Exhibit 10.1

TEXTRON INC.

2007 LONG-TERM INCENTIVE PLAN

(AMENDED AND RESTATED AS OF APRIL 28, 2010)

(Share numbers adjusted to reflect stock splits)

1. Purposes of the Plan

The purposes of the Plan are to (a) promote the long-term success of the Company
and its Subsidiaries and to increase shareholder value by providing Eligible
Individuals with incentives to contribute to the long-term growth and
profitability of the Company and (b) assist the Company in attracting, retaining
and motivating highly qualified individuals who are in a position to make
significant contributions to the Company and its Subsidiaries.

Upon the Effective Date, no further Awards will be granted under the Prior Plan.

2. Definitions and Rules of Construction

(a)    Definitions.    For purposes of the Plan, the following capitalized words
shall have the meanings set forth below:

“Affiliate” means any Parent or Subsidiary and any person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the Company.

“Award” means an Option, Restricted Stock, Restricted Stock Unit, Stock
Appreciation Right, Performance Stock, Performance Share Unit or Other Award
granted by the Committee pursuant to the terms of the Plan.

“Award Document” means an agreement, certificate or other type or form of
document or documentation approved by the Committee that sets forth the terms
and conditions of an Award. An Award Document may be in paper, electronic or
other media, may be limited to a notation on the books and records of the
Company and, unless the Committee requires otherwise, need not be signed by a
representative of the Company or a Participant.

“Beneficial Owner” and “Beneficially Owned” have the meaning set forth in
Rule 13d-3 under the Exchange Act.

“Board” means the Board of Directors of the Company, as constituted from time to
time.

“Change of Control” means:

(i) Any “person” or “group” (within the meaning of Sections 13 (d) and 14
(d)(2) of the Exchange Act other than the Company, any “person” who on the
Effective Date was a director or officer of the Company, any trustee or other
fiduciary holding Common Stock under an employee benefit plan of the Company or
a Subsidiary, or any corporation which is owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of Common Stock, is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Act) of more than thirty percent (30%) of the then
outstanding voting stock of the Company, or

(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company’s shareholders
was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the two-year period (or
whose election or nomination was previously so approved) cease for any reason to
constitute a majority of the Board, or

(iii) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either

 

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by remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or

(iv) the shareholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.

If an Award is subject to Section 409A of the Code, the payment or settlement of
the Award shall accelerate upon a Change of Control only if the event also
constitutes a “change in ownership,” “change in effective control,” or “change
in the ownership of a substantial portion of the Company’s assets” as defined
under Section 409A of the Code. Any adjustment to the Award that does not affect
the Award’s status under Section 409A (including, but not limited to,
accelerated vesting or adjustment of the amount of the Award) may occur upon a
Change in Control as defined in the Plan, regardless of whether the event also
constitutes a change in control under Section 409A. Notwithstanding the
foregoing, with respect to any Award granted after April 28, 2010, for purposes
of clause (iii) and (iv) above a “Change of Control” shall be deemed to occur
only upon consummation (and not upon approval) of a transaction described in
such clauses.

“Code” means the Internal Revenue Code of 1986, as amended, and the applicable
rulings and regulations promulgated thereunder.

“Committee” means the Organization and Compensation Committee of the Board, any
successor committee thereto or any other committee appointed from time to time
by the Board to administer the Plan, which committee shall meet the requirements
of Section 162(m) of the Code, Section 16(b) of the Exchange Act and the
applicable rules of the NYSE; provided, however, that, if any Committee member
is found not to have met the qualification requirements of Section 162(m) of the
Code and Section 16(b) of the Exchange Act, any actions taken or Awards granted
by the Committee shall not be invalidated by such failure to so qualify.

“Common Stock” means the common stock of the Company, par value $0.125 per
share, or such other class of share or other securities as may be applicable
under Section 13 of the Plan.

“Company” means Textron Inc., a Delaware corporation, or any successor to all or
substantially all of the Company’s business that adopts the Plan.

“Early Retirement” means the attainment of age 60, or age 55 with 10 years of
service, or 20 years of service.

“Effective Date” means April 25, 2007, the date on which the Plan was approved
by the shareholders of the Company.

“Eligible Individuals” means the individuals described in Section 4(a) of the
Plan who are eligible for Awards under the Plan.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Fair Market Value” means, with respect to a share of Common Stock, the closing
selling price of a share of Common Stock on the relevant date of determination
as reported on the composite tape for securities listed on the NYSE, or such
national securities exchange as may be designated by the Committee. If there
were no sales on the relevant date, the fair market value shall equal the
closing share price on the most recent day preceding the relevant date during
which a sale occurred.

“Family Member” means any 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, and any person sharing the Participant’s
household (other than a tenant or employee).

“Incentive Stock Option” means an Option that is intended to comply with the
requirements of Section 422 of the Code or any successor provision thereto.

 

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“Non-Employee Director” means any member of the Board who is not an officer or
employee of the Company or any Subsidiary.

“Nonqualified Stock Option” means an Option that is not intended to comply with
the requirements of Section 422 of the Code or any successor provision thereto.

“NYSE” means the New York Stock Exchange.

“Option” means an Incentive Stock Option or Nonqualified Stock Option granted
pursuant to Section 7 of the Plan.

“Other Award” means any form of Award other than an Option, Restricted Stock,
Restricted Stock Unit, Performance Stock, Performance Share Unit, or Stock
Appreciation Right granted pursuant to Section 11 of the Plan.

“Parent” means a corporation which owns or beneficially owns a majority of the
outstanding voting stock or voting power of the Company. Notwithstanding the
above, with respect to an Incentive Stock Option, Parent shall have the same
meaning as “parent corporation” set forth in Section 424(e) of the Code.

“Participant” means an Eligible Individual who has been granted an Award under
the Plan.

“Performance Period” means the period established by the Committee and set forth
in the applicable Award Document over which Performance Targets are measured.

“Performance Stock” means a Target Number of Shares granted pursuant to
Section 10(b) of the Plan.

“Performance Target” means the performance measures established by the
Committee, from among the performance criteria provided in Section 6(g), and set
forth in the applicable Award Document.

“Performance Share Unit” means a right to receive a Target Number of Shares or
cash in the future granted pursuant to Section 10(c) of the Plan.

“Permitted Transferees” means (i) a Participant’s Family Member, (ii) one or
more trusts in which Family Members have more than fifty percent of the
beneficial interest, (iii) a foundation in which the Participant or Family
Members control the management of assets; or (iv) any other entity in which the
Participants or Family Members own more than fifty percent of the voting
interests.

“Plan” means this Textron Inc. 2007 Long-Term Incentive Plan, as amended or
restated from time to time.

“Plan Limit” means the maximum aggregate number of Shares that may be issued for
all purposes under the Plan as set forth in Section 5(a) of the Plan.

“Prior Plan” means the 1999 Long-Term Incentive Plan, as amended and restated
from time to time.

“Restricted Stock” means one or more Shares granted pursuant to Section 8(b) of
the Plan.

“Restricted Stock Unit” means a right to receive one or more Shares (or cash, if
applicable) in the future granted pursuant to Section 8(c) of the Plan.

“Shares” means shares of Common Stock, as may be adjusted pursuant to
Section 13(b).

“Stock Appreciation Right” means a right to receive all or some portion of the
appreciation on Shares granted pursuant to Section 9 of the Plan.

“Subsidiary” means (i) a corporation or other entity with respect to which the
Company, directly or indirectly, has the power, whether through the ownership of
voting securities, by contract or otherwise, to elect at least a majority of the
members of such corporation’s board of directors or analogous governing body, or
(ii) any other corporation or other entity in which the Company, directly or
indirectly, has an equity or similar interest greater than 50% and which the
Committee designates as a Subsidiary for purposes of the Plan. For purposes of
determining eligibility for the grant of

 

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Incentive Stock Options under the Plan, the term “Subsidiary” shall be defined
in the manner required by Section 424(f) of the Code.

“Substitute Award” means any Award granted upon assumption of, or in
substitution or exchange for, outstanding employee equity awards previously
granted by a company or other entity acquired by the Company or with which the
Company combines pursuant to the terms of an equity compensation plan that was
approved by the shareholders of such company or other entity.

“Target Number” means, if applicable, the target number of Shares or cash value
established by the Committee and set forth in the applicable Award Document.

(b)    Rules of Construction.    The masculine pronoun shall be deemed to
include the feminine pronoun, and the singular form of a word shall be deemed to
include the plural form, unless the context requires otherwise. Unless the text
indicates otherwise, references to sections are to sections of the Plan.

3. Administration

(a)    Committee.    The Plan shall be administered by the Committee, which
shall have full power and authority, subject to the express provisions hereof,
to:

(i) select the Participants from the Eligible Individuals;

(ii) grant Awards in accordance with the Plan;

(iii) determine the number of Shares subject to each Award or the cash amount
payable in connection with an Award;

(iv) determine the terms and conditions of each Award, including, without
limitation, those related to term, permissible methods of exercise, vesting,
cancellation, payment, settlement, exercisability, Performance Periods,
Performance Targets, and the effect, if any, of a Participant’s termination of
employment with the Company or any of its Subsidiaries or, subject to
Section 6(d), a Change of Control of the Company;

(v) subject to Sections 6(g), 16 and 17(e) of the Plan, amend the terms and
conditions of an Award after the granting thereof;

(vi) specify and approve the provisions of the Award Documents delivered to
Participants in connection with their Awards;

(vii) construe and interpret any Award Document delivered under the Plan;

(viii) make factual determinations in connection with the administration or
interpretation of the Plan;

(ix) adopt, prescribe, amend, waive and rescind administrative regulations,
rules and procedures relating to the Plan;

(x) employ such legal counsel, independent auditors and consultants as it deems
desirable for the administration of the Plan and to rely upon any advice,
opinion or computation received therefrom;

(xi) vary the terms of Awards to Participants in non-US jurisdictions to take
account of local tax and securities law and other regulatory requirements or to
procure favorable tax treatment for Participants;

(xii) correct any defects, supply any omission or reconcile any inconsistency in
any Award Document or the Plan; and

(xiii) make all other determinations and take any other action desirable or
necessary to interpret, construe or implement properly the provisions of the
Plan or any Award Document.

(b)    Plan Construction and Interpretation.    The Committee shall have full
power and authority, subject to the express provisions hereof, to construe and
interpret the Plan.

(c)    Determinations of Committee Final and Binding.    All determinations by
the Committee in carrying out and administering the Plan and in construing and
interpreting the Plan shall be made in the

 

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Committee’s sole discretion and shall be final, binding and conclusive for all
purposes and upon all persons interested herein.

(d)    Delegation of Authority.    To the extent not prohibited by applicable
laws, rules and regulations, the Committee may, from time to time, delegate some
or all of its authority under the Plan to a subcommittee or subcommittees
thereof or other persons or groups of persons as it deems necessary, appropriate
or advisable under such conditions or limitations as it may set at the time of
such delegation or thereafter; provided, however, that the Committee may not
delegate its authority (i) to make Awards to employees (A) who are subject on
the date of the Award to the reporting rules under Section 16(a) of the Exchange
Act, (B) who are executive officers whose compensation may be subject to the
limit on deductible compensation pursuant to Section 162(m) of the Code, or
(C) who are officers of the Company who are delegated authority by the Committee
hereunder, or (ii) pursuant to Section 16 of the Plan. For purposes of the Plan,
reference to the Committee shall be deemed to refer to any subcommittee,
subcommittees, or other persons or groups of persons to whom the Committee
delegates authority pursuant to this Section 3(d). In addition, notwithstanding
the foregoing, an independent Committee of the Board is required to approve any
grants under this plan to non-employee directors.

(e)    Liability of Committee.    Subject to applicable laws, rules and
regulations: (i) no member of the Board or Committee (or its delegates) shall be
liable for any good faith action or determination made in connection with the
operation, administration or interpretation of the Plan and (ii) the members of
the Board or the Committee (and its delegates) shall be entitled to
indemnification and reimbursement in the manner provided in the Company’s
Certificate of Incorporation as it may be amended from time to time. In the
performance of its responsibilities with respect to the Plan, the Committee
shall be entitled to rely upon information and/or advice furnished by the
Company’s officers or employees, the Company’s accountants, the Company’s
counsel and any other party the Committee deems necessary, and no member of the
Committee shall be liable for any action taken or not taken in reliance upon any
such information and/or advice.

(f)    Action by the Board.    Anything in the Plan to the contrary
notwithstanding, subject to applicable laws, rules and regulations, any
authority or responsibility that, under the terms of the Plan, may be exercised
by the Committee may alternatively be exercised by the Board.

4. Eligibility

(a)    Eligible Individuals.    Awards may be granted to employees and
Non-Employee Directors of the Company or any of its Subsidiaries; provided,
however, that only employees of the Company or a Parent or Subsidiary may be
granted Incentive Stock Options. The Committee shall have the authority to
select the persons to whom Awards may be granted and to determine the type,
number and terms of Awards to be granted to each such Participant. Under the
Plan, references to “employment” or “employed” include service of Participants
who are Non-Employee Directors, except for purposes of determining eligibility
to be granted Incentive Stock Options.

(b)    Grants to Participants.    The Committee shall have no obligation to
grant any Eligible Individual an Award or to designate an Eligible Individual as
a Participant solely by reason of such Eligible Individual having received a
prior Award or having been previously designated as a Participant. The Committee
may grant more than one Award to a Participant and may designate an Eligible
Individual as a Participant for overlapping periods of time.

5. Shares Subject to the Plan

(a)    Plan Limit.    Subject to adjustment in accordance with Section 13 of the
Plan, the maximum aggregate number of Shares that may be issued for all purposes
under the Plan shall be 12,000,000 plus any Shares that become available for
issuance upon cancellation, forfeiture, or expiration of awards granted under
the Prior Plan without having been exercised or settled. Shares to be issued
under the Plan may be authorized and unissued shares, issued shares that have
been reacquired by the Company (in the open-market or in private transactions)
and that are being held in treasury, or a combination thereof. No more than
12,000,000 Shares may be issued pursuant to Incentive Stock Options.

 

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(b)    Rules Applicable to Determining Shares Available for Issuance.    The
number of Shares remaining available for issuance will be reduced by the number
of Shares subject to outstanding Awards that are both denominated and intended
to be settled in Shares and, for all other awards, by the number of Shares
actually delivered upon settlement or payment of the Award. For purposes of
determining the number of Shares that remain available for issuance under the
Plan, (i) the number of Shares that are tendered by a Participant or withheld by
the Company to pay the exercise price of an Award or to satisfy the
Participant’s tax withholding obligations in connection with the exercise or
settlement of an Award and (ii) all of the Shares covered by a stock-settled
Stock Appreciation Right to the extent exercised, will not be added back to the
Plan Limit. In addition, for purposes of determining the number of Shares that
remain available for issuance under the Plan, the number of Shares corresponding
to Awards that are both denominated and intended to be settled in Shares under
the Plan that are forfeited or cancelled or otherwise expire for any reason
without having been exercised or settled or that is settled through issuance of
consideration other than Shares (including, without limitation, cash) shall be
added back to the Plan Limit and again be available for the grant of Awards;
provided, however, that this provision shall not be applicable with respect to
(i) the cancellation of a Stock Appreciation Right granted in tandem with an
Option upon the exercise of the Option or (ii) the cancellation of an Option
granted in tandem with a Stock Appreciation Right upon the exercise of the Stock
Appreciation Right.

(c)    Special Limits.    Anything to the contrary in Section 5(a) above
notwithstanding, but subject to adjustment under Sections 5(b) and 13 of the
Plan, the following special limits shall apply to Shares available for Awards
under the Plan:

(i) the maximum number of Shares that may be issued pursuant to awards of
Restricted Stock, Restricted Stock Units, Performance Stock, Performance Share
Units and Other Awards that are payable in Shares granted under the Plan shall
equal 3,000,000 Shares in the aggregate.

(ii) the maximum number of Shares that may be made subject to Options and Stock
Appreciation Rights granted to any Eligible Individual in any calendar year
shall equal 400,000 Shares, and if any Option or Stock Appreciation Right is
forfeited, cancelled or otherwise expires for any reason without having been
exercised, the Shares subject to such Option or Stock Appreciation Right shall
be included in the determination of the aggregate number of Shares issued to
such employee under the Plan.

(iii) the maximum amount of Awards (other than those Awards set forth in
Section 5(c)(ii)) that may be (1) awarded to any Eligible Individual in any
calendar year (with respect to Awards settled in Shares) is 400,000 Shares
measured as of the date of grant, or (2) paid to any Eligible Individual in any
calendar year (with respect to Awards settled in cash) is $15 million; and

(iv) A maximum of five percent (5%) of the aggregate number of Shares available
for issuance under the Plan may be issued as Restricted Stock, Restricted Stock
Units, Performance Stock, or Performance Share Units, having no minimum vesting
period as specified in Sections 8(a) and 10(a).

(d) Any Shares underlying Substitute Awards shall not be counted against the
number of Shares remaining for issuance and shall not be subject to
Section 5(c).

6. Awards in General

(a)    Types of Awards.    Awards under the Plan may consist of Options,
Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance
Stock, Performance Share Units and Other Awards. Any Award described in Sections
7 through 11 of the Plan may be granted singly or in combination or tandem with
any other Award, as the Committee may determine. Awards under the Plan may be
made in combination with, in replacement of, or as alternatives to awards or
rights under any other compensation or benefit plan of the Company, including
the plan of any acquired entity.

(b)    Terms Set Forth in Award Document.    The terms and conditions of each
Award shall be set forth in an Award Document in a form approved by the
Committee for such Award, which Award Document shall contain terms and
conditions not inconsistent with the Plan. Notwithstanding the foregoing, and
subject to applicable laws, the Committee may accelerate (i) the vesting or
payment of any Award, (ii) the lapse of restrictions on any Award or (iii) the
date on which any Award first becomes exercisable. The Committee shall exercise
this discretion only in the event of death, disability, Change of Control,

 

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retirement, or termination without cause. If an Award is subject to Section 409A
of the Code, or if an Award is intended to qualify as “performance-based
compensation” for purposes of Section 409A or Section 162(m) of the Code, the
Committee shall have discretion to alter the terms of the Award only to the
extent that the alteration would not cause the Award to fail to satisfy the
requirements of Section 409A or the “performance-based compensation” exemption
under Section 162(m), respectively. The terms of Awards may vary among
Participants, and the Plan does not impose upon the Committee any requirement to
make Awards subject to uniform terms. Accordingly, the terms of individual Award
Documents may vary.

(c)    Termination of Employment.    The Committee shall specify at or after the
time of grant of an Award the provisions governing the disposition of an Award
in the event of a Participant’s termination of employment with the Company or
any of its Subsidiaries. Subject to applicable laws, rules and regulations, in
connection with a Participant’s termination of employment, the Committee shall
have the discretion to accelerate the vesting, exercisability or settlement of,
eliminate the restrictions and conditions applicable to, alter the form of
payment, or extend the post-termination exercise period of an outstanding Award.
Such provisions may be specified in the applicable Award Document or determined
at a subsequent time. If an Award is subject to Section 409A of the Code, or if
an Award is intended to qualify as “performance-based compensation” for purposes
of Section 409A or Section 162(m) of the Code, the Committee shall have
discretion to alter the terms of the Award only to the extent that the
alteration would not cause the Award to fail to satisfy the requirements of
Section 409A or the “performance-based compensation” exemption under
Section 162(m), respectively.

(d)    Change of Control.    (i) The Committee shall have full authority to
determine the effect, if any, of a Change of Control of the Company or any
Subsidiary on the vesting, exercisability, settlement, payment or lapse of
restrictions applicable to an Award, which effect may be specified in the
applicable Award Document or determined at a subsequent time. Subject to
applicable laws, rules and regulations, the Board or the Committee shall, at any
time prior to, coincident with or after the effective time of a Change of
Control, take such actions as it may consider appropriate, including, without
limitation: (A) providing for the acceleration of any vesting conditions
relating to the exercise or settlement of an Award or that an Award shall
terminate or expire unless exercised or settled in full on or before a date
fixed by the Committee; (B) making such adjustments to the Awards then
outstanding as the Committee deems appropriate to reflect such Change of
Control; (C) causing the Awards then outstanding to be assumed, or new rights
substituted therefor, by the surviving corporation in such Change of Control; or
(D) permitting or requiring Participants to surrender outstanding Options and
Stock Appreciation Rights in exchange for a cash payment equal to the
difference, if any, between the highest price paid for a Share in the Change of
Control transaction and the Exercise Price of the Award. If an Award is subject
to Section 409A of the Code, the Committee shall have discretion to alter the
terms of the Award only to the extent that the alteration would not cause the
Award to fail to satisfy the requirements of Section 409A. In addition, except
as otherwise specified in an Award Document (or a Participant’s written
employment agreement with the Company or any Subsidiary):

(1) any and all Options and Stock Appreciation Rights outstanding as of the
effective date of the Change of Control shall become immediately exercisable;

(2) any restrictions imposed on Restricted Stock and Restricted Stock Units
outstanding as of the effective date of the Change of Control shall lapse;

(3) the Performance Targets with respect to all Performance Share Units,
Performance Stock and other performance-based Awards granted pursuant to
Sections 6(g) or 10 outstanding as of the effective date of the Change of
Control shall be deemed to have been attained at the specified target level of
performance;

(4) the vesting of all Awards denominated in Shares outstanding as of the
effective date of the Change of Control shall be accelerated; and

(5) any Award that became earned or vested as a result of the Change in Control
shall be paid in full within 30 days after the vesting date (unless the payment
would constitute an impermissible acceleration of a distribution that is subject
to Section 409A of the Code, in which case the payment shall be made on the
original distribution date).

 

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(ii) Subject to applicable laws, rules and regulations, the Committee may
provide, in an Award Document or subsequent to the grant of an Award for the
accelerated vesting, exercisability and/or the deemed attainment of a
Performance Target with respect to an Award upon specified events similar to a
Change of Control.

(iii) Notwithstanding any other provision of the Plan or any Award Document, the
provisions of this Section 6(d) may not be terminated, amended, or modified upon
or after a Change of Control in a manner that would adversely affect a
Participant’s rights with respect to an outstanding Award without the prior
written consent of the Participant. Subject to Section 16, the Board, upon
recommendation of the Committee, may terminate, amend or modify this
Section 6(d) at any time and from time to time prior to a Change of Control.

(e)    Dividends and Dividend Equivalents.    The Committee may provide
Participants with the right to receive dividends or payments equivalent to
dividends or interest with respect to an outstanding Award, which payments can
either be paid currently or deemed to have been reinvested in Shares, and can be
made in Shares, cash or a combination thereof, as the Committee shall determine;
provided, however, that the terms of any payment or reinvestment of dividends
(including the time and form in which reinvested dividends will be paid to the
Participant) must be specified in the Award Document when the Award is granted
and must comply with all applicable laws, rules and regulations, including,
without limitation, Section 409A of the Code. Dividends or dividend equivalents
that are paid currently with respect to any non-vested Award generally shall be
paid at the same time as dividends are paid to the Company’s shareholders, and
in no event later than 2 1/2 months after the end of the year in which the
dividend record date falls. Dividends or dividend equivalents that are
reinvested with respect to any non-vested Award shall vest and be paid out at
the same time and under the same conditions as the underlying Award.
Notwithstanding the foregoing, no dividends or dividend equivalents shall be
paid with respect to Options or Stock Appreciation Rights.

(f)    Rights of a Shareholder.    A Participant shall have no rights as a
shareholder with respect to Shares covered by an Award (including voting rights)
until the date the Participant or his or her nominee becomes the holder of
record of such Shares. No adjustment shall be made for dividends or other rights
for which the record date is prior to such date, except as provided in
Section 13.

(g)    Performance-Based Awards.    (i) The Committee may determine whether any
Award (or portion of an Award) under the Plan is intended to be
“performance-based compensation” as that term is used in Section 162(m) of the
Code. Any such Awards (or portions of Awards) designated to be
“performance-based compensation” shall be conditioned on the achievement of one
or more Performance Targets to the extent required by Section 162(m) of the Code
and will be subject to all other conditions and requirements of Section 162(m).
The Performance Targets will consist of specified levels of one or more of the
following performance criteria as the Committee deems appropriate: operating
cash flows from continuing operations, operating working capital, free cash
flow, revenues, segment profit, corporate expenses, special charges, gain (loss)
on sale of business, income from continuing operations, net income,
EBITDA—earnings before interest, taxes, depreciation and amortization,
EBIT—earnings before interest and taxes, EPS—earnings per share, as adjusted
EPS, ROA—return on assets, ROS—return on sales, ROE—return on equity,
ROIC—return on invested capital, WACC—weighted average cost of capital, total
shareholder return, stock price appreciation, growth in managed assets, organic
growth, cost performance, net cost reductions, inventory turns, selling and
administrative expense as a percentage of sales, days sales outstanding, ratio
of income to fixed charges, segment profit margins, total profit margin,
EVA—economic value added, intrinsic value and effective income tax rate, in each
case determined in accordance with generally accepted accounting principles
(subject to modifications approved by the Committee) consistently applied on a
business unit, divisional, subsidiary or consolidated basis or any combination
thereof. The Performance Targets may be described in terms of objectives that
are related to the individual Participant or objectives that are Company-wide or
related to a Subsidiary, division, department, region, function or business unit
and may be measured on an absolute or cumulative basis or on the basis of
percentage of improvement over time, and may be measured in terms of Company
performance (or performance of the applicable Subsidiary, division, department,
region, function or business unit) or measured relative to selected peer
companies or a market index. In addition, for Awards or portions of Awards not
intended to qualify as “performance-based compensation” under Section 162(m) of
the Code, the Committee may establish Performance Targets based on other
criteria as it deems appropriate.

 

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(ii) The Participants will be designated, and the applicable Performance Targets
will be established, by the Committee within ninety (90) days following the
commencement of the applicable Performance Period (or such earlier or later date
permitted or required by Section 162(m) of the Code). Each Participant will be
assigned a Target Number payable if Performance Targets are achieved. Any
payment of an Award granted with Performance Targets shall be conditioned on the
written certification of the Committee in each case that the Performance Targets
and any other material conditions were satisfied. The Committee may determine,
at the time of Award grant and to the extent permitted by Code
Section 162(m) and the regulations and interpretive rulings thereunder, that if
performance exceeds the specified Performance Targets, the Award may be settled
with payment greater than the Target Number, but in no event may such payment
exceed the limits set forth in Section 5(c). Similarly, the Committee may
establish a payment that is below the Target Number but above a threshold level
of payment if performance is below established Performance Targets. The
Committee retains the right to reduce any Award notwithstanding the attainment
of the Performance Targets. Notwithstanding the above, for any Award or portion
of an Award designated to be “performance-based compensation” under
Section 162(m) of the Code, the Committee does not retain any right to increase
any amount otherwise determined under the provisions of the Plan and the Award.

(h)    Deferrals.     All Awards that are subject to a substantial risk of
forfeiture when granted shall be paid to the Participant in a lump sum (in cash,
Shares, or a combination of the two) no later than the end of the year in which
the Award vests (or, if later, by the 15th day of the third calendar month after
the Award vests), unless the Participant has made a valid election under a
deferred compensation plan sponsored by the Company to defer all or part of the
Award. No deferral opportunity shall exist with respect to an Award unless
explicitly permitted by the Committee at the time of grant. No Option or Stock
Appreciation Right shall include a right to defer gain upon exercise or any
other deferral feature.

(i)    Repricing of Options and Stock Appreciation Rights.    Notwithstanding
anything in the Plan to the contrary, except as may be specifically authorized
by the Company’s shareholders, at any time when the exercise price of a Option
or Stock Appreciation Right is above the Fair Market Value of a Share, the
Company shall not reduce the exercise price of such Option or Stock Appreciation
Right and shall not exchange such Option or Stock Appreciation Right for a new
Award with a lower (or no) exercise price or for cash The foregoing shall not
(i) prevent adjustments pursuant to Section 13 or (ii) apply to grants of
Substitute Awards.

(j) One-Time Option Exchange. Notwithstanding any other provision of the Plan to
the contrary, upon approval of the Company’s shareholders, the Committee may
provide for, and the Company may implement, a one-time-only option exchange
offer, pursuant to which certain outstanding Options could, at the election of
the person holding such Options, be tendered to the Company in exchange for the
issuance of a lesser amount of Options with a lower exercise price, provided
that such one-time-only option exchange offer is commenced within six months of
the date of such shareholder approval.

7. Terms and Conditions of Options

(a)    General.    The Committee, in its discretion, may grant Options to
Eligible Individuals and shall determine whether such Options shall be Incentive
Stock Options or Nonqualified Stock Options. Each Option shall be evidenced by
an Award Document that shall expressly identify the Option as an Incentive Stock
Option or Nonqualified Stock Option, and be in such form and contain such
provisions as the Committee shall from time to time deem appropriate.

(b)    Exercise Price.    The exercise price of an Option shall be fixed by the
Committee at the time of grant or shall be determined by a method specified by
the Committee at the time of grant. In no event shall the exercise price of an
Option be less than one hundred percent (100%) of the Fair Market Value of a
Share on the date of grant; provided, however that the exercise price of a
Substitute Award granted as an Option shall be determined in accordance with
Section 409A of the Code and, with respect to Incentive Stock Options,
Section 424 of the Code and may be less than one hundred percent (100%) of the
Fair Market Value.

 

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(c)    Term.    An Option shall be effective for such term as shall be
determined by the Committee and as set forth in the Award Document relating to
such Option, and the Committee may extend the term of an Option after the time
of grant; provided, however, that the term of an Option may in no event extend
beyond the tenth (10th) anniversary of the date of grant of such Option.

(d)    Exercise; Payment of Exercise Price.    Options shall be exercised by
delivery of a notice of exercise in a form approved by the Company. Subject to
the provisions of the applicable Award Document, the exercise price of an Option
may be paid (i) in cash or cash equivalents, (ii) by actual delivery or
attestation to ownership of freely transferable Shares already owned by the
person exercising the Option, (iii) by a combination of cash and Shares equal in
value to the exercise price, (iv) through net share settlement or similar
procedure involving the withholding of Shares subject to the Option with a value
equal to the exercise price or (v) by such other means as the Committee may
authorize. In accordance with the rules and procedures authorized by the
Committee for this purpose, the Option may also be exercised through a “cashless
exercise” procedure authorized by the Committee from time to time that permits
Participants to exercise Options by delivering irrevocable instructions to a
broker to deliver promptly to the Company the amount necessary to pay the
exercise price and the amount of any required tax or other withholding
obligations or such other procedures determined by the Company from time to
time.

(e)    Incentive Stock Options.    The exercise price per Share of an Incentive
Stock Option shall be fixed by the Committee at the time of grant or shall be
determined by a method specified by the Committee at the time of grant, but in
no event shall the exercise price of an Incentive Stock Option be less than one
hundred percent (100%) of the Fair Market Value of a Share on the date of grant.
No Incentive Stock Option may be issued pursuant to the Plan to any individual
who, at the time the Incentive Stock Option is granted, owns stock possessing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries, unless (i) the exercise price
determined as of the date of grant is at least one hundred ten percent (110%) of
the Fair Market Value on the date of grant of the Shares subject to such
Incentive Stock Option and (ii) the Incentive Stock Option is not exercisable
more than five (5) years from the date of grant thereof. No Participant shall be
granted any Incentive Stock Option which would result in such Participant
receiving a grant of Incentive Stock Options that would have an aggregate Fair
Market Value in excess of one hundred thousand dollars ($100,000), determined as
of the time of grant, that would be exercisable for the first time by such
Participant during any calendar year. No Incentive Stock Option may be granted
under the Plan after February 28, 2017, the tenth (10th) anniversary of the date
on which the Plan was adopted by the Board. The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with the provisions
of Section 422 of the Code, or any successor provision thereto, as amended from
time to time.

8. Terms and Conditions of Restricted Stock and Restricted Stock Units

(a)    Minimum Vesting Provisions.    Restricted Stock or Restricted Stock Units
settled in Shares that are granted without any other performance-based
qualification criteria other than the Participant’s continued service shall have
a minimum period of restriction of three (3) years. Performance-based grants
shall feature a minimum period of restriction of one (1) year. Awards of
Restricted Stock or Restricted Stock Units shall not be deemed to lack a minimum
period of restriction solely because they vest before the end of the period in
the event of the Participant’s death, disability or retirement, including Early
Retirement, or in the event of a Change of Control.

(b)    Restricted Stock.    The Committee, in its discretion, may grant
Restricted Stock to Eligible Individuals. An Award of Restricted Stock shall
consist of one or more Shares granted to an Eligible Individual, and shall be
subject to the terms, conditions and restrictions set forth in the Plan and
established by the Committee in connection with the Award and specified in the
applicable Award Document. Restricted Stock may, among other things, be subject
to restrictions on transferability, vesting requirements or other specified
circumstances under which it may be canceled.

(c)    Restricted Stock Units.    The Committee, in its discretion, may grant
Restricted Stock Units to Eligible Individuals. A Restricted Stock Unit shall
entitle a Participant to receive, subject to the terms, conditions and
restrictions set forth in the Plan and the applicable Award Document, one or
more Shares. Restricted Stock Units may, among other things, be subject to
restrictions on transferability, vesting

 

10

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requirements or other specified circumstances under which they may be canceled.
If and when the cancellation provisions lapse, the Restricted Stock Units shall
become Shares owned by the applicable Participant or, at the sole discretion of
the Committee, cash, or a combination of cash and Shares, with a value equal to
the Fair Market Value of the Shares at the time of payment.

9. Stock Appreciation Rights

(a)    General.    The Committee, in its discretion, may grant Stock
Appreciation Rights to Eligible Individuals. A Stock Appreciation Right shall
entitle a Participant to receive, upon satisfaction of the conditions to payment
specified in the applicable Award Document, an amount equal to the excess, if
any, of the Fair Market Value on the exercise date of the number of Shares for
which the Stock Appreciation Right is exercised over the grant price for such
Stock Appreciation Right specified in the applicable Award Document. The grant
price per share of Shares covered by a Stock Appreciation Right shall be fixed
by the Committee at the time of grant or, alternatively, shall be determined by
a method specified by the Committee at the time of grant, but in no event shall
the grant price of a Stock Appreciation Right be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant; provided,
however, that the grant price of a Substitute Award granted as a Stock
Appreciation Rights shall be in accordance with Section 409A of the Code and may
be less than one hundred percent (100%) of the Fair Market Value. Payments to a
Participant upon exercise of a Stock Appreciation Right may be made in cash or
Shares, or a combination of cash and Shares having an aggregate Fair Market
Value as of the date of exercise equal to the excess, if any, of the Fair Market
Value on the exercise date of the number of Shares for which the Stock
Appreciation Right is exercised over the grant price for such Stock Appreciation
Right. The term of a Stock Appreciation Right settled in Shares shall not exceed
ten (10) years.

(b)    Stock Appreciation Rights in Tandem with Options.    A Stock Appreciation
Right granted in tandem with an Option may be granted either at the same time as
such Option or subsequent thereto. If granted in tandem with an Option, a Stock
Appreciation Right shall cover the same number of Shares as covered by the
Option (or such lesser number of Shares as the Committee may determine) and
shall be exercisable only at such time or times and to the extent the related
Option shall be exercisable, and shall have the same term as the related Option.
The grant price of a Stock Appreciation Right granted in tandem with an Option
shall equal the per-share exercise price of the Option to which it relates. Upon
exercise of a Stock Appreciation Right granted in tandem with an Option, the
related Option shall be canceled automatically to the extent of the number of
Shares covered by such exercise; conversely, if the related Option is exercised
as to some or all of the Shares covered by the tandem grant, the tandem Stock
Appreciation Right shall be canceled automatically to the extent of the number
of Shares covered by the Option exercise.

10. Terms and Conditions of Performance Stock and Performance Share Units

(a)    Minimum Vesting Provisions.    Performance Stock or Performance Share
Units shall feature a minimum period of restriction of one (1) year. Awards of
Performance Stock or Performance Share Units shall not be deemed to lack a
minimum period of restriction solely because they vest before the end of the
period in the event of the Participant’s death, disability or retirement,
including Early Retirement, or in the event of a Change of Control.

(b)    Performance Stock.    The Committee may grant Performance Stock to
Eligible Individuals. An Award of Performance Stock shall consist of a Target
Number of Shares granted to an Eligible Individual based on the achievement of
Performance Targets over the applicable Performance Period, and shall be subject
to the terms, conditions and restrictions set forth in the Plan and established
by the Committee in connection with the Award and specified in the applicable
Award Document.

(c)    Performance Share Units.    The Committee, in its discretion, may grant
Performance Share Units to Eligible Individuals. A Performance Share Unit shall
entitle a Participant to receive, subject to the terms, conditions and
restrictions set forth in the Plan and established by the Committee in
connection with the Award and specified in the applicable Award Document, a
Target Number of Shares or cash based upon the achievement of Performance
Targets over the applicable Performance Period. At the sole discretion of the
Committee, Performance Share Units shall be settled through the delivery of
Shares or cash, or a combination of Shares and cash.

 

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11. Other Awards

The Committee shall have the authority to specify the terms and provisions of
other forms of equity- or cash-based Awards not described above that the
Committee determines to be consistent with the purpose of the Plan and the
interests of the Company, which Awards may provide for cash payments or
settlement in Shares. To the extent that any such Awards which constitute “full
value” awards are to be settled in Shares and are performance-based, the minimum
period of restriction shall be one (1) year. Awards which constitute “full
value” awards and are to be settled in Shares that have no performance-based
criteria other than the Participant’s continued service shall have a minimum
period of restriction of three (3) years.

12. Certain Restrictions

(a)    Transfers.    No Award shall be transferable other than pursuant to a
beneficiary designation under Section 12(c), by last will and testament or by
the laws of descent and distribution or, except in the case of an Incentive
Stock Option, pursuant to a domestic relations order, as the case may be;
provided, however, that the Committee may, subject to applicable laws, rules and
regulations and such terms and conditions as it shall specify, permit the
transfer of an Award, other than an Incentive Stock Option, for no consideration
to a Permitted Transferee. Any Award transferred to a Permitted Transferee shall
be further transferable only by last will and testament or the laws of descent
and distribution or, for no consideration, to another Permitted Transferee of
the Participant.

(b)    Award Exercisable Only by Participant.    During the lifetime of a
Participant, an Award shall be exercisable only by the Participant or by a
Permitted Transferee to whom such Award has been transferred in accordance with
Section 12(a) above. The grant of an Award shall impose no obligation on a
Participant to exercise or settle the Award.

(c)    Beneficiary Designation.    The beneficiary or beneficiaries of the
Participant to whom any benefit under the Plan is to be paid in case of his or
her death before he or she receives any or all of such benefit shall be
determined under the Company’s Group Life Insurance Plan. A Participant may,
from time to time, name any beneficiary or beneficiaries to receive any benefit
in case of his or her death before he or she receives any or all of such
benefit. Each such designation shall revoke all prior designations by the same
Participant, including the beneficiary designated under the Company’s Group Life
Insurance Plan, and will be effective only when filed by the Participant in
writing (in such form or manner as may be prescribed by the Committee) with the
Company during the Participant’s lifetime. In the absence of a valid designation
under the Company’s Group Life Insurance Plan or otherwise, if no validly
designated beneficiary survives the Participant or if each surviving validly
designated beneficiary is legally impaired or prohibited from receiving the
benefits under an Award, the Participant’s beneficiary shall be the
Participant’s estate.

13. Recapitalization or Reorganization

(a)    Authority of the Company and Shareholders.    The existence of the Plan,
the Award Documents and the Awards granted hereunder shall not affect or
restrict in any way the right or power of the Company or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company’s capital structure or business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior preference
stocks whose rights are superior to or affect the Shares or the rights thereof
or which are convertible into or exchangeable for Shares, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

(b)    Change in Capitalization.    Notwithstanding any provision of the Plan or
any Award Document, the number and kind of Shares authorized for issuance under
Section 5 of the Plan, including the maximum number of Shares available under
the special limits provided for in Section 5(c), shall be equitably adjusted in
the sole discretion of the Committee in the event of a stock split, reverse
stock split, stock dividend, recapitalization, reorganization, partial or
complete liquidation, reclassification, merger, consolidation, separation,
extraordinary cash dividend, split-up, spin-off, combination, exchange of
Shares, warrants or rights offering to purchase Shares at a price substantially
below Fair Market Value, or any other corporate event or distribution of stock
or property of the Company affecting the Shares in order to preserve, but not
increase, the benefits or potential benefits intended to be made available under
the Plan. In addition, upon the occurrence of any of the foregoing events, the
number and kind of Shares subject to any outstanding

 

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Award and the exercise price per Share (or the grant price per Share, as the
case may be), if any, under any outstanding Award shall be equitably adjusted
(including by payment of cash to a Participant) in the sole discretion of the
Committee in order to preserve the benefits or potential benefits intended to be
made available to Participants. Such adjustments shall be made by the Committee.
Unless otherwise determined by the Committee, such adjusted Awards shall be
subject to the same restrictions and vesting or settlement schedule to which the
underlying Award is subject.

14. Term of the Plan

Unless earlier terminated pursuant to Section 16, the Plan shall terminate on
the tenth (10th) anniversary of the Effective Date, except with respect to
Awards then outstanding. No Awards may be granted under the Plan after the tenth
(10th) anniversary of the Effective Date. No Incentive Stock Option may be
granted under the Plan after February 28, 2017, the tenth (10th) anniversary of
the date on which the Plan was adopted by the Board. To the extent (but only to
the extent) required by Section 162(m) of the Code, no Award that is intended to
be “performance-based compensation” under Section 162(m) shall be granted after
the first shareholder meeting in 2012 unless the material terms of the
performance goal for the Award have been disclosed to and reapproved by
shareholders before that date.

15. Effective Date

The Plan shall become effective on the Effective Date.

16. Amendment and Termination

Subject to applicable laws, rules and regulations, the Board may at any time
terminate or, from time to time, amend, modify or suspend the Plan; provided,
however, that no termination, amendment, modification or suspension (i) will be
effective without the approval of the shareholders of the Company if such
approval is required under applicable laws, rules and regulations, including the
rules of NYSE and (ii) shall materially and adversely alter or impair the rights
of a Participant in any Award previously made under the Plan without the consent
of the holder thereof. Notwithstanding the foregoing, the Board shall have broad
authority to amend the Plan or any Award under the Plan without the consent of a
Participant to the extent it deems necessary or desirable (a) to comply with,
take into account changes in, or interpretations of, applicable tax laws,
securities laws, employment laws, accounting rules and other applicable laws,
rules and regulations, (b) to take into account unusual or nonrecurring events
or market conditions (including, without limitation, the events described in
Section 13(b)), or (c) to take into account significant acquisitions or
dispositions of assets or other property by the Company. For the avoidance of
doubt, except for adjustments pursuant to Section 13, no amendment or
modification to the Plan will be effective without the approval of the
shareholders of the Company if such amendment or modification would (i) increase
benefits to Participants, (ii) increase the number of Shares reserved for
issuance under the Plan or (iii) modify the requirements for participation in
the Plan. The Board may, to the extent permitted by applicable law, make a
non-exclusive written delegation of its authority to amend the Plan to the
Committee or to one or more officers of the Company. The Board may, to the
extent permitted by applicable law, authorize the Committee to make a further
delegation of its authority to amend the Plan.

17. Miscellaneous

(a)    Tax Withholding.    The Company or a Subsidiary, as appropriate, may
require any individual entitled to receive a payment of an Award to remit to the
Company, prior to payment, an amount sufficient to satisfy any applicable tax
withholding requirements. In the case of an Award payable in Shares, the Company
or a Subsidiary, as appropriate, may permit or require a Participant to satisfy,
in whole or in part, such obligation to remit taxes by the Company withholding
Shares that would otherwise be received by such individual or repurchasing
Shares that were issued to the Participant to satisfy the (i) minimum statutory
withholding rates within the United States, or (ii) in accordance with local tax
jurisdictions outside the United States, as applicable, for any applicable tax
withholding purposes, in accordance with all applicable laws and pursuant to
such rules as the Committee may establish from time to time. The Company or a
Subsidiary, as appropriate, shall also have the right to deduct from all cash
payments made to a Participant (whether or not such payment is made in
connection with an Award) any applicable taxes required to be withheld with
respect to such payments.

(b)    No Right to Awards or Employment.    No person shall have any claim or
right to receive Awards under the Plan. Neither the Plan, the grant of Awards
under the Plan nor any action taken or omitted to be

 

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taken under the Plan shall be deemed to create or confer on any Eligible
Individual any right to be retained in the employ of the Company or any
Subsidiary or other affiliate thereof, or to interfere with or to limit in any
way the right of the Company or any Subsidiary or other affiliate thereof to
terminate the employment of such Eligible Individual at any time. No Award shall
constitute salary or contractual compensation for the year of grant, any later
year or any other period of time. Payments received by a Participant under any
Award made pursuant to the Plan shall not be included in, nor have any effect
on, the determination of employment-related rights or benefits under any other
employee benefit plan or similar arrangement provided by the Company and the
Subsidiaries, unless otherwise specifically provided for under the terms of such
plan or arrangement or by the Committee.

(c)    Securities Law Restrictions.    An Award may not be exercised or settled,
and no Shares may be issued in connection with an Award, unless the issuance of
such Shares (i) has been registered under the Securities Act of 1933, as
amended, (ii) has qualified under applicable state “blue sky” laws (or the
Company has determined that an exemption from registration and from
qualification under such state “blue sky” laws is available) and (iii) complies
with all applicable foreign securities laws. All certificates for Shares
delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any exchange upon which the Shares are then listed, and any applicable
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.

(d)    Section 162(m) of the Code.    The Plan is intended to comply in all
respects with Section 162(m) of the Code; provided, however, that in the event
the Committee determines that compliance with Section 162(m) of the Code is not
desired with respect to a particular Award (or portion of an Award), compliance
with Section 162(m) of the Code will not be required. In addition, if any
provision of this Plan would cause Awards or portions of Awards that are
intended to constitute “qualified performance-based compensation” under
Section 162(m) of the Code, to fail to so qualify, that provision shall be
severed from, and shall be deemed not to be a part of, the Plan, but the other
provisions hereof shall remain in full force and effect.

(e)    Section 409A of the Code.    Notwithstanding any contrary provision in
the Plan or an Award Document, if any provision of the Plan or an Award Document
contravenes any regulations or guidance promulgated under Section 409A of the
Code or would cause an Award to be subject to additional taxes, accelerated
taxation, interest and/or penalties under Section 409A of the Code, such
provision of the Plan or Award Document may be modified by the Committee without
the consent of the Participant in any manner the Committee deems reasonable or
necessary. In making such modifications the Committee shall attempt, but shall
not be obligated, to maintain, to the maximum extent practicable, the original
intent of the applicable provision without contravening the provisions of
Section 409A of the Code. Moreover, any discretionary authority that the
Committee may have pursuant to the Plan shall not be applicable to an Award that
is subject to Section 409A of the Code to the extent such discretionary
authority would contravene Section 409A of the Code or the guidance promulgated
thereunder.

(f)    Awards to Individuals Subject to Laws of a Jurisdiction Outside of the
United States.    To the extent that Awards under the Plan are awarded to
Eligible Individuals who are domiciled or reside outside of the United States or
to persons who are domiciled or reside in the United States but who are subject
to the tax laws of a jurisdiction outside of the United States, the Committee
may adjust the terms of the Awards granted hereunder to such person (i) to
comply with the laws, rules and regulations of such jurisdiction and (ii) to
permit the grant of the Award not to be a taxable event to the Participant. The
authority granted under the previous sentence shall include the discretion for
the Committee to adopt, on behalf of the Company, one or more sub-plans
applicable to separate classes of Eligible Individuals who are subject to the
laws of jurisdictions outside of the United States.

 

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(g)    Satisfaction of Obligations.    Subject to applicable law, the Company
may apply any cash, Shares, securities or other consideration received upon
exercise or settlement of an Award to any obligations a Participant owes to the
Company and the Subsidiaries in connection with the Plan or otherwise,
including, without limitation, any tax obligations or obligations under a
currency facility established in connection with the Plan.

(h)    No Limitation on Corporate Actions.    Nothing contained in the Plan
shall be construed to prevent the Company or any Subsidiary from taking any
corporate action, whether or not such action would have an adverse effect on any
Awards made under the Plan. No Participant, beneficiary or other person shall
have any claim against the Company or any Subsidiary as a result of any such
action.

(i)    Unfunded Plan.    The Plan is intended to constitute an unfunded plan for
incentive compensation. Prior to the issuance of Shares, cash or other form of
payment in connection with an Award, nothing contained herein shall give any
Participant any rights that are greater than those of a general unsecured
creditor of the Company. The Committee may, but is not obligated to, authorize
the creation of trusts or other arrangements to meet the obligations created
under the Plan to deliver Shares with respect to awards hereunder.

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

(k)    Application of Funds.    The proceeds received by the Company from the
sale of Shares pursuant to Awards will be used for general corporate purposes.

(l)    Award Document.    In the event of any conflict or inconsistency between
the Plan and any Award Document, the Plan shall govern and the Award Document
shall be interpreted to minimize or eliminate any such conflict or
inconsistency.

(m)    Headings.    The headings of Sections herein are included solely for
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan.

(n)    Severability.    If any provision of this Plan is held unenforceable, the
remainder of the Plan shall continue in full force and effect without regard to
such unenforceable provision and shall be applied as though the unenforceable
provision were not contained in the Plan.

(o)    Expenses.    The costs and expenses of administering the Plan shall be
borne by the Company.

(p)    Jurisdiction, Venue and Governing Law.    Except as to matters of federal
law, the Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of Rhode Island. Any dispute,
controversy or claim arising out of or relating to the Plan or any award under
the Plan shall be brought only in a court of competent jurisdiction in the State
of Rhode Island, and no other court, agency or tribunal shall have jurisdiction
to resolve any such dispute, controversy or claim.

(q) Compliance with Individual Tax Requirements. The Plan is intended, and shall
be interpreted, to provide compensation that is exempt from Section 409A , or
that complies with the applicable requirements of Section 409A. The Company does
not warrant that the Plan will comply with Section 409A of the Code with respect
to any Participant or with respect to any payment, however. In no event shall
the Company; any Subsidiary; any director, officer, or employee of the Company
or a Subsidiary; or any member of the Committee be liable for any additional
tax, interest, or penalty incurred by a Participant as a result of the Plan’s
failure to satisfy the requirements of Section 409A of the Code, or as a result
of the Plan’s failure to satisfy any other requirements of applicable tax laws.

 

15