EXHIBIT 10.01

2009 Praxair, Inc.

Long Term Incentive Plan

Effective April 28, 2009

Amended April 27, 2010

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Contents

 

Article 1. Establishment, Purpose, and Duration

   2

Article 2. Definitions

   2

Article 3. Administration

   8

Article 4. Shares Subject to this Plan and Maximum Awards

   9

Article 5. Eligibility and Participation

   11

Article 6. Stock Options

   11

Article 7. Stock Appreciation Rights

   13

Article 8. Restricted Stock Grants

   14

Article 9. Performance Units

   16

Article 10. Other Stock-Based Awards

   18

Article 11. Transferability of Awards

   19

Article 12. Performance Measures

   19

Article 13. Dividend Equivalents

   21

Article 14. Beneficiary Designation

   21

Article 15. Rights of Participants

   21

Article 16. Change in Control

   22

Article 17. Amendment, Modification, Suspension, and Termination

   23

Article 18. Withholding

   24

Article 19. Successors

   24

Article 20. General Provisions

   24

 

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2009 Praxair, Inc.

Long Term Incentive Plan

Article 1. Establishment, Purpose, and Duration

1.1 Establishment. Praxair, Inc., a Delaware corporation (hereinafter referred
to as the “Company”), establishes an incentive compensation plan to be known as
the 2009 Praxair, Inc. Long Term Incentive Plan (hereinafter referred to as the
“Plan”), as set forth in this document.

This Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights (“SARs”), Restricted Stock, Restricted Stock
Units, Performance Units, and Other Stock-Based Awards.

This Plan was adopted by the Board on February 24, 2009, became effective upon
shareholder approval on April 28, 2009 (the “Effective Date”) and shall remain
in effect as provided in Section 1.3 hereof. This Plan was also amended by the
Board on April 27, 2010 in order to add Directors as a class of eligible
Participants, subject to shareholder approval.

1.2 Purpose of this Plan. The purpose of this Plan is to provide a means whereby
Employees develop personal involvement in the financial success of the Company,
and to encourage them to devote their best efforts to the business of the
Company, thereby advancing the interests of the Company and its shareholders. A
further purpose of this Plan is to provide a means through which the Company may
attract and retain able Employees and to provide a means whereby those
individuals can acquire and maintain stock ownership, thereby strengthening
their concern for the welfare of the Company. This Plan also provides a means of
compensating Directors in the form of equity as a complement to other elements
of the Directors’ overall compensation program and to align their interests with
those of the Company’s shareholders.

1.3 Duration of this Plan. Unless sooner terminated as provided herein, this
Plan shall terminate February 24, 2019. After this Plan is terminated, no Awards
may be granted but Awards previously granted shall remain outstanding in
accordance with their applicable terms and conditions and this Plan’s terms and
conditions.

Article 2. Definitions

Whenever used in this Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized.

 

  2.1 “Award” means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Restricted Stock Units, Performance Units, or Other Stock-Based Awards, in each
case subject to the terms of this Plan.

 

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  2.2 “Award Agreement” means either (a) a written agreement entered into by the
Company and a Participant setting forth the terms and provisions applicable to
an Award granted under this Plan, or (b) a written or electronic statement
issued by the Company to a Participant describing the terms and provisions of
such Award, including any amendment or modification thereof. The Committee may
provide for the use of electronic, internet or other non-paper Award Agreements,
and the use of electronic, internet or other non-paper means for the acceptance
thereof and actions thereunder by a Participant.

 

  2.3 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

 

  2.4 “Board” means the Board of Directors of the Company.

 

  2.5 “Change in Control” means the occurrence of any one of the following
events with respect to the Company:

 

  (a) individuals who, on January 1, 2009, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to January 1, 2009,
whose election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the Company proxy statement in which such person is named
as a nominee for director, without objection to such nomination) shall be an
Incumbent Director; provided, however, that no individual elected or nominated
as a director of the Company initially as a result of an actual or threatened
election contest with respect to directors or any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than the
Board shall be deemed an Incumbent Director;

 

  (b) any “person” (as such term is defined in Section 3(a)(9) of the Exchange
Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes a Beneficial Owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (the
“Praxair Voting Securities”); provided, however, that the event described in
this Subsection 2.5(b) shall not be deemed to be a Change in Control by virtue
of any of the following acquisitions: (A) by the Company or any of its
subsidiaries; (B) by any employee benefit plan sponsored or maintained by the
Company or any of its subsidiaries; (C) by any underwriter temporarily holding
securities pursuant to an offering of such securities; or (D) pursuant to a
Non-Qualifying Transaction (as defined in Subsection 2.5(c));

 

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  (c) the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company or any of its
subsidiaries that requires the approval of the Company’s stockholders, whether
for such transaction or the issuance of securities in the transaction (a
“Business Combination”), unless immediately following such Business Combination:
(A) more than 50% of the total voting power of (x) the corporation resulting
from such Business Combination (the “Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has
Beneficial Ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”), is
represented by Praxair Voting Securities that were outstanding immediately prior
to such Business Combination (or, if applicable, shares into which such Praxair
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Praxair Voting Securities among the
holders thereof immediately prior to the Business Combination, (B) no person
(other than any employee benefit plan sponsored or maintained by the Surviving
Corporation or the Parent Corporation), is or becomes the Beneficial Owner,
directly or indirectly, of 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
and (C) at least a majority of the members of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) were Incumbent Directors at the time of the Board’s approval of the
execution of the initial agreement providing for such Business Combination (any
Business Combination which satisfies all of the criteria specified in (A),
(B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); or

 

  (d) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or a sale or disposition of all or substantially all
of the Company’s assets.

Notwithstanding the foregoing, to the extent an Award is subject to Code
Section 409A, the Committee shall have the discretion to define Change in
Control for such Award in a manner which complies with such Code Section.

 

  2.6 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time
to time. For purposes of this Plan, references to sections of the Code shall be
deemed to include references to any applicable regulations thereunder and any
successor or similar provision.

 

  2.7

“Committee” means, with respect to Awards granted to (a) Employees, the
Compensation and Management Development Committee of the Board, and
(b) Directors, the Governance and Nominating Committee of the Board, and in each
case any other committee designated by the Board to administer this Plan with
respect to

 

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Employee or Director Awards. The Committee shall consist of not less than two
directors. However, if a member of the Committee is not an “outside director”
within the meaning of Code Section 162(m) or is not a “non-employee director”
within the meaning of Rule 16b-3 under the Exchange Act, the Committee may from
time to time delegate some or all of its functions under the Plan to a committee
or subcommittee composed of members that meet the relevant requirements. The
term “Committee” includes any such committee or subcommittee, to the extent of
the Compensation and Management Development Committee’s delegation, or the
Governance and Nominating Committee’s delegation, as the case may be. If the
Committee does not exist or cannot function for any reason, the Board may take
any action under the Plan that would otherwise be the responsibility of the
Committee, other than any actions required to be carried out by a committee of
at least two “outside directors” or “non-employee directors”.

 

  2.8 “Company” means Praxair, Inc., a Delaware corporation, and any successor
thereto as provided in Article 19 herein.

 

  2.9 “Covered Employee” means any Employee who is or may become a “Covered
Employee,” as defined in Code Section 162(m), and who is designated, either as
an individual Employee or class of Employees, by the Committee within the
shorter of (a) ninety (90) days after the beginning of the Performance Period,
or (b) the period prior to the date twenty-five percent (25%) of the Performance
Period has elapsed, as a “Covered Employee” under this Plan for such applicable
Performance Period.

 

  2.10 “Director” means any director of the Company who is not an Employee.

 

  2.11 “Effective Date” has the meaning set forth in Section 1.1.

 

  2.12 “Employee” means any individual performing services for the Company or a
Subsidiary and designated as an employee of the Company or its Subsidiaries on
the payroll records thereof. An Employee shall not include any individual during
any period he or she is classified or treated by the Company or its Subsidiary
as an independent contractor, a consultant, or any employee of an employment,
consulting, or temporary agency or any other entity other than the Company or
its Subsidiary, without regard to whether such individual is subsequently
determined to have been, or is subsequently retroactively reclassified as a
common-law employee of the Company or its Subsidiary during such period.

 

  2.13 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.

 

  2.14 “Fair Market Value” or “FMV” means, in respect of any date on or as of
which a determination thereof is being or to be made, the closing market price
of a Share reported on the New York Stock Exchange Composite Transactions tape
on such date, or, if no Shares were traded on such date, on the next preceding
day on which sales of Shares were reported on the New York Stock Exchange
Composite Transactions tape.

 

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  2.15 “Grant Date” means the date an Award is granted to a Participant pursuant
to the Plan.

 

  2.16 “Grant Price” means the price established at the time of grant of a SAR
pursuant to Article 7, used to determine whether there is any payment due upon
exercise of the SAR.

 

  2.17 “Incentive Stock Option” or “ISO” means an Option to purchase Shares
granted under Article 6 to an Employee that is designated as an Incentive Stock
Option and that is intended to meet the requirements of Code Section 422, or any
successor provision.

 

  2.18 “Insider” shall mean an individual who is, on the relevant date, an
executive officer of the Company or a more than ten percent (10%) Beneficial
Owner of any class of the Company’s equity securities that is registered
pursuant to Section 12 of the Exchange Act, as determined by the Board in
accordance with Section 16 of the Exchange Act.

 

  2.19 “Market Price” means, in respect of any date on or as of which a
determination thereof is being or to be made, the average of the high and low
prices of a Share reported on the New York Stock Exchange Composite Transactions
tape on such date, or, if no Shares were traded on such date, on the next
preceding day on which sales of Shares were reported on the New York Stock
Exchange Composite Transactions tape.

 

  2.20 “Nonqualified Stock Option” or “NQSO” means an Option that is not
intended to meet the requirements of Code Section 422, or that otherwise does
not meet such requirements.

 

  2.21 “Option” means an Incentive Stock Option or a Nonqualified Stock Option,
as described in Article 6.

 

  2.22 “Option Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option.

 

  2.23 “Other Stock-Based Award” means an equity-based or equity-related Award
not otherwise described by the terms of this Plan, granted pursuant to Article
10.

 

  2.24 “Participant” means any Employee or a Director to whom an Award is
granted.

 

  2.25

“Performance-Based Compensation” means compensation under an Award that is
intended to satisfy the requirements of Code Section 162(m) for certain
performance-based

 

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compensation paid to Covered Employees. Any Award granted hereunder that is
intended to be Performance-Based Compensation within the meaning of Code
Section 162(m) shall be subject to the terms and provisions of this Plan and not
the Praxair, Inc. Plan for Determining Performance-Based Awards Under
Section 162(m).

 

  2.26 “Performance Goal” means, with respect to any applicable Award to an
Employee, the one or more targets, goals or levels of attainment required to be
achieved in terms of the specified Performance Measures during the specified
Performance Period, as set forth in the related Award Agreement.

 

  2.27 “Performance Measures” means: (a) with respect to any Award to an
Employee intended to qualify as Performance-Based Compensation, any one or more
of the measures described in Article 12 on which the Performance Goals are based
and which are approved by the Company’s shareholders pursuant to this Plan in
order to qualify Awards as Performance-Based Compensation; and (b) with respect
to any other Award, such performance measures as determined by the Committee in
its sole discretion and set forth in the applicable Award Agreement for purposes
of determining the applicable Performance Goal.

 

  2.28 “Performance Period” means the period of time during which the
Performance Goals must be met in order to determine the degree of payout and/or
vesting with respect to an Award granted to an Employee.

 

  2.29 “Performance Unit” means an Award to an Employee under Article 9 herein
and subject to the terms of this Plan, denominated in Units, the value of which
at the time it is payable is determined as a function of the extent to which
corresponding Performance Goal(s) has been achieved during the applicable
Performance Period.

 

  2.30 “Plan” means this 2009 Praxair, Inc. Long Term Incentive Plan.

 

  2.31 “Restricted Stock” means Shares issued pursuant to a Restricted Stock
Grant under Article 8 so long as the Shares remain subject to the restrictions
and conditions specified in the Award Agreement pursuant to which such
Restricted Stock Grant is made.

 

  2.32 “Restricted Stock Grant” means an Award of Restricted Stock or Restricted
Stock Units made pursuant to the provisions of Article 8.

 

  2.33 “Restricted Stock Unit” means a Unit issued pursuant to a Restricted
Stock Grant under Article 8 so long as the Units remain subject to the
restrictions and conditions specified in the Award Agreement.

 

  2.34 “Restriction Period” means the period when Restricted Stock or Restricted
Stock Units are subject to a substantial risk of forfeiture (based on the
passage of time, the achievement of Performance Goals, or upon the occurrence of
other events as determined by the Committee, in its discretion), as provided in
Article 8.

 

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  2.35 “Share” means a share of common stock of the Company, $0.01 par value per
share or any security issued by the Company in substitution or exchange therefor
or in lieu thereof.

 

  2.36 “Share Equivalent” means a Unit (or fraction thereof, if authorized by
the Committee) substantially equivalent to a hypothetical Share, credited to the
Participant and having a value at any time equal to the FMV of a Share (or
fraction thereof) at such time.

 

  2.37 “Stock Appreciation Right” or “SAR” means an Award, designated as a SAR,
pursuant to the terms of Article 7 herein.

 

  2.38 “Subsidiary” means any corporation or other entity, whether domestic or
foreign, in which the Company has or obtains, directly or indirectly, a
proprietary interest of fifty percent (50%) or greater by reason of stock
ownership or otherwise; provided, however, that (a) for purposes of determining
whether any Employee can be a Participant with respect to any Award of Incentive
Stock Option, the term “Subsidiary” has the meaning given to such term in Code
Section 424, as interpreted by the regulations thereunder and applicable law;
and (b) for purposes of determining whether any individual may be a Participant
with respect to any Award of Options or SARs that are intended to be exempt from
Code Section 409A, the term “Subsidiary” means any corporation or other entity
to which the Company is an “eligible issuer of service recipient stock” within
the meaning of Code Section 409A.

 

  2.39 “Unit” means a bookkeeping entry used by the Company to record and
account for the grant or settlement of an Award until such time as the Award is
paid, canceled, forfeited or terminated, as the case may be, which, except as
otherwise specified by the Committee, shall be equal to one Share Equivalent.

Article 3. Administration

3.1 General. The Committee shall be responsible for administering this Plan,
subject to this Article 3 and the other provisions of this Plan. The Committee
may employ attorneys, consultants, accountants, agents, and other individuals,
any of whom may be an Employee, and the Committee, the Company, and its officers
and directors shall be entitled to rely upon the advice, opinions, or valuations
of any such individuals. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Participants, the Company, and all other interested individuals.

3.2 Authority of the Committee. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of this Plan and any
Award Agreement

 

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or other agreement or document ancillary to, or in connection with, this Plan,
to determine eligibility for Awards and to adopt such rules, regulations, forms,
instruments, and guidelines for administering this Plan as the Committee may
deem necessary or proper. Such authority shall include, but not be limited to,
selecting Participants, establishing all Award terms and conditions, including
the terms and conditions set forth in Award Agreements, granting Awards as an
alternative to or as the form of payment for grants or rights earned or due
under compensation plans or arrangements of the Company, construing any
ambiguous provision of the Plan or any Award Agreement, and, subject to Article
17, adopting modifications and amendments to this Plan or any Award Agreement,
including without limitation, any that are necessary to comply with the laws of
the countries and other jurisdictions in which the Company and/or its
Subsidiaries operate.

3.3 Delegation. The Committee may delegate to one or more of its members or to
one or more officers of the Company, and/or its Subsidiaries or to one or more
agents or advisors, such administrative duties or powers as it may deem
advisable, and the Committee or any individuals to whom it has delegated duties
or powers as aforesaid may employ one or more individuals to render advice with
respect to any responsibility the Committee or such individuals may have under
this Plan. The Committee may, by resolution, authorize the Chief Executive
Officer of the Company (the “CEO”) or any other officer of the Company, to do
one or both of the following on the same basis as can the Committee:
(a) designate Employees to be recipients of Awards and (b) determine the size of
any such Awards; provided, however, (i) the Committee shall not delegate such
responsibilities for any Awards to be granted to an Employee who is considered
an Insider; (ii) the resolution providing such authorization sets forth the
total number of Awards the CEO or officer may grant; and (iii) the CEO or
officer, as applicable, shall report periodically to the Committee regarding the
nature and scope of the Awards granted pursuant to the authority delegated.

Article 4. Shares Subject to this Plan and Maximum Awards

4.1 Number of Shares Available for Awards. Subject to adjustment as provided in
Section 4.4, the maximum number of Shares which may be issued pursuant to Awards
under this Plan on or after the Effective Date shall be 12,000,000 Shares (the
“Share Authorization”). The Shares available for issuance under this Plan may be
authorized and unissued Shares or treasury Shares. The maximum number of Shares
of the Share Authorization that may be issued pursuant to ISOs under this Plan
shall be 12,000,000 Shares. The maximum number of Shares of the Share
Authorization that may be issued under this Plan pursuant to Awards other than
Options or SARs shall be 4,000,000 Shares.

4.2 Share Usage. Shares subject to an Award that expires according to its terms
or is forfeited, terminated, canceled or surrendered, in each case, without
having been exercised or settled, or can be paid only in cash, will be available
again for grant under the Plan, without reducing the number of Shares that are
available for Awards under the Plan. In no event shall (a) any Shares subject to
an Option that is cancelled upon the exercise of a tandem SAR; (b) any Shares
subject to an Award that are surrendered in payment of the exercise price of an
Option or

 

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in payment of the taxes associated with an Award; or (c) any Shares subject to a
SAR that are not issued in connection with the stock settlement of the SAR upon
exercise thereof become available for grant under the Plan pursuant to this
Section.

4.3 Annual Award Limits. Unless and until the Committee determines that an Award
to a Covered Employee shall not be designed to qualify as Performance-Based
Compensation, the following limits (each an “Annual Award Limit” and,
collectively, “Annual Award Limits”), as adjusted pursuant to Sections 4.4,
shall apply to grants of such Awards to Employees under this Plan:

 

  (a) Options: The maximum aggregate number of Shares subject to Options granted
in any one calendar year to any one Participant shall be 1,000,000.

 

  (b) SARs: The maximum number of Shares subject to SARs granted in any one
calendar year to any one Participant shall be 1,000,000.

 

  (c) Restricted Stock or Restricted Stock Units: The maximum aggregate
Restricted Stock Grant in any one calendar year to any one Participant shall be
300,000 Shares, or equal to the Fair Market Value of 300,000 Shares, determined
as of the date of vesting or payout, as applicable.

 

  (d) Performance Units: The maximum aggregate Award of Performance Units that a
Participant may receive in any one calendar year shall be 300,000 Shares, or
equal to the Fair Market Value of 300,000 Shares, determined as of the date of
vesting or payout, as applicable.

 

  (e) Other Stock-Based Awards: The maximum aggregate grant with respect to
Other Stock-Based Awards pursuant to Section 10.1 in any one calendar year to
any one Participant shall be 300,000 Shares.

4.4 Adjustments in Authorized Shares. In the event of any corporate event or
transaction (including, but not limited to, a change in the Shares of the
Company or the capitalization of the Company) such as a merger, consolidation,
reorganization, recapitalization, separation, partial or complete liquidation,
stock dividend, stock split, reverse stock split, split up, spin-off, or other
distribution of stock or property of the Company, combination of Shares,
exchange of Shares, dividend in kind, or other like change in capital structure,
number of outstanding Shares or distribution (other than normal cash dividends)
to shareholders of the Company, or any similar corporate event or transaction,
the Committee, in order to prevent dilution or enlargement of Participants’
rights under this Plan, shall substitute or adjust, as applicable, the number
and kind of Shares that may be issued under this Plan or under particular forms
of Awards, the number and kind of Shares subject to outstanding Awards, the
Option Price or Grant Price applicable to outstanding Awards, the Annual Award
Limits, and other value determinations applicable to outstanding Awards.

 

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To further reflect any of the foregoing events, transactions or adjustments, the
Committee, in its sole discretion, may also make adjustments in the terms of any
Awards under this Plan and may modify any other terms of outstanding Awards,
including modifications of Performance Goals and changes in the length of
Performance Periods, as it deems necessary or appropriate. The determination of
the Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under this Plan.

Subject to the provisions of Article 17 and notwithstanding anything else herein
to the contrary, without affecting the number of Shares reserved or available
hereunder, the Committee may authorize the issuance or assumption of benefits
under this Plan in connection with any merger, consolidation, acquisition of
property or stock, or reorganization upon such terms and conditions as it may
deem appropriate (including, but not limited to, a conversion of equity awards
into Awards under this Plan in a manner consistent with paragraph 53 of FASB
Interpretation No. 44), subject to compliance with the rules under Code Sections
422 and 424, as and where applicable.

Article 5. Eligibility and Participation

Only Employees and Directors shall be eligible to participate in this Plan.
Subject to the provisions of this Plan, the designated Committee may, from time
to time, select those Employees or Directors to whom Awards shall be granted and
shall determine, in its sole discretion, the nature of, any and all terms
permissible by law, and the amount of each Award; provided, however, that no
Award made to a Director shall be subject to or conditioned upon the attainment
of any Performance Goal.

Article 6. Stock Options

6.1 Grant of Options. Subject to the terms and provisions of this Plan, Options
may be granted to Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the Committee, in its sole
discretion. Options may be granted in addition to, or in tandem with or
independent of, SARs or any other Awards under the Plan.

6.2 Award Agreement. Each Option grant shall be evidenced by an Award Agreement
that shall specify the Option Price, the term of the Option, the number of
Shares to which the Option pertains, the conditions, including any Performance
Goals, upon which an Option shall become vested and exercisable, and such other
terms and conditions as the Committee shall determine which are not inconsistent
with the terms of this Plan. The Award Agreement also shall specify whether the
Option is intended to be an ISO or a NQSO.

6.3 Option Price. The Option Price for each grant of an Option under this Plan
shall be determined by the Committee in its sole discretion and shall be
specified in the Award Agreement; provided, however, the Option Price must be at
least equal to 100% of the FMV of the Shares as determined on the Grant Date.

 

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6.4 Term of Options. Each Option granted to a Participant shall expire at such
time as the Committee shall determine at the time of grant; provided, however,
no Option shall be exercisable later than the day before the tenth
(10th) anniversary of its Grant Date.

6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which terms and restrictions need
not be the same for each grant or for each Participant. Except upon a Change in
Control and in certain limited situations (including, but not limited to, the
death or disability of the Participant): (a) Awards of Options subject solely to
the continued service of the Participant shall become exercisable no earlier
than three (3) years after the Grant Date provided that such Option may
partially vest after no less than one year following such Grant Date; and
(b) any other Award of Options shall become exercisable no earlier than one
(1) year after the Grant Date.

6.6 Payment. Options granted under this Article 6 shall be exercised by the
delivery of a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee, or by complying with
any alternative procedures which may be authorized by the Committee, setting
forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

A condition of the issuance of the Shares as to which an Option shall be
exercised shall be the payment of the Option Price. The Option Price of any
Option shall be payable to the Company in full either: (a) in cash or its
equivalent; (b) by tendering (either by actual delivery or attestation)
previously acquired Shares having an aggregate Market Price at the time of
exercise equal to the Option Price (provided that except as otherwise determined
by the Committee, the Shares that are tendered must have been held by the
Participant for at least six (6) months (or such other period, if any, as the
Committee may permit) prior to their tender to satisfy the Option Price if
acquired under this Plan or any other compensation plan maintained by the
Company or have been purchased on the open market); (c) by having the Company
withhold Shares that otherwise would be delivered to the exerciser pursuant to
the exercise of the Option having a value equaling the aggregate Option Price
due; (d) by a cashless (broker-assisted) exercise; (e) by a combination of (a),
(b), (c) and/or (d); or (f) any other method approved or accepted by the
Committee in its sole discretion.

Subject to any governing rules or regulations, as soon as practicable after
receipt of written notification of exercise and full payment (including
satisfaction of any applicable tax withholding), the Company shall deliver to
the Participant evidence of book entry Shares, or upon the Participant’s
request, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).

Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars.

6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this

 

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Article 6 as it may deem advisable, including, without limitation, minimum
holding period requirements, restrictions under applicable federal securities
laws, under the requirements of any stock exchange or market upon which such
Shares are then listed and/or traded, or under any blue sky or state securities
laws applicable to such Shares.

6.8 Termination of Employment or Service as a Director. Each Participant’s Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of, as the case may be,
(a) an Employee’s employment or provision of services to the Company and/or its
Subsidiaries or (b) a Director’s service as a director of the Company . Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination.

6.9 Notification of Disqualifying Disposition. If any Participant shall make any
disposition of Shares issued pursuant to the exercise of an ISO under the
circumstances described in Code Section 421(b) (relating to certain
disqualifying dispositions), such Participant shall notify the Company of such
disposition within ten (10) days thereof.

Article 7. Stock Appreciation Rights

7.1 Grant of SARs. Subject to the terms and conditions of this Plan, SARs may be
granted to Participants at any time and from time to time as shall be determined
by the Committee, in its sole discretion. Subject to the terms and conditions of
this Plan, the Committee shall have complete discretion in determining the
number of SARs granted to each Participant and, consistent with the provisions
of this Plan, in determining the terms and conditions pertaining to such SARs.
SARs may be granted under the Plan alone, in tandem with, in addition to or
independent of, Options or any other Awards under the Plan.

7.2 SAR Agreement. Each SAR Award shall be evidenced by an Award Agreement that
shall specify the Grant Price, the term of the SAR, the number of Shares to
which the SAR pertains, the conditions, including any Performance Goals, upon
which the SAR shall become vested and exercisable, and such other terms and
conditions as the Committee shall determine which are not inconsistent with the
terms of this Plan.

7.3 Term of SAR. The term of a SAR granted under this Plan shall be determined
by the Committee, in its sole discretion, and specified in the SAR Award
Agreement; provided, however, no SAR shall be exercisable later than the tenth
(10th) anniversary of its Grant Date.

7.4 Grant Price. The Grant Price for each Award of a SAR shall be determined by
the Committee and shall be specified in the Award Agreement; provided, however,
the Grant Price must be at least equal to 100% of the FMV of the Shares as
determined on the Grant Date.

 

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7.5 Exercise of SARs. SARs granted under this Article 7 shall be exercisable at
such times and be subject to such restrictions and conditions as the Committee
shall in each instance approve, which terms and restrictions need not be the
same for each grant or for each Participant. Except upon a Change in Control and
in certain limited situations (including, but not limited to, the death or
disability of the Participant): (a) Awards of SARs subject solely to the
continued service of the Participant shall become exercisable no earlier than
three (3) years after the Grant Date provided that such SAR may partially vest
after no less than one year following such Grant Date; and (b) any other Award
of SARs shall become exercisable no earlier than one (1) year after the Grant
Date. The Committee may provide that a SAR shall be automatically exercised on
one or more specified dates.

7.6 Settlement of SARs. Upon the exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

 

  (a) The excess of the FMV of a Share on the date of exercise over the Grant
Price; by

 

  (b) The number of Shares with respect to which the SAR is exercised.

At the discretion of the Committee, the payment upon exercise of a SAR may be in
cash, Shares, or any combination thereof, or in any other manner approved by the
Committee in its sole discretion. The Committee’s determination regarding the
form of SAR payout shall be set forth in the Award Agreement pertaining to the
grant of the SAR.

7.7 Termination of Employment or Service as a Director. Each Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the SAR following termination of, as the case may be, (a) an Employee’s
employment with the Company and/or its Subsidiaries, or (b) a Director’s service
as a director of the Company. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with Participants, need not be uniform among all SARs issued pursuant to
this Plan, and may reflect distinctions based on the reasons for termination.

7.8 Other Restrictions. The Committee shall impose such other conditions and/or
restrictions on any Shares received upon exercise of a SAR granted pursuant to
this Plan as it may deem advisable or desirable. These restrictions may include,
but shall not be limited to, a requirement that the Participant hold the Shares
received upon exercise of a SAR for a specified period of time.

Article 8. Restricted Stock Grants

8.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the terms
and provisions of this Plan, the Committee, at any time and from time to time,
may grant Restricted Stock Grants to Participants in such amounts as the
Committee shall determine. A Restricted Stock Grant is the issue of Shares or
Units in the name of a Participant subject to such terms and

 

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conditions as the Committee shall deem appropriate, including, without
limitation, restrictions on the sale, assignment, transfer or other disposition
of such Shares or Units and the requirement that the Participant forfeit such
Shares or Units back to the Company (a) upon termination of employment of an
Employee or termination of service as a Director for specified reasons within a
specified period of time; (b) if any specified Performance Goals are not
achieved during a specified Performance Period; or (c) if such other conditions
as the Committee may specify are not satisfied.

8.2 Restricted Stock or Restricted Stock Unit Agreement. Each Restricted Stock
Grant shall be evidenced by an Award Agreement that shall specify the
Restriction Period(s), the number of Shares of Restricted Stock and/or
Restricted Stock Units granted, the conditions and restrictions imposed upon the
Restricted Stock Grant, and such other provisions as the Committee shall
determine which are not inconsistent with the terms of this Plan.

8.3 Restriction Period. Each Restricted Stock Grant shall provide that in order
for a Participant to receive unrestricted Shares or payment in settlement of a
Restricted Stock Unit, the Participant must remain an Employee or a Director, as
the case may be, for a period of time specified by the Committee in the Award
Agreement. The Committee may also establish one or more Performance Goals that
are required to be achieved during one or more Performance Periods within the
Restriction Period as a condition to the lapse of restrictions of Awards to
Employees. Except upon a Change in Control and in certain limited situations
(including, but not limited to, the death or disability of the Participant):
(a) Except as provided in Subsection 8.3(c), Awards of Restricted Stock and/or
Restricted Stock Units subject solely to the continued service of the
Participant shall have a Restriction Period of not less than three (3) years
from the Grant Date; (b) Awards to Employees of Restricted Stock and/or
Restricted Stock Units subject to the achievement of one or more Performance
Goals shall have a minimum Restriction Period of one (1) year; and (c) Awards of
Restricted Stock and/or Restricted Stock Units subject solely to the continued
service of a Director shall have such Restriction Period as the Committee shall
determine, provided, however, that the aggregate number of Shares subject to
Restricted Stock or Restricted Stock Unit Awards granted to Directors under this
Subsection 8.3(c) with a vesting period of less than three years shall not
exceed five percent (5%) of the Share Authorization under Section 4.1 of this
Plan, as may be adjusted from time to time pursuant to the provisions of this
Plan. The Committee may provide for the pro rata lapse of restrictions in
installments during the Restriction Period.

8.4 Restrictions. The following restrictions and conditions shall apply to each
Restricted Stock Grant during the Restriction Period: (a) the Participant may
not sell, assign, transfer, pledge, hypothecate, encumber or otherwise dispose
of or realize on the Shares or Units subject to the Restricted Stock Grant; and
(b) the Shares issued as Restricted Stock or the Restricted Stock Units shall be
forfeited to the Company if the Participant for any reason ceases to be an
Employee or a Director, as the case may be, prior to the end of the Restriction
Period, except due to circumstances specified in the related Award Agreement or
otherwise approved by the Committee. Unless otherwise directed by the Committee,
(i) all certificates representing Shares of Restricted Stock will be held in
custody by the Company until all restrictions thereon have lapsed, together with
a stock power or powers executed by the Participant in whose name such

 

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certificates are registered, endorsed in blank and covering such Shares, or
(ii) all uncertificated Shares of Restricted Stock will be held at the Company’s
transfer agent in book entry form with appropriate restrictions relating to the
transfer of such Shares of Restricted Stock. The Committee may, in its sole
discretion, include such other restrictions and conditions as it may deem
appropriate.

The Committee may, in its sole discretion, impose such other conditions and/or
restrictions on any Restricted Stock Grant awarded pursuant to this Plan as it
may deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock
or each Restricted Stock Unit, and/or restrictions under applicable laws or
under the requirements of any stock exchange or market upon which such Shares
are listed or traded, or holding requirements or sale restrictions placed on the
Shares by the Company upon vesting of such Restricted Stock or Restricted Stock
Units.

8.5 Payment. Upon expiration of the Restriction Period and if all conditions
have been satisfied and any applicable Performance Goals attained, the Shares of
Restricted Stock will be made available to the Participant or the Restricted
Stock Units will be vested in the account of the Participant, free of all
restrictions; provided, that the Committee may, in its discretion, require
(a) the further deferral of any Restricted Stock Grant beyond the initially
specified Restriction Period; (b) that the Restricted Stock or Restricted Stock
Units be retained by the Company; and (c) that the Participant receive a cash
payment in lieu of unrestricted Shares or Units.

8.6 Rights as a Shareholder. Unless otherwise determined by the Committee and
set forth in a Participant’s Award Agreement, the Participant shall have, with
respect to shares of Restricted Stock, all of the rights of a shareholder of the
Company, including the right to vote the shares and receive any dividends paid
thereon. Any such dividends shall be reinvested on the dividend payment date in
additional Shares of Restricted Stock under the Restricted Stock Grant and shall
be subject to the restrictions and other terms and conditions set forth therein.
A Participant shall not have, with respect to Restricted Stock Units, any voting
or other rights of a shareholder of the Company; provided, however, that if
determined by the Committee and set forth in the Participant’s Award Agreement,
the Participant shall have the right to receive Dividend Equivalents in
accordance with the provisions of Article 13.

8.7 Section 83(b) Election. The Committee may provide in an Award Agreement that
the Award of Restricted Stock is conditioned upon the Participant making or
refraining from making an election with respect to the Award under Code
Section 83(b). If a Participant makes an election pursuant to Code Section 83(b)
concerning a Restricted Stock Award, the Participant shall be required to file
promptly a copy of such election with the Company.

Article 9. Performance Units

9.1 Grant of Performance Units. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant Performance
Units to Employees in

 

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such amounts and upon such terms as the Committee shall determine. Each
Performance Unit shall represent the prospective contingent right to receive
payment based upon Company and/or Subsidiary performance over a specified
Performance Period. Each Performance Unit shall have an initial value that is
established by the Committee at the time of grant and need not be equivalent to
the value of a Share Equivalent. At the time of grant, the Committee, in its
sole discretion, shall establish the Performance Period, Performance Measures,
Performance Goals and such other terms and conditions applicable to such Award.
The number of Shares and/or the amount of cash or other consideration earned in
settlement of a Performance Unit shall be determined at the end of the
Performance Period.

9.2 Earning of Performance Units. Each Performance Unit Award Agreement shall
provide that in order for an Employee to receive a payment in settlement of the
Award, the Company must achieve certain Performance Goals over a designated
Performance Period, with attainment of one or more Performance Goals determined
using one or more specific Performance Measures. The Performance Goals and the
Performance Period shall be established by the Committee in its sole discretion;
provided, however that except upon a Change in Control and in certain limited
situations (including, but not limited to, the death or disability of the
Participant), the Performance Period must have a minimum duration of one
(1) year. The Committee shall establish one or more Performance Measures for
each Performance Period for determining the portion of the Performance Unit
Award which will be earned or forfeited based on the extent to which the
Performance Goals are achieved or exceeded. Such Performance Goals may include
minimum, maximum and target levels of performance, with the size of the payment
payable in settlement of the Performance Unit Award based on the level attained.

9.3 Form of Performance Unit Award. Performance Unit Awards shall be made on
such terms and conditions not inconsistent with the Plan, and in such form or
forms, as the Committee may from time to time approve. Performance Units may be
awarded alone, in addition to, or independent of other Awards under the Plan.
Subject to the terms of the Plan, the Committee shall, in its discretion,
determine the number of Units subject to each Performance Unit Award made to an
Employee and may impose different terms and conditions on any particular
Performance Unit Award made to any Employee. The Performance Goals, Performance
Period or Periods, Performance Measures and other terms and conditions
applicable to any Performance Unit Award shall be set forth in the relevant
Award Agreement.

9.4 Termination of Employment. Each Performance Unit Award Agreement shall set
forth the extent to which an Employee shall have the right to retain Performance
Units following termination of the Employee’s employment with the Company and/or
its Subsidiaries. Such provisions shall be determined in the sole discretion of
the Committee, shall be included in the Award Agreement entered into with each
Employee, need not be uniform among all Awards of Performance Units, and may
reflect distinctions based on the reasons for termination. Notwithstanding the
foregoing, to the extent a Performance Unit is intended to be Performance-Based
Compensation, the termination provisions in the Award Agreement shall comply
with the requirements of Code Section 162(m) (including any regulations,
rulings, notices and procedures thereunder).

 

17

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9.5 Payment of Performance Units. Subject to the terms of this Plan and the
applicable Award Agreement, after the later of the date the applicable
Performance Period has ended or the date on which any other terms and conditions
applicable to such Performance Unit Award have been satisfied, the holder of
Performance Units shall be entitled to receive payout of the value and number of
Performance Units earned by the Employee over the Performance Period, to be
determined as a function of the extent to which the corresponding Performance
Goals have been achieved. Subject to Section 12.3 below, such payment shall be
as determined by the Committee and as evidenced in the Award Agreement. Subject
to the terms of this Plan, the Committee, in its sole discretion, may pay
earned Performance Units in the form of Shares, cash, any combination thereof,
or any other form as designated by the Committee in its sole discretion, equal
to the value of the earned Performance Units at the close of the applicable
Performance Period, or at such other time as specified in the Award Agreement.
Any Shares paid in settlement of such Performance Units may be granted subject
to any restrictions deemed appropriate by the Committee. The determination of
the Committee with respect to the form of payout of such Awards shall be set
forth in the applicable Award Agreement.

Article 10. Other Stock-Based Awards

10.1 Other Stock-Based Awards. The Committee may grant other types of
equity-based or equity-related Awards not otherwise described by the terms of
this Plan (including, subject to the limitations below, the grant or offer for
sale of unrestricted Shares) in such amounts and subject to such terms and
conditions, as the Committee shall determine. Such Awards may involve the
transfer of actual Shares to Participants, or payment in cash or otherwise of
amounts based on the value of Shares and may include, without limitation, Awards
designed to comply with or take advantage of the applicable local laws of
jurisdictions other than the United States. Notwithstanding any provision in
this Plan to the contrary, Awards of unrestricted Shares shall only be made in
lieu of salary and/or cash bonuses/variable compensation paid to Employees or
cash fees paid to Directors.

10.2 Value of Other Stock-Based Awards. Each Other Stock-Based Award shall be
expressed in terms of Shares or Units, as determined by the Committee. The
Committee may, in its discretion, establish Performance Goals with respect to
any Other Stock-Based Awards. If the Committee exercises its discretion to
establish Performance Goals, the number and/or value of Other Stock-Based Awards
that will be paid out to the Participant will depend on the extent to which the
Performance Goals are met.

10.4 Payment of Other Stock-Based Awards. Payment, if any, with respect to an
Other Stock-Based Award shall be made in accordance with the terms of the Award,
in cash or Shares as the Committee determines.

10.5 Termination of Employment or Service as a Director. The Committee shall
determine the extent to which the Participant shall have the right to receive
Other Stock-Based Awards following termination of, as the case may be, (a) an
Employee’s employment with the Company and/or its Subsidiaries, or (b) a
Director’s service as a director of the Company. Such

 

18

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provisions shall be determined in the sole discretion of the Committee, such
provisions shall be included in the applicable Award Agreement, but need not be
uniform among all Other Stock-Based Awards issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination.

Article 11. Transferability of Awards

No Award under the Plan, and no right or interest therein, shall be
(a) assignable, alienable or transferable by a Participant, except by will or
the laws of descent and distribution, or (b) subject to any obligation, or the
lien or claims of any creditor, of any Participant, or (c) subject to any lien,
encumbrance or claim of any party made in respect of or through any Participant,
however arising. During the lifetime of a Participant, Options and SARs are
exercisable only by, Shares issued upon the exercise of Options and SARs or in
settlement of other Awards will be issued only to, and other payments in
settlement of any Award will be payable only to, the Participant or his or her
legal representative. A Participant may designate a beneficiary or beneficiaries
in accordance with Article 14. Notwithstanding the foregoing, the Committee may,
in its sole discretion and on and subject to such terms and conditions as it
shall deem appropriate, which terms and conditions shall be set forth in the
related Award Agreement: (i) authorize a Participant to transfer all or a
portion of any Nonqualified Stock Option or SAR, as the case may be, granted to
such Participant; provided, that in no event shall any transfer be made to any
person or persons other than such Participant’s spouse, children or
grandchildren, or a trust or partnership for the exclusive benefit of one or
more such persons, which transfer must be made as a gift and without any
consideration; and (ii) provide for the transferability of a particular grant or
Award pursuant to a domestic relations order. All other transfers and any
retransfer by any permitted transferee are prohibited and any such purported
transfer shall be null and void. Each Nonqualified Stock Option or SAR which
becomes the subject of a permitted transfer (and the Participant to whom it was
granted by the Company) shall continue to be subject to the same terms and
conditions as were in effect immediately prior to such permitted transfer. The
Participant shall remain responsible to the Company for the payment of all
withholding taxes incurred as a result of any exercise of such Option or SAR. In
no event shall any permitted transfer of an Option, SAR or other grant or Award
create any right in any party in respect of any Option, SAR or other grant or
Award, other than the rights of the qualified transferee in respect of such
Option, SAR or other Award specified in the related Award Agreement.

Article 12. Performance Measures

12.1 Performance Measures. The Performance Goals upon which the payment or
vesting of an Award to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following Performance
Measures:

 

  (a) Net earnings or net income (before or after taxes);

 

  (b) Earnings per share (basic or diluted);

 

  (c) Net sales;

 

  (d) Revenue growth;

 

19

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  (e) Operating profit;

 

  (f) Return measures (including, but not limited to, return on assets, capital,
invested capital, equity, sales, or revenue);

 

  (g) Cash flow (including, but not limited to, operating cash flow, free cash
flow, cash flow return on equity, and cash flow return on investment);

 

  (h) Earnings before or after taxes, interest, depreciation, and/or
amortization;

 

  (i) Gross or operating margins;

 

  (j) Productivity ratios;

 

  (k) Share price (including, but not limited to, growth measures and total
shareholder return);

 

  (l) Expense targets;

 

  (m) Margins;

 

  (n) Operating efficiency;

 

  (o) Market share;

 

  (p) Working capital targets;

 

  (q) Economic value added or EVA (net operating profit after tax minus the sum
of capital multiplied by the cost of capital); and

 

  (r) Objective safety measures.

Any Performance Measure(s) may be used to measure the performance of the Company
and/or its Subsidiary as a whole or any business unit of the Company and/or its
Subsidiary or any combination thereof, as the Committee may deem appropriate, or
any of the above Performance Measures as compared to the performance of a group
of comparator companies, or published or special index that the Committee, in
its sole discretion, deems appropriate, or the Committee may select Share price
as a Performance Measure as compared to various stock market indices. The
Committee also has the authority to provide in an Award Agreement for
accelerated vesting of any Award based on the achievement of Performance Goals
pursuant to the Performance Measures specified in this Article 12.

12.2 Evaluation of Performance. The Committee may provide at the time of any
such Award that any evaluation of performance may include or exclude any of the
following events that occurs during a Performance Period: (a) asset write-downs
and impairments; (b) gain/loss on sale of assets; (c) litigation or claim
judgments or settlements (including insurance proceeds); (d) the effect of
changes in tax laws, accounting principles, or other laws or provisions
affecting reported results; (e) any reorganization and restructuring programs;
(f) extraordinary nonrecurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management’s discussion and analysis of financial
condition and results of operations appearing in the Company’s annual report to
shareholders and/or other public filings for the applicable year;
(g) acquisitions or divestitures; (h) foreign exchange gains and losses; and
(i) the effect of any materially adverse and unforeseen market conditions beyond
the control of the Company and its Subsidiaries, Employees, officers and
directors. To the extent such inclusions or exclusions affect Awards to Covered
Employees that are intended to be Performance-Based Compensation, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for
deductibility.

 

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12.3 Adjustment of Performance-Based Compensation. Awards that are intended to
qualify as Performance-Based Compensation may not be adjusted upward. The
Committee shall retain the discretion to adjust such Awards downward, either on
a formula or discretionary basis or any combination, as the Committee
determines.

12.4 Committee Discretion. In the event that the Committee determines that it is
advisable to grant Awards that shall not qualify as Performance-Based
Compensation, the Committee may make such grants without satisfying the
requirements of Code Section 162(m) and base vesting on Performance Measures
other than those set forth in Section 12.1.

Article 13. Dividend Equivalents

Any Participant selected by the Committee may be granted dividend equivalents
based on the dividends declared on Shares or Share Equivalents that are subject
to any Award (other than Options and SARs), to be credited as of dividend
payment dates, during the period between the date the Award is granted and the
date the Award is exercised, vests, settled or expires, as determined by the
Committee (“Dividend Equivalents”). Except as otherwise provided in the Plan or
the applicable Award Agreement, such Dividend Equivalents shall be converted to
cash or additional Shares or Share Equivalents by such formula, at such time and
subject to such limitations as may be determined by the Committee; provided,
however, that in no event shall any Dividend Equivalents become payable earlier
than the date on which the underlying Award becomes vested and payable.

Article 14. Beneficiary Designation

Each Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under this Plan is to be paid in case of the Participant’s death before
receiving any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant and will be effective only when filed
by the Participant in writing with the Company during the Participant’s
lifetime. In the absence of any such beneficiary designation, benefits remaining
unpaid or rights remaining unexercised at the Participant’s death shall be paid
to or exercised by the Participant’s executor, administrator, or legal
representative.

Article 15. Rights of Participants

15.1 Employment. Nothing in this Plan or an Award Agreement shall interfere with
or limit in any way the right of the Company and/or its Subsidiaries, to
terminate any Employee’s employment at any time or for any reason not prohibited
by law, nor confer upon any Employee any right to continue his employment, or
upon any Director a right to continue to serve as a Director, for any specified
period of time.

 

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Neither an Award nor any benefits arising under this Plan shall constitute an
employment contract with the Company and/or its Subsidiaries for an Employee or
a contract for service as a director with the Company for a Director and,
accordingly, subject to Article 17, this Plan and the benefits hereunder may be
terminated at any time in the sole and exclusive discretion of the Committee
without giving rise to any liability on the part of the Company and/or its
Subsidiaries.

15.2 Participation. No individual shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to receive
a future Award.

15.3 Rights as a Shareholder. Except as otherwise provided herein, a Participant
shall have none of the rights of a shareholder with respect to Shares covered by
any Award until the Participant becomes the record holder of such Shares.

Article 16. Change in Control

16.1 Change in Control of the Company. Notwithstanding any other provision of
this Plan to the contrary, the provisions of this Article 16 shall apply in the
event of a Change in Control, unless otherwise determined by the Committee in
connection with the grant of an Award as reflected in the applicable Award
Agreement.

Upon a Change in Control, except to the extent that another Award meeting the
requirements of Section 16.2 (a “Replacement Award”) is provided to the
Participant to replace such Award (the “Replaced Award”), all then-outstanding
Options and SARs shall immediately become fully vested and exercisable, and all
other then-outstanding Awards subject solely to the satisfaction of a service
obligation by a Participant to the Company and/or its Subsidiary shall vest in
full and be free of restrictions related to the vesting of such Awards. The
treatment of any other Awards shall be as determined by the Committee in
connection with the grant thereof, as reflected in the applicable Award
Agreement.

Except to the extent that a Replacement Award is provided to the Participant,
the Committee may, in its sole discretion, determine that any or all outstanding
Awards granted under the Plan, whether or not exercisable, will be canceled and
terminated and that in connection with such cancellation and termination the
holder of such Award may receive for each Share subject to such Awards a cash
payment (or the delivery of shares of stock, other securities or a combination
of cash, stock and securities equivalent to such cash payment) equal to the
difference, if any, between the consideration received by shareholders of the
Company in respect of a Share in connection with such transaction and the
purchase price per share, if any, under the Award multiplied by the number of
Shares subject to such Award; provided that if such product is zero or less or
to the extent that the Award is not then exercisable, the Award will be canceled
and terminated without payment therefor.

16.2 Replacement Awards. An Award shall meet the conditions of this Section 16.2
(and hence qualify as a Replacement Award) if: (a) it has a value at least equal
to the value of the Replaced Award as determined by the Committee in its sole
discretion; (b) it relates to publicly traded equity securities of the Company
or its successor in the Change in Control or another

 

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entity that is affiliated with the Company or its successor following the Change
in Control; and (c) its other terms and conditions are not less favorable to the
Participant than the terms and conditions of the Replaced Award (including the
provisions that would apply in the event of a subsequent Change in Control).
Without limiting the generality of the foregoing, the Replacement Award may take
the form of a continuation of the Replaced Award if the requirements of the
preceding sentence are satisfied. The determination of whether the conditions of
this Section 16.2 are satisfied shall be made by the Committee, as constituted
immediately before the Change in Control, in its sole discretion.

16.3 Termination of Employment or Service as a Director. Upon a termination of
employment of an Employee or termination of service as a Director occurring in
connection with or during the period of two (2) years immediately after such
Change in Control, other than for cause, (a) all Replacement Awards held by the
Participant shall become fully vested and (if applicable) exercisable and free
of restrictions, and (b) all Options and SARs held by the Participant
immediately before the termination of employment that the Participant held as of
the date of the Change in Control or that constitute Replacement Awards shall
remain exercisable for not less than one (1) year following such termination or
until the expiration of the stated term of such Option or SAR, whichever period
is shorter; provided, that if the applicable Award Agreement provides for a
longer period of exercisability, that provision shall control.

Article 17. Amendment, Modification, Suspension, and Termination

17.1 Amendment, Modification, Suspension, and Termination. Subject to
Section 17.2, the Board may, at any time and from time to time, alter, amend,
modify, suspend, or terminate this Plan and any Award Agreement in whole or in
part without approval of the Company’s shareholders, unless such approval is
necessary to comply with applicable laws, including the Exchange Act and the
Code, or the rules and regulations of any securities exchange on which the
Shares are listed. In no event may the Board amend the Plan without the prior
approval of the Company’s shareholders to (a) increase the maximum number of
Shares which may be issued pursuant to the Plan; (b) increase any limitation set
forth in the Plan on the number of Shares which may be issued, or the aggregate
value of Awards which may be made, in respect of any type of Award to any single
Participant during any specified period; (c) except as provided in Section 4.4,
lower the Option Price of a previously granted Option or the Grant Price of a
previously granted SAR, whether by repricing, replacing, or regranting through
cancellation; (d) change the class of individuals eligible to participate in the
Plan; (e) reduce the minimum Option Price or the minimum SAR Grant Price as set
forth in Sections 6.3 and 7.4; or (f) reduce the minimum vesting period,
Restriction Period or Performance Period requirements applicable to Awards under
the Plan.

17.2 Awards Previously Granted. Notwithstanding any other provision of this Plan
to the contrary (other than Section 17.3), no termination, amendment,
suspension, or modification of this Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under this Plan, without
the written consent of the Participant holding such Award.

 

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17.3 Amendment to Conform to Law. Notwithstanding any other provision of this
Plan to the contrary, the Board may amend the Plan or an Award Agreement, to
take effect retroactively or otherwise, as deemed necessary or advisable for the
purpose of conforming the Plan or an Award Agreement to any present or future
law relating to plans of this or similar nature and to the administrative
regulations and rulings promulgated thereunder. By accepting an Award under this
Plan, a Participant agrees to any amendment made pursuant to this Section 17.3
to any Award granted under the Plan without further consideration or action.

Article 18. Withholding

All Awards under the Plan will be made subject to any applicable withholding for
taxes of any kind. The Company shall have the right to deduct from any amount
payable under the Plan, including delivery of Shares to be made under the Plan,
all federal, state, city, local or foreign taxes of any kind required by law to
be withheld with respect to such payment and to take such other actions as may
be necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes. If Shares are used to satisfy withholding taxes, such
shares shall be valued based on the Market Value thereof on the date when the
withholding for taxes is required to be made and shall be withheld only up to
the minimum required tax withholding rates or such other rate that will not
trigger a negative accounting impact on the Company. The Company shall have the
right to require a Participant to pay cash to satisfy withholding taxes as a
condition to the payment of any amount (whether in cash or Shares) under the
Plan.

Article 19. Successors

All obligations of the Company under this Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

Article 20. General Provisions

20.1 Forfeiture Events. The Committee may specify in an Award Agreement that the
Participant’s rights, payments, and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events may include, but
shall not be limited to, any Participant’s fraud resulting in the restatement of
the Company’s published earnings, termination of an Employee’s employment or a
Director’s service as a director for cause, termination of the Participant’s
provision of services to the Company and/or its Subsidiary, violation of
material Company and/or Subsidiary policies, breach of noncompetition,
confidentiality, or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company and/or its Subsidiaries.

 

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20.2 Legend. The certificates for Shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer of such
Shares.

20.3 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

20.4 Severability. In the event any provision of this Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of this Plan, and this Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

20.5 Requirements of Law. The granting of Awards and the issuance of Shares
under this Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

20.6 Delivery of Title. The Company shall have no obligation to issue or deliver
evidence of title for Shares issued under this Plan prior to:

 

  (a) Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and

 

  (b) Completion of any registration or other qualification of the Shares under
any applicable national or foreign law or ruling of any governmental body that
the Company determines to be necessary or advisable.

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

20.8 Investment Representations. The Committee may require any individual
receiving Shares pursuant to an Award under this Plan to represent and warrant
in writing that the individual is acquiring the Shares for investment and
without any present intention to sell or distribute such Shares.

20.9 Employees or Directors Based Outside of the United States. Notwithstanding
any provision of this Plan to the contrary, in order to comply with the laws in
other countries in which the Company and/or its Subsidiaries operate or have
Employees or in which Directors may reside, the Committee, in its sole
discretion, shall have the power and authority to:

 

  (a) Determine which Subsidiaries shall be covered by this Plan;

 

  (b) Determine which Employees or Directors outside the United States are
eligible to participate in this Plan;

 

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  (c) Modify the terms and conditions of any Award granted to Employees or
Directors outside the United States to comply with applicable foreign laws;

 

  (d) Establish subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or advisable. Any
subplans and modifications to Plan terms and procedures established under this
Section 20.9 by the Committee shall be attached to this Plan document as
appendices; and

 

  (e) Take any action, before or after an Award is made, that it deems advisable
to obtain approval or comply with any necessary local government regulatory
exemptions or approvals.

Notwithstanding the above, the Committee may not take any actions hereunder, and
no Awards shall be granted, that would violate applicable law.

20.10 Uncertificated Shares. To the extent that this Plan provides for issuance
of certificates to reflect the transfer of Shares, the transfer of such Shares
may be effected on a noncertificated basis, to the extent not prohibited by
applicable law or the rules of any stock exchange.

20.11 Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company, and/or its Subsidiaries
may make to aid it in meeting its obligations under this Plan. Nothing contained
in this Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Company and any Participant, beneficiary, legal representative, or any other
individual. To the extent that any individual acquires a right to receive
payments from the Company and/or its Subsidiaries under this Plan, such right
shall be no greater than the right of an unsecured general creditor of the
Company or a Subsidiary, as the case may be. All payments to be made hereunder
shall be paid from the general funds of the Company or a Subsidiary, as the case
may be 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 expressly
set forth in this Plan.

20.12 No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to this Plan or any Award. The Committee shall determine whether cash,
Awards, or other property shall be issued or paid in lieu of fractional Shares
or whether such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated.

20.13 Deferrals. To the extent permitted by Code Section 409A, the Committee
may, whether at the time of grant or at any time thereafter prior to payment or
settlement, require a Participant to defer, or permit (subject to such
conditions as the Committee may from time to time establish) a Participant to
elect to defer, receipt of all or any portion of any payment of cash or Shares
that would otherwise be due to such Participant in payment or settlement of any
Award under the Plan. If any such deferral is required by the Committee (or is
elected by the Participant with the permission of the Committee), the Committee
shall establish rules and procedures for

 

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payment of such deferrals. The Committee may provide for the payment or
crediting of interest, at such rate or rates as it shall in its discretion deem
appropriate, on such deferred amounts credited in cash and the payment or
crediting of Dividend Equivalents in respect of deferred amounts credited in
Share Equivalents or Restricted Stock Units. Deferred amounts may be paid in a
lump sum or in installments in the manner and to the extent permitted, and in
accordance with rules and procedures established, by the Committee. This Section
shall not apply to any grant of Options or SARs that are intended to be exempt
from Code Section 409A.

20.14 Nonexclusivity of this Plan. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board or Committee to
adopt such other compensation arrangements as it may deem desirable for any
Participant or Participants.

20.15 No Constraint on Corporate Action. Nothing in this Plan shall be construed
to: (a) limit, impair, or otherwise affect the Company’s or a Subsidiary’s right
or power to make adjustments, reclassifications, reorganizations, or changes of
its capital or business structure, or to merge or consolidate, or dissolve,
liquidate, sell, or transfer all or any part of its business or assets; or
(b) limit the right or power of the Company or a Subsidiary to take any action
which such entity deems to be necessary or appropriate.

20.16 Governing Law. The Plan and each Award Agreement shall be governed by the
laws of the State of Connecticut, excluding any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of this
Plan to the substantive law of another jurisdiction. Unless otherwise provided
in the Award Agreement, recipients of an Award under this Plan are deemed to
submit to the exclusive jurisdiction and venue of the federal or state courts of
Connecticut, to resolve any and all issues that may arise out of or relate to
this Plan or any related Award Agreement.

 

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