Foster Wheeler Ltd. Omnibus Incentive Plan
 
Effective May 9, 2006
 

 
 

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Contents
 

           
Article 1.
Establishment, Purpose, and Duration
1
Article 2.
Definitions
1
Article 3.
Administration
7
Article 4.
Shares Subject to This Plan and Maximum Awards
8
Article 5.
Eligibility and Participation
10
Article 6.
Stock Options
10
Article 7.
Stock Appreciation Rights
13
Article 8.
Restricted Stock and Restricted Stock Units
15
Article 9.
Performance Units/Performance Shares
18
Article 10.
Cash-Based Awards and Other Stock-Based Awards
20
Article 11.
Forfeiture of Awards.
22
Article 12.
Transferability of Awards
23
Article 13.
Performance Measures
23
Article 14.
Director Awards
25
Article 15.
Dividend Equivalents
25
Article 16.
Beneficiary Designation
25
Article 17.
Rights of Participants
26
Article 18.
Change in Control
26
Article 19.
Amendment, Modification, Suspension, and Termination
27
Article 20.
Withholding
27
Article 21.
Successors
28
Article 22.
General Provisions
28

 
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Foster Wheeler Ltd.
 
Omnibus Incentive Plan
 
Article 1. Establishment, Purpose, and Duration
1.1 Establishment. Foster Wheeler Ltd., a Bermuda company (hereinafter referred
to as the “Company”), establishes an incentive compensation plan known as the
Foster Wheeler Ltd. Omnibus Incentive Plan (hereinafter referred to as the
“Plan”), as set forth in this document. The Plan supercedes and replaces the
Foster Wheeler Ltd. 1995 Stock Option Plan, the Directors Stock Option Plan, the
2004 Stock Option Plan, and the Management Restricted Stock Plan (the “Prior
Plans”), except that the Prior Plans shall remain in effect until the awards
granted under such plans have been exercised, forfeited, are otherwise
terminated, or any and all restrictions lapse, as the case may be, in accordance
with the terms of such awards.
 
This Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Cash-Based Awards, and Other Stock-Based
Awards.
 
This Plan shall become effective upon shareholder approval (the “Effective
Date”) and shall remain in effect as provided in Section 1.3 hereof.
 
1.2 Purpose of this Plan. The purpose of this Plan is to provide a means whereby
designated Employees, Directors, and Third-Party Service Providers 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 this 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 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 ownership of Shares, thereby strengthening their concern for the
welfare of the Company.
 
1.3 Duration of this Plan. Unless sooner terminated as provided herein, this
Plan shall terminate ten (10) years from the Effective Date, e.g. on the day
before the tenth (10th) anniversary of the Effective Date. After this Plan is
terminated, no Awards may be granted but Awards previously granted shall remain
outstanding in accordance with their applicable terms and conditions and this
Plan’s terms and conditions. Notwithstanding the foregoing, no Incentive Stock
Options may be granted more than ten (10) years after the earlier of: (a)
adoption of this Plan by the Board, or (b) the Effective Date.
 
Article 2. Definitions
Whenever used in this Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
 

 
(a)
“Affiliate” shall mean any corporation or other entity (including, but not
limited to, a partnership or a limited liability company) that is affiliated
with the Company through stock or equity ownership or otherwise, and is
designated as an Affiliate for purposes of this Plan by the Committee.

 

 
(b)
“Annual Award Limit” or “Annual Award Limits” have the meaning set forth in
Section 4.3.

 

 
(c)
“Applicable Laws” means the legal requirements relating to the administration of
equity plans or the issuance of share capital by a company, including under the
laws of Bermuda, applicable U.S. state corporate laws, U.S. federal and
applicable state securities laws, other U.S. federal and state laws, the Code,
any stock exchange rules and regulations that may from time to time be
applicable to the Company, and the applicable laws, rules and regulations of any
other country or jurisdiction where Awards are granted under the Plan, as such
laws, rules, regulations, interpretations and requirements may be in place from
time to time.

 
 
 
 

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(d)
“Award” means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units,
Cash-Based Awards, or Other Stock-Based Awards, in each case subject to the
terms of this Plan.

 

 
(e)
“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 or electronic statement
issued by the Company to a Participant describing the terms and provisions of
such Award, including in each case any amendment or modification thereof. The
Committee may provide for the use of electronic, Internet, or other non-paper
Award Agreements, and the use of electronic, Internet, or other non-paper means
for the acceptance thereof and actions thereunder by a Participant.

 

 
(f)
“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.

 

 
(g)
“Board” or “Board of Directors” means the Board of Directors of the Company.

 

 
(h)
“Cash-Based Award” means an Award, denominated in cash, granted to a Participant
as described in Article 10.

 

 
(i)
“Cause” means, unless otherwise specified in an applicable employment agreement
between the Company and a Participant (for the avoidance of doubt, employment
agreements entered into with Affiliates or Subsidiaries of the Company shall not
be deemed to be employment agreements with the Company), with respect to any
Participant:

 

 
(i)
Conviction of a felony;

 

 
(ii)
Actual or attempted theft or embezzlement of Company, any Subsidiary, or any
Affiliate assets;

 

 
(iii)
Use of illegal drugs;

 

 
(iv)
Material breach of an employment agreement between the Company, Affiliate or
Subsidiary, as the case may be, and the Participant that the Participant has not
cured within thirty (30) days after the Company, Affiliate or Subsidiary, as
applicable, has provided the Participant notice of the material breach which
shall be given within sixty (60) days of the Company’s, Affiliate’s or
Subsidiary’s, as applicable, knowledge of the occurrence of the material breach;

 

 
(v)
Commission of an act of moral turpitude that in the judgment of the Committee
can reasonably be expected to have an adverse effect on the business,
reputation, or financial situation of the Company, any Subsidiary, or any
Affiliate and/or the ability of the Participant to perform his or her duties;

 

 
(vi)
Gross negligence or willful misconduct in performance of the Participant’s
duties;

 

 
(vii)
Breach of fiduciary duty to the Company, any Subsidiary, or any Affiliate; or

 

 
(viii)
Willful refusal to perform the duties of the Participant’s titled position.

 

 
(j)
“Change in Control” means, unless otherwise specified in an applicable
employment agreement between the Company and a Participant (for the avoidance of
doubt, employment agreements entered into with Affiliates or Subsidiaries of the
Company shall not be deemed to be employment agreements with the Company),

 
 
 
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(i)
The acquisition by any individual, entity, or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of Beneficial
Ownership of voting securities of the Company where such acquisition causes such
Person to own twenty percent (20%) 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 paragraph (i), the following
acquisitions shall not be deemed to result in a Change in Control: (A) any
acquisition directly from the Company or any corporation or other legal entity
controlled, directly or indirectly, by the Company, (B) any acquisition by the
Company or any corporation or other legal entity controlled, directly or
indirectly, by the Company, (C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation or
other legal entity controlled, directly or indirectly, by the Company, or (D)
any acquisition by any corporation pursuant to a transaction that complies with
clauses (A), (B), and (C) of paragraph (iii) below; and provided, further, that
if any Person’s Beneficial Ownership of the Outstanding Company Voting
Securities reaches or exceeds twenty percent (20%) as a result of a transaction
described in clause (A) or (B) above, and such Person subsequently acquires
Beneficial Ownership of additional voting securities of the Company, such
subsequent acquisition shall be treated as an acquisition that causes such
Person to own twenty percent (20%) or more of the Outstanding Company Voting
Securities;

 

 
(ii)
Individuals who, as of the date hereof, constitute the Board (such individuals,
the “Incumbent Board”) cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a 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 occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

 

 
(iii)
The consummation of a reorganization, merger, amalgamation or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (“Business Combination”) or, if consummation of such Business
Combination is subject to the consent of any government or governmental agency,
the obtaining of such consent (either explicitly or implicitly by consummation);
excluding, however, such a Business Combination pursuant to which (A) all or
substantially all of the individuals and entities who were the Beneficial Owners
of the Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than sixty percent
(60%) of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that 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) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Voting
Securities, (B) no Person (excluding any (x) corporation owned, directly or
indirectly, by the Beneficial Owner of the Outstanding Company Voting Securities
as described in clause (A) immediately preceding, or (y) employee benefit plan
(or related trust) of the Company or such corporation resulting from such
Business Combination, or any of their respective subsidiaries) Beneficially
Owns, directly or indirectly, twenty percent (20%) or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

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

 

 
(k)
“Change-in-Control Price” means the highest price per Share offered in
conjunction with any transaction resulting in a Change in Control (as determined
in good faith by the Committee if any part of the offered price is payable other
than in cash) or, in the case of a Change in Control occurring solely by reason
of events not related to a transfer of Shares, the highest Fair Market Value of
a Share on any of the thirty (30) consecutive trading days ending on the last
trading day before the Change in Control occurs.

 

 
(l)
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time. For purposes of this Plan, references to sections of the Code shall be
deemed to include references to any applicable regulations thereunder and any
successor or similar provision, as well as any applicable interpretative
guidance issued related thereto.

 

 
(m)
“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. If the Committee does not exist or cannot
function for any reason, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee.

 

 
(n)
“Company” means Foster Wheeler Ltd., a Bermuda company, and any successor
thereto as provided in Article 21 herein.

 

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

 

 
(p)
“Director” means any individual who is a member of the Board of Directors of the
Company and who is not an Employee.

 

 
(q)
“Disability” means, unless otherwise specified in an applicable employment
agreement between the Company and a Participant (excluding any agreements
entered into with Affiliates or Subsidiaries of the Company), (i) in the case of
an Employee, the Employee qualifying for long-term disability benefits under any
long-term disability program sponsored by the Company, Affiliate or Subsidiary
in which the Employee participates, and (ii) in the case of a Director or
Third-Party Service Provider, the inability of the Director or Third-Party
Service Provider to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death, or which has lasted or can be expected to last for a continuous
period of not less than 12 months, as determined by the Committee, based upon
medical evidence and in accordance with Code Section 22(e)(3).

 

 
(r)
“Effective Date” has the meaning set forth in Section 1.1.

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

 

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

 

 
(u)
“Fair Market Value” or “FMV” means the closing price 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.

 

 
(v)
“Full-Value Award” means an Award other than in the form of an ISO, NQSO, or
SAR, and which is settled by the issuance of fully paid Shares.

 

 
(w)
“Grant Date” means the date on which the Committee approves the grant of an
Award by Committee action or such later date as specified in advance by the
Committee.

 

 
(x)
“Grant Price” means the price established when the Committee approves the grant
of an SAR pursuant to Article 7, used to determine whether there is any payment
due upon exercise of the SAR.

 

 
(y)
“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.

 

 
(z)
“Insider” means 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 or Committee in
accordance with Section 16 of the Exchange Act.

 

 
(aa)
“Involuntary Termination” means the Company’s, Affiliate’s and/or Subsidiary’s
termination of a Participant’s employment or service other than for Cause.

 

 
(bb)
“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.

 

 
(cc)
“Non-Tandem SAR” means an SAR that is granted independently of any Option, as
described in Article 7.

 

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

 

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

 

 
(ff)
“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.

 
 
 
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(gg)
“Participant” means any eligible individual as set forth in Article 5 to whom an
Award is granted.

 

 
(hh)
“Performance-Based Compensation” means compensation under an Award that is
intended to satisfy the requirements of Code Section 162(m) for certain
performance-based compensation paid to Covered Employees. Notwithstanding the
foregoing, nothing in this Plan shall be construed to mean that an Award which
does not satisfy the requirements for performance-based compensation under Code
Section 162(m) does not constitute performance-based compensation for other
purposes, including Code Section 409A.

 

 
(ii)
“Performance-Based Exception” means the exception for Performance-Based
Compensation from the tax deductibility limitations of Code Section 162(m).

 

 
(jj)
“Performance Measures” means measures as described in Article 13 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.

 

 
(kk)
“Performance Period” means the period of time during which the performance goals
must be met in order to determine the degree of payout and/or vesting with
respect to an Award.

 

 
(ll)
“Performance Share” means an Award under Article 9 herein and subject to the
terms of this Plan, denominated in fully paid Shares, the value of which at the
time it is payable is determined as a function of the extent to which
corresponding performance criteria or Performance Measure(s), as applicable,
have been achieved.

 

 
(mm)
“Performance Unit” means an Award under Article 9 herein and subject to the
terms of this Plan, denominated in units, the value of which at the time it is
payable is determined as a function of the extent to which corresponding
performance criteria or Performance Measure(s), as applicable, have been
achieved.

 

 
(nn)
“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 the occurrence of
other events as determined by the Committee, in its discretion) by the exercise
of the Company’s right to repurchase such Restricted Stock or Restricted Stock
Units, as provided in Article 8.

 

 
(oo)
“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.

 

 
(pp)
“Plan” means the Foster Wheeler Ltd. Omnibus Incentive Plan.

 

 
(qq)
“Plan Year” means the Company’s fiscal year.

 

 
(rr)
“Prior Plans” mean, collectively: (i) the Foster Wheeler Ltd. 1995 Stock Option
Plan; (ii) the Directors Stock Option Plan; (iii) the 2004 Stock Option Plan;
and (iv) the Management Restricted Stock Plan.

 

 
(ss)
“Restricted Stock” means an Award granted to a Participant pursuant to Article
8.

 

 
(tt)
“Resignation for Good Reason” means, unless otherwise specified in an applicable
employment agreement between the Company and a Participant (for the avoidance of
doubt, employment agreements entered into with Affiliates or Subsidiaries of the
Company shall not be deemed to be employment agreements with the Company), any
of the following occurs without the Participant’s consent:

 
 
 
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(i)
material diminution in title, duties, responsibilities or authority;

 

 
(ii)
reduction of base salary and benefits except for across-the-board changes for
Employees at the Participant’s level;

 

 
(iii)
exclusion from executive benefit/compensation plans;

 

 
(iv)
relocation of the Participant’s principal business location by the Participant’s
employer (the Company, Affiliate, or Subsidiary, as the case may be) of greater
than fifty (50) miles;

 

 
(v)
material breach of the Participant’s employment agreement with the Company,
Affiliate or Subsidiary, as the case may be, that the Company, Affiliate or
Subsidiary, as applicable, has not cured within thirty (30) days after the
Participant has provided the Company, Affiliate or Subsidiary, as applicable,
notice of the material breach which shall be given within sixty (60) days of the
Participant’s knowledge of the occurrence of the material breach; or

 

 
(vi)
resignation in compliance with applicable law or rules of professional conduct.

 

 
(uu)
“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 Grant
Date.

 

 
(vv)
“Retirement” means termination of employment by the Participant after the
Participant has attained age 65.

 

 
(ww)
“Share” means a common share of the Company, US $.01 par value per share.

 

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

 

 
(yy)
“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.

 

 
(zz)
“Tandem SAR” means an SAR that is granted in connection with a related Option
pursuant to Article 7, 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 forfeited).

 

 
(aaa)
“Third-Party Service Provider” means any consultant, agent, advisor, or
independent contractor who renders services to the Company, any Subsidiary, or
an Affiliate that: (i) are not in connection with the offer or sale of the
Company’s securities in a capital raising transaction; and (ii) do not directly
or indirectly promote or maintain a market for the Company’s securities.

 
Article 3. Administration
 
 
 
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3.1 General. The Committee shall be responsible for administering this Plan,
subject to this 0 and the other provisions of this Plan. The Committee shall
consist of not less than two (2) Directors who are both non-employee directors,
within the meaning of Rule 16b-3 of the Exchange Act, and “outside directors,”
as defined in Treasury Regulation Section 1.162-27; provided, however, that if
at any time any member of the Committee is not an outside director, as so
defined, the Committee may establish a subcommittee, consisting of all members
who are outside directors, for all purposes of any Award to a Covered Employee,
unless the Committee determines that such an Award is not intended to qualify
for the Performance-Based Exception. The Committee may employ attorneys,
consultants, accountants, agents, and other individuals, any of whom may be an
Employee, and the Committee, the Company, and its officers and Directors shall
be entitled to rely upon the advice, opinions, or valuations of any such
individuals. All actions taken and all interpretations and determinations made
by the Committee shall be final and binding upon the Participants, the Company,
and all other interested individuals.
 
3.2 Authority of the Committee. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of this Plan and any
Award Agreement or other agreement or document ancillary to or in connection
with this Plan, to determine eligibility for Awards and to adopt such rules,
regulations, forms, instruments, and guidelines for administering this Plan as
the Committee may deem necessary or proper. Such authority shall include, but
not be limited to, selecting Award recipients, establishing all Award terms and
conditions (including the terms and conditions set forth in Award Agreements),
granting Awards as an alternative to or as the form of payment for grants or
rights earned or due under compensation plans or arrangements of the Company,
construing any provision of the Plan or any Award Agreement, and, subject to
Article 19, adopting modifications and amendments to this Plan or any Award
Agreement, including without limitation, accelerating the vesting of any Award
or extending the post-termination exercise period of an Award (subject to the
limitations of Code Section 409A), and any other modifications or amendments
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.
 
Notwithstanding the foregoing, members of the Board or the Committee who are
either eligible for Awards or have been granted Awards may vote on any and all
matters, including matters affecting the administration of the Plan or the grant
of Awards pursuant to the Plan. However, no such member shall act upon the
granting of a specific Award to himself or herself, but any such member may be
counted in determining the existence of a quorum at any meeting of the Board or
the Committee during which action is taken with respect to the granting of an
Award to him or her.
 
3.3 Delegation. The Committee may delegate to one or more of its members or to
one or more officers of the Company, and/or its Subsidiaries and Affiliates or
to one or more agents or advisors such administrative duties or powers as it may
deem advisable, and the Committee or any individuals to whom it has delegated
duties or powers as aforesaid may employ one or more individuals to render
advice with respect to any responsibility the Committee or such individuals may
have under this Plan. The Committee may, by resolution, authorize one or more
officers of the Company to do one or both of the following on the same basis as
can the Committee: (a) designate Employees to be recipients of Awards; (b)
determine the size of any such Awards; provided, however, (i) the Committee
shall not delegate such responsibilities to any such officer for Awards granted
to an Employee who is considered an Insider; (ii) the resolution providing such
authorization sets forth the total number of Awards such officer(s) may grant;
and (iii) the officer(s) shall report periodically to the Committee regarding
the nature and scope of the Awards granted pursuant to the authority delegated.
 
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Article 4. Shares Subject to This 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 grant to Participants under this Plan (the “Share
Authorization”) shall be:

 

 
(i)
Four million eighty-thousand (4,080,000) Shares; plus

 

 
(ii)
(A) the number of Shares (not to exceed 700,000) which remained available for
grant under the Company’s Prior Plans as of the Effective Date; and (B) the
number of Shares (not to exceed 5,000,000) subject to outstanding awards as of
the Effective Date under the Prior Plans that on or after the Effective Date
cease for any reason to be subject to such awards (other than by reason of
exercise or settlement of the awards to the extent they are exercised for or
settled in vested and nonforfeitable Shares).

 
 
 
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(b)
All Shares of the Share Authorization may be granted as Full-Value Awards.

 

 
(c)
The maximum number of Shares of the Share Authorization that may be issued
pursuant to ISOs under this Plan shall be four million seven hundred eighty
thousand (4,780,000) Shares.

 

 
(d)
The maximum number of Shares of the Share Authorization that may be granted to
Directors shall be 500,000 Shares.

 
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 this Plan. Moreover,
if the Option Price of any Option granted under this Plan is satisfied by
tendering Shares to the Company (by either actual delivery or by attestation and
subject to Section 6.6), or if an SAR is exercised, only the number of Shares
issued, net of the Shares tendered, if any, will be delivered for purposes of
determining the maximum number of Shares available for delivery under this Plan.
The Shares available for issuance under this Plan may be authorized and unissued
Shares or Shares available on 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
this Plan:
 

 
(a)
Options. The maximum aggregate number of Shares subject to Options granted in
any one Plan Year to any one Participant shall be 500,000, as adjusted pursuant
to Sections 4.4 and/or 19.2.

 

 
(b)
SARs. The maximum number of Shares subject to Stock Appreciation Rights granted
in any one Plan Year to any one Participant shall be 500,000, as adjusted
pursuant to Sections 4.4 and/or 19.2.

 

 
(c)
Restricted Stock Units or Restricted Stock. The maximum aggregate grant with
respect to Awards of Restricted Stock Units or Restricted Stock that a
Participant may receive in any one Plan Year shall be 300,000 Shares, as
adjusted pursuant to Sections 4.4 and/or 19.2, or equal to the value of 300,000
Shares, as adjusted pursuant to Sections 4.4 and/or 19.2.

 

 
(d)
Performance Units or Performance Shares. The maximum aggregate Award of
Performance Units or Performance Shares that a Participant may receive in any
one Plan Year shall be 300,000 Shares, as adjusted pursuant to Sections 4.4
and/or 19.2, or equal to the value of 300,000 Shares, as adjusted pursuant to
Sections 4.4 and/or 19.2, determined as of the date of vesting or payout, as
applicable.

 

 
(e)
Cash-Based Awards. The maximum aggregate amount awarded or credited with respect
to Cash-Based Awards to any one Participant in any one Plan Year may not exceed
the greater of the value of $5,000,000 or 300,000 Shares, as adjusted pursuant
to Sections 4.4 and/or 19.2, determined as of the date of vesting or payout, as
applicable.

 

 
(f)
Other Stock-Based Awards. The maximum aggregate grant with respect to Other
Stock-Based Awards pursuant to Section 10.2 in any one Plan Year to any one
Participant shall be 300,000 Shares, as adjusted pursuant to Sections 4.4 and/or
19.2.

 
4.4 Adjustments in Authorized Shares. In the event of any corporate event or
transaction (including, but not limited to, a change in the authorized number of
Shares of the Company or the capitalization of the Company) such as an
amalgamation, a merger, consolidation, reorganization, recapitalization,
separation, partial or complete liquidation, stock dividend, stock split,
reverse stock split, split up, spin-off, division, consolidation or other
distribution of stock or property of the Company, combination of Shares,
exchange of Shares, dividend in kind, or other like change in capital structure,
number of issued Shares 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 this Plan, shall substitute or adjust, as
applicable, the number and kind of Shares that may be issued under this Plan or
under particular forms of Awards, the number and kind of Shares subject to
outstanding Awards, the Option Price or Grant Price applicable to outstanding
Awards, the Annual Award Limits, and other value determinations applicable to
outstanding Awards.
 
 
 
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The Committee, in its sole discretion, may also make appropriate adjustments in
the terms of any Awards under this 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 this Plan.
 
Subject to the provisions of Article 19 and notwithstanding anything else herein
to the contrary, without affecting the number of Shares reserved or available
hereunder, the Committee may authorize the issuance or assumption of benefits
under this Plan in connection with any amalgamation, merger, consolidation,
acquisition of property or stock, or reorganization upon such terms and
conditions as it may deem appropriate (including, but not limited to, a
conversion of equity awards into Awards under this Plan in a manner consistent
with paragraph 53 of FASB Interpretation No. 44 or subsequent accounting
guidance), subject to compliance with the rules under Code Sections 422 and 424,
as and where applicable. The Committee shall provide to Participants reasonable
written notice (which may include, without limit, notice by electronic means)
within a reasonable time of any such determinations it makes.
 
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 this 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.
 
5.3 Leaves of Absence. Notwithstanding any other provision of the Plan to the
contrary, for purposes of determining Awards granted hereunder, a Participant
shall not be deemed to have incurred a termination of employment if such
Participant is placed on military or sick leave or such other leave of absence
which is considered as continuing intact the employment relationship with the
Company, any Subsidiary, or any Affiliate. In such a case, the employment
relationship shall be deemed to continue until the date when a Participant’s
right to reemployment shall no longer be guaranteed either by law or contract.
 
5.4 Transfer of Service. Notwithstanding any other provision of the Plan to the
contrary, for purposes of determining Awards granted hereunder, a Participant
shall not be deemed to have incurred a termination of employment if the
Participant’s status as an Employee, Director, or Third-Party Service Provider
terminates and the Participant is then, or immediately thereafter becomes, an
eligible individual due to another status or relationship with the Company, any
Subsidiary, or any Affiliate.
 
Article 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of this Plan, Options
may be granted to Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the Committee, in its sole
discretion; provided that ISOs may be granted only to eligible Employees of the
Company or of any parent or subsidiary corporation (as permitted under Code
Sections 422 and 424).
 
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 this
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 determined by the Committee in its sole discretion and shall be
specified in the Award Agreement; provided, however, the Option Price must be at
least equal to one hundred percent (100%) of the FMV of the Shares as determined
on the Grant Date. With respect to a Participant who owns, directly or
indirectly, more than ten percent (10%) of the total combined voting power of
all classes of the stock of the Company, any Subsidiary, or any Affiliate, the
Option Price of Shares subject to an ISO shall be at least equal to one hundred
and ten percent (110%) of the Fair Market Value of such Shares on the ISO’s
Grant Date. In any event, the Option Price shall not be less than the aggregate
par value of the Shares covered by the Option.
 
6.4 Term of Options. Each Option granted to a Participant shall expire at such
time as the Committee shall determine when the Committee approves the grant;
provided, however, no Option shall be exercisable later than the day before the
tenth (10th) anniversary of the Grant Date. Notwithstanding the foregoing, with
respect to ISOs, in the case of a Participant who owns, directly or indirectly,
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, any Subsidiary, or an Affiliate, no such ISO shall be
exercisable later than the day before the fifth (5th) anniversary of the Grant
Date.
 
6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which terms and restrictions need
not be the same for each grant or for each Participant. Notwithstanding the
foregoing, the Fair Market Value of Shares to which ISOs are exercisable for the
first time by any Participant during any calendar year shall not exceed one
hundred thousand dollars ($100,000). Any ISOs that become exercisable in excess
of such amount shall be deemed Nonqualified Stock Options to the extent of such
excess. In addition, in order to exercise any ISOs granted under this 0, the
Participant must be an Employee of the Company, any Subsidiary, or any Affiliate
from the Grant Date until at least three months before the date the ISO is
exercised.
 
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, in full, to the Company, under any of the following
methods as determined by the Committee, in its discretion: (a) in cash or its
equivalent; (b) by tendering (either by actual delivery or attestation) to the
Company for repurchase previously acquired Shares having an aggregate Fair
Market Value at the time of exercise equal to the Option Price together with an
assignment of the proceeds of the Share repurchase to pay the Option Price
(provided that except as otherwise determined by the Committee, the Shares that
are tendered must have been held by the Participant for at least six (6) months
(or such other period, if any, as the Committee may permit) prior to their
tender to satisfy the Option Price if acquired under this Plan or any other
compensation plan maintained by the Company or have been purchased on the open
market and further provided that any such repurchase of Shares shall be subject
to the Companies Act 1981 of Bermuda); (c) by a cashless (broker-assisted)
exercise; (d) by a combination of (a), (b) and/or (c); or (e) any other method
approved or accepted by the Committee in its sole discretion.
 
Subject to any governing rules or regulations, as soon as practicable after
receipt of written notification of exercise and full payment (including
satisfaction of any applicable tax withholding), the Company shall deliver to
the Participant evidence of book entry Shares, or upon the Participant’s
request, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).
 
Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars.
 
6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this 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.
 
 
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6.8 Termination of Employment, Service as a Director or Third-Party Service
Provider. 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 employment or services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be, subject to Sections 5.3
and 5.4. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on, among other things, the
reasons for termination, or reasons relating to breach or threatened breach of
restrictive covenants to which the Participant is subject, if any. Subject to
Article 18, in the event a Participant’s Award Agreement does not set forth such
provisions, the following provisions shall apply:
 

 
(a)
Involuntary Termination or Resignation for Good Reason. These termination events
apply only to Participants who are Employees or Third-Party Service Providers.
In the event that a Participant’s employment, or service as a Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates by
reason of an Involuntary Termination or Resignation for Good Reason by the
Participant, to the extent that an Option is not then exercisable, the Option
shall immediately become vested and exercisable with respect to all Shares
covered by the Participant’s Option, and the Option shall remain exercisable
until the earlier of (A) the expiration of the term of the Option, or (B) six
(6) months (three (3) months for ISOs) after the date of such termination.

 

 
(b)
Death or Disability. These termination events apply to all Participants. In the
event that a Participant’s employment, or service as a Director or Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates by
reason of death or Disability, to the extent that an Option is not then
exercisable, the Option shall immediately become vested and exercisable with
respect to all Shares covered by the Participant’s Option, and the Option shall
remain exercisable until the earlier of (A) the expiration of the term of the
Option, or (B) 12 months after the date of such termination. In the case of the
Participant’s death, the Participant’s beneficiary or estate may exercise the
Option.

 

 
(c)
Retirement. This termination event shall apply only to Participants who are
Employees. In the event that a Participant’s employment terminates by reason of
Retirement from the Company, Affiliate and/or any Subsidiary, to the extent an
Option is not then exercisable, the Option shall become vested and exercisable
as to a number of Shares determined as follows: (i) the total number of Shares
covered by the Option times (ii) a ratio, the numerator of which is the total
number of months of employment from the Grant Date of the Option to the end of
the month in which such termination occurs and the denominator of which is the
total number of months of vesting required for a fully vested Option as set
forth in the Award Agreement. The vested portion of the Option, as determined
under this subsection (c), shall remain exercisable until the earlier of (A) the
expiration of the term of the Option, or (B) 36 months after the date of such
termination. The unvested portion of the Option shall be immediately forfeited.

 

 
(d)
Termination for Cause. This termination event applies to all Participants. In
the event that a Participant’s employment, or service as a Director or
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for Cause, all Options granted to such Participant shall expire
immediately and all rights to purchase Shares (vested or nonvested) under the
Options shall cease upon such termination. In addition, the provisions of 0
shall apply.

 

 
(e)
Other Termination. This termination event applies to all Participants, as
follows:

 

 
(i)
In the event that a Participant’s employment, or service as a Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates
for any reason other than those set forth in subsections (a) through (d) above,
all then vested and exercisable Options shall remain exercisable from the date
of such termination until the earlier of (A) the expiration of the term of the
Option, or (B) 30 days after the date of such termination. Such Options shall
only be exercisable to the extent that they were exercisable as of such
termination date and all unvested Options shall be immediately forfeited.

 
 
 
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(ii)
In the event that a Participant’s service as a Director with the Company,
Affiliate and/or any Subsidiary terminates for any reason other than those set
forth in subsections (b) through (d) above, to the extent the Option is not then
exercisable, the Option shall become vested and exercisable as to a number of
Shares determined as follows: (A) the total number of Shares covered by the
Option times (B) a ratio, the numerator of which is the total number of months
of service from the Grant Date of the Option to the end of the month in which
such termination occurs and the denominator of which is the total number of
months of vesting required for a fully vested Option as set forth in the Award
Agreement. The vested portion of the Option, as determined under this paragraph
(ii) shall remain exercisable from the date of such termination until the
earlier of (x) the expiration of the term of the Option, or (y) 30 days after
the date of such termination. The unvested portion of the Option shall be
immediately forfeited.

 
6.9 Notification of Disqualifying Disposition. If any Participant shall make any
disposition of Shares issued pursuant to the exercise of an ISO under the
circumstances described in Code Section 421(b) (relating to certain
disqualifying dispositions), such Participant shall notify the Company of such
disposition within ten (10) calendar days thereof.
 
Article 7. Stock Appreciation Rights
7.1 Grant of SARs. Subject to the terms and conditions of this Plan, SARs may be
granted to Participants at any time and from time to time as shall be determined
by the Committee. The Committee may grant Non-Tandem SARs, Tandem SARs, or any
combination of these forms of SARs.
 
Subject to the terms and conditions of this Plan, the Committee shall have
complete discretion in determining the number of SARs granted to each
Participant and, consistent with the provisions of this Plan, in determining the
terms and conditions pertaining to such SARs.
 
The Grant Price for each grant of an SAR shall be determined by the Committee
and shall be specified in the Award Agreement. Notwithstanding the foregoing,
the Grant Price of a Non-Tandem SAR on the Grant Date shall be at least equal to
one hundred percent (100%) of the FMV of the Shares as determined on the Grant
Date. The Grant Price of a Tandem SAR on the Grant Date shall equal 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 this 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 day before the tenth (10th) anniversary of the Grant
Date. 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 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 the foregoing, with respect to a Tandem SAR granted in
connection with an ISO: (i) the Tandem SAR shall expire no later than the
expiration of the underlying ISO; (ii) the value of the payout with respect to
the Tandem SAR may be for no more than one hundred percent (100%) of the
difference between the Option Price of the underlying ISO and the Fair Market
Value of the Shares subject to the underlying ISO at the time the Tandem SAR is
exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market
Value of the Shares covered by the ISO exceeds the Option Price of the ISO.
 
 
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7.5 Exercise of Non-Tandem SARs. SARs may be exercised upon whatever terms and
conditions the Committee, in its sole discretion, imposes.
 
7.6 Settlement of SARs. 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, fully paid 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, Service as a Director or Third-Party Service
Provider. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise the SAR following termination of
the Participant’s employment with or services to the Company, its Affiliates,
and/or its Subsidiaries, as the case may be, subject to Sections 5.3 and 5.4.
Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with Participants, need
not be uniform among all SARs issued pursuant to this Plan, and may reflect
distinctions based on, among other things, the reasons for termination, or
reasons relating to breach or threatened breach of restrictive covenants to
which the Participant is subject, if any. Subject to Article 18, in the event a
Participant’s Award Agreement does not set forth such provisions, the following
provisions shall apply:
 

 
(a)
Involuntary Termination or Resignation for Good Reason. These termination events
apply only to Participants who are Employees or Third-Party Service Providers.
In the event that a Participant’s employment, or service as a Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates by
reason of an Involuntary Termination or Resignation for Good Reason by the
Participant, to the extent that an SAR is not then exercisable, the SAR shall
immediately become vested and exercisable with respect to all Shares covered by
the Participant’s SAR, and the SAR shall remain exercisable until the earlier of
(A) the expiration of the term of the SAR, or (B) six (6) months (three (3)
months for SARs granted in tandem with ISOs) after the date of such termination.

 

 
(b)
Death or Disability. These termination events apply to all Participants. In the
event that a Participant’s employment, or service as a Director or Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates by
reason of death or Disability, to the extent that an SAR is not then
exercisable, the SAR shall immediately become vested and exercisable with
respect to all Shares covered by the Participant’s SAR, and the SAR shall remain
exercisable until the earlier of (A) the expiration of the term of the SAR, or
(B) 12 months after the date of such termination. In the case of the
Participant’s death, the Participant’s beneficiary or estate may exercise the
SAR.

 

 
(c)
Retirement. This termination event applies only to Participants who are
Employees. In the event that a Participant’s employment terminates by reason of
Retirement from the Company, Affiliate and/or any Subsidiary, to the extent an
SAR is not then exercisable, the SAR shall become vested and exercisable as to a
number of Shares determined as follows: (i) the total number of Shares covered
by the SAR times (ii) a ratio, the numerator of which is the total number of
months of employment from the Grant Date of the SAR to the end of the month in
which such termination occurs and the denominator of which is the total number
of months of vesting required for a fully vested SAR as set forth in the Award
Agreement. The vested portion of the SAR, as determined under this subsection
(c), shall remain exercisable until the earlier of (A) the expiration of the
term of the SAR, or (B) 36 months after the date of such termination. The
unvested portion of the SAR shall be immediately forfeited.

 
 
 
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(d)
Termination for Cause. This termination event applies to all Participants. In
the event that a Participant’s employment, or service as a Director or
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for Cause, all SARs granted to such Participant shall expire
immediately and all rights to purchase Shares (vested or nonvested) under the
SARs shall cease upon such termination. In addition, the provisions of Article
11 shall apply.

 

 
(e)
Other Termination. This termination event applies to all Participants, as
follows:

 

 
(i)
In the event that a Participant’s employment, or service as a Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates
for any reason other than those set forth in subsections (a) through (d) above,
all then vested and exercisable SARs shall remain exercisable from the date of
such termination until the earlier of (A) the expiration of the term of the SAR,
or (B) 30 days after the date of such termination. Such SARs shall only be
exercisable to the extent that they were exercisable as of such termination date
and all unvested SARs shall be immediately forfeited.

 

 
(ii)
In the event that a Participant’s service as a Director with the Company,
Affiliate and/or any Subsidiary terminates for any reason other than those set
forth in subsections (b) through (d) above, to the extent the SAR is not then
exercisable, the SAR shall become vested and exercisable as to a number of
Shares determined as follows: (A) the total number of Shares covered by the SAR
times (B) a ratio, the numerator of which is the total number of months of
service from the Grant Date of the SAR to the end of the month in which such
termination occurs and the denominator of which is the total number of months of
vesting required for a fully vested SAR as set forth in the Award Agreement. The
vested portion of the SAR, as determined under this paragraph (ii) shall remain
exercisable from the date of such termination until the earlier of (x) the
expiration of the term of the SAR, or (y) 30 days after the date of such
termination. The unvested portion of the SAR shall be immediately forfeited.

 
7.8 Other Restrictions. The Committee shall impose such other conditions and/or
restrictions on any Shares received upon exercise of an SAR granted pursuant to
this Plan as it may deem advisable or desirable. These restrictions may include,
but shall not be limited to, a requirement that the Participant hold the Shares
received upon exercise of 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 this Plan, the Committee, at any time and from time to time,
may grant 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
 
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 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 this Plan as it may deem advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for each Share of
Restricted Stock (which price shall not be less than par value of such Share) 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.
 
 
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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 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.
 
8.4 Certificate Legend. In addition to any legends placed on certificates
pursuant to Section 0, each certificate representing Shares of Restricted Stock
granted pursuant to this 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 the common shares of Foster Wheeler Ltd. represented by
this certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the Foster Wheeler
Ltd. Omnibus Incentive Plan, and in the associated Award Agreement. A copy of
this Plan and such Award Agreement will be provided by Foster Wheeler Ltd.,
without charge, within five (5) days after receipt of a written request
therefor.
 
8.5 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.
 
8.6 Termination of Employment, Service as a Director or Third-Party Service
Provider. Each Award Agreement shall set forth the extent to which the
restrictions placed on Restricted Stock and/or Restricted Stock Units shall
lapse following termination of the Participant’s employment with or services to
the Company, its Affiliates, and/or its Subsidiaries, as the case may be,
subject to Sections 5.3 and 5.4. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with each Participant, need not be uniform among all Shares of Restricted
Stock or Restricted Stock Units issued pursuant to this Plan, and may reflect
distinctions based on, among other things, the reasons for termination, or
reasons relating to breach or threatened breach of restrictive covenants to
which the Participant is subject, if any. Subject to Article 18, in the event a
Participant’s Award Agreement does not set forth such provisions, the following
provisions shall apply:
 

 
(a)
Involuntary Termination or Resignation for Good Reason. These termination events
apply only to Participants who are Employees or Third-Party Service Providers.

 

 
(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment or service, as the case may be, with
the Company, Affiliate and/or any Subsidiary terminates by reason of an
Involuntary Termination or Resignation for Good Reason by the Participant, to
the extent any Shares of Restricted Stock or Restricted Stock Units, as the case
may be, are not then vested, all Shares of Restricted Stock or all Restricted
Stock Units, as the case may be, shall immediately become fully vested on the
date of such termination and any restrictions shall lapse.

 

 
(ii)
If the Award granted to Participants who are Employees is intended to qualify
for the Performance-Based Exception, the Award shall become fully vested and any
restrictions shall lapse upon attainment of the applicable Performance Measures.

 

 
(b)
Death or Disability.  These termination events apply to all Participants.

 
 
 
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(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment, or service as a Director or
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates by reason of death or Disability, to the extent any Shares of
Restricted Stock or Restricted Stock Units, as the case may be, are not then
vested, all Shares of Restricted Stock or all Restricted Stock Units, as the
case may be, shall immediately become fully vested on the date of such
termination and any restrictions shall lapse.

 

 
(ii)
If the Award granted to Participants who are Employees is intended to qualify
for the Performance-Based Exception, the Award shall become fully vested and any
restrictions shall lapse upon attainment of the applicable Performance Measures.

 

 
(c)
Retirement. This termination event applies only to Participants who are
Employees.

 

 
(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment terminates by reason of Retirement
from the Company, Affiliate and/or any Subsidiary, to the extent any Award
covering Shares of Restricted Stock or Restricted Stock Units, as the case may
be, are not then vested, the Award shall become vested on the date of such
termination (for Shares of Restricted Stock, upon attainment of age 65
regardless of whether there is a termination of employment) and any restrictions
shall lapse as to a number of Shares or Units, as the case may be, determined as
follows: (A) the total number of Shares of Restricted Stock or Restricted Units,
as applicable, times (B) a ratio, the numerator of which is the total number of
months of employment from the Grant Date of the Award to the end of the month in
which the Participant’s termination occurs (for Shares of Restricted Stock,
attainment of age 65 occurs) and the denominator of which is the total number of
months of vesting required for a fully vested Award as set forth in the Award
Agreement.

 

 
(ii)
If the Award is intended to qualify for the Performance-Based Exception, the
Award shall become vested to the extent described in this subsection (c) and any
restrictions on the vested portion shall lapse upon attainment of the applicable
Performance Measures.

 

 
(d)
Termination for Cause. This termination event applies to all Participants. In
the event that a Participant’s employment, or service as a Director or
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for Cause all vested and unvested Shares of Restricted Stock or all
vested and unvested Restricted Stock Units, as the case may be, shall be
forfeited to the Company. In addition, the provisions of Article 11 shall apply.

 

 
(e)
Other Termination. This termination event applies to all Participants, as
follows:

 

 
(i)
In the event that a Participant’s employment, or service as a Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates
for any reason other than as described in subsections (a) through (d), all
unvested Shares of Restricted Stock or all unvested Restricted Stock Units, as
the case may be, shall be immediately forfeited to the Company.

 

 
(ii)
In the event that a Participant’s service as a Director with the Company,
Affiliate and/or any Subsidiary terminates for any reason other than as
described in subsections (b) through (d), to the extent any Award covering
Shares of Restricted Stock or Restricted Stock Units, as the case may be, are
not then vested, the Award shall become vested on the date of such termination
and any restrictions shall lapse as to a number of Shares or Units, as the case
may be, determined as follows: (A) the total number of Shares of Restricted
Stock or Restricted Units, as applicable, times (B) a ratio, the numerator of
which is the total number of months of service from the Grant Date of the Award
to the end of the month in which the Participant’s termination occurs and the
denominator of which is the total number of months of vesting required for a
fully vested Award as set forth in the Award Agreement. The unvested portion of
the Award shall be immediately forfeited to the Company.

 
 
 
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8.7 Forfeiture and Right of Repurchase. In the event that any Shares are
required to be forfeited under any circumstances set forth in this Article 8,
Article 20 or otherwise under this Plan or an Award Agreement, then the Company
shall have the right (but not the obligation) to repurchase any or all of such
forfeited Shares for $0.001 per Share. The Company shall have 90 days from the
date of any event giving rise to forfeiture within which to effect a repurchase
of any or all of the Shares subject to such forfeiture conditions. The Company’s
right to repurchase the Shares is assignable by the Company, in its sole
discretion, to a Subsidiary, Affiliate or other party to whom such rights can be
assigned under Applicable Laws.
 
8.8 Section 83(b) Election. The Committee may provide in an Award Agreement that
the Award of Restricted Stock is conditioned upon the Participant making or
refraining from making an election with respect to the Award under Code
Section 83(b). If a Participant makes an election pursuant to Code Section 83(b)
concerning a Restricted Stock Award, the Participant shall be required to file
promptly a copy of such election with the Company.
 
Article 9. Performance Units/Performance Shares
9.1 Grant of Performance Units/Performance Shares. Subject to the terms and
provisions of this 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 Performance Unit/Performance Shares Agreement. Each Performance Unit and/or
Performance Share grant shall be evidenced by an Award Agreement that shall
specify the number of Performance Shares or the number of Performance Units
granted, the applicable Performance Period, and such other terms and provisions
as the Committee shall determine.
 
9.3 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 Grant Date. The Committee shall set 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.
 
9.4 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.
 
9.5 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 this
Plan, the Committee, in its sole discretion, may pay earned Performance
Units/Performance Shares in the form of cash or in fully paid 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.
 
9.6 Termination of Employment, Service as a Director or Third-Party Service
Provider. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to receive payment for any Performance Units
and/or Performance Shares following termination of the Participant’s employment
with or services to the Company, its Affiliates, and/or its Subsidiaries, as the
case may be, subject to Sections 5.3 and 5.4. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among
all Awards of Performance Units or Performance Shares issued pursuant to this
Plan, and may reflect distinctions based on, among other things, the reasons for
termination, or reasons relating to the breach or threatened breach of
restrictive covenants to which the Participant is subject, if any. Subject to
Article 18, in the event that a Participant’s Award Agreement does not set forth
such termination provisions, the following termination provisions shall apply:
 
 
 
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(a)
Involuntary Termination or Resignation for Good Reason. These termination events
apply only to Participants who are Employees or Third-Party Service Providers.

 

 
(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment or service, as the case may be, with
the Company, Affiliate and/or any Subsidiary terminates by reason of an
Involuntary Termination or Resignation for Good Reason by the Participant, the
Participant shall receive a full payout of the Performance Units and/or
Performance Shares.

 

 
(ii)
If the Award granted to Participants who are Employees is intended to qualify
for the Performance-Based Exception, the Participant shall receive a payout as
determined under this subsection (a) upon attainment of the applicable
Performance Measures.

 

 
(b)
Death or Disability. These termination events apply to all Participants.

 

 
(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment or service, as the case may be, with
the Company, Affiliate and/or any Subsidiary terminates by reason of death or
Disability, the Participant shall receive a full payout of the Performance Units
and/or Performance Shares.

 

 
(ii)
If the Award granted to Participants who are Employees is intended to qualify
for the Performance-Based Exception, the Participant shall receive a payout as
determined under this subsection (b) upon attainment of the applicable
Performance Measures.

 

 
(c)
Retirement. This termination event applies only to Participants who are
Employees.

 

 
(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment with the Company, Affiliate and/or any
Subsidiary, terminates during a Performance Period due to Retirement, the
Participant shall receive a prorated payout of the Performance Units and/or
Performance Shares, unless the Committee determines otherwise. The prorated
payout shall be determined by the Committee, shall be based upon the length of
time that the Participant held the Performance Units and/or Performance Shares
during the Performance Period, and shall further be adjusted based on the
achievement of the pre-established performance goals.

 

 
(ii)
If the Award is intended to qualify for the Performance-Based Exception, the
Participant shall receive a payout as determined under this subsection (c) upon
attainment of the applicable Performance Measures.

 

 
(d)
Termination for Cause. This termination event applies to all Participants. In
the event that a Participant’s employment, or service as a Director or
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for Cause during a Performance Period, all Performance Units and/or
Performance Shares (vested or unvested) shall be immediately forfeited to the
Company. In addition, the provisions of Article 11 shall apply.

 

 
(e)
Other Termination. This termination event applies to all Participants, as
follows:

 
 
 
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(i)
In the event that a Participant’s employment, or service as a Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates
during a Performance Period for any reason other than as described in
subsections (a) through (d), all unvested Performance Units and/or Performance
Shares shall be immediately forfeited to the Company.

 

 
(ii)
In the event that a Participant’s service as a Director with the Company,
Affiliate and/or any Subsidiary terminates during a Performance Period for any
reason other than as described in subsections (b) through (d), to the extent any
Award covering Performance Units and/or Performance Shares are not then vested,
the Award shall become vested on the date of such termination and any
restrictions shall lapse as to a number of Performance Units or Performance
Shares, as the case may be, determined as follows: (A) the total number of
Performance Shares or Performance Units, as applicable, times (B) a ratio, the
numerator of which is the total number of months of service from the Grant Date
of the Award to the end of the month in which the Participant’s termination
occurs and the denominator of which is the total number of months of vesting
required for a fully vested Award as set forth in the Award Agreement. The
unvested portion of the Award shall be immediately forfeited to the Company.

 
9.7 Forfeiture and Right of Repurchase. In the event that any Shares are
required to be forfeited under any circumstances set forth in this Article 9,
Article 20 or otherwise under this Plan or an Award Agreement, then the Company
shall have the right (but not the obligation) to repurchase any or all of such
forfeited Shares for $0.001 per Share. The Company shall have 90 days from the
date of any event giving rise to forfeiture within which to effect a repurchase
of any or all of the Shares subject to such forfeiture conditions. The Company’s
right to repurchase the Shares is assignable by the Company, in its sole
discretion, to a Subsidiary, Affiliate or other party to whom such rights can be
assigned under Applicable Laws.
 
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 as the Committee may
determine.
 
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 fully paid 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 Cash-Based Award or Stock-Based Award Agreement. Each Cash-Based Award or
Stock-Based Award grant shall be evidenced by an Award Agreement that shall
specify the amount of the Cash-Based Award or Stock-Based Award granted and such
other terms and provisions as the Committee shall determine; provided that no
Award Agreement shall provide for the issuance of Shares except on a fully paid
basis.
 
10.4 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, and provided the cash or
services received by the Company in exchange for Shares shall have a value not
less than the aggregate par value of any Shares issued as part of such other
Stock-Based Award.
 
 
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10.5 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 fully paid Shares as the
Committee determines.
 
10.6 Termination of Employment, Service as a Director or Third-Party Service
Provider. 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, subject to Sections 5.3 and 5.4. Such provisions shall be determined in
the sole discretion of the Committee, such provisions may be included in an
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, or
reasons relating to the breach or threatened breach of restrictive covenants to
which the Participant is subject, if any. Subject to Article 18, in the event
that a Participant’s Award Agreement does not set forth such termination
provisions, the following termination provisions shall apply:
 

 
(a)
Involuntary Termination or Resignation for Good Reason. These termination events
apply only to Participants who are Employees or Third-Party Service Providers.

 

 
(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment or service, as the case may be, with
the Company, Affiliate and/or any Subsidiary terminates by reason of an
Involuntary Termination or Resignation for Good Reason by the Participant, the
Participant shall receive a full payout of the Performance Units and/or
Performance Shares.

 

 
(ii)
If the Award granted to Participants who are Employees is intended to qualify
for the Performance-Based Exception, the Participant shall receive a payout as
determined under this subsection (a) upon attainment of the applicable
Performance Measures.

 

 
(b)
Death or Disability. These termination events apply to all Participants.

 

 
(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment or service, as the case may be, with
the Company, Affiliate and/or any Subsidiary terminates by reason of death or
Disability, the Participant shall receive a full payout of the Award.

 

 
(ii)
If the Award granted to Participants who are Employees is intended to qualify
for the Performance-Based Exception, the Participant shall receive a payout as
determined under this subsection (b) upon attainment of the applicable
Performance Measures.

 

 
(c)
Retirement. This termination event applies only to Participants who are
Employees.

 

 
(i)
If the Award is not intended to qualify for the Performance-Based Exception, in
the event that a Participant’s employment with the Company, Affiliate and/or any
Subsidiary, terminates during a Performance Period due to Retirement, the
Participant shall receive a prorated payout of the Award, unless the Committee
determines otherwise. The prorated payout shall be determined by the Committee,
shall be based upon the length of time that the Participant held the Award
during the Performance Period, and shall further be adjusted based on the
achievement of the pre-established performance goals. Unless the Committee
determines otherwise in the event of Retirement, payment of the earned Award
shall be made at the same time as payments are made to Participants who did not
terminate employment during the applicable Performance Period.

 
 
 
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(ii)
If the Award is intended to qualify for the Performance-Based Exception, the
Participant shall receive a payout as determined under this subsection (c) upon
attainment of the applicable Performance Measures.

 

 
(d)
Termination for Cause. This termination event applies to all Participants. In
the event that a Participant’s employment, or service as a Director or
Third-Party Service Provider with the Company, Affiliate and/or any Subsidiary
terminates for Cause the Award (vested or unvested) shall be immediately
forfeited to the Company. In addition, the provisions of Article 11 shall apply.

 

 
(e)
Other Termination. This termination event applies to all Participants, as
follows:

 

 
(i)
In the event that a Participant’s employment, or service as a Third-Party
Service Provider with the Company, Affiliate and/or any Subsidiary terminates
during a Performance Period for any reason other than as described in
subsections (a) through (d), the unvested portion of the Award shall be
immediately forfeited to the Company.

 

 
(ii)
In the event that a Participant’s service as a Director with the Company,
Affiliate and/or any Subsidiary terminates during a Performance Period for any
reason other than as described in subsections (b) through (d), to the extent the
Award is unvested, the Award shall become vested on the date of such termination
and any restrictions shall lapse as to a portion of the Award determined as
follows: (A) the total value of the Award times (B) a ratio, the numerator of
which is the total number of months of service from the Grant Date of the Award
to the end of the month in which the Participant’s termination occurs and the
denominator of which is the total number of months of vesting or the performance
period required for a fully vested Award as set forth in the Award Agreement.
The unvested portion of the Award shall be immediately forfeited to the Company.

 
10.7 Forfeiture and Right of Repurchase. In the event that any Shares are
required to be forfeited under any circumstances set forth in this Article 10,
Article 20 or otherwise under this Plan or an Award Agreement, then the Company
shall have the right (but not the obligation) to repurchase any or all of such
forfeited Shares for $0.001 per Share. The Company shall have 90 days from the
date of any event giving rise to forfeiture within which to effect a repurchase
of any or all of the Shares subject to such forfeiture conditions. The Company’s
right to repurchase the Shares is assignable by the Company, in its sole
discretion, to a Subsidiary, Affiliate or other party to whom such rights can be
assigned under Applicable Laws.
 
Article 11. Forfeiture of Awards.
11.1 General. Notwithstanding anything else to the contrary contained herein,
the Committee in granting any Award shall have the full power and authority to
determine whether, to what extent and under what circumstances such Award shall
be forfeited, cancelled or suspended. Unless an Award Agreement includes
provisions expressly superseding the provisions of this Article 11, the
provisions of this Article 11 shall apply to all Awards. Any such forfeiture
shall be effected by the Company in such manner and to such degree as the
Committee, in its sole discretion, determines, and will in all events (including
as to the provisions of this Article 11) be subject to the Applicable Laws.
 
In order to effect a forfeiture under this Article 11, the Committee may require
that the Participant sell Shares received upon exercise or settlement of an
Award to the Company or to such other person as the Company may designate at
such price and on such other terms and conditions as the Committee in its sole
discretion may require.
 
11.2 Forfeiture Events. Unless otherwise specified by the Committee, in addition
to any vesting or other forfeiture or repurchase conditions that may apply to an
Award and Shares issued pursuant to an Award, each Award granted under the Plan
will be subject to the following forfeiture conditions:
 
 
 
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(a)
Competitive Activity. All outstanding Awards and Shares issued pursuant to an
Award held by an Participant will be forfeited in their entirety (including as
to any portion of an Award or Shares subject thereto that are vested or as to
which any repurchase or resale rights or forfeiture restrictions in favor of the
Company or its designee with respect to such Shares have previously lapsed) if
the Participant, without the consent of the Company, while employed or in
service, as the case may be, or within six (6) months after termination of
employment or service, establishes an employment or similar relationship with a
competitor of the Company or engages in any similar activity that is in conflict
with or adverse to the interests of the Company, as determined by the Committee
in its sole discretion; provided, that if an Participant has sold Shares issued
upon exercise or settlement of an Award within six (6) months prior to the date
on which the Participant would otherwise have been required to forfeit such
Shares or the Option under this subsection (a) as a result of the Participant's
competitive or similar acts, then the Company will be entitled to recover any
and all profits realized by the Participant in connection with such sale.

 

 
(b)
Termination for Cause. All outstanding Awards and Shares issued pursuant to an
Award held by an Participant will be forfeited in their entirety (including as
to any portion of an Award or Shares subject thereto that are vested or as to
which any repurchase or resale rights or forfeiture restrictions in favor of the
Company or its designee have previously lapsed) if the Participant’s employment
or service is terminated by the Company for Cause; provided, however, that if an
Participant has sold Shares issued upon exercise or settlement of an Award
within six (6) months prior to the date on which the Participant would otherwise
have been required to forfeit such Shares under this subsection (b) as a result
of termination of the Participant’s employment or service for Cause, then the
Company will be entitled to recover any and all profits realized by the
Participant in connection with such sale; and provided further, that in the
event the Committee determines that it is necessary to establish whether grounds
exist for termination for Cause, the Award will be suspended during any period
required to conduct such determination, meaning that the vesting, exercisability
and/or lapse of restrictions otherwise applicable to the Award will be tolled
and if grounds for such termination are determined to exist, the forfeiture
specified by this subsection (b) will apply as of the date of suspension, and if
no such grounds are determined to exist, the Award will be reinstated on its
original terms.

 
Article 12. Transferability of Awards
12.1 Transferability. Except as provided in Section 12.2 below, during a
Participant’s lifetime, his or her Awards shall be exercisable only by the
Participant or the Participant’s legal representative. Except as permitted by
the Committee, Awards shall not be transferable other than by will or the laws
of descent and distribution; no Awards shall be subject, in whole or in part, to
attachment, execution, or levy of any kind; and any purported transfer in
violation hereof shall be null and void. The Committee may establish such
procedures as it deems appropriate for a Participant to designate a beneficiary
to whom any amounts payable or Shares deliverable in the event of, or following,
the Participant’s death, may be provided.
 
12.2 Committee Action. The Committee may, in its discretion, determine that
notwithstanding Section 12.1, any or all Awards (other than ISOs) shall be
transferable to and exercisable by such transferees, and subject to such terms
and conditions, as the Committee may deem appropriate; provided, however, no
Award may be transferred for value (as defined in the General Instructions to
Form S-8).
 
Article 13. Performance Measures
13.1 Performance Measures. The performance goals upon which the payment or
vesting of an Award to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following Performance
Measures:
 

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

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

 
(c)
Net sales or revenue growth;

 
(d)
Net operating profit;

 
 
 
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(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,
cash flow return on equity, and cash flow return on investment);

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

 
(h)
Booking activity and Backlog growth (including, but not limited to, as measured
in man-hours, future revenues, Foster Wheeler scope and/or contract profit);

 
(i)
Gross or operating margins;

 
(j)
Productivity ratios;

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

 
(l)
Expense targets;

 
(m)
Leverage targets (including, but not limited to, absolute amount of consolidated
debt, EBITDA/consolidated debt ratios and/or debt to equity ratios);

 
(n)
Credit rating targets;

 
(o)
Margins;

 
(p)
Operating efficiency;

 
(q)
Safety;

 
(r)
Market share;

 
(s)
Customer satisfaction;

 
(t)
Working capital targets;

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

 
(v)
Developing new products and lines of revenue;

 
(w)
Reducing operating expenses;

 
(x)
Developing new markets;

 
(y)
Meeting completion schedules;

 
(z)
Developing and managing relationships with regulatory and other governmental
agencies;

 
(aa)
Managing cash;

 
(bb)
Managing claims against the Company, including litigation; and

 
(cc)
Identifying and completing strategic acquisitions.

 
Any Performance Measure(s) may be used to measure the performance of the
Company, any Subsidiary, or an Affiliate as a whole or any business unit of the
Company, any Subsidiary, or an Affiliate or any combination thereof, as the
Committee may deem appropriate, or any of the above Performance Measures as
compared to the performance of a group of comparator companies, or published or
special index that the Committee, in its sole discretion, deems appropriate, or
the Committee may select 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 13.
 
Notwithstanding the foregoing, for each Award designed to qualify for the
Performance-Based Exception, the Committee shall establish and set forth in the
Award the applicable performance goals for that Award no later than the latest
date that the Committee may establish such goals without jeopardizing the
ability of the Award to qualify for the Performance-Based Exception and the
Committee shall be satisfied that the attainment of such Performance Measure(s)
shall represent value to the Company in an amount not less than the par value of
any related Performance Shares.
 
13.2 Evaluation of Performance. Subject to Section 13.3, 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 and other asset revaluations, (b) litigation or claim
judgments or settlements, (c) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported 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, (g) foreign exchange gains
and losses, and (h) changes in material liability estimates. 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.
 
 
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13.3 Adjustment of Performance-Based Compensation. The degree of payout and/or
vesting of Awards designed to qualify for the Performance-Based Exception shall
be determined based upon the written certification of the Committee as to the
extent to which the performance goals and any other material terms and
conditions precedent to such payment and/or vesting have been satisfied. The
Committee shall have the sole discretion to adjust the determinations of the
value and degree of attainment of the pre-established performance goals;
provided, however, that the performance goals applicable to Awards which are
designed to qualify for the Performance-Based Exception, and which are held by
Covered Employees, may not be adjusted so as to increase the payment under the
Award (the Committee shall retain the sole discretion to adjust such performance
goals upward, or to otherwise reduce the amount of the payment and/or vesting of
the Award relative to the pre-established performance goals).
 
13.4 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 13.1.
 
Article 14. Director Awards
The Board shall determine all Awards to Directors. The terms and conditions of
any grant to any such Director shall be set forth in an Award Agreement and
shall be otherwise subject to the Plan.
 
Article 15. 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.
 
Notwithstanding the foregoing, if the grant of an Award to a Covered Employee is
designed to comply with the requirements of the Performance-Based Exception, the
Committee may apply any restrictions it deems appropriate to the payment of
dividends declared with respect to such Award, such that the dividends and/or
the Award maintain eligibility for the Performance-Based Exception. With respect
to Restricted Stock and/or Restricted Stock Units, in the event that any
dividend constitutes a derivative security or an equity security pursuant to the
rules under Section 16 of the Exchange Act, such dividend shall be subject to a
vesting period equal to the remaining vesting period of the Shares of Restricted
Stock and/or Restricted Stock Unit with respect to which the dividend is paid.
 
Article 16. Beneficiary Designation
Each Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under this Plan is to be paid in case of 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, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid to or exercised by the
Participant’s spouse, executor, administrator, or legal representative, as
determined by the Committee, in its sole discretion.
 
 
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Article 17. Rights of Participants
17.1 Employment. Nothing in this 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. In addition, the receipt of any Award shall not create
a right 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 registered holder of such Shares.
 
Article 18. Change in Control
18.1 Change in Control of the Company. Upon the occurrence of a Change in
Control while the Participant is employed or in service with the Company, an
Affiliate and/or any Subsidiary, unless otherwise specifically prohibited under
Applicable Laws, or by the rules and regulations of any governing governmental
agencies or national securities exchanges, or unless the Committee shall
determine otherwise in the Award Agreement:
 

 
(a)
Any and all Options and SARs granted hereunder shall become immediately vested
and exercisable.

 

 
(b)
Any Period of Restriction for Restricted Stock and Restricted Stock Units
granted hereunder that have not previously vested shall end, and such Restricted
Stock and Restricted Stock Units shall become fully vested.

 

 
(c)
The target payout opportunities attainable under all outstanding Awards which
are subject to achievement of any of the Performance Measures specified in
Article 13, or any other performance conditions or restrictions that the
Committee has made the Award contingent upon, shall be deemed to have been
earned as of the effective date of the Change in Control, and such Awards
treated as follows:

 

 
(i)
The vesting of all such Awards denominated in Shares shall be accelerated as of
the effective date of the Change in Control, and there shall be paid out to
Participants a pro rata number of fully paid Shares based upon an assumed
achievement of all relevant targeted performance goals and upon the length of
time within the Performance Period, if any, that has elapsed prior to the Change
in Control. The Committee has the authority to pay all or any portion of the
value of the Shares in cash.

 

 
(ii)
All such Awards denominated in cash shall be paid pro rata to Participants,
with the proration determined as a function of the length of time within the
Performance Period, if any, that has elapsed prior to the Change in Control, and
based on an assumed achievement of all relevant targeted performance goals.

 

 
(d)
Subject to Article 19, herein, the Committee shall have the authority to make
any modifications to the Awards as determined by the Committee to be appropriate
before the effective date of the Change in Control.

 
 
 
 
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18.2 Treatment of Awards. In the event of a Change in Control where the Company
ceases to have publicly traded equity securities, after the consummation of the
Change in Control, if no replacement awards are issued in lieu of outstanding
Awards under the Plan, then the Plan and all outstanding Awards granted
hereunder shall terminate, and the Company (or successor) shall pay Participants
an amount for their outstanding Awards determined using the Change-in-Control
Price. Participants with outstanding Options and SARs shall be given an
opportunity to exercise all their Options and SARs in connection with the
consummation of the Change in Control and receive payment for any acquired
Shares using the Change-in-Control Price.
 
18.3 Employment or Other Agreement. Notwithstanding the foregoing, to the extent
that an employment or other agreement with the Company, Affiliate or Subsidiary
provides benefits of greater value upon a Change in Control than those provided
in this Article 18, the rights set forth in such other agreement shall supercede
the provisions of this Article 18. In addition, to the extent that another
employment or change in control agreement provides benefits with respect to
Awards covered by this Plan that are of lesser value than the benefits provided
under a Award granted under the Plan, the Award shall supersede such other
employment or change in control agreement to such extent.
 
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 this 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 Section 4.4, Options or SARs issued under
this 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 this Plan shall be
made without shareholder approval if shareholder approval is required by
Applicable Laws.
 
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 this Plan. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under this Plan.
 
19.3 Awards Previously Granted. Notwithstanding any other provision of this Plan
to the contrary (other than Section 19.4), no termination, amendment,
suspension, or modification of this Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under this Plan, without
the written consent of the Participant holding such Award.
 
19.4 Amendment to Conform to Law. Notwithstanding any other provision of this
Plan to the contrary, the Board may amend the Plan or an Award Agreement, to
take effect retroactively or otherwise, as deemed necessary or advisable for the
purpose of conforming the Plan or an Award Agreement to any present or future
law relating to plans of this or similar nature (including, but not limited to,
Code Section 409A), and to the administrative regulations and rulings
promulgated thereunder. By accepting an Award under this Plan, each Participant
agrees to any amendment made pursuant to this Section 19.4 to any Award granted
under the Plan without further consideration or action.
 
Article 20. Withholding
20.1 General. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, the amount necessary
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.
 
 
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20.2 Stock Settled Awards. Each Participant shall make such arrangements as the
Committee may require, within a reasonable time prior to the date on which any
portion of an Award settled in Shares is scheduled to vest, for the payment of
all withholding tax obligations through either (i) giving instructions to a
broker for the sale on the open market of a sufficient number of Shares to pay
the withholding tax in a manner that satisfies all Applicable Laws,
(ii) depositing with the Company an amount of funds equal to the estimated
withholding tax liability, or (iii) such other method as the Committee in its
discretion may approve, including a combination of (i) and (ii). If a
Participant fails to make such arrangements, or if by reason of any action or
inaction of the Participant the Company fails to receive a sufficient amount to
satisfy the withholding tax obligation, then, anything else contained in this
Plan or any Award to the contrary notwithstanding, the Shares that would
otherwise have vested on such date shall be subject to forfeiture, as determined
by the Committee, regardless of the Participant’s status as an Employee,
Director or Third-Party Service Provider; provided, that the Committee, in its
sole discretion, may permit a Participant to cure any failure to provide funds
to meeting the withholding tax obligation (including any penalties or interest
thereon), if the Committee determines that the failure was due to factors beyond
the Participant’s control.
 
Article 21. Successors
All obligations of the Company under this Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
amalgamation, 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 (including repurchase of Shares for nominal
consideration), 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, failure to remit
the amounts necessary to satisfy the Participant’s tax withholding obligations,
termination of employment for Cause, termination of the Participant’s provision
of services to the Company, Affiliate, and/or 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 Right of Offset. The Company, any Subsidiary, or an Affiliate may, to the
extent permitted by applicable law, deduct from and set off against any amounts
the Company, any Subsidiary, or an Affiliate, as the case may be, may owe to the
Participant from time to time, including amounts payable in connection with any
Award, owed as wages, fringe benefits, or other compensation owed to the
Participant, such amounts as may be owed by the Participant to the Company, any
Subsidiary, or an Affiliate, as the case may be, although the Participant shall
remain liable for any part of the Participant’s payment obligation not satisfied
through such deduction and setoff. By accepting any Award granted hereunder, the
Participant agrees to any deduction or setoff under this Section 22.2.
 
 
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22.3 Compliance with Code Section 162(m). The Company intends that the Awards
granted to Covered Employees shall satisfy the requirements of the
Performance-Based Exception, unless otherwise determined by the Committee when
the Award is granted. Accordingly, the terms of this Plan, including the
definition of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m) and regulations
thereunder. Notwithstanding the foregoing, because the Committee cannot
determine with certainty whether a given Participant will be a Covered Employee
with respect to a fiscal year that has not yet been completed, the term Covered
Employee as used herein shall mean only a person designated by the Committee as
likely to be a Covered Employee with respect to a fiscal year. If any provision
of the Plan or any Award Agreement designated as intended to satisfy the
Performance-Based Exception does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee or
any other person sole discretion to increase the amount of compensation
otherwise payable in connection with such Award upon attainment of the
applicable performance objectives. Payment of any amount that the Company
reasonably determines would not be deductible by reason of Code Section 162(m)
shall be deferred until the earlier of the earliest date on which the Company
reasonably determines that the deductibility of the payment will not be so
limited, or the year following the termination of employment.
 
22.4 Legend. The certificates for Shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer of such
Shares.
 
22.5 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.
 
22.6 Severability. In the event any provision of this Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of this Plan, and this Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
 
22.7 Requirements of Law. The granting of Awards and the issuance of Shares
under this Plan shall be subject to all Applicable Laws, and to such approvals
by any governmental agencies or stock exchange as may be required.
 
22.8 Securities Law Compliance. With respect to Insiders, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3 or its
successor under the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Committee.
 
22.9 Delivery of Title. The Company shall have no obligation to issue or deliver
evidence of title for Shares issued under this Plan prior to:
 

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

 

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

 
22.10 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.
 
22.11 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.
 
22.12 Employees Based Outside of the United States. Notwithstanding any
provision of this Plan to the contrary, in order to comply with the laws in
other countries in which the Company, 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 this Plan;

 

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

 

 
(c)
Modify the terms and conditions of any Award granted to Employees and/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 22.12 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.
 
22.13 Uncertificated Shares. To the extent that this Plan provides for issuance
of certificates to reflect the transfer of Shares, the transfer of such Shares
may be effected on a noncertificated basis, to the extent not prohibited by
Applicable Laws.
 
22.14 Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company, and/or its Subsidiaries,
and/or its Affiliates may make to aid it in meeting its obligations under this
Plan. Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary,
legal representative, or any other individual. To the extent that any individual
acquires a right to receive payments from the Company, its Subsidiaries, and/or
its Affiliates under this Plan, such right shall be no greater than the right of
an unsecured general creditor of the Company, any Subsidiary, or an Affiliate,
as the case may be. All payments to be made hereunder shall be paid from the
general funds of the Company, any Subsidiary, or an Affiliate, as the case may
be and no special or separate fund shall be established and no segregation of
assets shall be made to assure payment of such amounts except as expressly set
forth in this Plan.
 
22.15 No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to this Plan or any Award. The Committee shall determine whether cash,
Awards, or other property shall be issued or paid in lieu of fractional Shares
or whether such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated.
 
22.16 Retirement and Welfare Plans. Neither Awards made under this Plan nor
Shares or cash paid pursuant to such Awards may be included as “compensation”
for purposes of computing the benefits payable to any Participant under the
Company’s, any Subsidiary’s, or an Affiliate’s retirement plans (both qualified
and non-qualified) or welfare benefit plans unless such other plan expressly
provides that such compensation shall be taken into account in computing a
Participant’s benefit.
 
22.17 Deferred Compensation. No deferral of compensation (as defined under Code
Section 409A or guidance thereto) is intended under this Plan. Notwithstanding
this intent, if any Award granted under the Plan would be considered deferred
compensation as defined under Code Section 409A, and if this Plan or the terms
of an Award fail to meet the requirements of Code Section 409A with respect to
such Award, then such Award shall remain in effect and be subject to taxation in
accordance with Section 409A. In this circumstance, the Committee may accelerate
distribution or settlement of an Award in accordance with Code Section 409A. The
Company shall have no liability for any tax imposed on a Participant by Code
Section 409A, and if any tax is imposed on the Participant, the Participant
shall have no recourse against the Company for payment of any such tax.
Notwithstanding the foregoing, if any modification of an Award causes the Award
to be deferred compensation under Code Section 409A, the Committee may rescind
such modification in accordance with Code Section 409A.
 
22.18 Nonexclusivity of this Plan. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board or Committee to
adopt such other compensation arrangements as it may deem desirable for any
Participant.
 
22.19 No Constraint on Corporate Action. Nothing in this Plan shall be construed
to: (a) limit, impair, or otherwise affect the Company’s, any Subsidiary’s, or
an Affiliate’s right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to
amalgamate, merge or consolidate, or dissolve, liquidate, sell, or transfer all
or any part of its business or assets; or (b) limit the right or power of the
Company, any Subsidiary, or an Affiliate to take any action which such entity
deems to be necessary or appropriate.
 
22.20 Governing Law. The Plan and each Award Agreement shall be governed by the
laws of the state of New Jersey, excluding any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of this
Plan to the substantive law of another jurisdiction. Unless otherwise provided
in the Award Agreement, recipients of an Award under this Plan are deemed to
submit to the exclusive jurisdiction and venue of the federal or state courts of
New Jersey, to resolve any and all issues that may arise out of or relate to
this Plan or any related Award Agreement.
 
22.21 Indemnification. Subject to requirements of New Jersey 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 or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under this Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgement in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his/her own behalf, unless such loss, cost, liability,
or expense is a result of his/her own willful misconduct or except as expressly
provided by statute.
 
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 Articles of Incorporation or Code of Regulations, 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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