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Exhibit 10.12

  

  

  

2004 Omnibus Stock and Incentive
Compensation Plan

Neenah Paper, Inc.

Effective December 1, 2004

  

  

  

  

   

   

   

   

  

  

  

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Contents

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Article 1. Establishment, Purpose, and Duration   1
Article 2. Definitions
 
1
Article 3. Administration
 
7
Article 4. Shares Subject to the Plan and Maximum Awards
 
7
Article 5. Eligibility and Participation
 
9
Article 6. Stock Options
 
9
Article 7. Stock Appreciation Rights
 
12
Article 8. Restricted Stock and Restricted Stock Units
 
14
Article 9. Performance Units/Performance Shares
 
15
Article 10. Cash-Based Awards and Other Stock-Based Awards
 
16
Article 11. Performance Measures
 
17
Article 12. Covered Employee Annual Incentive Award
 
19
Article 13. Nonemployee Director Awards
 
19
Article 14. Dividend Equivalents
 
19
Article 15. Beneficiary Designation
 
20
Article 16. Deferrals
 
20
Article 17. Rights of Participants
 
22
Article 18. Change in Control
 
22
Article 19. Amendment, Modification, Suspension, and Termination
 
23
Article 20. Withholding
 
24
Article 21. Successors
 
24
Article 22. General Provisions
 
24

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Neenah Paper, Inc.
2004 Omnibus Stock and Incentive Compensation Plan

Article 1. Establishment, Purpose, and Duration

        1.1   Establishment. Neenah Paper, Inc., a Delaware corporation (the
"Company"), establishes an incentive compensation plan to be known as the 2004
Omnibus Stock and Incentive Compensation Plan (the "Plan"), as set forth in this
document.

        The Plan permits the grant of Cash-Based Awards, Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units, Covered Employee
Annual Incentive Awards, and Other Stock-Based Awards.

        The Plan was adopted by the Board of Directors on August 31, 2004 and
approved by the Company's sole shareholder on August 31, 2004. The Plan shall
become effective December 1, 2004 (the "Effective Date") and shall remain in
effect as provided in Section 1.3 hereof.

        1.2   Purpose of the Plan. The purpose of the Plan is to provide a means
whereby Employees, Directors, and Third-Party Service Providers of the Company
develop a sense of proprietorship and personal involvement in the development
and 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 the Plan is to provide a
means through which the Company may attract able individuals to become Employees
or serve as Directors or Third-Party Service Providers of the Company and to
provide a means whereby those individuals upon whom the responsibilities of the
successful administration and management of the Company are of importance, can
acquire and maintain stock ownership, thereby strengthening their concern for
the welfare of the Company.

        1.3   Duration of the Plan. Unless sooner terminated as provided herein,
the Plan shall terminate ten (10) years from the Effective Date. After the Plan
is terminated, no Awards may be granted but Awards previously granted shall
remain outstanding in accordance with their applicable terms and conditions and
the Plan's terms and conditions. Notwithstanding the foregoing, no Incentive
Stock Options may be granted more than ten (10) years after the earlier of
(a) adoption of the Plan by the Board, or (b) the Effective Date.

Article 2. Definitions

        Whenever used in the 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   "Affiliate" means the Company and any company, person or
organization which, on the date of determination, (A) is a member of a
controlled group of corporations (as defined in Code section 414(b)) which
includes the Company; (B) is a trade or business (whether or not incorporated)
which controls, is controlled by or is under common control with (within the
meaning of Code section 414(c)) the Company; (C) is a member of an affiliated
service group (as defined in Code section 414(m)) which includes the Company; or
(D) is otherwise required to be aggregated with the Company pursuant to Code
section 414(o) and regulations promulgated thereunder.

        2.2   "Annual Award Limit" or "Annual Award Limits" have the meaning set
forth in Section 4.3.

        2.3   "Award" means, individually or collectively, a grant under this
Plan of Cash-Based Awards, Nonqualified Stock Options, Incentive Stock Options,
SARs, Restricted Stock, Restricted Stock Units, Performance Shares, Performance
Units, Covered Employee Annual Incentive Awards, or Other Stock-Based Awards, in
each case subject to the terms of this Plan.

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        2.4   "Award Agreement" means either (i) 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 (ii) a written statement
issued by the Company to a Participant describing the terms and provisions of
such Award.

        2.5   "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.

        2.6   "Board" or "Board of Directors" means the Board of Directors of
the Company.

        2.7   "Cash-Based Award" means an Award granted to a Participant as
described in Article 10.

        2.8   "Cause," unless otherwise set forth in the Participant's Award
Agreement, means the Participant's:

(a)Willful failure to perform his duties and responsibilities;

(b)Embezzlement, fraud, or misappropriation against or with respect to the
Company, its Subsidiaries, and/or their assets;

(c)Conviction of a felony charge or a plea of guilty or nolo contendre to a
felony charge;

(d)Use of alcohol and/or drugs (whether prescription or nonprescription) which
impairs the Participant's ability to perform his duties and responsibilities;

(e)Unlawful trading in the securities of any corporation (including the Company)
based on information gained as a result of the Participant's performance of
services for the Company;

(f)Violation of any of the corporate policies, work rules, or standards of the
Company, including but not limited to the Code of Conduct, sexual harassment
policy, and insider trading policy, or violation of any applicable statute,
regulation, or rule, or provision of any applicable code of professional ethics;
or

(g)Willful disclosure to unauthorized persons of confidential information or
trade secrets of the Company.

The Committee shall determine, in its sole discretion, whether a Participant is
being terminated for any of the reasons outlined in (a) through (g); provided
that such determination by the Committee shall apply only to Awards granted
under this Plan.

        2.9   "Change in Control" means any of the following events:

(a)The acquisition by any Person of Beneficial Ownership of thirty percent (30%)
or more of the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of Directors (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this Section 2.9, the following acquisitions shall not constitute a Change in
Control: (i) any acquisition by a Person who on the Effective Date is the
Beneficial Owner of thirty percent (30%) or more of the Outstanding Company
Voting Securities, (ii) any acquisition directly from the Company, including
without limitation, a public offering of securities, (iii) any acquisition by
the Company, (iv) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any of its Affiliates or
Subsidiaries, or (v) any acquisition by any corporation pursuant to a
transaction which complies with subparagraphs (i), (ii), and (iii) of
Section 2.9(c);

(b)During any period of two consecutive years, individuals who at the beginning
of such period constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board, provided that any individual
becoming a Director whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a

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majority of the Directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election or removal of the Directors of the Company or other actual or
threatened solicitation of proxies of consents by or on behalf of a Person other
than the Board;

(c)Consummation of a reorganization, merger, or consolidation to which the
Company is a party or a sale or other disposition of all or substantially all of
the assets of the Company (a "Business Combination"), in each case unless,
following such Business Combination: (i) all or substantially all of the
individuals and entities who were the Beneficial Owners of Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than sixty percent (60%) of the combined
voting power of the outstanding voting securities entitled to vote generally in
the election of directors of the company resulting from the Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) (the "Successor Entity") in
substantially the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Voting Securities; and (ii) no
Person (excluding any Successor Entity or any employee benefit plan, or related
trust, of the Company or such Successor Entity) beneficially owns, directly or
indirectly, thirty percent (30%) or more of the combined voting power of the
then outstanding voting securities of the Successor Entity, except to the extent
that such ownership existed prior to the Business Combination; and (iii) at
least a majority of the members of the board of directors of the Successor
Entity were members of the Incumbent Board (including persons deemed to be
members of the Incumbent Board by reason of the proviso to paragraph (b) of this
Section 2.9) at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination; or

(d)Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

        2.10 "Code" means the U.S. Internal Revenue Code of 1986, as amended
from time to time, and as construed and interpreted by valid regulations or
rulings issued thereunder.

        2.11 "Committee" means the Compensation Committee of the Board or a
subcommittee thereof, or any other committee designated by the Board to
administer this Plan. The members of the Committee shall be appointed from time
to time by and shall serve at the discretion of the Board.

        2.12 "Company" means Neenah Paper, Inc., a Delaware corporation, and any
successor thereto as provided in Article 21 herein.

        2.13 "Consolidated Operating Earnings" means the consolidated earnings
before income taxes of the Company, computed in accordance with generally
accepted accounting principles, but shall exclude the effects of Extraordinary
Items.

        2.14 "Covered Employee" means a Participant who is a "covered employee,"
as defined in Code Section 162(m) and the treasury regulations promulgated under
Code Section 162(m), or any successor statute.

        2.15 "Covered Employee Annual Incentive Award" means an Award granted to
a Covered Employee as described in Article 12.

        2.16 "Director" means any individual who is a member of the Board of
Directors of the Company.

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        2.17 "Disability" means a physical or mental illness, injury or
impairment which causes a Participant to meet the requirements to receive
long-term disability benefits under a plan sponsored by the Company, its
Affiliates, and/or its Subsidiaries or if no such plan is applicable, a
Participant's inability to engage in the essential functions of his duties due
to a medically-determinable physical or mental impairment, illness or injury,
which can be expected to result in death or to be of long-continued and
indefinite duration, as determined by a medical professional selected by the
Committee. Notwithstanding the foregoing, Disability means, as to an ISO, a
"permanent and total disability" within the meaning of Code section 22(e)(3).

        2.18 "Disabled" means a Participant is (a) unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (b) is, by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than twelve (12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan covering
employees of the Participant's employer.

        2.19 "Effective Date" has the meaning set forth in Section 1.1.

        2.20 "Employee" means any employee of the Company, its Affiliates,
and/or its Subsidiaries.

        2.21 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.

        2.22 "Extraordinary Items" means (i) extraordinary, unusual, and/or
nonrecurring items of gain or loss; (ii) gains or losses on the disposition of a
business; or (iii) the effect of a merger or acquisition, recorded in accordance
with the criteria for Extraordinary Items in APB No 30, "Reporting the Results
of Operations."

        2.23 "Fair Market Value" or "FMV" means a price that is based on the
opening, closing, actual, high, low, or average selling prices of a Share
reported on the New York Stock Exchange ("NYSE") or other established stock
exchange (or exchanges) or national securities market on the applicable date,
the preceding trading day, the next succeeding trading day, or an average of
trading days, as determined by the Committee in its discretion. Unless the
Committee determines otherwise, if the Shares are traded over the counter at the
time a determination of its Fair Market Value is required to be made hereunder,
its Fair Market Value shall be deemed to be equal to the average between the
reported high and low or closing bid and asked prices of a Share on the most
recent date on which Shares were publicly traded. In the event Shares are not
publicly traded at the time a determination of their value is required to be
made hereunder, the determination of their Fair Market Value shall be made by
the Committee in such manner as it deems appropriate. Such definition(s) of FMV
shall be specified in each Award Agreement and may differ depending on whether
FMV is in reference to the grant, exercise, vesting, settlement, or payout of an
Award. For purposes of determining the Fair Market Value of a Share on the date
the Company becomes a separate publicly traded Company, the Fair Market Value of
a Share shall be determined as the average of the opening and closing prices of
the Company's common stock on the New York Stock Exchange on the first day of
regular-way trading.

        2.24 "Freestanding SAR" means an SAR that is granted independently of
any Options, as described in Article 7.

        2.25 "Good Reason," unless otherwise set forth in the Participant's
Award Agreement, means either of the following:

(a)A reduction of a Participant's base salary by ten percent (10%) or more,
unless substantially similar salary reductions are applicable to other
similarly-situated employees of the Company; or

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(b)Without the express written agreement of the Participant, any assignment or
change in duties that would require the relocation of the Participant's work
place to a location that is more than fifty (50) miles from the Participant's
work place immediately prior to a Change in Control of the Company; provided
however, the relocation of the Participant's work place must also increase the
regular commute distance between the Participant's residence and work place by
more than twenty-five (25) miles (one-way).

Notwithstanding the foregoing, if a Participant is also a participant in the
Company's Executive Severance Plan, "Good Reason" shall have the same meaning as
any definition of "good reason" under the Executive Severance Plan.

        2.26 "Grant Price" means the price established at the time of grant of
an SAR pursuant to Article 7, used to determine whether there is any payment due
upon exercise of the SAR.

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

        2.28 "Insider" shall mean an individual who is, on the relevant date, an
officer, or Director 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.

        2.29 "Nonemployee Director" means a Director who is not an Employee.

        2.30 "Nonemployee Director Award" means any Award granted, whether
singly, in combination, or in tandem, to a Participant who is a Nonemployee
Director pursuant to such applicable terms, conditions, and limitations as the
Board or Committee may establish in accordance with this Plan.

        2.31 "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.

        2.32 "Operating Cash Flow" means cash flow from operating activities as
defined in SFAS No 95, Statement of Cash Flows.

        2.33 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6.

        2.34 "Option Price" means the price at which a Share may be purchased by
a Participant pursuant to an Option.

        2.35 "Option Term" means the period of time an Option is outstanding as
the Committee shall determine at the time of grant; provided, however, no Option
shall be outstanding later than the tenth (10th) anniversary date of its grant.

        2.36 "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.

        2.37 "Participant" means any eligible individual as set forth in
Article 5 to whom an Award is granted.

        2.38 "Performance-Based Compensation" means compensation under an Award
that satisfies the requirements of Section 162(m) of the Code and the applicable
treasury regulations thereunder for certain performance-based compensation paid
to Covered Employees.

        2.39 "Performance Measures" means measures as described in Article 11 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.

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        2.40 "Performance Period" means the period of time during which the
performance goals must be met in order to determine the degree of payout,
exercisability and/or vesting with respect to an Award.

        2.41 "Performance Share" means an Award under Article 9 herein and
subject to the terms of the Plan, denominated in Shares, the value of which at
the time it is payable is determined as a function of the extent to which
corresponding performance criteria have been achieved.

        2.42 "Performance Unit" means an Award under Article 9 herein and
subject to the terms of the 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 criteria have been achieved.

        2.43 "Period of Restriction" 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.

        2.44 "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d) thereof.

        2.45 "Plan" means this Neenah Paper, Inc. 2004 Omnibus Stock and
Incentive Compensation Plan.

        2.46 "Plan Year" means the short period beginning on the Effective Date
and ending on December 31, 2004; and thereafter, each twelve (12) calendar month
period beginning on January 1 and ending on the following December 31.

        2.47 "Restricted Stock" means an Award granted to a Participant pursuant
to Article 8.

        2.48 "Restricted Stock Unit" means an Award granted to a Participant
pursuant to Article 8, except no Shares are actually awarded to the Participant
on the date of grant.

        2.49 "Retirement" means termination of employment by a Participant, who
is also an Employee, after (i) the later of attaining age sixty-five (65) or the
fifth anniversary of the Participant's date of hire, or (ii) attaining age
fifty-five (55) with at least five (5) Years of Vesting Service; provided,
however, that if a Participant is a participant under the Company's Pension Plan
or Retirement Contribution Plan, "Retirement" shall mean satisfying the
requirements for "retirement" or "early retirement" as defined in the applicable
plan.

        2.50 "Service Vesting Awards" means an Award, the vesting of which is
contingent solely on the continued service of the Participant as an Employee or
a Director.

        2.51 "Share" means a share of common stock of the Company, $.01 par
value per share.

        2.52 "Stock Appreciation Right" or "SAR" means an Award, designated as
an SAR, pursuant to the terms of Article 7 herein.

        2.53 "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 more than fifty percent (50%) by reason of
stock ownership or otherwise.

        2.54 "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall require
forfeiture of the right to purchase a Share under the related Option (and when a
Share is purchased under the Option, the Tandem SAR shall similarly be
canceled).

        2.55 "Third-Party Service Provider" means any consultant, agent,
advisor, or independent contractor who renders services to the Company, its
Affiliates, and/or its Subsidiaries that (a) are not in connection with the
offer and sale of the Company's securities in a capital raising transaction, and
(b) do not directly or indirectly promote or maintain a market for the Company's
securities.

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        2.56 "Unforseeable Emergency" means a severe financial hardship to the
Participant or beneficiary resulting from a sudden and unexpected illness or
accident of the Participant or beneficiary, loss of the Participant's or
beneficiary's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant or beneficiary.

        2.57 "Year of Vesting Service" shall be determined in the same manner as
year of vesting service is determined in the Neenah Paper Pension Plan or Neenah
Paper Retirement Contribution Plan, whichever is applicable to the Participant;
however, if such plan is subsequently terminated, the Committee shall determine
the meaning of such term, in its sole discretion.

Article 3. Administration

        3.1   General. The Committee shall be responsible for administering the
Plan, subject to this Article 3 and the other provisions of the 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 the Plan
and any Award Agreement or other agreement or document ancillary to or in
connection with the Plan, to determine eligibility for Awards and to adopt such
rules, regulations, forms, instruments, and guidelines for administering the
Plan as the Committee may deem necessary or proper. Such authority shall
include, but not be limited to, selecting Award recipients, establishing all
Award terms and conditions, including the terms and conditions set forth in
Award Agreements, and, subject to Article 19, adopting modifications and
amendments to the 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, its Affiliates, and/or its Subsidiaries
operate.

        3.3   Delegation. The Committee may authorize individuals other than its
members to carry out its policies and directives subject to the limitations and
guidelines set by the Committee, and may delegate its authority under the Plan,
provided, however, the delegation of authority to grant Awards shall be limited
to grants by the Chief Executive Officer to newly hired employees, or to respond
to special recognition or retention needs, and any such grants shall be limited
to eligible Participants who are not subject to section 16 of the Exchange Act.
The delegation of authority shall be limited as follows: (a) with respect to
individuals who are subject to section 16 of the Exchange Act, the authority to
grant Awards, the selection for participation, decisions concerning the timing,
pricing and amount of a grant or Award and authority to administer Awards shall
not be delegated by the Committee; (b) the maximum number of Shares covered by
Awards which may be granted by the Chief Executive Officer within any calendar
year period shall not exceed three hundred thousand (300,000); (c) any
delegation shall satisfy all applicable requirements of rule 16b-3 of the
Exchange Act, or any successor provision; and (d) no such delegation shall
result in the disallowance of a deduction to the Company under section 162(m) of
the Code or any successor section. Any individual to whom such authority is
granted shall continue to be eligible to receive Awards under the Plan.

Article 4. Shares Subject to the Plan and Maximum Awards

        4.1   Number of Shares Available for Awards.

(a)Subject to adjustment as provided in Section 4.4 herein, the maximum number
of Shares available for issuance to Participants under the Plan (the "Share
Authorization") shall be three million five hundred thousand (3,500,000) Shares.

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(b)Subject to the limit set forth in Section 4.1(a) on the number of Shares that
may be issued in the aggregate under the Plan, the maximum number of Shares that
may be issued pursuant to ISOs shall be: three million five hundred thousand
(3,500,000) Shares that may be issued pursuant to Awards in the form of ISOs.

(c)Subject to the limit set forth in Section 4.1(a) on the number of Shares that
may be issued in the aggregate under the Plan, the maximum number of shares that
may be issued to Nonemployee Directors shall be five hundred thousand (500,000)
Shares, and no Nonemployee Director may receive Awards subject to more than
fifty thousand (50,000) Shares in any Plan Year.

        4.2   Share Usage. Shares covered by an Award shall only be counted as
used to the extent they are actually issued. Any Shares related to Awards which
terminate by expiration, forfeiture, cancellation, or otherwise without the
issuance of such Shares, are settled in cash in lieu of Shares, or are exchanged
with the Committee's permission, prior to the issuance of Shares, for Awards not
involving Shares, shall be available again for grant under the Plan. Moreover,
if the Option Price of any Option granted under the Plan or the tax withholding
requirements with respect to any Award granted under the Plan are satisfied by
tendering Shares to the Company (by either actual delivery or by attestation),
or if an SAR is exercised, only the number of Shares issued, net of the Shares
tendered, if any, will be deemed delivered for purposes of determining the
maximum number of Shares available for delivery under the Plan. The Shares
available for issuance under the Plan may be authorized and unissued Shares,
treasury Shares or from Shares reacquired by the Company, including Shares
purchased in the open market.

        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") shall apply to grants of such
Awards under the Plan:

(a)Options: The maximum aggregate number of Shares subject to Options granted in
any one (1) Plan Year to any one (1) Participant shall be three hundred thousand
(300,000) Shares.

(b)SARs: The maximum number of Shares subject to Stock Appreciation Rights
granted in any one (1) Plan Year to any one (1) Participant shall be three
hundred thousand (300,000) Shares.

(c)Restricted Stock or Restricted Stock Units: The maximum aggregate grant with
respect to Awards of Restricted Stock or Restricted Stock Units in any one
(1) Plan Year to any one (1) Participant shall be two hundred thousand (200,000)
Shares.

(d)Performance Units or Performance Shares: The maximum aggregate Award of
Performance Units or Performance Shares that any one (1) Participant may receive
in any one (1) Plan Year shall be two hundred thousand (200,000) Shares if such
Award is payable in Shares, or equal to the value of two hundred thousand
(200,000) Shares if such Award is payable in cash or property other than Shares
determined as of the earlier of vesting or payout.

(e)Cash-Based Awards: The maximum aggregate amount awarded or credited with
respect to Cash-Based Awards to any one (1) Participant in any one (1) Plan Year
may not exceed five million (5,000,000) dollars.

(f)Covered Employee Annual Incentive Award: The maximum aggregate amount awarded
or credited in any one (1) Plan Year with respect to a Covered Employee Annual
Incentive Award shall be determined in accordance with Article 12.

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(g)Other Stock-Based Awards: The maximum aggregate grant with respect to Other
Stock-Based Awards pursuant to Section 10.2 in any one (1) Plan Year to any one
(1) Participant shall be two hundred thousand (200,000) 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, 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 or distribution
(other than normal cash dividends) to shareholders of the Company, or any
similar corporate event or transaction, the Committee, in its sole discretion,
in order to prevent dilution or enlargement of Participants' rights under the
Plan, shall substitute or adjust, as applicable, the number and kind of Shares
that may be issued under the 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.

        The Committee, in its sole discretion, may also make appropriate
adjustments in the terms of any Awards under the Plan to reflect or related to
such changes or distributions and to modify any other terms of outstanding
Awards, including modifications of performance goals and changes in the length
of Performance Periods. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on Participants under the
Plan.

        Subject to the provisions of Article 19, 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, subject to compliance with the
ISO rules under Section 422 of the Code, where applicable.

Article 5. Eligibility and Participation

        5.1   Eligibility. Individuals eligible to participate in this Plan
include all Employees, Directors, and Third-Party Service Providers.

        5.2   Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible individuals, those
individuals 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.

Article 6. Stock Options

        6.1   Grant of Options. Subject to the terms and provisions of the 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; provided, that ISOs may be granted only to eligible
Employees of the Company or of any parent or subsidiary corporation (as
permitted by Section 422 of the Code and the treasury regulations thereunder).

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

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        6.3   Option Price. The Option Price for each grant of an Option under
this Plan shall be as determined by the Committee and shall be specified in the
Award Agreement. The Option Price shall be: (i) based on one hundred percent
(100%) of the FMV of the Shares on the date of grant, or (ii) set at a premium
to the FMV of the Shares on the date of grant; provided, however, the Option
Price on the date of grant must be at least equal to one hundred percent (100%)
of the FMV of the Shares on the date of grant; provided however, the Option
Price of a converted Kimberly-Clark option shall be determined in the sole
discretion of the Committee.

        6.4   Duration 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 tenth (10th)
anniversary date of its grant. Notwithstanding the foregoing, for Nonqualified
Stock Options granted to Participants outside the United States, the Committee
has the authority to grant Nonqualified Stock Options that have a term greater
than ten (10) years.

        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.

        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 Fair Market Value 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 prior to their tender to satisfy the
Option Price or have been purchased on the open market); (c) by a combination of
(a) and (b); or (d) any other method approved or accepted by the Committee in
its sole discretion, including, without limitation, if the Committee so
determines, a cashless (broker-assisted) exercise.

        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 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. Unless otherwise specified in
the Participant's Award Agreement, such Shares acquired pursuant to the exercise
of an Option shall not be subject to any transfer restriction.

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        6.8   Termination of Employment. Unless otherwise provided in a
Participant's Award Agreement, the Options, which become exercisable as provided
in Section 6.5 above, shall be treated as follows:

(a)If a Participant's employment terminates during the Option Term by reason of
death, the Options shall immediately vest and terminate and have no force or
effect upon the earlier of: (i) thirty-six (36) months after the date of death;
or (ii) the expiration of the Option Term.

(b)If a Participant's employment terminates during the Option Term by reason of
Disability, the Options shall immediately vest and terminate and have no force
or effect upon the earlier of: (i) thirty-six (36) months after the
Participant's termination of employment; or (ii) the expiration of the Option
Term.

(c)If a Participant's employment terminates during the Option Term by reason of
Retirement, the Options shall immediately vest and terminate and have no force
or effect upon the earlier of: (i) sixty (60) months after the Participant's
termination of employment; or (ii) the expiration of the Option Term.

(d)If a Participant's employment terminates during the Option Term due to
dismissal by the Company for Cause, the Options terminate and have no force or
effect upon the date of the Participant's termination.

(e)If the Participant's employment terminates during the Option Term for any
other reason, the Options terminate and have no force or effect upon the earlier
of: (i) ninety (90) days after the Participant's termination of employment; or
(ii) the expiration of the Option Term.

(f)If the Participant continues employment with the Company through the Option
Term, the Options terminate and have no force or effect upon the expiration of
the Option Term.

        6.9   Termination of Service for Directors or Third-Party Service
Providers. 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 the Participant's service with the Company, its Affiliates,
and/or its Subsidiaries, as the case may be. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant who is a Director or Third-Party
Service Provider, need not be uniform among all Options issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination.

        6.10 Transferability of Options.

(a)Incentive Stock Options. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all ISOs
granted to a Participant under this Article 6 shall be exercisable during his
lifetime only by such Participant.

(b)Nonqualified Stock Options. Except as otherwise provided in a Participant's
Award Agreement or otherwise determined at any time by the Committee, no NQSO
granted under this Article 6 may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution; provided, that the Committee may permit further
transferability, on a general or a specific basis, and may impose conditions and
limitations on any permitted transferability. Further, except as otherwise
provided in a Participant's Award Agreement or otherwise determined at any time
by the Committee, or unless the Committee decides to permit further
transferability, all NQSOs granted to a Participant under this Article 6 shall
be exercisable during his lifetime only by such Participant. With respect to
those NQSOs, if any, that are permitted to be transferred to another individual,
references in the Plan to exercise or payment of the Option Price by the
Participant shall be deemed to include, as determined by the Committee, the
Participant's permitted transferee.

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        6.11 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 Section 421(b) of the Code (relating to certain
disqualifying dispositions), such Participant shall notify the Company of such
disposition within ten (10) days thereof.

        6.12 Substituting SARs. Only in the event the Company is not accounting
for equity compensation under APB Opinion No. 25, the Committee shall have the
ability to substitute, without receiving Participant permission, SARs paid only
in Shares (or SARs paid in Shares or cash at the Committee's discretion) for
outstanding Options; provided, the terms of the substituted SARs are the same as
the terms for the Options and the aggregate difference between the Fair Market
Value of the underlying Shares and the Grant Price of the SARs is equivalent to
the aggregate difference between the Fair Market Value of the underlying Shares
and the Option Price of the Options. If, in the opinion of the Committee, this
provision creates adverse accounting consequences for the Company, it shall be
considered null and void.

Article 7. Stock Appreciation Rights

        7.1   Grant of SARs. Subject to the terms and conditions of the Plan,
SARs may be granted to Participants at any time and from time to time as shall
be determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs, or any combination of these forms of SARs.

        Subject to the terms and conditions of the Plan, the Committee shall
have complete discretion in determining the number of SARs granted to each
Participant and, consistent with the provisions of the Plan, in determining the
terms and conditions pertaining to such SARs.

        The Grant Price for each grant of a Freestanding SAR shall be determined
by the Committee and shall be specified in the Award Agreement. The Grant Price
shall be: (i) based on one hundred percent (100%) of the FMV of the Shares on
the date of grant, (ii) set at a premium to the FMV of the Shares on the date of
grant, or (iii) indexed to the FMV of the Shares on the date of grant, with the
index determined by the Committee, in its discretion; provided, however, the
Grant Price on the date of grant must be at least equal to one hundred percent
(100%) of the FMV of the Shares on the date of grant. The Grant Price of Tandem
SARs shall be equal to the Option Price of the related Option.

        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, and such
other provisions as the Committee shall determine.

        7.3   Term of SAR. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion, and except as determined
otherwise by the Committee and specified in the SAR Award Agreement, no SAR
shall be exercisable later than the tenth (10th) anniversary date of its grant.
Notwithstanding the foregoing, for SARs granted to Participants outside the
United States, the Committee has the authority to grant SARs that have a term
greater than ten (10) years.

        7.4   Exercise of Freestanding SARs. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes.

        7.5.  Exercise of Tandem SARs. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.

        Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (b) the value of
the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the excess of the Fair Market Value of the Shares subject to
the

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underlying ISO at the time the Tandem SAR is exercised over the Option Price of
the underlying ISO; and (c) the Tandem SAR may be exercised only when the Fair
Market Value of the Shares subject to the ISO exceeds the Option Price of the
ISO.

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

(a)The excess of the Fair Market Value 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 SAR exercise 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. Unless otherwise provided in a
Participant's Award Agreement, the SARs, which become exercisable as provided in
Sections 7.4 and 7.5 above, shall be treated as follows:

(a)If a Participant's employment terminates during the SARs term by reason of
death, the SARs shall immediately vest and terminate and have no force or effect
upon the earlier of: (i) twelve (12) months after the date of death; or (ii) the
expiration of the SAR term.

(b)If a Participant's employment terminates during the SARs term by reason of
Disability, the SARs shall immediately vest and terminate and have no force or
effect upon the earlier of: (i) thirty-six (36) months after the Participant's
termination of employment; or (ii) the expiration of the SAR term.

(c)If a Participant's employment terminates during the SARs term by reason of
Retirement, the SARs shall immediately vest and terminate and have no force or
effect upon the earlier of: (i) sixty (60) months after the Participant's
termination of employment; or (ii) the expiration of the SAR term.

(d)If a Participant's employment terminates during the SARs term due to
dismissal by the Company for Cause, the SARs terminate and have no force or
effect upon the date of the Participant's termination.

(e)If the Participant's employment terminates during the SARs term for any other
reason, the SARs terminate and have no force or effect upon the earlier of:
(i) ninety (90) days after the Participant's termination of employment; or
(ii) the expiration of the SAR term.

(f)If the Participant continues employment with the Company through the SARs
term, the SARs terminate and have no force or effect upon the expiration of the
SAR term.

        7.8   Termination of Service for Directors or Third-Party Service
Providers. Each Participant's Award Agreement shall set forth the extent to
which the Participant shall have the right to exercise an SAR following
termination of the Participant's service with the Company, its Affiliates,
and/or its Subsidiaries, as the case may be. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant who is a Director or Third-Party
Service Provider, need not be uniform among all SARs issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination.

        7.9   Nontransferability of SARs. Except as otherwise provided in a
Participant's Award Agreement or otherwise determined at any time by the
Committee, no SAR granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws

13

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of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement or otherwise determined at any time by the
Committee, all SARs granted to a Participant under the Plan shall be exercisable
during his lifetime only by such Participant. With respect to those SARs, if
any, that are permitted to be transferred to another individual, references in
the Plan to exercise of the SAR by the Participant or payment of any amount to
the Participant shall be deemed to include, as determined by the Committee, the
Participant's permitted transferee.

        7.10 Other Restrictions. The Committee shall impose such other
conditions and/or restrictions on any Shares received upon exercise of an SAR
granted pursuant to the 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 an SAR for a specified
period of time.

Article 8. Restricted Stock and Restricted Stock Units

        8.1   Grant of Restricted Stock or Restricted Stock Units. Subject to
the terms and provisions of the Plan, the Committee, at any time and from time
to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to
Participants in such amounts as the Committee shall determine. Restricted Stock
Units shall be similar to Restricted Stock except that no Shares are actually
awarded to the Participant on the date of grant.

        8.2   Restricted Stock or Restricted Stock Unit Agreement. Each
Restricted Stock and/or Restricted Stock Unit grant shall be evidenced by an
Award Agreement that shall specify the Period(s) of Restriction, the number of
Shares of Restricted Stock or the number of Restricted Stock Units granted, and
such other provisions as the Committee shall determine.

        8.3   Transferability. Except as provided in this Plan or an Award
Agreement, the Shares of Restricted Stock and/or Restricted Stock Units granted
herein may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated until the end of the applicable Period of Restriction
established by the Committee and specified in the Award Agreement (and in the
case of Restricted Stock Units until the date of delivery or other payment), or
upon earlier satisfaction of any other conditions, as specified by the
Committee, in its sole discretion, and set forth in the Award Agreement or
otherwise at any time by the Committee. All rights with respect to the
Restricted Stock and/or Restricted Stock Units granted to a Participant under
the Plan shall be available during his lifetime only to such Participant, except
as otherwise provided in an Award Agreement or at any time by the Committee.

        8.4   Other Restrictions. The Committee shall impose such other
conditions and/or restrictions on any Shares of Restricted Stock or Restricted
Stock Units granted pursuant to the 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,
restrictions based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of the performance
goals, time-based restrictions, 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.

        To the extent deemed appropriate by the Committee, the Company may
retain the certificates representing Shares of Restricted Stock in the Company's
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied or lapse.

        Except as otherwise provided in this Article 8, Shares of Restricted
Stock covered by each Restricted Stock Award shall become freely transferable by
the Participant after all conditions and restrictions applicable to such Shares
have been satisfied or lapse (including satisfaction of any

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applicable tax withholding obligations), and Restricted Stock Units shall be
paid in cash, Shares, or a combination of cash and Shares as the Committee, in
its sole discretion shall determine.

        Any such restrictions shall be evidenced by a legend on the certificates
(if such Shares are certificated) representing the Restricted Stock.

        8.5   Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.4, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan may bear a legend such as the
following or as otherwise determined by the Committee in its sole discretion:

        The sale or transfer of Shares of stock represented by this certificate,
whether voluntary, involuntary, or by operation of law, is subject to certain
restrictions on transfer as set forth in the Neenah Paper, Inc. 2004 Omnibus
Stock and Incentive Compensation Plan, and in the associated Award Agreement. A
copy of the Plan and such Award Agreement may be obtained from Neenah
Paper, Inc.

        8.6   Voting Rights. Unless otherwise determined by the Committee and
set forth in a Participant's Award Agreement, to the extent permitted or
required by law, as determined by the Committee, Participants holding Shares of
Restricted Stock granted hereunder may be granted the right to exercise full
voting rights with respect to those Shares during the Period of Restriction. A
Participant shall have no voting rights with respect to any Restricted Stock
Units granted hereunder.

        8.7   Termination of Employment. Unless otherwise provided in a
Participant's Award Agreement, upon termination of employment due to death,
Disability, or Retirement, all restrictions on such Restricted Stock or
Restricted Stock Units shall terminate. In the event a Participant's employment
terminates for any other reason, including but not limited to, termination with
or without Cause by the Company, its Affiliates, and/or its Subsidiaries, or
voluntary termination by the Participant, all of the unvested Shares of
Restricted Stock and Restricted Stock Units a Participant holds at the time of
such termination shall be forfeited to the Company.

        8.8   Termination of Service for Directors or Third-Party Service
Providers. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to retain Restricted Stock and/or Restricted
Stock Units following termination of the Participant's service with the Company,
its Affiliates, and/or its Subsidiaries, as the case may be. Such provisions
shall be determined in the sole discretion of the Committee, shall be included
in the Award Agreement entered into with each Participant who is a Director or
Third-Party Service Provider, need not be uniform among all Shares of Restricted
Stock or Restricted Stock Units issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.

        8.9   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
Section 83(b) of the Code. If a Participant makes an election pursuant to
Section 83(b) of the Code 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/Performance Shares

        9.1   Grant of Performance Units/Performance Shares. Subject to the
terms and provisions of the Plan, the Committee, at any time and from time to
time, may grant Performance Units and/or Performance Shares to Participants in
such amounts and upon such terms as the Committee shall determine.

        9.2   Value of Performance Units/Performance Shares. Each Performance
Unit shall have an initial value that is established by the Committee at the
time of grant. Each Performance Share shall have an initial value equal to the
Fair Market Value of a Share on the date of grant. The Committee shall set

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performance goals in its discretion which, depending on the extent to which they
are met, will determine the value and/or number of Performance Units/Performance
Shares that will be paid out to the Participant.

        9.3   Earning of Performance Units/Performance Shares. Subject to the
terms of this Plan, after the applicable Performance Period has ended, the
holder of Performance Units/Performance Shares shall be entitled to receive
payout on the value and number of Performance Units/Performance Shares earned by
the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance goals have been achieved.

        9.4   Form and Timing of Payment of Performance Units/Performance
Shares. Payment of earned Performance Units/Performance Shares shall be as
determined by the Committee and as evidenced in the Award Agreement. Subject to
the terms of the Plan, the Committee, in its sole discretion, may pay earned
Performance Units/Performance Shares in the form of cash or in Shares (or in a
combination thereof) equal to the value of the earned Performance
Units/Performance Shares at the close of the applicable Performance Period, or
as soon as practicable after the end of the Performance Period. Any Shares 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 Award Agreement pertaining to the grant of the Award.

        9.5   Termination of Employment. Unless otherwise provided in a
Participant's Award Agreement, upon termination of employment due to death,
Disability, or Retirement, any Performance Units and/or Performance Shares shall
become payable on a pro rata basis assuming the performance goals have been
achieved at target. The proration shall be determined as a function of the
length of time within the Performance Period that has elapsed prior to
termination of employment. In the event a Participant's employment terminates
for any other reason, including but not limited to, termination with or without
Cause by the Company, its Affiliates, and/or its Subsidiaries, or voluntary
termination by the Participant, any Performance Units and/or Performance Shares
a Participant holds at the time of such termination shall be forfeited.

        9.6   Termination of Service for Directors or Third-Party Service
Providers. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to retain Performance Units and/or Performance
Shares following termination of the Participant's service with the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall
be determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant who is a Director or
Third-Party Service Provider, need not be uniform among all Awards of
Performance Units or Performance Shares issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination.

        9.7   Nontransferability. Except as otherwise provided in a
Participant's Award Agreement or otherwise determined at any time by the
Committee, Performance Units/Performance Shares may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further, except as otherwise provided
in a Participant's Award Agreement or otherwise determined at any time by the
Committee, a Participant's rights under the Plan shall be exercisable during his
lifetime only by such Participant.

Article 10. Cash-Based Awards and Other Stock-Based Awards

        10.1 Grant of Cash-Based Awards. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Cash-Based
Awards to Participants in such amounts and upon such terms, including the
achievement of specific performance goals, as the Committee may determine.

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        10.2 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 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.

        10.3 Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based
Award shall specify a payment amount or payment range as determined by the
Committee. Each Other Stock-Based Award shall be expressed in terms of Shares or
units based on Shares, as determined by the Committee. The Committee may
establish performance goals in its discretion. If the Committee exercises its
discretion to establish performance goals, the number and/or value of Cash-Based
Awards or 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 Cash-Based Awards and Other Stock-Based Awards. Payment,
if any, with respect to a Cash-Based Award or 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. The Committee shall determine the extent
to which the Participant shall have the right to receive Cash-Based Awards or
Other Stock-Based Awards following termination of the Participant's employment
with or provision of services to the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, such provisions may be included in an Award
Agreement entered into with each Participant, but need not be uniform among all
Awards of Cash-Based Awards or Other Stock-Based Awards issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination.

        10.6 Termination of Service for Directors or Third-Party Service
Providers. The Committee shall determine the extent to which the Participant
shall have the right to receive Cash-Based Awards or Other Stock-Based Awards
following termination of the Participant's service with the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall
be determined in the sole discretion of the Committee, such provisions may be
included in an Award Agreement entered into with each Participant who is a
Director or Third-Party Service Provider, but need not be uniform among all
Awards of Cash-Based Awards or Other Stock-Based Awards issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination.

        10.7 Nontransferability. Except as otherwise determined by the
Committee, neither Cash-Based Awards nor Other Stock-Based Awards may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided by the Committee, a Participant's rights under the Plan, if
exercisable, shall be exercisable during his lifetime only by such Participant.
With respect to those Cash-Based Awards or Other Stock-Based Awards, if any,
that are permitted to be transferred to another individual, references in the
Plan to exercise or payment of such Awards by or to the Participant shall be
deemed to include, as determined by the Committee, the Participant's permitted
transferee.

Article 11. Performance Measures

        11.1 Performance Measures. Unless and until the Committee proposes for
shareholder vote and the shareholders approve a change in the general
Performance Measures set forth in this Article 11, the performance goals upon
which the payment or vesting of an Award to a Covered Employee (other than a
Covered Employee Annual Incentive Award awarded or credited pursuant to
Article 12) that is

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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;

(c)Net sales or revenue growth;

(d)Gross or net operating profit;

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

(f)Cash flow (including, but not limited to, operating cash flow, free cash
flow, and cash flow return on capital);

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

(h)Gross or operating margins;

(i)Productivity ratios;

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

(k)Expense targets;

(l)Margins;

(m)Operating efficiency;

(n)Customer satisfaction;

(o)Working capital targets;

(p)Economic Value Added (EVA®);

(q)Volume;

(r)Capital expenditures;

(s)Market share;

(t)Costs;

(u)Regulatory ratings;

(v)Asset quality;

(w)Net worth; and

(x)Safety.

        Any Performance Measure(s) may be used to measure the performance of the
Company, its Affiliates, and/or its Subsidiaries as a whole or any business unit
of the Company, its Affiliates, and/or its Subsidiaries 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 Company may select Performance Measure (j) above as compared
to various stock market indices. The Committee also has the authority to provide
for accelerated vesting of any Award based on the achievement of performance
goals pursuant to the Performance Measures specified in this Article 11.

        11.2 Evaluation of Performance. The Committee may provide in 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,
(b) litigation or claim judgments or settlements, (c) the effect of changes in
tax laws, accounting principles, or other laws or provisions affecting reported

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results, (d) any reorganization and restructuring programs, (e) 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
for the applicable year, (f) acquisitions or divestitures, and (g) foreign
exchange gains and losses. To the extent such inclusions or exclusions affect
Awards to Covered Employees, they shall be prescribed in a form that meets the
requirements of Code Section 162(m) for deductibility.

        11.3 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.

        11.4 Committee Discretion. In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing
Performance Measures without obtaining shareholder approval of such changes, the
Committee shall have sole discretion to make such changes without obtaining
shareholder approval. In addition, 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 11.1.

Article 12. Covered Employee Annual Incentive Award

        12.1 Establishment of Incentive Pool. The Committee may designate
Covered Employees who are eligible to receive a monetary payment in any Plan
Year based on a percentage of an incentive pool equal to the greater of:
(i) twenty percent (20%) of the Company's Consolidated Operating Earnings for
the Plan Year, or (ii) twenty percent (20%) of the Company's Operating Cash Flow
for the Plan Year. The Committee shall allocate an incentive pool percentage to
each designated Covered Employee for each Plan Year. In no event may (1) the
incentive pool percentage for any one Covered Employee exceed forty percent
(40%) of the total pool, and (2) the sum of the incentive pool percentages for
all Covered Employees cannot exceed one hundred percent (100%) of the total
pool.

        12.2 Determination of Covered Employees' Portions. As soon as possible
after the determination of the incentive pool for a Plan Year, the Committee
shall calculate each Covered Employee's allocated portion of the incentive pool
based upon the percentage established at the beginning of the Plan Year. Each
Covered Employee's incentive award then shall be determined by the Committee
based on the Covered Employee's allocated portion of the incentive pool subject
to adjustment in the sole discretion of the Committee. In no event may the
portion of the incentive pool allocated to a Covered Employee be increased in
any way, including as a result of the reduction of any other Covered Employee's
allocated portion. The Committee shall retain the discretion to adjust such
Awards downward.

Article 13. Nonemployee Director Awards

        All Awards to Nonemployee Directors shall be determined by the Board or
Committee. The terms and conditions of any grant to any such Nonemployee
Director shall be set forth in an Award Agreement.

Article 14. Dividend Equivalents

        Any Participant selected by the Committee may be granted dividend
equivalents based on the dividends declared on Shares that are subject to any
Award, 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 or
expires, as determined by the Committee. Such dividend equivalents shall be
converted to cash or additional Shares by such formula and at such time and
subject to such limitations as may be determined by the Committee. Unless
otherwise specified in the Participant's Award Agreement, a

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Participant shall not be entitled to receive dividend equivalents based on the
dividends declared on the Shares that are subject to an Award.

Article 15. Beneficiary Designation

        If the Committee so determines, each Participant under the Plan may,
from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his death before he receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant, shall
be in a form prescribed by the Committee, 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, upon the
Participant's death, benefits remaining unpaid or rights remaining unexercised,
may be paid to or exercised by the Participant's executor or administrator.

Article 16. Deferrals

        16.1 Deferrals. The Committee may permit or require a Participant to
defer such Participant's receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant by virtue of the exercise
of an Option or SAR, the lapse or waiver of restrictions with respect to
Restricted Stock or Restricted Stock Units, or the satisfaction of any
requirements or performance goals with respect to Performance Shares,
Performance Units, Covered Employee Annual Incentive Awards, Other Stock-Based
Awards, or Cash-Based Awards. If any such deferral election is required or
permitted, the Committee may establish one or more programs to permit a
Participant the opportunity to defer receipt of such consideration and, in its
sole discretion, establish rules and procedures for such payment deferrals.

        16.2 Awards Subject to Code Section 409A. The remaining provisions of
this Article 16 shall apply to any Award granted under this Plan that is or
becomes subject to Code Section 409A.

        16.3 Deferral and/or Distribution Elections. The following rules shall
apply to any deferral and/or distribution elections ("Elections") that may be
permitted or required by the Committee to be made in regard to an award:

(a)All Elections must be in writing and specify the amount of the Award being
deferred, as well as the time and form of distribution as permitted by this
Plan.

(b)All Elections shall be made by the end of the Participant's taxable year
prior to the year in which services commence for which an Award would otherwise
be granted to the individual; provided, however, that if the Award qualifies as
"performance-based compensation" for purposes of Code Section 409A, then the
deferral election can be made no later than six (6) months prior to the end of
the performance period.

(c)Elections shall continue in effect until a written election to revoke or
change such Election is received by the Company, except that a written election
to revoke or change such Election must be made prior to the beginning of the
calendar year for which such Election is to be effective.

        16.4 Subsequent Elections. This Plan permits a subsequent election to
delay the distribution or change the form of distribution of an Award; however,
such subsequent election shall comply with the following requirements:

(a)Such subsequent election may not take effect until at least twelve
(12) months after the date on which the subsequent election is made;

(b)In the case of a subsequent election related to a distribution of an award
not described in Section 16.5(b), 16.5(c), or 16.5(f), such subsequent election
must result in a delay of

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distribution for a period of not less than five (5) years from the date such
distribution would otherwise have been made; and

(c)Any subsequent election related to a distribution pursuant to Section 6.4(d)
shall not be made less than twelve (12) months prior to the date of the first
scheduled payment under such distribution.

        16.5 Distributions Pursuant to Elections. Any Award deferred under this
Plan may not be distributed earlier than:

(a)Separation from service (as determined by the Secretary of the United States
Treasury);

(b)The date the Participant becomes Disabled;

(c)Death;

(d)A specified time (or pursuant to a fixed schedule) specified in the deferral
election as of the date of the deferral of such award;

(e)To the extent provided by the Secretary of the United States Treasury, a
Change in Control; or

(f)The occurrence of an Unforeseeable Emergency.

Notwithstanding anything else herein to the contrary, to the extent that a
Participant is a "Specified Employee" (as defined in Code
Section 409A(a)(2)(B)(i)) of the Company, no distribution pursuant to
Section 16.5(a) of any deferred amounts may be made before six (6) months after
such Participant's date of separation from service, or, if earlier, the date of
the Participant's death.

        16.6 Unforeseeable Emergency. The Committee shall have the authority to
alter the timing or manner of payment of deferred amounts in the event that a
Participant establishes, to the satisfaction of the Committee, the occurrence of
an Unforeseeable Emergency. In such event, the amount(s) distributed with
respect to such Unforeseeable Emergency cannot exceed the amounts necessary to
satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of such distribution(s), after taking into
account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant's assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship). Furthermore, to the extent the
Committee agrees an Unforeseeable Emergency has occurred for a Participant, the
Committee may, in its sole discretion:

(a)Authorize the cessation of deferrals by such Participant under this Plan; or

(b)Provide that, subject to the above requirements, all, or a portion, of any
previous deferrals by the Participant shall immediately be paid in a lump-sum
payment; or

(c)Provide for such other payment schedule as deemed appropriate by the
Committee under the circumstances.

The occurrence of an Unforeseeable Emergency shall be judged and determined by
the Committee. The Committee's decision with respect to whether an Unforeseeable
Emergency has occurred and the manner in which, if at all, the payment of
deferrals to the Participant shall be altered or modified, shall be final,
conclusive, and not subject to approval or appeal.

        16.7 Disabled

(a)A Participant may elect one or both of the following forms of distribution
for his or her deferral(s) distributable by reason of the Participant becoming
Disabled: (i) a single distribution, or (ii) a distribution in approximately
equal annual installments over a period of

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either five (5) or ten (10) years. The deferral(s) of a Participant who fails or
refuses to elect a method of distribution upon becoming Disabled shall be paid
in a single sum.

(b)A distribution payable by reason of a Participant becoming Disabled shall be
paid (in the case of a single distribution) or commence to be paid (in the case
of annual installments) as soon as practicable following the date the
Participant becomes Disabled.

        16.8 Death. If a Participant dies before complete distribution of his or
her deferral(s) under this Plan has occurred, the Participant's undistributed
deferrals shall commence to be distributed to his or her beneficiary under the
distribution method for death elected by the Participant as soon as
administratively possible following receipt by the Committee of satisfactory
notice and confirmation of the Participant's death. The deferral(s) of a
Participant who fails or refuses to elect a method of distribution upon death
shall be paid in a single distribution.

        16.9 No Acceleration of Distributions. Notwithstanding anything to the
contrary herein, this Plan does not permit the acceleration of the time or
schedule of any distribution under this Plan, except as provided by Code
Section 409A and/or the Secretary of the United States Treasury.

Article 17. Rights of Participants

        17.1 Employment. Nothing in the Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company, its Affiliates,
and/or its Subsidiaries, to terminate any Participant's employment or service on
the Board or to the Company at any time or for any reason not prohibited by law,
nor confer upon any Participant any right to continue his employment or service
as a Director or Third-Party Service Provider for any specified period of time.

        Neither an Award nor any benefits arising under this Plan shall
constitute an employment contract with the Company, its Affiliates, and/or its
Subsidiaries and, accordingly, subject to Articles 3 and 19, 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, its Affiliates, and/or its Subsidiaries.

        17.2 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.

        17.3 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 18. Change in Control

        18.1 Change in Control of the Company. Notwithstanding any other
provision of this Plan to the contrary, the provisions of this Article 18 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, all then-outstanding Options and Stock
Appreciation Rights shall become fully vested and exercisable, all other
then-outstanding Awards that are Service Vesting Awards shall vest in full and
be free of restrictions, and unless otherwise determined by the Committee and
set forth in the Participant's Award Agreement, the target payout opportunities
attainable under all outstanding Awards of performance-based Restricted Stock,
performance-based Restricted Stock Units, Performance Units, Performance Shares,
and performance-based Cash-Based Awards shall be deemed to have been fully
earned and payable as of the effective date of the Change in Control; provided
however to the extent that another Award meeting the requirements of
Section 18.2 (a "Replacement Award") is provided to the Participant pursuant to
Section 4.4 to replace such Award (the "Replaced

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Award"). The treatment of any other outstanding Awards shall be as determined by
the Committee in connection with the grant thereof, as reflected in the
applicable Award Agreement.

        18.2 Replacement Awards. An Award shall meet the conditions of this
Section 18.2 (and hence qualify as a Replacement Award) if: (i) it has a value
at least equal to the value of the Replaced Award, as determined by the
Committee in its sole discretion; (ii) it relates to publicly traded equity
securities of the Company or its successor in the Change in Control or another
entity that is affiliated with the Company or its successor following the Change
in Control; and (iii) 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 18.2 are satisfied shall be made by the Committee, as constituted
immediately before the Change in Control, in its sole discretion.

        18.3 Termination of Employment. Upon termination of employment without
Cause by the Company, termination of employment with Good Reason by the
Employee, or termination of directorship of a Director, occurring during the
period of two (2) years after such Change in Control, (i) all Replacement Awards
held by the Participant shall become fully vested, (if applicable) exercisable
and free of restrictions, and (if applicable) fully earned and payable, and
(ii) all Options and Stock Appreciation Rights held by the Participant
immediately before the termination of employment or termination of directorship
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 19. Amendment, Modification, Suspension, and Termination

        19.1 Amendment, Modification, Suspension, and Termination. Subject to
Section 19.3, the Committee may, at any time and from time to time, alter,
amend, modify, suspend, or terminate the Plan and any Award Agreement in whole
or in part; provided, however, that, without the prior approval of the Company's
shareholders and except as provided in Sections 4.4 and 6.11, Options or SARs
issued under the Plan will not be repriced, replaced, or regranted through
cancellation, or by lowering the Option Price of a previously granted Option or
the Grant Price of a previously granted SAR, and no material amendment of the
Plan shall be made without shareholder approval if shareholder approval is
required by law, regulation, or stock exchange rule.

        19.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.4 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under the Plan.

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

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Article 20. Withholding

        20.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, the
minimum statutory amount to satisfy federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan.

        20.2 Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock
and Restricted Stock Units, or upon the achievement of performance goals related
to Performance Shares, or any other taxable event arising as a result of an
Award granted hereunder, Participants may elect, subject to the approval of the
Committee and as permitted by the rules established by the Securities and
Exchange Commission and/or the Code, to satisfy the withholding requirement, in
whole or in part, by having the Company withhold Shares having a Fair Market
Value on the date the tax is to be determined equal to the minimum statutory
total tax that could be imposed on the transaction. All such elections shall be
irrevocable, made in writing, and signed by the Participant, and shall be
subject to any restrictions or limitations that the Committee, in its sole
discretion, deems appropriate.

Article 21. Successors

        All obligations of the Company under the 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 22. General Provisions

        22.1 Forfeiture Events.

(a)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, termination of employment or service for Cause, termination of the
Participant's provision of services to the Company, its Affiliates, and/or its
Subsidiary, violation of material Company, Affiliate, 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, its
Affiliates, and/or its Subsidiaries.

(b)If the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, if the Participant
knowingly or grossly negligently engaged in the misconduct, or knowingly or
grossly negligently failed to prevent the misconduct, or if the Participant is
one of the individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the
amount of any payment in settlement of an Award earned or accrued during the
twelve- (12-) month period following the first public issuance or filing with
the United States Securities and Exchange Commission (whichever just occurred)
of the financial document embodying such financial reporting requirement.

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

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        22.3 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.

        22.4 Severability. In the event any provision of the Plan 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 provision had not been included.

        22.5 Requirements of Law. The granting of Awards and the issuance of
Shares under the 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.

        22.6 Delivery of Title. The Company shall have no obligation to issue or
deliver evidence of title for Shares issued under the 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.

        22.7 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.

        22.8 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.

        22.9 Employees Based Outside of the United States. Notwithstanding any
provision of the Plan to the contrary, in order to comply with the laws in other
countries in which the Company, its Affiliates, and/or its Subsidiaries operate
or have Employees, Directors, or Third-Party Service Providers, the Committee,
in its sole discretion, shall have the power and authority to:

(a)Determine which Affiliates and Subsidiaries shall be covered by the Plan;

(b)Determine which Employees and/or Directors, or Third-Party Service Providers
outside the United States are eligible to participate in the Plan;

(c)Modify the terms and conditions of any Award granted to Employees and/or
Directors or Third-Party Service Providers 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 22.9 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.

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

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        22.11 Unfunded Plan. Participants shall have no right, title, or
interest whatsoever in or to any investments that the Company, its Affiliates,
and/or its Subsidiaries may make to aid it in meeting its obligations under the
Plan. Nothing contained in the 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, its Affiliates, and/or
its Subsidiaries under the Plan, such right shall be no greater than the right
of an unsecured general creditor of the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. All payments to be made hereunder shall be
paid from the general funds of the Company, its Affiliates, and/or its
Subsidiaries, 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 the Plan.

        22.12 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the 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.

        22.13 Retirement and Welfare Plans. Neither Awards made under the Plan
nor Shares or cash paid pursuant to such Awards, except pursuant to Covered
Employee Annual Incentive Awards, may be included as "compensation" for purposes
of computing the benefits payable to any Participant under the Company's, its
Affiliates', and/or its Subsidiaries' retirement plans (both qualified and
nonqualified) or welfare benefit plans unless such other plan expressly provides
that such compensation shall be taken into account in computing a Participant's
benefit.

        22.14 Nonexclusivity of the 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.

        22.15 No Constraint on Corporate Action. Nothing in this Plan shall be
construed to: (i) limit, impair, or otherwise affect the Company's, its
Affiliates', and/or its Subsidiaries' 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, (ii) limit the right or power of
the Company, its Affiliates, and/or its Subsidiaries to take any action which
such entity deems to be necessary or appropriate.

        22.16 Governing Law. The Plan and each Award Agreement shall be governed
by the laws of the State of Delaware, excluding any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of
the Plan to the substantive law of another jurisdiction.

        22.17 Indemnification. Subject to requirements of Delaware law, each
individual who is or shall have been a member of the Board, or a committee
appointed by the Board, or an officer of the Company to whom authority was
delegated in accordance with Article 3, shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him in settlement
thereof, with the Company's approval, or paid by him in satisfaction of any
judgment in any such action, suit, or proceeding against him, provided he shall
give the Company an opportunity, at its own expense, to handle and defend the
same before he undertakes to handle and defend it on his own behalf, unless such
loss, cost, liability, or expense is a result of his own willful misconduct or
except as expressly provided by Delaware law.

        The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such individuals may be entitled under
the Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

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2004 Omnibus Stock and Incentive Compensation Plan Neenah Paper, Inc. Effective
December 1, 2004