the terms hereof) shall terminate, subject to any
provision that has been expressly made by the Board, through a plan of
reorganization or otherwise, for the survival, substitution, assumption,

 

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exchange or other continuation or settlement of such Option and provided that,
in the case of Options that will not survive or be substituted for, assumed,
exchanged, or otherwise continued or settled in the Termination Transaction, the
holders of Options that are outstanding and vested or will vest in connection
with such Terminating Transaction shall be given reasonable advance notice of
the impending termination and a reasonable opportunity to exercise their
outstanding and vested Options in accordance with their terms before the
termination of the Options (except that in no case shall more than ten days’
notice of the impending termination be required). Provision shall be made in
connection with any Terminating Transaction where the Restricted Units would not
otherwise continue for the assumption of the Restricted Units in such
Terminating Transaction. For purposes of this Article VII, an Award shall be
deemed to have been “assumed” if (without limiting other circumstances in which
an Award is assumed) the Award continues after the Terminating Transaction,
and/or is assumed and continued by an entity that, as a result of the
Terminating Transaction, owns the Company or all or substantially all of the
Company’s assets directly or through one or more subsidiaries following the
Terminating Transaction (an “Acquiring Parent”), and confers the right to
purchase or receive, as applicable and subject to vesting and the other terms
and conditions of the Award, for each LLC Unit subject to the Award immediately
prior to the Terminating Transaction, the consideration (whether cash, shares,
or other securities or property) received in the Terminating Transaction by the
securityholders of the Company for each LLC Unit sold or exchanged in such
transaction (or the consideration received by a majority of the securityholders
participating in such transaction if the securityholders were offered a choice
of consideration); provided, however, that if the consideration offered for an
LLC Unit in the Terminating Transaction is not solely the ordinary common stock
or similar common equity securities of a successor corporation or an Acquiring
Parent, the Board may provide for the consideration to be received upon exercise
or payment of the Award, for each unit subject to the Award, to be solely
ordinary common stock or similar common equity securities of the successor
corporation or an Acquiring Parent equal in Fair Market Value to the per-unit
consideration received by the securityholders participating in the Terminating
Transaction. In the event such an Acquiring Parent refuses to so assume the
Restricted Units in connection with an event that constitutes both a Terminating
Transaction (to the extent the Restricted Units are not otherwise then vested)
and a change in ownership or effective control of the Company (within the
meaning of Section 409A of the Code and regulations and other guidance of the
Internal Revenue Service promulgated thereunder), the Restricted Units shall be
paid in connection with such event in a manner compliant with Treas. Reg.
Section 1.409A-3(j)(4)(ix)(B) promulgated under the Code (or any similar
successor provision).

ARTICLE VIII

RESTRICTIONS ON AWARDS

 

8.1 Compliance with Securities Laws.

No Awards shall be granted under the Plan, and no LLC Units shall be issued and
delivered pursuant to Awards granted under the Plan, unless and until the
Company and/or the Participant shall have complied with all applicable federal
or state registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.

 

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The Board in its discretion may, as a condition to the delivery of any LLC Units
pursuant to any Award granted under the Plan, require the applicable Participant
(a) to represent in writing that the LLC Units received pursuant to such Award
are being acquired for investment and not with a view to distribution and (b) to
make such other representations and warranties as are deemed reasonably
appropriate by the Board. Certificates representing LLC Units acquired under the
Plan that have not been registered under the Securities Act shall, if required
by the Board, bear such legends as may be required by the Investor Rights
Agreement and the applicable Award Agreement.

 

8.2 Nonassignability of Awards; Limited Exceptions.

(a) Unless otherwise expressly provided in this Section 8.2 and by applicable
law, (i) all Awards are non-transferable and will not be subject in any manner
to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or
charge; (ii) Awards will be exercised only by the Participant; and (iii) amounts
payable or units issuable pursuant to an Award will be delivered only to (or for
the account of) the Participant. In addition, the units shall be subject to the
restrictions set forth herein and in the Investor Rights Agreement.

(b) The exercise and transfer restrictions in Section 8.2(a) will not apply to
(i) transfers to the Company; (ii) subject to approval by the Board, transfers
by gift or domestic relations order to one or more “family members” (as that
term is defined in SEC Rule 701 promulgated under the Securities Act, which
includes certain family trusts) of the Participant; (iii) transfers by will or
the laws of descent and distribution; or (iv) if the Participant has suffered a
disability, permitted transfers or exercises on behalf of the Participant by the
Participant’s duly authorized legal representative.

 

8.3 No Evidence of Employment or Service.

Nothing contained in the Plan or in any Award Agreement shall confer upon any
Participant any right with respect to the continuation of his or her employment
by or service with the Company or any of its Subsidiaries or interfere in any
way with the right of the Company or any such Subsidiary, in its sole discretion
(subject to the terms of any separate agreement to the contrary), at any time to
terminate such employment or service or to increase or decrease the compensation
of the Participant from the rate in existence at the time of the grant of an
Award.

 

8.4 Plan Not Funded.

Awards under the Plan will be payable in LLC Units or from the general assets of
the Company, and (except as to the Reserved Units) no special or separate
reserve, fund or deposit will be made to assure payment of such Awards. No
Participant, beneficiary or other person will have any right, title or interest
in any fund or in any specific asset (including LLC Units, except as expressly
provided) of the Company or any of its Subsidiaries or affiliates by reason of
any Award hereunder. Neither the provisions of the Plan (or of any related
documents), nor the creation or adoption of the Plan, nor any action taken
pursuant to the provisions of the Plan will create, or be construed to create, a
trust of any kind or a fiduciary relationship between the Company or any of its
Subsidiaries and any Participant, beneficiary or other person. To the extent
that a Participant, beneficiary or other person acquires a right to receive
payment pursuant to any Award hereunder, such right will be no greater than the
right of any unsecured general creditor of the Company.

 

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8.5 Restrictions for Canada.

For the purposes of the Plan, if a Participant is a resident of Canada, such
Participant’s employment with the Company or a Subsidiary shall be considered to
have terminated effective on the last day of the Participant’s actual and active
employment with the Company or such Subsidiary, whether such day is selected by
agreement with the Participant or unilaterally by the Company or such Subsidiary
and whether with or without advance notice to the Participant. For the avoidance
of doubt, no period of notice that is given or that ought to have been given
under applicable law in respect of such termination of employment will be
utilized in determining entitlement under the Plan.

ARTICLE IX

TERM OF THE PLAN

The Plan shall become effective on the Effective Date. Unless earlier terminated
by the Board, the Plan will terminate at the close of business on the day before
the tenth anniversary of the Effective Date. After the termination of the Plan
either upon such stated expiration date or its earlier termination by the Board,
no additional Awards may be granted under the Plan, but previously granted
Awards (and the authority of the Board or Committee with respect thereto,
including the authority to amend such Awards) shall remain outstanding in
accordance with their applicable terms and conditions and the terms and
conditions of the Plan.

ARTICLE X

AMENDMENT OF PLAN

The Board may, at any time, terminate or, from time to time, amend, modify or
suspend the Plan, in whole or in part; provided, however, that the approval of
the holders of a majority of the votes that may be cast by all of the holders of
LLC Units of the Company entitled to vote (voting together as a single class,
with each such holder entitled to cast one vote per unit held by such holder)
shall be obtained prior to any amendment of the Plan becoming effective if such
approval is required by law or is necessary to comply with regulations
promulgated by the Securities and Exchange Commission under Section 16(b) of the
Exchange Act or if such approval is otherwise deemed necessary or advisable by
the Board. Notwithstanding the foregoing, the Plan may not be terminated,
suspended, modified or amended as it pertains to any existing Award Agreement if
such action would impair the rights of the applicable Participant without the
consent of such Participant.

ARTICLE XI

WITHHOLDING TAXES

Upon any exercise or payment of any Award, the Company (or any Subsidiary
employing the Participant) shall have the right at its option and in its sole
discretion to (a) require the

 

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Participant to pay or provide for payment of the amount of any taxes which the
Company (or Subsidiary) may be required to withhold with respect to such
exercise or payment; (b) deduct from any amount payable to the Participant in
cash or securities in respect of the Award the amount of any taxes which the
Company (or Subsidiary) may be required to withhold with respect to such
exercise or payment; or (c) reduce the number of LLC Units to be delivered to
the Participant in connection with such exercise or payment by the appropriate
number of LLC Units, valued at their then fair market value, to satisfy the
minimum withholding obligation of the Company (or Subsidiary). In no event will
the value of LLC Units withheld under clause (c) above exceed the minimum amount
of required withholding under applicable law.

ARTICLE XII

OTHER PROVISIONS

 

12.1 Governing Law.

All questions concerning the construction, interpretation and validity of the
Plan and the instruments evidencing the Awards granted hereunder shall be
governed by and construed and enforced in accordance with the domestic laws of
the State of Delaware, without giving effect to any choice or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Delaware. In furtherance of the foregoing, the internal law of the
State of Delaware will control the interpretation and construction of the Plan,
even if under such jurisdiction’s choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.

 

12.2 Captions.

The use of captions in the Plan is for convenience. The captions are not
intended to provide substantive rights.

 

12.3 Number and Gender.

With respect to words used in the Plan, the singular form shall include the
plural form, the masculine gender shall include the feminine gender, and vice
versa, as the context requires.

 

12.4 No Restriction on Corporate Powers.

The existence of the Plan, the Award Agreements, and the Awards granted
hereunder, shall not limit, affect or restrict in any way the right or power of
the Board or the securityholders of the Company to make or authorize: (a) any
adjustment, recapitalization, reorganization or other change in the Company or
any Subsidiary’s capital structure or its business; (b) any merger,
amalgamation, consolidation or change in the ownership of the Company or any
Subsidiary; (c) any issue of bonds, debentures, capital, preferred or prior
preference securities ahead of or affecting the Company’s capital securities or
the rights thereof; (d) any dissolution or liquidation of the Company or any
Subsidiary; (e) any sale or transfer of all or any part of the assets or
business of the Company or any Subsidiary; or (f) any other corporate act or
proceeding by the Company or any Subsidiary. No Participant, beneficiary or any
other person shall have

 

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any claim under any Award or Award Agreement against any member of the Board or
any committee thereof, or the Company or any employees, officers or agents of
the Company or any Subsidiary, as a result of any such action.

 

12.5 Construction.

It is intended that Awards granted under the Plan will not result in the
imposition of any tax liability pursuant to Section 409A of the Code. The Plan
and each Award Agreement shall be construed and interpreted consistent with that
intent. Without limiting the generality of the foregoing and notwithstanding any
provision of the Plan to the contrary, if a Participant is a “specified
employee” as defined in Code Section 409A on such Participant’s separation from
service (within the meaning of Section 409A of the Code) with the Company, the
Participant shall not be entitled to any payments hereunder until the earlier of
(i) the date which is six (6) months after his separation from service with the
Company for any reason other than death, or (ii) the date of the Participant’s
death. Any amounts otherwise payable to the Participant following a termination
of his employment that are not so paid by reason of this Section 12.5 shall be
paid as soon as practicable after the date that is six (6) months after the
Participant’s separation from service with the Company (or, if earlier, the date
of the Participant’s death). The provisions of this Section 12.5 shall only
apply if, and to the extent, required to comply with Code Section 409A.

 

12.6 Notices.

Any notice to be given with respect to any Award granted under the Plan shall be
in writing and addressed to the Company at its principal office to the attention
of the Secretary, and to the Participant at the Participant’s last address
reflected on the Company’s records, or at such other address as either party may
hereafter designate in writing to the other. Any such notice shall be given only
when received, but if the Participant is no longer an employee of the Company or
any of its Subsidiaries, shall be deemed to have been duly given by the Company
when enclosed in a properly sealed envelope addressed as aforesaid, registered
or certified, and deposited (postage and registry or certification fee prepaid)
in a post office or branch post office regularly maintained by the United States
Government.

 

12.7 Severability.

In the event any portion of the Plan or any action taken pursuant thereto shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provisions had not been included, and the
illegal or invalid action shall be null and void.

 

12.8 Enforcement; Waiver of Jury Trial.

In the event the Company or any Participant institutes litigation to enforce or
protect its or his/her rights under the Plan and/or any Award Agreement, the
party prevailing in any such litigation shall be paid by the non-prevailing
party, in addition to all other relief, all reasonable attorneys’ fees,
out-of-pocket costs and disbursements relating to such litigation. The Company
and each Participant granted an Award hereunder hereby irrevocably and
unconditionally waive, to the fullest extent it or he/she may legally and
effectively do so, trial by jury in any suit, action or proceeding arising under
the Plan and/or any Award Agreement.

*            *            *

 

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