Exhibit 10.2

Notice of Stock Option Grant

SENSUS METERING SYSTEMS

2007 STOCK OPTION PLAN

NOTICE OF STOCK OPTION GRANT

FOR OFFICERS, EMPLOYEES AND EMPLOYEE DIRECTORS—NQSO

You (the “Participant”) have been granted the following option (“Option”) to
purchase Class B Common Shares of Sensus Metering Systems (Bermuda 1) Ltd. (the
“Company”), par value US$0.01 per share (the “Shares”), pursuant to the Sensus
Metering Systems 2007 Stock Option Plan (the “Plan”):

 

Name of Participant:    [                            ] Total Number of Shares
Subject to Option:    [                            ] Type of Option:   
Nonqualified Stock Option (“NQSO”) Option Exercise Price Per Share:   
[                            ] Effective Date of Grant (“Grant Date”):   
[                            ] Vesting Schedule:    Subject to the terms of the
Plan and the attached Nonqualified Stock Option Agreement (the “Agreement”),
provided your employment with the Company and the Related Companies has not
terminated on or prior to such date(s), the right to exercise this Option shall
vest as follows:    Date            Percentage of Shares           
Second anniversary of Grant Date    40%    Third anniversary of Grant Date   
20%    Fourth anniversary of Grant Date    20%    Fifth anniversary of Grant
Date    20% Expiration:    [                            ]

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   This Option may expire earlier upon termination
of employment with the Company and the Related Companies as provided in the Plan
or the Agreement.

Capitalized terms that are not defined herein shall have the meanings ascribed
to them in the Plan.

By your signature and the signature of the Company’s representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the Plan and the Nonqualified Stock Option Agreement,
both of which are attached to and made a part of this document.

[Signature page follows]

 

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PARTICIPANT:

    

SENSUS METERING SYSTEMS (BERMUDA 1) LTD.

       

By:

     

Date:

         

Title:

     

Address:

         

Date:

                               

 

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SENSUS METERING SYSTEMS (BERMUDA 1) LTD.

NONQUALIFIED STOCK OPTION AGREEMENT

FOR OFFICERS, EMPLOYEES AND EMPLOYEE DIRECTORS

1. Grant of Option

(a) On the terms and conditions set forth in the Notice of Stock Option Grant
(the “Grant Notice”) attached hereto and this Nonqualified Stock Option
Agreement (the “Agreement”), the Company grants to the Participant on the Grant
Date specified in the Grant Notice the option (the “Option”) to purchase at the
Option Exercise Price specified in the Grant Notice the number of Shares set
forth in the Grant Notice. The Option Exercise Price is agreed to be at least
100% of the Fair Market Value per Share on the Grant Date (or 110% of Fair
Market Value per Share if the Participant is a 5% Owner).

(b) The Option is granted pursuant to the Plan, a copy of which the Participant
acknowledges having received. All terms, provisions and conditions applicable to
the Option set forth in the Plan and not set forth herein are hereby
incorporated by reference herein. To the extent any provision hereof is
inconsistent with a provision of the Plan, the provisions of the Plan will
govern. All capitalized terms that are used in this Agreement and not otherwise
defined in Section 9 hereof or elsewhere herein shall have the meanings ascribed
to them in the Plan.

2. Limitations on Transfer of Options; Management Shareholders Agreement

(a) The Option shall be subject to the limitations on transfer set forth in
Section 5.7 of the Plan.

(b) The issuance of any Shares pursuant to any exercise of the Option provided
for hereby is conditioned upon the Participant’s execution and delivery of the
Management Shareholders Agreement, and no such issuance shall be made prior to
such execution and delivery. All Shares issued pursuant to any exercise of the
Option shall be subject to the limitations on transfer and other restrictions
set forth in the Management Shareholders Agreement.

3. Right to Exercise; Procedure for Exercise

(a) The Option may be exercised, in whole or in part, prior to expiration to the
extent it is vested. The Grant Notice contains the Option vesting schedule (the
“Vesting Schedule”). In accordance with the Grant Notice, in the event of the
termination of the Participant’s employment with the Company and the Related
Companies, the Option shall not vest with respect to any further Shares beyond
those with respect to which it has vested as of the effective date of such
termination of employment.

(b) Notwithstanding Section 3(a), the Option will become fully vested upon the
consummation of a sale of all of the shares or all or substantially all of the
assets of the Company, whether by sale, merger, amalgamation, combination,
consolidation or similar business transaction.

 

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(c) The exercise procedures set forth in Section 5.6 of the Plan shall govern
the exercise of the Option.

4. Term and Expiration

(a) Basic Term. Subject to earlier termination pursuant to the terms hereof, the
Option shall expire on the expiration date set forth in the Grant Notice, which
date is 10 years after the Effective Date of Grant (5 years after the Effective
Date of Grant if the Participant is a 5% Owner).

(b) Expiration Following Termination for Cause, Material Breach or
Unsatisfactory Performance or Voluntary Termination Before the Second
Anniversary of this Agreement. If Participant’s employment with the Company and
the Related Companies is terminated (x) at any time by the Company or a Related
Company for Cause, Material Breach or Unsatisfactory Performance or (y) by
Participant pursuant to a Voluntary Termination prior to the second anniversary
of this Agreement, the Option shall terminate and cease to be exercisable,
whether or not vested, upon the effective date of such termination.

(c) Expiration Following Termination for Other Than Cause, Material Breach or
Unsatisfactory Performance; Voluntary Termination After the Second Anniversary
of this Agreement]; or Termination Following Material Reduction. If
Participant’s employment with the Company and the Related Companies is
terminated (x) at any time by the Company or a Related Company for no reason or
any reason other than Cause, Material Breach or Unsatisfactory Performance or
(y) by Participant pursuant to a Voluntary Termination after the second
anniversary of this Agreement, or following a Material Reduction, the Option
shall, subject to the vesting requirements and provisions set forth in
Section 3, remain exercisable for a period of six months following the effective
date of such termination, after which time the Option shall terminate and cease
to be exercisable, whether or not vested.

(d) Exercise Following Death of Participant. If the Participant dies after
termination of his or her employment with the Company and the Related Companies,
but before the expiration of the Option, all or part of the Option may be
exercised (prior to expiration) by the personal representative of the
Participant or by any person who has acquired this Option directly from the
Participant by will, bequest or inheritance, but only to the extent that the
Option was vested and exercisable upon termination of the Participant’s
employment.

(e) Termination of Unvested Option. In the event that the Option is not
exercisable in respect of any Shares prior to the effective date of termination
of a Participant’s employment with the Company or a Related Company, the Option
shall thereupon expire and be terminated.

5. Company’s Right to Repurchase Shares. Anything to the contrary herein
notwithstanding, in the event that the (x) Committee determines that the
Participant has engaged in conduct in violation of this Agreement, or
(y) Participant’s employment with the Company and the Related Companies has been
terminated, all or any portion of any Shares issued to the Participant upon
exercise of the Option shall be subject to repurchase as described in this
Section 5. The purchase price for any Shares to be purchased pursuant to this
Section 5 is

 

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payable, at the option of the Company, in cash, Three Year Junior Notes or a
combination thereof.

(a) Call of Shares Upon Termination for Cause, Material Breach or Unsatisfactory
Performance or Voluntary Termination Prior to the Third Anniversary of this
Agreement. If Participant’s employment with the Company and the Related
Companies is terminated (x) at any time by the Company or a Related Company for
Cause, Material Breach or Unsatisfactory Performance or (y) by Participant
pursuant to a Voluntary Termination prior to the third anniversary of this
Agreement, subject to applicable law including the Companies Act of 1981 of
Bermuda, the Company may repurchase all or any portion of any Shares issued to
the Participant upon exercise of the Option at a price per share equal to the
lower of the Exercise Price per Share paid by the Participant or the then
current Fair Market Value of the Shares.

(b) Call of Shares Upon Termination for Other Than Cause, Material Breach or
Unsatisfactory Performance; Voluntary Termination after the Third Anniversary of
this Agreement; or Termination Following Material Reduction. If Participant’s
employment with the Company and the Related Companies is terminated (x) at any
time by the Company and the Related Companies for no reason or any reason other
than Cause, Material Breach or Unsatisfactory Performance or (y) by Participant
pursuant to a Voluntary Termination after the third anniversary of this
Agreement, or following a Material Reduction, subject to applicable law,
including the Companies Act of 1981 of Bermuda, the Company may repurchase all
or any portion of any Shares issued to the Participant upon exercise of the
Option at a purchase price per share equal to the Repurchase Price per Share.

(c) Expiration of Repurchase Option. If the Company does not deliver to the
Participant a written notice (a “Call Notice”) of its intention to exercise the
call rights set forth in this Section 5 within six months of the later of
termination of employment of a Participant or violation of this Agreement by the
Participant, as applicable, or the date of issuance of the Shares with respect
to which any such call right is exercised, such call rights will expire. This
Section 5 shall terminate upon the consummation of a sale of all of the capital
stock or all or substantially all of the assets of the Company, whether by sale,
merger, amalgamation, combination, consolidation or similar business
transaction.

(d) Restrictions on Payments by the Company. Notwithstanding anything to the
contrary contained in this Agreement, all repurchases pursuant to this
Section 5, including issuances of and payments by the Company on the Three Year
Junior Notes, shall be subject to (i) applicable restrictions contained in any
applicable law, (ii) restrictions contained in the Company’s and its
subsidiaries’ debt and equity financing agreements, including the Credit
Agreement and the Indenture, each as amended and in effect from time to time,
and any Senior Indebtedness (as defined in the Three Year Junior Notes) and
(iii) the availability of cash to make any lump sum cash payments. If any such
restrictions or unavailability prohibit the repurchase of Shares hereunder which
the Company is otherwise entitled or required to make, the Company may make such
repurchases as soon as it is permitted to do so under such restrictions.

(e) Timing Considerations. In the event the Company makes payments in cash
pursuant to the provisions of this Section 5, such payments will be made within
90 days of the

 

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date of the call. In the event that the Company makes payments in Three Year
Junior Notes, such notes will be executed and delivered within 90 days of the
date of the call.

6. Non-Competition/Non-Disclosure Provisions.

(a) Non-Competition. In consideration of this Agreement, the Participant
covenants and agrees that during the period the Participant is an officer,
director or employee of the Company or its Related Companies and the Restricted
Period, the Participant shall not, subject to this Section 6, without the
express written approval of the Board of Directors of the Company, directly or
indirectly, in one or a series of transactions, own, manage, operate, control,
invest or acquire an interest in, whether as a proprietor, partner, shareholder,
member, lender, director, officer, employee, joint venturer, investor, lessor,
supplier, customer, agent, representative or other participant, or otherwise
engage or participate in, whether as a proprietor, partner, shareholder, member,
lender, director, officer, employee, joint venturer, investor, lessor, supplier,
customer, agent, representative or other participant, any business which
competes, directly or indirectly, with the Business in the Market (a
“Competitive Business”) without regard to (i) whether the Competitive Business
has its office, manufacturing or other business facilities within or without the
Market, (ii) whether any of the activities of the Participant referred to above
occur or are performed within or without the Market or (iii) whether the
Participant resides, or reports to an office, within or without the Market;
provided, however, that (x) the Participant may, anywhere in the Market,
directly or indirectly, in one or a series of transactions, own, invest or
acquire an interest in up to two percent (2%) of the capital stock of a
corporation whose capital stock is traded publicly, and that (y) the Participant
may accept employment with a successor company to the Company.

(b) Non-Solicitation. If a Participant’s employment is terminated, then, subject
to this Section 6, the Participant shall not during the Restricted Period and
thereafter (i) directly or indirectly, in one or a series of transactions,
recruit, solicit or otherwise induce or influence any proprietor, partner,
shareholder, member, lender, director, officer, employee, sales agent, joint
venturer, investor, lessor, customer, supplier, agent, representative or any
other person which has a business relationship with the Company or its Related
Companies or had a business relationship with the Company or its Related
Companies within the twenty-four (24) month period preceding the date of the
incident in question, to discontinue, reduce or modify such employment, agency
or business relationship with the Company or its Related Companies, or
(ii) employ or seek to employ or cause any Competitive Business to employ or
seek to employ any person or agent who is then (or was at any time within twelve
(12) months prior to the date the Participant or the Competitive Business
employs or seeks to employ such person) employed or retained by the Company or
its Related Companies. Notwithstanding the foregoing, nothing herein shall
prevent the Participant from providing a letter of recommendation to an employee
with respect to a future employment opportunity.

(c) Non-Disclosure. The Participant further agrees, during and after his
employment with the Company and its Related Companies, the Restricted Period and
thereafter, that the Participant will not, directly or indirectly in one or a
series of transactions disclose to any person or use or otherwise exploit for
the Participant’s own benefit or for the benefit of anyone other than the
Company or its subsidiaries any Confidential Information (as defined below)
whether prepared by the Participant or not provided, however, that any
Confidential Information may be

 

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disclosed to officers, representatives, employees and agents of the Company or
its Related Companies who need to know such Confidential Information in order to
perform the services or conduct the operations required or expected of them in
the Business. The Participant shall use his best efforts to prevent the removal
of any Confidential Information from the premises of the Company or its Related
Companies, except as required in his normal course of employment by the Company
or its Related Companies. The Participant shall use his commercially reasonable
efforts to cause all persons or entities to whom Confidential Information shall
be disclosed by the Participant hereunder to observe the terms and conditions
set forth herein as though each such person or entity was bound hereby. The
Participant shall have no obligation hereunder to keep confidential any
Confidential Information if and to the extent disclosure of any thereof is
specifically required by law; provided, however, that in the event disclosure is
required by applicable law, the Participant shall provide the Company with
prompt notice of such requirement, prior to making any disclosure, so that the
Company may seek an appropriate protective order. At the request of the Company,
the Participant agrees to deliver to the Company all Confidential Information
which the Participant may possess or control. The Participant agrees that all
Confidential Information of the Company and its Related Companies (whether now
or hereafter existing) conceived, discovered or made by him during his
employment with the Company or its Related Companies exclusively belongs to the
Company and its Related Companies (and not to the Participant). The Participant
will promptly disclose such Confidential Information to the Company and its
Related Companies and perform all actions reasonably requested by the Company
and its direct and indirect subsidiaries to establish and confirm such exclusive
ownership. As used herein, the term “Confidential Information” means any
confidential information including, without limitation, any study, data,
calculations, software storage media or other compilation of information,
patent, patent application, copyright, trademark, trade name, service mark,
service name, “know-how”, trade secrets, customer lists, details of client or
consultant contracts, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, business acquisition plans
or any portion or phase of any scientific or technical information, ideas,
discoveries, designs, computer programs (including source of object codes),
processes, procedures, formulas, improvements or other proprietary or
intellectual property of the Company or its Related Companies, whether or not in
written or tangible form, and whether or not registered, and including all
files, records, manuals, books, catalogues, memoranda, notes, summaries, plans,
reports, records, documents and other evidence thereof. The term “Confidential
Information” does not include, and there shall be no obligation hereunder with
respect to, information that becomes generally available to the public other
than as a result of a disclosure by the Participant not permissible hereunder.

(d) Non-Disparagement. The Participant agrees, during and after his employment
with the Company and its Related Companies, during the Restricted Period and
thereafter, that he shall not make any false, defamatory or disparaging
statements about the Company or its Related Companies or the officers or
directors of the Company or its Related Companies. During and after the
Participant’s employment with the Company or its Related Companies, the Company
agrees on behalf of itself and its Related Companies that neither the officers
nor the directors of the Company or its Related Companies shall make any false,
defamatory or disparaging statements about the Participant.

(e) Specific Performance. All the parties hereto agree that their rights under
this Section 6 are special and unique and that violation thereof would not be
adequately compensated

 

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by money damages and each grants the others the right to specifically enforce
(including injunctive relief where appropriate) the terms of this Agreement.

7. Definitions. Except where the context clearly implies or indicates the
contrary, a word, term, or phrase used in the Plan is similarly used in this
Agreement. For purposes of this Agreement the following terms shall have the
meaning as set forth below:

(a) “Business” means the business of providing the following products and
services for metering or equipment monitoring and communication by or for
utilities or residential/commercial submetering entities of water, gas,
electricity and heat consumption by their customers:

 

  (A) Residential Water Meters (Velocity, Positive Displacement, Piston,
Ultrasonic, Magnetic or otherwise);

 

  (B) Commercial / Industrial Water Meters (Turbine, Combination, Propeller,
Irrigation, Fire Hydrant, Fire Service, or otherwise);

 

  (C) Sub Meters—Water, Gas, Electric and Heat;

 

  (D) Residential Gas Meters (Diaphragm and Ultrasonic);

 

  (E) Intermediate and Large Capacity Gas Meters (Diaphragm and Ultrasonic);

 

  (F) Turbine Gas Meters;

 

  (G) Pressure Regulation Products;

 

  (H) Correlative Natural Gas, Energy and Density Measurement Products;

 

  (I) Single phase and Polyphase Solid-State Electricity Meters;

 

  (J) Heat Meters (Velocity and Ultrasonic);

 

  (K) Heat Integrators;

 

  (L) Bulk Hot Water Meters;

 

  (M) Automatic Meter Reading Devices or Systems for any of the foregoing;

 

  (N) Meter Test Equipment for any of the foregoing;

 

  (O) Instrumentation for any of the foregoing;

 

  (P) Any aspect of the business acquired by the Company’s subsidiary, Sensus
Metering Systems, Inc., from Automatic Meter Reading Data Systems, L.L.C.,
including the provision of technology, equipment, applications, software of
monitoring services in respect of (i) automatic meter reading, (ii) radio
frequency based control, (iii) tower telemetry, (iv) sub-metering, (v) equipment
monitoring;

 

  (Q) Meter accuracy testing and recalibration services;

 

  (R) Project management services related to Metering and AMR activities;

 

  (S) Pipe Repair, Pipe Tapping and Pipe Joining Products;

 

  (T) High Pressure, Low Porosity Aluminum Die Castings;

 

  (U) Services to utilities related to the procurement, testing, repair and
management of meter populations; and

 

  (V) Software applications sold, licensed or offered as a service to utilities
and used to (i) manage billing, meter data, and equipment status or (ii) control
distribution or measurement equipment for utilities and submetering entities.

 

  (b) “Cause” means any of the following:

 

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(i) Participant’s conviction of, or plea of guilty or nolo contendere to, a
felony or a crime involving embezzlement, conversion of property or moral
turpitude;

(ii) Participant’s fraud, embezzlement or conversion of property;

(iii) Participant’s conviction of, or plea of guilty or nolo contendere to, a
crime involving the acquisition, use or expenditure of federal, state or local
government funds;

(iv) an administrative or judicial determination that Participant committed
fraud or any other violation of law involving federal, state or local government
funds;

(v) Participant’s material violation, with the actual knowledge of Participant,
of any obligations imposed upon Participant, personally, as opposed to upon the
Company, whether as a shareholder or otherwise, under any material agreement or
instrument relating to the Company or any Related Company, this Agreement, the
Bye-Laws of the Company; the Management Shareholders Agreement, or the Plan and
related agreements, if applicable; or

(vi) Participant’s material and knowing failure to observe or comply with
Regulations whether as an officer, shareholder or otherwise, in any material
respect or in any manner which would reasonably be expected to have a material
adverse effect in respect of the Company and its Related Companies’ ongoing
business, assets, properties, operations, condition (financial and other),
prospects and other business relationships.

(c) “Credit Agreement” shall mean the Credit Agreement, dated as of December 17,
2003, among Sensus Metering Systems Inc., a Delaware corporation, Sensus
Metering Systems (LuxCo 2) S.AR.L, Sensus Metering Systems (Bermuda 2) Ltd., a
company organized under the laws of Bermuda, the Lenders (as defined therein),
Credit Suisse First Boston, as administrative and collateral agent for the
lenders as such agreement may be amended, waived or otherwise modified from time
to time.

(d) “Determination Period” shall mean last four consecutive completed fiscal
quarters as set forth on the audited financial statements of the Company
immediately preceding the “call” exercised pursuant to Section 2 for which
Repurchase Price shall be used to determine the repurchase price.

(e) “Disability” means due to physical or mental disability the Participant is
unable to perform, and does not perform, as certified by a mutually agreeable
competent medical physician, his material duties owed to the Company or its
subsidiaries hereunder for 180 days in any continuous 210 day period. The final
determination of Disability shall be made in the reasonable judgment of the
Board of Directors of the Company. In the event of any inconsistency between the
definition of disability herein and the definition of such term in any
employment agreement between the Participant and the Company then in effect, the
definition of such term in such employment agreement shall control for purposes
of the Plan.

(f) “EBITDA” shall have the meaning set forth in the Indenture.

 

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(g) “Indenture” shall mean the Indenture, dated as of December 17, 2003,
relating to the Senior Subordinated Notes of Sensus Metering Systems Inc., as
such indenture may be amended, waived or otherwise modified from time to time.

(h) “Management Shareholders Agreement” means the Management Subscription and
Shareholders Agreement, dated March 5, 2004, among the Company and the
shareholders party thereto, as amended from time to time in accordance with its
terms.

(i) “Material Breach” means:

(i) Participant’s breach of any of Participant’s fiduciary duties to the
Company, its Related Companies or its shareholders or making of a willful
misrepresentation or omission which breach, misrepresentation or omission would
reasonably be expected to materially adversely affect the business, properties,
assets, condition (financial or other) or prospects of the Company or its
subsidiaries;

(ii) Participant’s willful, continual and material neglect or failure to
discharge Participant’s duties, responsibilities or obligations prescribed by
this Agreement or of any other agreement between the Company or its Related
Companies or by the Company (other than arising solely due to physical or mental
disability);

(iii) Participant’s habitual drunkenness or substance abuse which materially
interferes with Participant’s ability to discharge Participant’s duties,
responsibilities or obligations prescribed by the Company or its Related
Companies;

(iv) Participant’s violation of any non-competition, non-disparagement or
confidentiality agreement with the Company or its direct or indirect
subsidiaries, including without limitation, those set forth in Section 6 of this
Agreement, or any other agreements with the Company or its direct or indirect
subsidiaries; and

(v) Participant’s gross neglect of such Participant’s duties and
responsibilities, as determined by the Company’s Board of Directors;

provided; for purposes of clauses (i)-(iv) above, to the extent such conduct is
able to be remedied or cured by the Participant, and such conduct is not cured
or remedied after the Company or its Board of Directors has provided such
Participant with 30 days’ written notice of such circumstances and the
possibility of a Material Breach in reasonable detail, and such Participant
fails to cure such circumstances and Material Breach within those 30 days. No
act or omission shall be deemed gross neglect if done, or omitted to be done, in
good faith by such Participant based upon a resolution duly adopted by the
Company’s Board of Directors. Whether a breach can be cured or remedied shall be
determined by the Board of Directors in its sole discretion.

(j) “Material Reduction” means circumstances involving a material reduction in
Participant’s position, authority, base compensation or benefits or a hostile or
adverse work environment with respect to Participant’s employment by the Company
or a Related Company, taken as a whole.

(k) “Related Company” means all direct and indirect subsidiaries of the Company.

 

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(l) “Regulations” means any laws, ordinances, regulations or rules of any
governmental, regulatory or administrative body, agent or authority, any court
or judicial authority, or any public, private or industry regulatory authority.

(m) “Repurchase Price” shall mean the quotient obtained by dividing (a) an
amount equal to (A) the product of 5.0 multiplied by EBITDA for the
Determination Period less (B) the aggregate amount of Indebtedness, as defined
in the Credit Agreement, including, but not limited to, indebtedness for
borrowed money and capitalized leases of the Company as of the end of the
Determination Period (including, without limitation, interest accrued but unpaid
or paid-in-kind as of the end of the Determination Period) less (C) the
aggregate liquidation value of the Series A Preference Shares, Series B
Preference Shares and the Series C Preference Shares of the Company outstanding
at the end of the Determination Period (including, without limitation, dividends
accrued but unpaid or paid-in-kind in respect of such preference share as of the
end of the Determination Period) less (D) the aggregate liquidation value of the
Class A Common Shares of the Company outstanding at the end of the Determination
Period less (E) the aggregate liquidation value of any class or series of equity
securities of the Company ranking senior in right of payment upon a liquidation
of the Company to the Class B Common Shares outstanding at the end of the
Determination Period less (F) the aggregate amount that would have been payable
by the Company in respect of any equity appreciation or similar rights
outstanding as of the end of the Determination Period assuming the exercise in
full of any and all such rights (whether vested or not) as of such date, by
(b) the aggregate number of Class A Common Shares and Class B Common Shares
issued and outstanding on a fully diluted basis as of the last day of the
Determination Period. For this purpose, “fully diluted basis” shall assume the
full exercise of all outstanding options, warrants, stock appreciation and other
rights in relation to Common Shares and the full conversion (if dilutive) of all
convertible securities, and other obligations, irrespective of whether then
exercisable or convertible, and further irrespective of any vesting, repurchase,
call or other restrictions or limitations. Notwithstanding the foregoing, the
Committee may, in its sole discretion, reduce either the amount contemplated by
clause (a), above, or the number of shares contemplated by clause (b) above, to
the extent necessary to avoid the inappropriate inclusion of both the
liquidation preference of a particular security and the shares into which such
security is convertible in such respective calculations.

(n) “Restricted Period” shall mean the period during which the Participant is
employed by the Company or any of the Related Companies and the period of 24
months from and after the date of termination of employment with the Company and
the Related Companies.

(o) “Unsatisfactory Performance” means a Participant’s failure to perform his or
her duties to the standards set by the Board of Directors (such determination to
be made in the good faith by the Company’s Board of Directors); provided, that
such Participant has been given notice and 30 days from such notice fails to
cure such unsatisfactory performance. Whether such unsatisfactory performance
can be cured shall be determined by the Company’s Board of Directors in its sole
discretion.

(p) “Voluntary Termination” means a voluntary termination of employment with the
Company and the Related Companies by Participant for any reason or no reason
other than a Material Reduction, death or Disability.

 

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8. Heirs and Successors. This Agreement shall be binding upon, and inure to the
benefit of, the Company and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company’s assets and business. If any rights of
the Participant or benefits distributable to the Participant under this
Agreement have not been exercised or distributed, respectively, at the time of
the Participant’s death, such rights shall be exercisable by the Designated
Beneficiary, and such benefits shall be distributed to the Designated
Beneficiary, in accordance with the provisions of this Agreement, the Plan and
the Company’s Bye-Laws. The “Designated Beneficiary” shall be the beneficiary or
beneficiaries designated by the Participant in a writing filed with the
Executive Team in such form and at such time as the Executive Team shall
require. If a deceased Participant fails to designate a beneficiary, or if the
Designated Beneficiary does not survive the Participant, any rights that would
have been exercisable by the Participant and any benefits distributable to the
Participant shall be exercised by or distributed to the legal representative of
the estate of the Participant. If a deceased Participant designates a
beneficiary and the Designated Beneficiary survives the Participant but dies
before the Designated Beneficiary’s exercise of all rights under this Agreement
or before the complete distribution of benefits to the Designated Beneficiary
under this Agreement, then any rights that would have been exercisable by the
Designated Beneficiary shall be exercised by the legal representative of the
estate of the Designated Beneficiary, and any benefits distributable to the
Designated Beneficiary shall be distributed to the legal representative of the
estate of the Designated Beneficiary. Any rights of a beneficiary and benefits
distributable to a beneficiary under this Agreement shall be subject to the
terms and restrictions of the Company’s Bye-Laws.

9. Tax Withholding. The Company may make such provisions as are necessary for
the withholding of all applicable taxes on the Option, in accordance with
Article 8 of the Plan.

10. Rights as a Shareholder. Neither the Participant nor the Participant’s
representative shall have any rights as a shareholder with respect to any Shares
subject to this Option until the Option has been exercised and Share
certificates have been issued to the Participant or representative, as the case
may be.

11. Ratification of Actions. By accepting the Option, the Participant and each
person claiming under or through the Participant shall be conclusively deemed to
have indicated the Participant’s acceptance and ratification of, and consent to,
any action taken under the Plan or this Agreement and Grant Notice by the
Company, the Board, or the Committee.

12. Notice. Any notice required by the terms of this Agreement shall be given in
writing and shall be deemed effective upon personal delivery or upon deposit
with the United States Postal Service, by registered or certified mail, with
postage and fees prepaid. Notice shall be addressed to the Company at its
principal executive office and to the Participant at the address that he or she
most recently provided in writing to the Company.

13. Defense of Claims. Each Participant agrees that, for the period beginning on
the date hereof, and continuing for a reasonable period after termination of
employment with the Company or its Related Companies, Participant will cooperate
with the Company in defense of any claims that may be made against the Company
and its Related Companies and affiliates, and will cooperate with the Company in
the prosecution of any claims that may be made by

 

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Company and its Related Companies and affiliates, to the extent that such claims
may relate to services performed by the Participant for the Company and its
Related Companies and affiliates. Each Participant agrees to promptly inform the
Company if he becomes aware of any lawsuits involving such claims that may be
filed against the Company and its Related Companies and affiliates. The Company
agrees to reimburse Participant for all of Participant’s reasonable
out-of-pocket expenses associated with such cooperation, including travel
expenses. For periods during and following Participant’s employment with the
Company, the Company agrees to provide reasonable compensation to Participant
for such cooperation in addition to reimbursement of expenses and his reasonable
attorneys’ fees, if any.

14. Severability. In case any one or more of the provisions or parts of a
provision contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement or any other jurisdiction, but this
Agreement shall be reformed and construed in any such jurisdiction as if such
invalid or illegal or unenforceable provision or part of a provision had never
been contained herein and such provision or part shall be reformed so that it
would be valid, legal and enforceable to the maximum extent permitted in such
jurisdiction.

15. Amendment. This Agreement may be amended in accordance with the provisions
of the Plan, and may otherwise be amended by written agreement of the
Participant and the Company without the consent of any other person.

16. APPLICABLE LAW; FORUM; WAIVER OF JURY TRIAL. THE PROVISIONS OF THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF ANY JURISDICTION. IN
THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR
OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED
AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, THE
PARTIES TO THIS AGREEMENT HEREBY (1) AGREE UNDER ALL CIRCUMSTANCES ABSOLUTELY
AND IRREVOCABLY TO INSTITUTE ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN
A COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE SOUTHERN DISTRICT OF NEW
YORK, WHETHER A STATE OR FEDERAL COURT; (2) AGREE THAT IN THE EVENT OF ANY SUCH
LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT AND SUBMIT TO THE
PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN CLAUSE (1) OF THIS SECTION
AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE RULES AND STATUTES
GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT NOTHING IN THIS SECTION
SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING TO REMOVE ANY ACTION TO A
FEDERAL COURT IN THE SOUTHERN DISTRICT OF NEW YORK); (3) AGREE TO WAIVE TO THE
FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH COURT OR
THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN ANY INCONVENIENT
FORUM; (4) AGREE, AFTER CONSULTATION WITH COUNSEL, TO WAIVE ANY RIGHTS TO A

 

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JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING TO THIS AGREEMENT;
(5) AGREE TO DESIGNATE, APPOINT AND DIRECT AN AUTHORIZED AGENT TO RECEIVE ON ITS
BEHALF SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS IN ANY LEGAL PROCEEDING IN
THE SOUTHERN DISTRICT OF NEW YORK; (6) AGREE TO PROVIDE THE OTHER PARTIES TO
THIS AGREEMENT WITH THE NAME, ADDRESS AND FACSIMILE NUMBER OF SUCH AGENT;
(7) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF PROCESS IN ANY LEGAL
PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS SET FORTH
HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (8) AGREE THAT ANY SERVICE MADE AS
PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND
(9) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH OF THE PARTIES
HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS
AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD NOT BE
MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY TO
WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED TO
SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE. THE CHOICE OF FORUM
SET FORTH IN THIS SECTION 16 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF
ANY JUDGMENT OF A NEW YORK FEDERAL OR STATE COURT, OR THE TAKING OF ANY ACTION
UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT, IN ANY OTHER APPROPRIATE
JURISDICTION.

17. Administration. The authority to administer and interpret this Agreement
shall be vested in the Committee, and the Committee shall have all the powers
with respect to this Agreement as it has with respect to the Plan. Any
interpretation of the Agreement by the Committee and any decision made by it
with respect to the Agreement is final and binding on all persons.

18. Plan Governs. The terms of this Agreement shall be subject to the terms of
the Plan, a copy of which may be obtained by the Participant from the office of
the Secretary of the Company. The Plan is hereby incorporated herein by
reference into and forms a part of this Agreement.

 

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