Exhibit 10.4.5

THE GOGO INC. 2016

OMNIBUS INCENTIVE PLAN

SECTION 1. PURPOSE

The purposes of the Gogo Inc. 2016 Omnibus Incentive Plan (the “Plan”) are to
promote the interests of Gogo Inc. and its shareholders by (i) attracting and
retaining executive personnel and other key employees and directors of
outstanding ability; (ii) motivating executive personnel and other key employees
and directors by means of performance-related incentives, to achieve
longer-range performance goals; and (iii) enabling such individuals to
participate in the long-term growth and financial success of Gogo Inc.

SECTION 2. DEFINITIONS

(a) Certain Definitions. Capitalized terms used herein without definition shall
have the respective meanings set forth below:

“Adjustment Event” has the meaning given in Section 4(f).

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

“Affiliate” means, (i) for purposes of Incentive Stock Options, any corporation
that is a “parent corporation” (as defined in Section 424(e) of the Code) or a
“subsidiary corporation” (as defined in Section 424(e) of the Code) of the
Company, and (ii) for all other purposes, with respect to any person, any other
person that (directly or indirectly) is controlled by, controlling or under
common control with such person.

“Alternative Award” has the meaning given in Section 13(b).

“Award” means any Performance Award, Restricted Stock, Restricted Stock Unit,
Option, Stock Appreciation Right, Deferred Share Unit, Dividend Equivalent or
other Stock-Based Award granted to a Participant pursuant to the Plan, including
an Award combining two or more types in a single grant.

“Award Agreement” means any written agreement, contract or other instrument or
document evidencing an Award granted under the Plan.

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

“Cause” with respect to a Participant, (A) if the Participant is a party to an
employment or similar agreement with the Company or an Employer that defines
such term, shall have the meaning ascribed thereto in such agreement and (B) if
the Participant is not a party to such agreement shall mean (i) the
Participant’s refusal to perform or the

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disregard of the Participant’s duties or responsibilities, or of specific
directives of the officer or other executive of the Company to whom the
Participant reports; (ii) the Participant’s willful, reckless or negligent
commission of act(s) or omission(s) which have resulted in or are likely to
result in, a loss to, or damage to the reputation of, the Company or any of its
affiliates, or that compromise the safety of any employee or other person;
(iii) the Participant’s act of fraud, embezzlement or theft in connection with
the Participant’s duties to the Company or in the course of his or her
employment, or the Participant’s commission of a felony or any crime involving
dishonesty or moral turpitude; (iv) the Participant’s material violation of the
Company’s policies or standards or of any statutory or common law duty of
loyalty to the Company; or (v) any material breach by the Participant of any one
or more noncompetition, nonsolicitation, confidentiality or other restrictive
covenants to which the Participant is subject.

“Change in Control” shall mean

(i) the acquisition by any person, entity or “group” (within the meaning of
Section 13(d)(3) or 14(d)(2), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the then
outstanding equity interests in the Company or the combined voting power of the
Company’s then outstanding voting securities; or

(ii) the consummation of a reorganization, merger or consolidation of the
Company or the sale of all or substantially all of the assets of the Company, in
each case with respect to which the persons who held equity interests in the
Company immediately prior to such reorganization, merger, consolidation or sale
do not immediately thereafter own, directly or indirectly, 50% or more of the
combined voting power of the then outstanding securities of the surviving or
resulting corporation or other entity.

in each case, provided that such event constitutes a “change in control” within
the meaning of Section 409A of the Code.

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to
occur if the Company files for bankruptcy, liquidation or reorganization under
the United States Bankruptcy Code or as a result of any restructuring that
occurs as a result of any such proceeding.

“Change in Control Price” means the price per share of Stock offered in
conjunction with any transaction resulting in a Change in Control. If any part
of the offered price is payable other than in cash, or if more than one price
per share of Stock is paid in conjunction with such transaction, the Change in
Control Price shall be determined in good faith by the Committee as constituted
immediately prior to the Change in Control.

 

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“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the Compensation Committee of the Board or such other
committee of the Board as the Board or the Compensation Committee shall
designate from time to time, which Committee shall be comprised of two or more
members of the Board, each of whom is a “non-employee director” within the
meaning of Rule 16b-3, as promulgated under the Exchange Act and an “independent
member” of the Board to the extent required by applicable law or stock exchange
rule. For those Awards intended to qualify as performance-based compensation
under Section 162(m) of the Code, the Committee shall mean the Compensation
Committee of the Board or such committee of the Board as the Board or
compensation committee shall designate, consisting of two or more members of the
Board, each of whom, is an “outside director,” within the meaning of
Section 162(m) of the Code and the Treasury Regulations promulgated thereunder.

“Company” means Gogo Inc., a Delaware corporation, and any successor thereto.

“Consultant” means consultants and advisors who are natural persons who provide
bona fide services to the Company and its Subsidiaries (other than services in
connection with the offer or sale of securities in a capital raising transaction
or that promote or maintain a market for the Company’s securities).

“Covered Employee” means any “covered employee” as defined in Section 162(m)(3)
of the Code.

“Deferred Annual Amount” shall have the meaning set forth in Section 9(a).

“Deferred Award” shall have the meaning set forth in Section 9(a).

“Deferred Share Unit” means a unit credited to a Participant’s account on the
books of the Company under Section 9 that represents the right to receive Stock
or cash with a value equal to the Fair Market Value of one share of Stock on
settlement of the account.

“Designated Beneficiary” means the beneficiary designated by the Participant, in
a manner determined by the Committee, to receive amounts due the Participant in
the event of the Participant’s death. In the absence of an effective designation
by the Participant, Designated Beneficiary shall mean the Participant’s estate.

“Disability” means, unless another definition is incorporated into the
applicable Award Agreement, Disability as specified under the Company’s
long-term disability insurance policy and any other termination of a
Participant’s employment or service under such circumstances that the Committee
determines to qualify as a Disability for purposes of this Plan; provided, that
if a Participant is a party to an employment or individual severance agreement
with an Employer that defines the term “Disability” then,

 

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with respect to any Award made to such Participant, “Disability” shall have the
meaning set forth in such agreement; provided, further, that in the case of any
Award subject to Section 409A of the Code, Disability shall have the meaning set
forth in Section 409A of the Code.

“Dividend Equivalent” means the right, granted under Section 11 of the Plan, to
receive payments in cash or in shares of Stock, based on dividends with respect
to shares of Stock.

“Effective Date” means the date, following adoption of this Plan by the Board,
on which this Plan is approved or reapproved by a majority of the votes cast at
a duly constituted meeting of the shareholders of the Company or by a duly
effective written consent of the shareholders in lieu thereof.

“Elective Deferred Share Unit” shall have the meaning set forth in Section 9(a).

“Eligible Director” means a member of the Board who is not an Employee.

“Employee” means any officer or employee of the Company, any Subsidiary or any
other Employer (as determined by the Committee in its sole discretion).

“Employer” means the Company and any Subsidiary, and, in the discretion of the
Committee, may also mean any business organization designated as an Employer;
provided that the Company directly or indirectly owns at least 20% of the
combined voting power of all classes of voting securities of such entity.

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

“Executive Officer” means any “officer” within the meaning of Rule 16(a)-1(f)
promulgated under the Act or any Covered Employee.

“Fair Market Value” means,

(i) If the Stock is listed on any established stock exchange or a national
market system, the closing sales price for a share of Stock (or the closing bid,
if no sales were reported) as quoted on such exchange or system on the date of
determination, as reported in The Wall Street Journal or, if not so reported,
such other source as the Committee deems reliable;

(ii) If the Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean between
the high bid and low asked prices for the Stock on the last market trading day
prior to the day of determination.

 

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(iii) If the Stock is not listed on an established stock exchange or national
market system, its Fair Market Value shall be determined in good faith by the
Committee pursuant to a reasonable valuation method in accordance with
Section 409A of the Code, including without limitation by reliance on an
independent appraisal completed within the preceding 12 months.

“Freestanding SAR” means a Stock Appreciation Right granted independently of any
Options.

“Good Reason” means, with respect to any Participant (A) if the Participant is a
party to an employment or similar agreement with the Company or an Employer that
defines such term, the meaning ascribed thereto in such agreement and (B) if the
Participant is not a party to such agreement, the occurrence of any one of the
following events (without the Participant’s consent):

(i) a material reduction in such Participant’s base salary;

(ii) a material reduction in such Participant’s annual incentive opportunity
(including a material adverse change in the method of calculating such
Participant’s annual incentive);

(iii) a material diminution of such Participant’s duties, responsibilities, or
authority; or

(iv) a relocation of more than 50 miles from such Participant’s principal place
of employment immediately prior to the Change in Control;

provided that such Participant provides the Company with written notice of his
or her intent to terminate his or her employment for Good Reason within 60 days
of such Participant becoming aware of any circumstances set forth above (with
such notice indicating the specific termination provision above on which such
Participant is relying and describing in reasonable detail the facts and
circumstances claimed to provide a basis for termination of his or her
employment under the indicated provision), that such Participant provides the
Company with at least 30 days following receipt of such notice to remedy such
circumstances and that the Company has not remedied such circumstances within
such timeframe.

“Incentive Stock Option” means an option to purchase Stock granted under
Section 7 of the Plan that is designated as an Incentive Stock Option that meets
the requirements of Section 422 of the Code.

“New Employer” means, after a Change in Control, a Participant’s employer, or
any direct or indirect parent or any direct or indirect majority-owned
subsidiary of such employer.

 

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“Non-statutory Stock Option” means an option to purchase shares of Stock granted
under Section 7 of the Plan that is not intended to be an Incentive Stock
Option.

“Non-U.S. Award(s)” has the meaning given in Section 3(f).

“Option” means an Incentive Stock Option or a Non-statutory Stock Option.

“Participant” means an Employee, Eligible Director or Consultant who is selected
by the Committee to receive an Award under the Plan.

“Performance Award” means an Award of Restricted Stock, Restricted Stock Units,
Options, Performance Shares, Deferred Shares, Deferred Share Units, Performance
Units, SARs, other Equity-Based Awards or other Awards, the grant, exercise,
voting or settlement of which is subject (in whole or in part) to the
achievement of specified Performance Goals.

“Performance Cycle” means the period of time selected by the Committee during
which performance is measured for the purpose of determining the extent to which
a Performance Award has been earned or vested.

“Performance Goals” means the objectives established by the Committee for a
Performance Cycle pursuant to Section 5(c) for the purpose of determining the
extent to which a Performance Award has been earned or vested.

“Performance Share” means a Performance Award that is a contractual right to
receive a share of Stock (or the cash equivalent thereof) granted pursuant to
Section 5 of the Plan.

“Performance Unit” means a Performance Award that is a dollar denominated unit
(or a unit denominated in the Participant’s local currency) granted pursuant to
Section 5 of the Plan.

“Permitted Transferees” has the meaning given it in Section 15(b).

“Plan” has the meaning given it in the preamble to this Agreement.

“Preexisting Plan” means the Aircell Holdings Inc. Stock Option Plan and the
Gogo Inc. 2013 Omnibus Incentive Plan.

“Preexisting Plan Award” means an award of stock options previously granted to a
Participant pursuant to the Aircell Holdings Inc. Stock Option Plan or an Award
(as defined in the Gogo Inc. 2013 Omnibus Incentive Plan) granted to a
Participant under the Gogo Inc. 2013 Omnibus Incentive Plan.

 

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“Restriction Period” means the period of time selected by the Committee during
which a grant of Restricted Stock, Restricted Stock Units or Deferred Share
Units, as the case may be, is subject to forfeiture and/or restrictions on
transfer pursuant to the terms of the Plan.

“Restricted Stock” means shares of Stock contingently granted to a Participant
under Section 6 of the Plan.

“Restricted Stock Unit” means a stock denominated unit contingently awarded
under Section 6 of the Plan.

“Section 409A of the Code” means Section 409A of the Code and the applicable
rules, regulations and guidance promulgated thereunder.

“Service” means, with respect to Employees and Consultants, continued employment
with the Company and its Subsidiaries and Affiliates or, with respect to
Eligible Directors, service on the Board of Directors.

“Service Award” means an Award that vests solely based on the passage of time or
continued Service over a fixed period of time.

“Specified Award” means an Award of non-qualified deferred compensation within
the meaning of and that is subject to Section 409A of the Code, and which may
include other Awards granted pursuant to the Plan (including, but not limited
to, Restricted Stock Units and Deferred Awards) that do not otherwise qualify
for an exemption from Section 409A of the Code.

“Stock” means the common stock of the Company, par value $0.01 per share.

“Stock Appreciation Right” or “SAR” means the right to receive a payment from
the Company in cash and/or shares of Stock equal to the product of (i) the
excess, if any, of the Fair Market Value of one share of Stock on the exercise
date over a specified price fixed by the Committee on the grant date, multiplied
by (ii) a stated number of shares of Stock.

“Stock-Based Awards” has the meaning given in Section 10(a).

“Subplan” has the meaning given in Section 3(f).

“Subsidiary” means any business entity in which the Company owns, directly or
indirectly, fifty percent (50%) or more of the total combined voting power of
all classes of stock entitled to vote, and any other business organization,
regardless of form, in which the Company possesses, directly or indirectly, 50%
or more of the total combined equity interests in such organization.

 

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“Ten Percent Holder” has the meaning given in Section 7(b).

“Termination of Service” means with respect to an Eligible Director, the date
upon which such Eligible Director ceases to be a member of the Board, with
respect to an Employee, the date the Participant ceases to be an Employee and,
with respect to a Consultant, the date the Consultant ceases to provide services
to the Company or any Employer, in each case as determined by the Committee;
provided, that, with respect to any Specified Award, Termination of Service
shall mean “separation from service”, as defined in Section 409A of the Code and
the rules, regulations and guidance promulgated thereunder.

“Voting Power” when used in the definition of Change in Control shall mean such
specified number of the Voting Securities as shall enable the holders thereof to
cast such percentage of all the votes which could be cast in an annual election
of directors and “Voting Securities” shall mean all securities of a company
entitling the holders thereof to vote in an annual election of directors.

(b) Gender and Number. Except when otherwise indicated by the context, words in
the masculine gender used in the Plan shall include the feminine gender, the
singular shall include the plural, and the plural shall include the singular.

SECTION 3. POWERS OF THE COMMITTEE

(a) Eligibility. Participants in the Plan shall consist of such Employees
(including any officer of the Company), Consultants and Eligible Directors as
the Committee in its sole discretion may select from time to time.

(b) Power to Grant and Establish Terms of Awards. The Committee shall have the
discretionary authority, subject to the terms of the Plan, to determine the
Participants, if any, to whom Awards shall be granted, the type or types of
Awards to be granted, and the terms and conditions of any and all Awards
including, without limitation, the number of shares of Stock subject to an
Award, the time or times at which Awards shall be granted, and the terms and
conditions of the Awards and the applicable Award Agreements. The Committee may
establish different terms and conditions for different types of Awards, for
different Participants receiving the same type of Award, and for the same
Participant for each type of Award such Participant may receive, whether or not
granted at the same or different times.

(c) Administration. The Plan shall be administered by the Committee. The
Committee shall have sole and complete authority and discretion to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
operation of the Plan as it shall from time to time deem advisable, and to
interpret the terms and provisions of the Plan. The Committee’s decisions
(including any failure to make

 

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decisions) shall be binding upon all persons, including but not limited to the
Company, shareholders, Employers and each Employee, Director, Consultant,
Participant, Designated Beneficiary and such person’s heirs, successors or
assigns, and shall be given deference in any proceeding with respect thereto.

(d) Delegation by the Committee. The Committee may delegate to the chief
executive officer of the Company the power and authority to make Awards to
Participants who are not Executive Officers or Covered Employees, pursuant to
such conditions and limitations as the Committee may establish. The Committee
may also appoint agents (who may be officers or employees of the Company) to
assist in the administration of the Plan and may grant authority to such persons
to execute agreements, including Award Agreements, or other documents on its
behalf. All expenses incurred in the administration of the Plan, including,
without limitation, for the engagement of any counsel, consultant or agent,
shall be paid by the Company.

(e) Restrictive Covenants and Other Conditions. Without limiting the generality
of the foregoing, the Committee may condition the grant of any Award under the
Plan upon the Participant to whom such Award would be granted agreeing in
writing to certain conditions (such as restrictions on the ability to transfer
the underlying shares of Stock) or covenants in favor of the Company and/or one
or more Affiliates thereof (including, without limitation, covenants not to
compete, not to solicit employees and customers and not to disclose confidential
information, that may have effect following the Termination of Service and after
the Stock subject to the Award has been transferred to the Participant),
including, without limitation, the requirement that the Participant disgorge any
profit, gain or other benefit received in respect of the Award prior to any
breach of any such covenant.

(f) Participants Based Outside the United States. To conform with the provisions
of local laws and regulations, or with local compensation practices and
policies, in foreign countries in which the Company or any of its Subsidiaries
or Affiliates operate, but subject to the limitations set forth herein regarding
the maximum number of shares issuable hereunder and the maximum award to any
single Participant, the Committee may (i) modify the terms and conditions of
Awards granted to Participants employed outside the United States (“Non-US
Awards”), (ii) establish subplans with modified exercise procedures and such
other modifications as may be necessary or advisable under the circumstances
(“Subplans”), (iii) take any action which it deems advisable to obtain, comply
with or otherwise reflect any necessary governmental regulatory procedures,
exemptions or approvals with respect to the Plan, and (iv) require UK
Participants to enter into a joint election under s431 ITEPA 2003. The
Committee’s decision to grant Non-US Awards or to establish Subplans is entirely
voluntary, and at the complete discretion of the Committee. The Committee may
amend, modify or terminate any Subplans at any time, and such amendment,
modification or termination may be made without prior notice to the
Participants. The Company, Subsidiaries,

 

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Affiliates and members of the Committee shall not incur any liability of any
kind to any Participant as a result of any change, amendment or termination of
any Subplan at any time. The benefits and rights provided under any Subplan or
by any Non-US Award (i) are wholly discretionary and, although provided by
either the Company, a Subsidiary or Affiliate, do not constitute regular or
periodic payments and (ii) are not to be considered part of the Participant’s
salary or compensation under the Participant’s employment with the Participant’s
local employer for purposes of calculating any severance, resignation,
redundancy or other end of service payments, vacation, bonuses, long-term
service awards, indemnification, pension or retirement benefits, or any other
payments, benefits or rights of any kind. If a Subplan is terminated, the
Committee may direct the payment of Non-US Awards (or direct the deferral of
payments whose amount shall be determined) prior to the dates on which payments
would otherwise have been made, and, in the Committee’s discretion, such
payments may be made in a lump sum or in installments.

SECTION 4. MAXIMUM AMOUNT AVAILABLE FOR AWARDS

(a) Number. Subject in all cases to the provisions of this Section 4, the
maximum number of shares of Stock that are available for Awards granted under
the Plan shall be 8,050,000 shares of Stock. Notwithstanding the provisions of
Section 4(b), the maximum number of shares of Stock that may be issued in
respect of Incentive Stock Options shall not exceed 8,050,000 shares of Stock.
Any shares of Stock granted in connection with Awards other than Options and
Stock Appreciation Rights shall be counted against this limit as 1.45 shares of
Stock for every one (1) share of Stock granted in connection with such Award.
Shares of Stock may be made available from Stock held in treasury or authorized
but unissued shares of the Company not reserved for any other purpose.

(b) Canceled, Terminated, or Forfeited Awards, etc. In addition to the number of
Shares provided for in Section 4(a), any shares of Stock subject to an Award or
a Preexisting Plan Award which for any reason expires without having been
exercised, is canceled or terminated or otherwise is settled without the
issuance of any Stock shall be available for grant under the Plan (and any such
shares of Stock subject to a Preexisting Plan Award shall no longer be available
for grant under a Preexisting Plan); provided, however, that (i) vested shares
of Stock that are repurchased after being issued from the Plan (or Preexisting
Plan), (ii) shares of Stock otherwise issuable or issued in respect of, or as
part of, any Award (or Preexisting Plan Award) that are withheld to cover
applicable taxes and (iii) shares of Stock that are tendered to exercise
outstanding Options or other Awards (or Preexisting Plan Awards) or to cover
applicable taxes shall not be available for future issuance under the Plan. If a
Stock Appreciation Right is granted in tandem with an Option so that only one
may be exercised with the other being surrendered in such exercise in accordance
with Section 8(b), the number of shares subject to the tandem Option and Stock
Appreciation Right shall only be taken into

 

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account once (and not as to both Awards). Shares of Stock subject to Awards that
are assumed, converted or substituted pursuant to an Adjustment Event will not
further reduce the maximum limitation set forth in Section 4(a).

(c) Individual Award Limitations. Subject to Sections 4(b) and 4(f), the
following individual Award limits shall apply for those Awards intended to
qualify as performance-based compensation under Section 162(m) of the Code:

(i) No Participant may receive the right to more than 1,250,000
share-denominated Performance Awards under the Plan in any one year.

(ii) No Participant may receive the right to Performance Units or other cash
based Performance Award under the Plan in any one year with a value of more than
$5,000,000 (or the equivalent of such amount denominated in the Participant’s
local currency).

(iii) No Participant may receive Options, Stock Appreciation Rights or any other
Award based solely on the increase in value of Stock on more than 2,500,000
shares of Stock under the Plan in any one year.

(d) Eligible Director Award Limitations. Subject to Sections 4(b) and 4(f), the
maximum aggregate grant date fair value of Awards granted to an Eligible
Director as compensation for services as an Eligible Director in any one year
may not exceed $300,000. This limitation does not apply to Awards granted at the
election of the Eligible Director in lieu of all or a portion of annual and
committee cash retainers.

(e) Minimum Vesting Requirements. Except for any accelerated vesting permitted
under Section 13 or upon the death or Disability of a Participant, and subject
to such additional vesting requirements or conditions as the Committee may
establish with respect to an Award, each Option, Stock Appreciation Right or any
other Award based solely on the increase in value of Stock will vest over a
minimum period of one year from the date of grant. Notwithstanding the preceding
sentence, the minimum vesting requirements shall not apply to Awards involving
an aggregate number of shares not in excess of 5% of the shares of Stock
available for grants under Section 4(a) of this Plan as of the Effective Date.

(f) Adjustment in Capitalization. The number and kind of shares of Stock
available for issuance under the Plan and the number, class, exercise price,
Performance Goals or other terms of any outstanding Award shall be adjusted by
the Board to reflect any extraordinary dividend or distribution, stock dividend,
stock split or share combination or any reorganization, recapitalization,
business combination, merger, consolidation, spin-off, exchange of shares,
liquidation or dissolution of the Company or other similar transaction or event
affecting the Stock (any such transaction or event, an “Adjustment Event”) in
such manner as it determines in its sole discretion.

 

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(g) Prohibition Against Repricing. Except to the extent (i) approved in advance
by holders of a majority of the shares of the Company entitled to vote generally
in the election of directors or (ii) as a result of any Adjustment Event, the
Committee shall not have the power or authority to reduce, whether through
amendment or otherwise, the exercise price of any outstanding Option or base
price of any outstanding Stock Appreciation Right or to grant any new Award, or
make any cash payment, in substitution for or upon the cancellation of Options
or Stock Appreciation Rights previously granted.

SECTION 5. PERFORMANCE AWARDS

(a) Generally. The Committee shall have the authority to determine the
Participants who shall receive Performance Awards, the number and type of
Performance Awards and the number of shares of Stock and/or value of Performance
Units or other cash-based Performance Award each Participant receives for each
or any Performance Cycle, and the Performance Goals applicable in respect of
such Performance Awards. Any adjustments to such Performance Goals shall be
approved by the Committee. The Committee shall determine the duration of each
Performance Cycle (the duration of Performance Cycles may differ from each
other), and there may be more than one Performance Cycle in existence at any one
time. Performance Awards shall be evidenced by an Award Agreement that shall
specify the kind of Award, the number of shares of Stock and/or value of Awards
awarded to the Participant, the Performance Goals applicable thereto, and such
other terms and conditions not inconsistent with the Plan as the Committee shall
determine. No shares of Stock will be issued at the time an Award of Performance
Shares is made, and the Company shall not be required to set aside a fund for
the payment of Performance Shares, Performance Units or other Performance
Awards.

(b) Earned Performance Awards. Performance Awards shall become earned, in whole
or in part, based upon the attainment of specified Performance Goals or the
occurrence of any event or events, including a Change in Control, as the
Committee shall determine, either before, at or after the grant date. In
addition to the achievement of the specified Performance Goals, the Committee
may, at the grant date, condition payment of Performance Awards on such
conditions as the Committee shall specify. The Committee may also require the
completion of a minimum period of service (in addition to the achievement of any
applicable Performance Goals) as a condition to the vesting of any Performance
Award.

(c) Performance Goals. At the discretion of the Committee, Performance Goals may
be based upon the relative or comparative attainment of one or more of the

 

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following criteria, whether in absolute terms or relative to the performance of
one or more similarly situated companies or a published index covering multiple
companies, and whether gross or net, before or after taxes, and/or before or
after other adjustments, as determined by the Committee for the Performance
Cycle: enterprise value, total return to the Company’s shareholders (inclusive
of dividends paid), operating earnings, net earnings, revenues, sales, basic or
diluted earnings per share, earnings before interest and taxes, earnings before
interest and taxes or earnings before interest, taxes, depreciation and/or
amortization, earnings before interest and taxes or earnings before interest,
taxes, depreciation and/or amortization minus capital expenditures, increase in
the Company’s earnings or basic or diluted earnings per share, revenue growth,
share price performance, return on invested capital, assets, equity or sales,
operating income, income, net income, economic value added, profit margins, cash
flow, cash flow on investment, free cash flow, improvement in or attainment of
expense levels, capital expenditure levels and/or working capital levels, budget
and expense management, debt reduction, gross profit, market share, cost
reductions, workplace health and/or safety goals, workforce satisfaction goals,
sales goals, diversity goals, employee retention, completion of key projects,
planes under contract or memoranda of understanding, strategic plan development
and implementation and/or achievement of synergy targets, and, in the case of
persons who are not Executive Officers, such other criteria as may be determined
by the Committee. Performance Goals may be established on a Company-wide basis
or with respect to one or more business units, divisions, Subsidiaries, or
products; and in either absolute terms or relative to the performance of one or
more comparable companies or an index covering multiple companies. When
establishing Performance Goals for a Performance Cycle, the Committee may
exclude any or all “unusual or infrequently occurring” as determined under U.S.
generally accepted accounting principles and as identified in the financial
statements, notes to the financial statements or management’s discussion and
analysis in the annual report, including, without limitation, the charges or
costs associated with restructurings of the Company or any Employer,
discontinued operations, unusual or infrequently occurring items, capital gains
and losses, dividends, share repurchase, other unusual, infrequently occurring
or non-recurring items, and the cumulative effects of accounting changes. Except
in the case of Awards to Executive Officers intended to be “other
performance-based compensation” under Section 162(m)(4) of the Code, the
Committee may also adjust the Performance Goals for any Performance Cycle as it
deems equitable in recognition of unusual or non-recurring events affecting the
Company, changes in applicable tax laws or accounting principles, or such other
factors as the Committee may determine (including, without limitation, any
adjustments that would result in the Company paying non-deductible compensation
to a Participant).

(d) Special Rule for Performance Goals. If, at the time of grant, the Committee
intends a Performance Award to qualify as “other performance based compensation”
within the meaning of Section 162(m)(4) of the Code, the Committee must
establish Performance Goals for the applicable Performance Cycle no later than
the

 

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90th day after the Performance Cycle begins (or by such other date as may be
required under Section 162(m) of the Code) and in no event later than the date
on which 25% of the performance period has lapsed.

(e) Negative Discretion. Notwithstanding anything in this Section 5 to the
contrary, the Committee shall have the right, in its absolute discretion, (i) to
reduce or eliminate the amount otherwise payable to any Participant under
Section 5(h) based on individual performance or any other factors that the
Committee, in its discretion, shall deem appropriate and (ii) to establish rules
or procedures that have the effect of limiting the amount payable to each
Participant to an amount that is less than the maximum amount otherwise
authorized.

(f) Affirmative Discretion. Notwithstanding any other provision in the Plan to
the contrary, (including, without limitation, the maximum amounts payable under
Section 4(c)), but subject to the maximum number of shares available for
issuance under Section 4(a) of the Plan, (i) the Committee shall have the right,
in its discretion, to grant a bonus in cash, in shares of Stock or in any
combination thereof, to any Participant (except for those Awards intended to
qualify as performance-based compensation under Section 162(m) of the Code
granted to a Participant who is a Covered Employee), based on individual
performance or any other criteria that the Committee deems appropriate and (ii)
in connection with the hiring of any person who is or becomes a Covered
Employee, the Committee may provide for a minimum bonus amount or Award payment
in any Performance Cycle, regardless of whether performance objectives are
attained.

(g) Certification of Attainment of Performance Goals. As soon as practicable
after the end of a Performance Cycle and prior to any payment or vesting in
respect of such Performance Cycle, the Committee shall certify in writing the
number of Performance Shares or other Performance Awards and the number and
value of Performance Units which have been earned or vested on the basis of
performance in relation to the established Performance Goals.

(h) Payment of Awards. Payment or delivery of Stock with respect to earned
Performance Awards shall be distributed to the Participant or, if the
Participant has died, to the Participant’s Designated Beneficiary, as soon as
practicable after the expiration of the Performance Cycle and the Committee’s
certification under paragraph 5(g) above, provided that payment or delivery of
Stock with respect to earned Performance Awards shall not be distributed to a
Participant until any other conditions on payment of such Awards established by
the Committee have been satisfied. The Committee shall determine whether earned
Performance Awards are distributed in the form of cash, shares of Stock or in a
combination thereof, with the value or number of shares payable to be determined
based on the Fair Market Value of the Stock on the date of the Committee’s
certification under paragraph 5(g) above. The Committee shall have the right to
impose whatever conditions it deems appropriate with respect to the award or
delivery of shares of Stock, including conditioning the vesting of such shares
on the performance of additional service.

 

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(i) Newly Eligible Participants. Notwithstanding anything in this Section 5 to
the contrary, the Committee shall be entitled to make such rules, determinations
and adjustments as it deems appropriate with respect to any Participant who
becomes eligible to receive Performance Awards after the commencement of a
Performance Cycle.

SECTION 6. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

(a) Grant. Restricted Stock and Restricted Stock Units may be granted to
Participants at such time or times as shall be determined by the Committee. The
grant date of any Restricted Stock or Restricted Stock Units under the Plan will
be the date on which such Restricted Stock or Restricted Stock Units are awarded
by the Committee, or on such other date as the Committee shall determine.
Restricted Stock and Restricted Stock Units shall be evidenced by an Award
Agreement that shall specify (i) the number of shares of Restricted Stock and
the number of Restricted Stock Units to be granted to each Participant, (ii) the
Restriction Period(s) and (iii) such other terms and conditions, including
rights to dividends or Dividend Equivalents, not inconsistent with the Plan as
the Committee shall determine, including customary representations, warranties
and covenants with respect to securities law matters. Grants of Restricted Stock
shall be evidenced by issuance of certificates representing the shares
registered in the name of the Participant or a bookkeeping entry in the
Company’s records (or by such other reasonable method as the Company shall
determine from time to time). No shares of Stock will be issued at the time an
Award of Restricted Stock Units is made and the Company shall not be required to
set aside a fund for the payment of any such Awards.

(b) Vesting. Restricted Stock and Restricted Stock Units granted to Participants
under the Plan shall be subject to a Restriction Period. Except as otherwise
determined by the Committee at or after grant, and subject to the Participant’s
continued employment with the Company on such date, the Restriction Period shall
lapse in accordance with the schedule provided in the Participant’s Award
Agreement. In its discretion, the Committee may also establish performance-based
vesting conditions with respect to Awards of Restricted Stock and Restricted
Stock Units (in lieu of, or in addition to, time-based vesting) based on one or
more of the Performance Goals listed in Section 5(c); provided that any Award of
Restricted Stock or Restricted Stock Units made to any Executive Officer that is
intended to qualify as “other performance based compensation” under
Section 162(m) of the Code shall be subject to the same restrictions and
limitations applicable to Performance Awards under Sections 5(d) and 5(g),
during a Performance Cycle selected by the Committee.

(c) Settlement of Restricted Stock and Restricted Stock Units. At the expiration
of the Restriction Period for any Restricted Stock Awards, the Company shall

 

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remove the restrictions applicable to share certificates or the bookkeeping
entry evidencing the Restricted Stock Awards, and shall, upon request, deliver
the stock certificates evidencing such Restricted Stock Awards to the
Participant or the Participant’s legal representative (or otherwise evidence the
issuance of such shares free of any restrictions imposed under the Plan). At the
expiration of the Restriction Period for any Restricted Stock Units, for each
such Restricted Stock Unit, the Participant shall receive, in the Committee’s
discretion, (i) a cash payment equal to the Fair Market Value of one share of
Stock as of such payment date, (ii) one share of Stock or (iii) any combination
of cash and shares of Stock.

(d) Restrictions on Transfer. Except as provided herein or in an Award
Agreement, shares of Restricted Stock and Restricted Stock Units may not be
sold, assigned, transferred, pledged, hedged or otherwise encumbered during the
Restriction Period. Any such attempt by the Participant to sell, assign,
transfer, pledge, hedge or encumber shares of Restricted Stock and Restricted
Stock Units without complying with the provisions of the Plan shall be void and
of no effect.

SECTION 7. STOCK OPTIONS

(a) Grant. The Committee may, in its discretion, grant Options to purchase
shares of Stock to such eligible persons as may be selected by the Committee.
Each Option, or portion thereof, that is not an Incentive Stock Option shall be
a Non-Statutory Stock Option. An Incentive Stock Option may not be granted to
any person who is not an employee of the Company or any parent or subsidiary (as
defined in Section 424 of the Code). Each Incentive Stock Option shall be
granted within ten years of the date this Plan is adopted by the Board. The
aggregate Fair Market Value of the shares of Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year shall not exceed $100,000 or such higher limit as may
be permitted under Section 422 of the Code. To the extent that the aggregate
Fair Market Value (determined as of the date of grant) of shares of Stock with
respect to which Options designated as Incentive Stock Options are exercisable
for the first time by a participant during any calendar year (under this Plan or
any other plan of the Company or any parent or subsidiary as defined in
Section 424 of the Code) exceeds $100,000 or such higher limit established by
the Code, such Options shall constitute Non-Statutory Stock Options. Each Option
shall be evidenced by an Award Agreement that shall specify the number of shares
of Stock subject to such Option, the exercise price associated with the Option,
the time and conditions of exercise of the Option and all other terms and
conditions of the Option.

(b) Number of Shares and Purchase Price. The number of shares of Stock subject
to an Option and the purchase price per share of Stock purchasable upon exercise
of the Option shall be determined by the Committee; provided, however, that the
purchase price per share of Stock purchasable upon exercise of an Option shall
not be

 

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less than 100% of the Fair Market Value of a share of Stock on the date of grant
of such Option; provided further, that if an Incentive Stock Option shall be
granted to any person who, at the time such Option is granted, owns capital
stock possessing more than ten percent of the total combined voting power of all
classes of capital stock of the Company (or of any parent or subsidiary as
defined in Section 424 of the Code) (a “Ten Percent Holder”), the purchase price
per share of Stock shall be the price (currently 110% of Fair Market Value)
required by the Code in order to constitute an Incentive Stock Option.

(c) Exercise Period and Exercisability. The period during which an Option may be
exercised shall be determined by the Committee; provided, however, that no
Option shall be exercised later than ten years after its date of grant; and
provided further, that if an Incentive Stock Option shall be granted to a Ten
Percent Holder, such Option shall not be exercised later than five years after
its date of grant. The Committee shall determine whether a Stock Option shall
become exercisable in cumulative or non-cumulative installments and in part or
in full at any time. The Committee may require that an exercisable Option, or
portion thereof, be exercised only with respect to whole shares of Stock.

(d) Method of Exercise. An Option may be exercised (i) by giving written notice
to the Company specifying the number of shares of Stock to be purchased and by
accompanying such notice with a payment therefor in full (or by arranging for
such payment to the Company’s satisfaction) and (ii) by executing such documents
as the Company may reasonably request. If the Company’s Stock is not listed on
an established stock exchange or national market system at the time an Option is
exercised, then the optionholder shall pay the exercise price of such Option in
cash. If the Company’s Stock is listed on an established stock exchange or
national market system at the time an option is exercised, then the optionholder
may pay the exercise price of such Option either (A) in cash, (B) by delivery
(either actual delivery or by attestation procedures established by the Company)
of shares of Stock having an aggregate Fair Market Value, determined as of the
date of exercise, equal to the aggregate purchase price payable by reason of
such exercise, (C) authorizing the Company to withhold whole shares of Stock
which would otherwise be delivered having an aggregate Fair Market Value,
determined as of the date of exercise, equal to the amount necessary to satisfy
such obligation, provided that the Committee determines that such withholding of
shares does not cause the Company to recognize an increased compensation expense
under applicable accounting principles, (D) in cash by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise or (E) a combination of (A), (B), (C) and (D), in each case
to the extent set forth in the Award Agreement relating to the Option. The
Company shall have sole discretion to disapprove of an election pursuant to any
of clauses (B) through (E). Any fraction of a share of Stock which would be
required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the optionee. No certificate representing
Stock shall be delivered until the full purchase price therefor and any
withholding taxes (as determined, pursuant to Section 15(a)), have been paid (or
arrangement made for such payment to the Company’s satisfaction).

 

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SECTION 8. STOCK APPRECIATION RIGHTS

(a) Grant. Stock Appreciation Rights may be granted to Participants at such time
or times as shall be determined by the Committee. Stock Appreciation Rights may
be granted in tandem with Options which, unless otherwise determined by the
Committee at or after the grant date, shall have substantially similar terms and
conditions to such Options to the extent applicable, or may be granted on a
freestanding basis, not related to any Option (“Freestanding SARs”). The grant
date of any Stock Appreciation Right under the Plan will be the date on which
the Stock Appreciation Right is awarded by the Committee or such other future
date as the Committee shall determine in its sole discretion. No Stock
Appreciation Right shall be exercisable on or after the tenth anniversary of its
grant date. Stock Appreciation Rights shall be evidenced by an Award Agreement,
whether as part of the Award Agreement governing the terms of the Options, if
any, to which such Stock Appreciation Right relates or pursuant to a separate
Award Agreement with respect to Freestanding SARs, in each case containing such
provisions not inconsistent with the Plan as the Committee shall determine,
including customary representations, warranties and covenants with respect to
securities law matters.

(b) Exercise Period and Exercisability. The period during which a Stock
Appreciation Right may be exercised shall be determined by the Committee;
provided, however, that no Stock Appreciation Right shall be exercised later
than ten years after its date of grant. The Committee shall determine whether a
Stock Appreciation Right shall become exercisable in cumulative or
non-cumulative installments and in part or in full at any time. Stock
Appreciation Rights granted in tandem with an Option shall become exercisable on
the same date or dates as the Options with which such Stock Appreciation Rights
are associated become exercisable. Stock Appreciation Rights that are granted in
tandem with an Option may only be exercised upon the surrender of the right to
exercise such Option for an equivalent number of shares of Stock, and may be
exercised only with respect to the shares of Stock for which the related Option
is then exercisable.

(c) Settlement. Subject to Section 13, upon exercise of a Stock Appreciation
Right, the Participant shall be entitled to receive payment in the form,
determined by the Committee, of cash or shares of Stock having a Fair Market
Value equal to such cash amount, or a combination of shares of Stock and cash
having an aggregate value equal to such amount, determined by multiplying:

(i) any increase in the Fair Market Value of one share of Stock on the exercise
date over the price fixed by the Committee on the grant date of such Stock
Appreciation Right, which may not be less than the Fair Market Value of a share
of Stock on the grant date of such Stock Appreciation Right, by

 

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(ii) the number of shares of Stock with respect to which the Stock Appreciation
Right is exercised;

provided, however, that on the grant date, the Committee may establish, in its
sole discretion, a maximum amount per share which will be payable upon exercise
of a Stock Appreciation Right.

SECTION 9. DEFERRED SHARE UNITS

(a) Grant. Freestanding Deferred Share Units may be granted to Participants at
such time or times as shall be determined by the Committee without regard to any
election by the Participant to defer receipt of any compensation or bonus amount
payable to him. The grant date of any freestanding Deferred Share Unit under the
Plan will be the date on which such freestanding Deferred Share Unit is awarded
by the Committee or on such other future date as the Committee shall determine
in its sole discretion. In addition, on fixed dates established by the Committee
and subject to such terms and conditions as the Committee shall determine, the
Committee may permit a Participant to elect to defer receipt of all or a portion
of his annual compensation and/or annual incentive bonus (“Deferred Annual
Amount”) payable by the Company or a Subsidiary and any other Award (“Deferred
Award”) and receive in lieu thereof an Award of elective Deferred Share Units
(“Elective Deferred Share Units”) equal to, in the case of a Deferred Annual
Amount, the greatest whole number which may be obtained by dividing (i) the
amount of the Deferred Annual Amount, by (ii) the Fair Market Value of one share
of Stock on the date of payment of such compensation and/or annual bonus or, in
the case of a Deferred Award under the Plan, the number of shares of Stock
subject to the Deferred Award. Each Award of Deferred Share Units shall be
evidenced by an Award Agreement that shall specify (x) the number of shares of
Stock to which the Deferred Share Units pertain, (y) the time and form of
payment of the Deferred Share Units and (z) such terms and conditions not
inconsistent with the Plan as the Committee shall determine, including customary
representations, warranties and covenants with respect to securities law matters
and such provisions as may be required pursuant to Section 409A of the Code.
Upon the grant of Deferred Share Units pursuant to the Plan, the Company shall
establish a notional account for the Participant and will record in such account
the number of Deferred Share Units awarded to the Participant. No shares of
Stock will be issued to the Participant at the time an award of Deferred Share
Units is granted. Deferred Share Units may become payable on a Change in
Control, Termination of Service or on a specified date or dates set forth in the
Award Agreement evidencing such Deferred Share Units.

(b) Rights as a Stockholder. The Committee shall determine whether and to what
extent Dividend Equivalents will be credited to the account of, or paid
currently to, a Participant receiving an Award of Deferred Share Units. Unless
otherwise provided by the Committee at or after the grant date, (i) any cash
dividends or distributions credited to the Participant’s account shall be deemed
to have been invested in additional Deferred

 

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Share Units on the record date established for the related dividend or
distribution in an amount equal to the greatest whole number which may be
obtained by dividing (A) the value of such dividend or distribution on the
record date by (B) the Fair Market Value of one share of Stock on such date, and
such additional Deferred Share Unit shall be subject to the same terms and
conditions as are applicable in respect of the Deferred Share Unit with respect
to which such dividends or distributions were payable, and (ii) if any such
dividends or distributions are paid in shares of Stock or other securities, such
shares and other securities shall be subject to the same vesting, performance
and other restrictions as apply to the Deferred Share Unit with respect to which
they were paid. A Participant shall not have any rights as a stockholder in
respect of Deferred Share Units awarded pursuant to the Plan (including, without
limitation, the right to vote on any matter submitted to the Company’s
stockholders) until such time as the shares of Stock attributable to such
Deferred Share Units have been issued to such Participant or his beneficiary.

(c) Vesting. Unless the Committee provides otherwise at or after the grant date,
the portion of each Award of Deferred Share Units that consists of freestanding
Deferred Share Units, together with any Dividend Equivalents credited with
respect thereto, will be subject to a Restriction Period. Except as otherwise
determined by the Committee at the time of grant, and subject to the
Participant’s continued Service with his or her Employer on such date, the
Restriction Period with respect to Deferred Share Units shall lapse as provided
in the Participant’s Award Agreement. In its discretion, the Committee may
establish performance-based vesting conditions with respect to Awards of
Deferred Share Units (in lieu of, or in addition to, time-based vesting) based
on one more of the Performance Goals listed in Section 5(c) or other performance
goal; provided that any Award of Deferred Share Units made to any Covered
Employee that is intended to qualify as performance-based compensation under
Section 162(m) of the Code shall be subject to the same restrictions and
limitations applicable to Awards of Performance Shares and Performance Units
under Sections 5(d) and 5(g), during a Performance Cycle selected by the
Committee. The portion of each Award of Deferred Share Units that consists of
Elective Deferred Share Units, together with any Dividend Equivalents credited
with respect thereto, need not be subject to any Restriction Period and may be
non-forfeitable.

(d) Further Deferral Elections. A Participant may elect to further defer receipt
of shares of Stock issuable in respect of Deferred Share Units or other Award
(or an installment of an Award) for a specified period or until a specified
event, subject in each case to the Committee’s approval and to such terms as are
determined by the Committee, all in its sole discretion. Subject to any
exceptions adopted by the Committee, such election must generally be made at
least 12 months before the prior settlement date of such Deferred Share Units
(or any such installment thereof) whether pursuant to this Section 9 or
Section 13 and must defer settlement for at least five years. A further deferral
opportunity is not required to be made available to all Participants, and
different terms and conditions may apply with respect to the further deferral
opportunities made available to different Participants.

 

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(e) Settlement. Subject to this Section 9 and Section 13, upon the date
specified in the Award Agreement evidencing the Deferred Share Units for each
such Deferred Share Unit the Participant shall receive, in the Committee’s
discretion, (i) a cash payment equal to the Fair Market Value of one share of
Stock as of such payment date, (ii) one share of Stock or (iii) any combination
of cash and shares of Stock.

SECTION 10. OTHER STOCK-BASED AWARDS

(a) Generally. The Committee is authorized to make Awards of other types of
equity-based or equity-related awards (“Stock-Based Awards”) not otherwise
described by the terms of the Plan in such amounts and subject to such terms and
conditions as the Committee shall determine. All Stock-Based Awards shall be
evidenced by an Award Agreement. Such Stock-Based Awards may be granted as an
inducement to enter the employ of the Company or any Subsidiary or in
satisfaction of any obligation of the Company or any Subsidiary to an officer or
other key employee, whether pursuant to this Plan or otherwise, that would
otherwise have been payable in cash or in respect of any other obligation of the
Company. Such Stock-Based Awards may entail the transfer of actual share of
Stock, or payment in cash or otherwise of amounts based on the value of share of
Stock 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. The terms of any other Stock-Based Award need not be uniform in
application to all (or any class of) Participants, and each other Stock-Based
award granted to any Participant (whether or not at the same time) may have
different terms.

SECTION 11. DIVIDEND EQUIVALENTS

(a) Generally. Dividend Equivalents may be granted to Participants at such time
or times as shall be determined by the Committee. Dividend Equivalents may be
granted in tandem with other Awards, in addition to other Awards, or
freestanding and unrelated to other Awards. The grant date of any Dividend
Equivalents under the Plan will be the date on which the Dividend Equivalent is
awarded by the Committee, or such other date as the Committee shall determine in
its sole discretion. Dividend Equivalents shall be evidenced in writing, whether
as part of the Award Agreement governing the terms of the Award, if any, to
which such Dividend Equivalent relates, or pursuant to a separate Award
Agreement with respect to freestanding Dividend Equivalents, in each case,
containing such provisions not inconsistent with the Plan as the Committee shall
determine, including customary representations, warranties and covenants with
respect to securities law matters.

 

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SECTION 12. TERMINATION OF EMPLOYMENT OR SERVICE.

(a) Subject to the requirements of the Code, all of the terms relating to the
exercise, cancellation or other disposition of an Award upon a termination of
employment with or service to the Company of the Participant, whether due to
disability, death or under any other circumstances, shall be determined by the
Committee.

(b) Termination in Connection with a Change in Control. Notwithstanding anything
to the contrary in this Section 12, Section 13 shall determine the treatment of
Awards upon a Change in Control.

SECTION 13. CHANGE IN CONTROL

(a) Change in Control. Unless otherwise determined by the Committee, as
otherwise provided in an Award Agreement, or as provided in Section 13(b) or
13(d), in the event of a Change in Control,

(i) no cancellation, termination, acceleration of exercisability or vesting,
lapse of any Restriction Period or settlement or other payment shall occur with
respect to any such outstanding Awards, provided that such outstanding Awards
shall be honored or assumed, or new rights substituted therefore (such honored,
assumed or substituted Award, an “Alternative Award”) by the New Employer,
provided that any Alternative Award must:

(A) be based on shares of Stock that are traded on an established U.S.
securities market or such other equity securities as are received by the holders
of Stock in the Change in Control transaction;

(B) provide the Participant (or each Participant in a class of Participants)
with rights and entitlements substantially equivalent to or better than the
rights, terms and conditions applicable under such Award, including, but not
limited to, an identical or better exercise or vesting schedule and identical or
better timing and methods of payment;

(C) have substantially equivalent economic value to such Award (determined at
the time of the Change in Control), it being understood that the economic value
of any Option or SAR need not reflect any value other than the spread value of
the Award at such time;

(D) not cause the Award to become subject to any additional taxes, interest or
penalties imposed by Section 409A of the Code; and

(E) have terms and conditions which provide that in the event that the
Participant’s employment is terminated without Cause or the Participant resigns
for Good Reason within 24 months after the occurrence of a Change in Control:

 

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(I) all outstanding Awards other than Performance Awards held by a terminated
Participant shall become vested and exercisable and the Restriction Period on
all such outstanding Service Awards shall lapse; and

(II) each outstanding Performance Award held by a terminated Participant with a
Performance Cycle in progress at the time of both the Change in Control and the
Termination of Service, shall be deemed to be earned and become vested and/or
paid out in an amount equal to the product of (x) such Participant’s target
award opportunity with respect to such Award for the Performance Cycle in
question and (y) the greater of the percentage of Performance Goals (which
Performance Goals shall be pro-rated, if necessary or appropriate, to reflect
the portion of the Performance Cycle that has been completed) achieved as of the
date of the Change in Control and as of the last day of the fiscal quarter ended
on or immediately prior to the date of Termination of Service. The portion of
any Performance Award that does not vest in accordance with the preceding
sentence shall immediately be forfeited and canceled without any payment
therefor.

(III) Payments. To the extent permitted under Section 15(l), all amounts payable
hereunder shall be payable in full, as soon as reasonably practicable, but in no
event later than 10 business days, following termination.

(ii) subject to Section 13(b), if no Alternative Awards are available or in the
event of a Change in Control in which all of the Stock is exchanged for or
converted into cash or the right to receive cash, then immediately prior to the
consummation of the transaction constituting the Change in Control, (A) all
unvested Awards (other than Performance Awards) shall vest and the Restriction
Period on all such outstanding Awards shall lapse; (B) each outstanding
Performance Award with a Performance Cycle in progress at the time of the Change
in Control shall be deemed to be earned and become vested and/or paid out in an
amount equal to the product of (x) such Participant’s target award opportunity
with respect to such Award for the Performance Cycle in question and (y) the
percentage of Performance Goals achieved as of the date of the Change in Control
(which Performance Goals shall be pro-rated, if necessary or appropriate, to
reflect the portion of the Performance Cycle that has been completed), and all
other Performance Awards shall lapse and be canceled and forfeited upon
consummation of the Change in Control; and (C) shares of Stock

 

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underlying all Restricted Stock, Restricted Stock Units, Performance Awards,
Deferred Share Units and other Stock-Based Awards that are vested or for which
the Restriction Period has lapsed (as provided in this Section 13(a) or
otherwise) shall be issued or released to the Participant holding such Award.

(iii) subject to Section 13(b), in the event of a Change in Control pursuant to
which shares of Stock are exchanged for a combination of (i) the securities of
another corporation or other entity and (ii) cash or property other than the
securities of another corporation or other entity, then the Committee, as
constituted prior to the Change in Control, may determine in its sole discretion
that some or all of the Awards shall be assumed or substituted in accordance
with Section 13(a)(i), and any remaining portion of the Award shall be
surrendered and cancelled in exchange for a cash payment in accordance with
Section 13(a)(ii).

(b) Section 409A. Notwithstanding anything in Section 13(b), if with respect to
any Specified Award an Alternative Award would be deemed a non-compliant
material modification (as defined in Section 409A of the Code) of such Award or
would otherwise violate Section 409A, then no Alternative Award shall be
provided and such Award shall instead be treated as provided in
Section 13(a)(ii) or as otherwise provided in the Award Agreement.

(c) Termination Without Cause Prior to a Change in Control. Unless otherwise
determined by the Committee at or after the time of grant, any Participant whose
employment or service is terminated without Cause within 3 months prior to the
occurrence of a Change in Control shall be treated, solely for the purposes of
this Plan (including, without limitation, this Section 13) as continuing in the
Company’s employment or service until the occurrence of such Change in Control,
and to have been terminated immediately thereafter.

(d) Committee Discretion. Notwithstanding anything in this Section 13 to the
contrary, except as otherwise provided in an Award Agreement, if the Committee
as constituted immediately prior to the Change in Control determines in its sole
discretion, then all Awards shall be canceled in exchange for a cash payment
equal to (x)(A) in the case of Option and SAR Awards that are vested (as
provided in Section 13(a) or otherwise), the excess, if any, of the Change in
Control Price over the exercise price for such Option or SAR and (B) in the case
of all other Awards that are vested or for which the Restriction Period has
lapsed (as provided in Section 13(a) or otherwise), the Change in Control Price,
multiplied by (y) the aggregate number of shares of Stock covered by such Award,
provided, however, that no Specified Award shall be cancelled in exchange for a
cash payment unless such payment may be made without the imposition of any
additional taxes or interest under Section 409A of the Code. The Committee may,
in its sole discretion, accelerate the exercisability or vesting or lapse of any
Restriction Period with respect to all or any portion of any outstanding Award
immediately prior to the

 

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consummation of the transaction constituting the Change in Control, provided,
however, that no such acceleration or vesting or lapse may be exercised with
respect to any Specified Award to the extent that such exercise would result in
the imposition of any additional tax, interest or penalty under Section 409A of
the Code.

SECTION 14. EFFECTIVE DATE, AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN

The Plan shall be effective on the Adoption Date, subject to the occurrence of
the Effective Date, and shall continue in effect, unless sooner terminated
pursuant to this Section 14, until the tenth anniversary of the Effective Date.
The Board or the Committee may at any time in its sole discretion, for any
reason whatsoever, terminate or suspend the Plan, and from time to time, subject
to obtaining any regulatory approval, including that of a stock exchange on
which the Stock is then listed, if applicable, may amend or modify the Plan;
provided that without the approval by a majority of the votes cast at a duly
constituted meeting of shareholders of the Company, no amendment or modification
to the Plan may (i) materially increase the benefits accruing to Participants
under the Plan, (ii) except as otherwise expressly provided in Section 4(f),
increase the number of shares of Stock subject to the Plan or the individual
Award limitations specified in Section 4(c), (iii) modify the class of persons
eligible for participation in the Plan, (iv) allow Options or Stock Appreciation
Rights to be issued with an exercise price or reference price below Fair Market
Value on the date of grant (v) extend the term of any Award granted under the
Plan beyond its original expiry date or (vi) materially modify the Plan in any
other way that would require shareholder approval under any regulatory
requirement that the Committee determines to be applicable, including, without
limitation, the rules of any exchange on which the Stock is then listed.
Notwithstanding any provisions of the Plan to the contrary, neither the Board
nor the Committee may, without the consent of the affected Participant, amend,
modify or terminate the Plan in any manner that would adversely affect any Award
theretofore granted under the Plan or result in the imposition of an additional
tax, interest or penalty under Section 409A of the Code.

SECTION 15. GENERAL PROVISIONS

(a) Withholding. The Employer shall have the right to deduct from all amounts
paid to a Participant in cash (whether under this Plan or otherwise) any amount
of taxes required by law to be withheld in respect of Awards under this Plan as
may be necessary in the opinion of the Employer to satisfy tax withholding
required under the laws of any country, state, province, city or other
jurisdiction, including but not limited to income taxes, capital gains taxes,
transfer taxes, and social security contributions that are required by law to be
withheld. In the case of payments of Awards in the form of Stock, at the
Committee’s discretion, the Participant shall be required to either pay to the
Employer the amount of any taxes required to be withheld with respect to such
Stock or,

 

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in lieu thereof, the Employer shall have the right to retain (or the Participant
may be offered the opportunity to elect to tender) the number of shares of Stock
whose Fair Market Value equals such amount required to be withheld, provided,
however, that in the event that the Company withholds shares of Stock issued or
issuable to the Participant to satisfy the withholding taxes, the Company shall
withhold a number of whole shares of Stock having a Fair Market Value,
determined as of the date of withholding, not in excess of such amount as may be
necessary to avoid liability award accounting; and provided, further, that with
respect to any Specified Award, in no event shall shares of Stock or other
amounts receivable under a Specified Award be withheld pursuant to this
Section 15(a) (other than upon or immediately prior to settlement in accordance
with the Plan and the applicable Award Agreement) other than to pay taxes
imposed under the U.S. Federal Insurance Contributions Act (FICA) and any
associated U.S. federal withholding tax imposed under Section 3401 of the Code
and in no event shall the value of such shares of Stock or other amounts
receivable under a Specified Award (other than upon or immediately prior to
settlement) exceed the amount of the tax imposed under FICA and any associated
U.S. federal withholding tax imposed under Section 3401 of the Code. The
Participant shall be responsible for all withholding taxes and other tax
consequences of any Award granted under this Plan.

(b) Nontransferability of Awards. Except as provided herein or in an Award
Agreement, no Award may be sold, assigned, transferred, pledged, hedged or
otherwise encumbered except by will or the laws of descent and distribution;
provided that the Committee may permit (on such terms and conditions as it shall
establish) a Participant to transfer an Award for no consideration to the
Participant’s child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Participant’s household (other
than a tenant or employee), a trust in which these persons have more than fifty
percent of the beneficial interest and any other entity in which these persons
(or the Participant) own more than fifty percent of the voting interests
(“Permitted Transferees”). A Participant may not enter into any transaction
which hedges or otherwise transfers the risk of price movements with regard to
the Stock subject to any unvested or unearned Award. No amendment to the Plan or
to any Award shall permit transfers other than in accordance with the preceding
sentence. Any attempt by a Participant to sell, assign, transfer, pledge, hedge
or encumber an Award without complying with the provisions of the Plan shall be
void and of no effect. Except to the extent required by law, no right or
interest of any Participant shall be subject to any lien, obligation or
liability of the Participant. All rights with respect to Awards granted to a
Participant under the Plan shall be exercisable during the Participant’s
lifetime only by such Participant or, if applicable, his or her Permitted
Transferee(s). The rights of a Permitted Transferee shall be limited to the
rights conveyed to such Permitted Transferee, who shall be subject to and bound
by the terms of the agreement or agreements between the Participant and the
Company.

 

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(c) No Limitation on Compensation. Nothing in the Plan shall be construed to
limit the right of the Company to establish other plans or to pay compensation
to its Employees, in cash or property, in a manner which is not expressly
authorized under the Plan.

(d) No Right to Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Employer. The grant of
an Award hereunder, and any future grant of Awards under the Plan is entirely
voluntary, and at the complete discretion of the Company. Neither the grant of
an Award nor any future grant of Awards by the Company shall be deemed to create
any obligation to grant any further Awards, whether or not such a reservation is
explicitly stated at the time of such a grant. The Plan shall not be deemed to
constitute, and shall not be construed by the Participant to constitute, part of
the terms and conditions of employment and participation in the Plan shall not
be deemed to constitute, and shall not be deemed by the Participant to
constitute, an employment or labor relationship of any kind with the Company.
The Employer expressly reserves the right at any time to dismiss a Participant
free from any liability, or any claim under the Plan, except as provided herein
and in any agreement entered into with respect to an Award. The Company
expressly reserves the right to require, as a condition of participation in the
Plan, that Award recipients agree and acknowledge the above in writing. Further,
the Company expressly reserves the right to require Award recipients, as a
condition of participation, to consent in writing to the collection, transfer
from the Employer to the Company and third parties, storage and use of personal
data for purposes of administering the Plan.

(e) No Rights as Shareholder. Subject to the provisions of the applicable Award
contained in the Plan and in the Award Agreement, no Participant, Permitted
Transferee or Designated Beneficiary shall have any rights as a shareholder with
respect to any shares of Stock to be distributed under the Plan until he or she
has become the holder thereof.

(f) Forfeiture, Cancellation or “Clawback” of Awards under Applicable Laws or
Regulations. The Company may cancel or reduce, or require a Participant to
forfeit and disgorge to the Company or reimburse the Company for, any Awards
granted or vested and any gains earned or accrued, due to the exercise, vesting
or settlement of Awards or sale of any Stock pursuant to an Award under the
Plan, to the extent permitted or required by, or pursuant to any Company policy
implemented as required by, applicable law, regulation or stock exchange rule in
effect on or after the Effective Date.

(g) Construction of the Plan. The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined solely in accordance with the
laws of the State of Delaware (without reference to the principles of conflicts
of law or choice of law that might otherwise refer the construction or
interpretation of this Plan to the substantive laws of another jurisdiction).

 

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(h) Rules of Construction. Whenever the context so requires, the use of the
masculine gender shall be deemed to include the feminine and vice versa, and the
use of the singular shall be deemed to include the plural and vice versa. That
this plan was drafted by the Company shall not be taken into account in
interpreting or construing any provision of this Plan.

(i) Compliance with Legal and Exchange Requirements. The Plan, the granting and
exercising of Awards thereunder, and any obligations of the Company under the
Plan, shall be subject to all applicable federal, state, and foreign country
laws, rules, and regulations, and to such approvals by any regulatory or
governmental agency as may be required, and to any rules or regulations of any
exchange on which the Stock is listed. The Company, in its discretion, may
postpone the granting and exercising of Awards, the issuance or delivery of
Stock under any Award or any other action permitted under the Plan to permit the
Company, with reasonable diligence, to complete such stock exchange listing or
registration or qualification of such Stock or other required action under any
federal, state or foreign country law, rule, or regulation and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Stock in
compliance with applicable laws, rules, and regulations. The Company shall not
be obligated by virtue of any provision of the Plan to recognize the exercise of
any Award or to otherwise sell or issue Stock in violation of any such laws,
rules, or regulations, and any postponement of the exercise or settlement of any
Award under this provision shall not extend the term of such Awards. Neither the
Company nor its directors or officers shall have any obligation or liability to
a Participant with respect to any Award (or Stock issuable thereunder) that
shall lapse because of such postponement.

(j) Deferrals. Subject to the requirements of Section 409A of the Code, the
Committee may postpone the exercising of Awards, the issuance or delivery of
Stock under, or the payment of cash in respect of, any Award or any action
permitted under the Plan, upon such terms and conditions as the Committee may
establish from time to time. Subject to the requirements of Section 409A of the
Code, a Participant may electively defer receipt of the shares of Stock or cash
otherwise payable in respect of any Award (including, without limitation, any
shares of Stock issuable upon the exercise of an Option other than an Incentive
Stock Option) upon such terms and conditions as the Committee may establish from
time to time.

(k) Limitation on Liability; Indemnification. No member of the Board or
Committee, and none of the chief executive officer or any other delegate or
agent of the Committee shall be liable for any act, omission, interpretation,
construction or determination made in connection with the Plan in good faith,
and each person who is or

 

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shall have been a member of the Board or Committee, the chief executive officer
and each delegate or agent of the Committee shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
(including attorneys’ fees) 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 made a party or in which he or she may be
involved in by reason of any action taken or failure to act under the Plan to
the full extent permitted by law, except as otherwise provided in the Company’s
Certificate of Incorporation and/or Bylaws, and under any directors’ and
officers’ liability insurance that may be in effect from time to time. The
foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Company’s Articles of Incorporation or By-laws, by contract,
as a matter of law, or otherwise.

(l) Amendment of Award. In the event that the Committee shall determine that
such action would, taking into account such factors as it deems relevant, be
beneficial to the Company, the Committee may affirmatively act to amend, modify
or terminate any outstanding Award at any time prior to payment or exercise in
any manner not inconsistent with the terms of the Plan, including without
limitation, change the date or dates as of which (A) an Option or Stock
Appreciation Right becomes exercisable, (B) a Performance Share or Performance
Unit is deemed earned, or (C) Restricted Stock, Restricted Stock Units, Deferred
Share Units and other Stock-Based Awards becomes nonforfeitable, except that no
outstanding Option may be amended or otherwise modified or exchanged (other than
in connection with a transaction described in Section 4(f)) in a manner that
would have the effect of reducing its original exercise price or otherwise
constitute repricing. Any such action by the Committee shall be subject to the
Participant’s consent if the Committee determines that such action would
adversely affect the Participant’s rights under such Award, whether in whole or
in part. Notwithstanding anything to the contrary contained herein, the
Committee may, in its sole discretion, accelerate the exercisability or vesting
or lapse of any Restriction Period with respect to all or any portion of any
outstanding Award at any time. Notwithstanding any provisions of the Plan to the
contrary, the Committee may not, without the consent of the affected
Participant, amend, modify or terminate an outstanding Award or exercise any
discretion in any manner that would result in the imposition of an additional
tax, interest or penalty under Section 409A of the Code.

(m) 409A Compliance. The Plan is intended to be administered in a manner
consistent with the requirements, where applicable, of Section 409A of the Code.
Where reasonably possible and practicable, the Plan shall be administered in a
manner to avoid the imposition on Participants of immediate tax recognition and
additional taxes pursuant to Section 409A of the Code. In the case of any
Specified Award that may be treated as payable in the form of “a series of
installment payments,” as defined in Treasury Regulation
Section 1.409A-2(b)(2)(iii), a Participant’s or Designated Beneficiary’s right
to receive such payments shall be treated as a right to receive a series of
separate

 

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payments for purposes of such Treasury Regulation. Notwithstanding the
foregoing, neither the Company nor the Committee, nor any of the Company’s
directors, officers or employees shall have any liability to any person in the
event Section 409A of the Code applies to any such Award in a manner that
results in adverse tax consequences for the Participant or any of his
beneficiaries or transferees. Notwithstanding any provision of this Plan or any
Award Agreement to the contrary, the Board or the Committee may unilaterally
amend, modify or terminate the Plan or any outstanding Award, including but not
limited to changing the form of Award or the exercise price of any Option or
SAR, if the Board or Committee determines, in its sole discretion, that such
amendment, modification or termination is necessary or advisable to comply with
applicable U.S. law, as a result of changes in law or regulation or to avoid the
imposition of an additional tax, interest or penalty under Section 409A of the
Code.

(n) Certain Provisions Applicable to Specified Employees. Notwithstanding the
terms of this Plan or any Award Agreement to the contrary, if at the time of
Participant’s Termination of Service he or she is a “specified employee” within
the meaning of Section 409A of the Code, any payment of any “nonqualified
deferred compensation” amounts (within the meaning of Section 409A of the Code
and after taking into account all exclusions applicable to such payments under
Section 409A of the Code) required to be made to the Participant upon or as a
result of the Termination of Service (as defined in Section 409A) shall be
delayed until after the six-month anniversary of the Termination of Service to
the extent necessary to comply with and avoid the imposition of taxes, interest
and penalties under Section 409A of the Code. Any such payments to which he or
she would otherwise be entitled during the first six months following his or her
Termination of Service will be accumulated and paid without interest on the
first payroll date after the six-month anniversary of the Termination of Service
(unless another Section 409A-compliant payment date applies) or within thirty
days thereafter. These provisions will only apply if and to the extent required
to avoid the imposition of taxes, interest and penalties under Section 409A of
the Code.

(o) No Impact on Benefits. Except as may otherwise be specifically stated under
any employee benefit plan, policy or program, no amount payable in respect of
any Award shall be treated as compensation for purposes of calculating a
Participant’s right under any such plan, policy or program.

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

 

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(q) Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of this Plan, and
shall not be employed in the construction of this Plan.

 

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