Exhibit 10.3

 

EXECUTION COPY

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.

2010 EQUITY INCENTIVE PLAN

 

1.                                       PURPOSE.  THE PURPOSE OF THE AVENTINE
RENEWABLE ENERGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN IS TO PROVIDE A MEANS
THROUGH WHICH THE COMPANY AND ITS AFFILIATES MAY ATTRACT AND RETAIN KEY
PERSONNEL AND TO PROVIDE A MEANS WHEREBY DIRECTORS, OFFICERS, EMPLOYEES,
CONSULTANTS AND ADVISORS (AND PROSPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
CONSULTANTS AND ADVISORS) OF THE COMPANY AND ITS AFFILIATES CAN ACQUIRE AND
MAINTAIN AN EQUITY INTEREST IN THE COMPANY, OR BE PAID INCENTIVE COMPENSATION,
WHICH MAY (BUT NEED NOT) BE MEASURED BY REFERENCE TO THE VALUE OF COMMON SHARES,
THEREBY STRENGTHENING THEIR COMMITMENT TO THE WELFARE OF THE COMPANY AND ITS
AFFILIATES AND ALIGNING THEIR INTERESTS WITH THOSE OF THE COMPANY’S
SHAREHOLDERS.

 

2.                                       DEFINITIONS.  THE FOLLOWING DEFINITIONS
SHALL BE APPLICABLE THROUGHOUT THE PLAN:

 

(A)                                  “AFFILIATE” MEANS (I) ANY PERSON OR ENTITY
THAT DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON
CONTROL WITH THE COMPANY AND/OR (II) TO THE EXTENT PROVIDED BY THE COMMITTEE,
ANY PERSON OR ENTITY IN WHICH THE COMPANY HAS A SIGNIFICANT INTEREST.  THE TERM
“CONTROL” (INCLUDING, WITH CORRELATIVE MEANING, THE TERMS “CONTROLLED BY” AND
“UNDER COMMON CONTROL WITH”), AS APPLIED TO ANY PERSON OR ENTITY, MEANS THE
POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE
DIRECTION OF THE MANAGEMENT AND POLICIES OF SUCH PERSON OR ENTITY, WHETHER
THROUGH THE OWNERSHIP OF VOTING OR OTHER SECURITIES, BY CONTRACT OR OTHERWISE.

 

(B)                                 “AWARD” MEANS, INDIVIDUALLY OR COLLECTIVELY,
ANY INCENTIVE STOCK OPTION, NONQUALIFIED STOCK OPTION, STOCK APPRECIATION RIGHT,
RESTRICTED STOCK, RESTRICTED STOCK UNIT, STOCK BONUS AWARD, AND PERFORMANCE
COMPENSATION AWARD GRANTED UNDER THE PLAN.

 

(C)                                  “BOARD” MEANS THE BOARD OF DIRECTORS OF THE
COMPANY.

 

(D)                                 “BUSINESS COMBINATION” HAS THE MEANING GIVEN
SUCH TERM IN THE DEFINITION OF “CHANGE IN CONTROL.”

 

(E)                                  “CAUSE” MEANS, IN THE CASE OF A PARTICULAR
AWARD, UNLESS THE APPLICABLE AWARD AGREEMENT STATES OTHERWISE, (I) THE COMPANY
OR AN AFFILIATE HAVING “CAUSE” TO TERMINATE A PARTICIPANT’S EMPLOYMENT OR
SERVICE, AS DEFINED IN ANY EMPLOYMENT OR CONSULTING AGREEMENT BETWEEN THE
PARTICIPANT AND THE COMPANY OR AN AFFILIATE IN EFFECT AT THE TIME OF SUCH
TERMINATION OR (II) IN THE ABSENCE OF ANY SUCH EMPLOYMENT OR CONSULTING
AGREEMENT (OR THE ABSENCE OF ANY DEFINITION OF “CAUSE” CONTAINED THEREIN),
(A) THE PARTICIPANT’S COMMISSION OF, CONVICTION FOR, PLEA OF GUILTY OR NOLO
CONTENDERE TO A FELONY OR A CRIME INVOLVING MORAL TURPITUDE, OR OTHER MATERIAL
ACT OR OMISSION INVOLVING DISHONESTY OR FRAUD, (B) THE PARTICIPANT’S CONDUCT
THAT RESULTS IN OR IS REASONABLY LIKELY TO RESULT IN HARM TO THE REPUTATION OR
BUSINESS OF THE COMPANY OR ANY OF ITS AFFILIATES IN ANY MATERIAL WAY, (C) THE
PARTICIPANT’S FAILURE TO PERFORM DUTIES AS REASONABLY DIRECTED BY THE COMPANY OR
THE PARTICIPANT’S MATERIAL VIOLATION OF ANY RULE, REGULATION, POLICY OR PLAN FOR
THE CONDUCT OF ANY SERVICE PROVIDER TO THE COMPANY OR ITS AFFILIATES OR ITS OR
THEIR BUSINESS (WHICH, IF CURABLE, IS NOT CURED WITHIN 10 DAYS AFTER NOTICE
THEREOF IS PROVIDED TO THE PARTICIPANT) OR (D) THE PARTICIPANT’S GROSS
NEGLIGENCE, WILLFUL MALFEASANCE OR MATERIAL ACT OF

 

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DISLOYALTY WITH RESPECT TO THE COMPANY OR ITS AFFILIATES (WHICH, IF CURABLE, IS
NOT CURED WITHIN 10 DAYS AFTER NOTICE THEREOF IS PROVIDED TO THE PARTICIPANT). 
ANY DETERMINATION OF WHETHER CAUSE EXISTS SHALL BE MADE BY THE COMMITTEE IN ITS
SOLE DISCRETION.

 

(F)                                    “CHANGE IN CONTROL” SHALL, IN THE CASE OF
A PARTICULAR AWARD, UNLESS THE APPLICABLE AWARD AGREEMENT STATES OTHERWISE OR
CONTAINS A DIFFERENT DEFINITION OF “CHANGE IN CONTROL,” BE DEEMED TO OCCUR UPON:

 

(i)                                     Any sale, lease, exchange or other
transfer (in one or a series of related transactions) of all or substantially
all of the assets of the Company;

 

(ii)                                  Any “person” as such term is used in
Section 13(d) and Section 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) is or becomes, directly or indirectly, the
“beneficial owner” as defined in Rule 13d-3 under the Exchange Act of securities
of the Company that represent more than 50% of the combined voting power of the
Company’s then outstanding voting securities (the “Outstanding Company Voting
Securities”); provided, however, that, for purposes of this Section 2(f), the
following acquisitions shall not constitute a Change in Control:  (I) any
acquisition directly from the Company, (II) any acquisition by the Company,
(III) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Affiliate, (IV) any acquisition by any
corporation pursuant to a transaction that complies with Sections
2(f)(iv)(A) and 2(f)(iv)(B), (V) any acquisition involving beneficial ownership
of less than 50% of the then-outstanding Common Shares (the “Outstanding Company
Common Shares”) or the Outstanding Company Voting Securities that is determined
by the Board, based on review of public disclosure by the acquiring Person with
respect to its passive investment intent, not to have a purpose or effect of
changing or influencing the control of the Company; provided, however, that for
purposes of this clause (V), any such acquisition in connection with (x) an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents or
(y) any “Business Combination” (as defined below) shall be presumed to be for
the purpose or with the effect of changing or influencing the control of the
Company;

 

(iii)                               During any period of two (2) consecutive
years, the individuals who at the beginning of such period constituted the Board
together with any individuals subsequently elected to the Board whose nomination
by the shareholders of the Company was approved by a vote of the then incumbent
Board (i.e. those members of the Board who either have been directors from the
beginning of such two-year period or whose election or nomination for election
was previously approved by the Board as provided in this Section 2(f)(iii))
cease for any reason to constitute a majority of the Board;

 

(iv)                              The Board or the shareholders of the Company
approve and consummate a merger, amalgamation or consolidation (a “Business
Combination”) of the Company with any other corporation, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company Common
Shares and the Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the

 

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combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors (or, for a non-corporate entity,
equivalent governing body), as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity that, as a
result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities, as the case may be, and (B) at least a
majority of the members of the board of directors (or, for a non-corporate
entity, equivalent governing body) of the entity resulting from such Business
Combination were members of the incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination;

 

(v)                                 The date which is 10 business days prior to
the consummation of complete liquidation of the Company.

 

(G)                                 “CODE” MEANS THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, AND ANY SUCCESSOR THERETO.  REFERENCE IN THE PLAN TO ANY
SECTION OF THE CODE SHALL BE DEEMED TO INCLUDE ANY REGULATIONS OR OTHER
INTERPRETATIVE GUIDANCE UNDER SUCH SECTION, AND ANY AMENDMENTS OR SUCCESSOR
PROVISIONS TO SUCH SECTION, REGULATIONS OR GUIDANCE.

 

(H)                                 “COMMITTEE” MEANS A COMMITTEE OF AT LEAST
TWO PEOPLE AS THE BOARD MAY APPOINT TO ADMINISTER THE PLAN OR, IF NO SUCH
COMMITTEE HAS BEEN APPOINTED BY THE BOARD, THE BOARD.

 

(I)                                     “COMMON SHARES” MEANS THE COMMON SHARES,
PAR VALUE $0.001 PER SHARE, OF THE COMPANY (AND ANY STOCK OR OTHER SECURITIES
INTO WHICH SUCH COMMON SHARES MAY BE CONVERTED OR INTO WHICH THEY MAY BE
EXCHANGED).

 

(J)                                     “COMPANY” MEANS AVENTINE RENEWABLE
ENERGY HOLDINGS, INC.

 

(K)                                  “CONFIDENTIAL INFORMATION” MEANS ANY AND
ALL CONFIDENTIAL AND/OR PROPRIETARY TRADE SECRETS, KNOWLEDGE, DATA, OR
INFORMATION OF THE COMPANY INCLUDING, WITHOUT LIMITATION, ANY: (A) DRAWINGS,
INVENTIONS, METHODOLOGIES, MASK WORKS, IDEAS, PROCESSES, FORMULAS, SOURCE AND
OBJECT CODES, DATA, PROGRAMS, SOFTWARE SOURCE DOCUMENTS, WORKS OF AUTHORSHIP,
KNOW-HOW, IMPROVEMENTS, DISCOVERIES, DEVELOPMENTS, DESIGNS AND TECHNIQUES, AND
ALL OTHER WORK PRODUCT OF THE COMPANY, WHETHER OR NOT PATENTABLE OR REGISTRABLE
UNDER TRADEMARK, COPYRIGHT, PATENT OR SIMILAR LAWS; (B) INFORMATION REGARDING
PLANS FOR RESEARCH, DEVELOPMENT, NEW SERVICE OFFERINGS AND/OR PRODUCTS,
MARKETING, ADVERTISING AND SELLING, DISTRIBUTION, BUSINESS PLANS AND STRATEGIES,
BUSINESS FORECASTS, BUDGETS AND UNPUBLISHED FINANCIAL STATEMENTS, LICENSES,
PRICES AND COSTS, SUPPLIERS, CUSTOMERS, CUSTOMER HISTORY, CUSTOMER PREFERENCES,
OR DISTRIBUTION ARRANGEMENTS; (C) ANY INFORMATION REGARDING THE SKILLS OR
COMPENSATION OF EMPLOYEES, SUPPLIERS, AGENTS, AND/OR INDEPENDENT CONTRACTORS OF
THE COMPANY; (D) CONCEPTS AND IDEAS RELATING TO THE DEVELOPMENT AND DISTRIBUTION
OF CONTENT IN ANY MEDIUM OR TO THE CURRENT, FUTURE AND PROPOSED PRODUCTS OR
SERVICES OF THE COMPANY; (E) INFORMATION ABOUT THE COMPANY’S INVESTMENT PROGRAM,
TRADING METHODOLOGY, OR PORTFOLIO HOLDINGS; OR (F) ANY OTHER INFORMATION, DATA
OR THE LIKE THAT IS LABELED CONFIDENTIAL OR DESCRIBED AS CONFIDENTIAL.

 

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(L)                                     “DATE OF GRANT” MEANS THE DATE ON WHICH
THE GRANTING OF AN AWARD IS AUTHORIZED, OR SUCH OTHER DATE AS MAY BE SPECIFIED
IN SUCH AUTHORIZATION.

 

(M)                               “EFFECTIVE DATE” MEANS THE DATE AS OF WHICH
THIS PLAN IS ADOPTED BY THE BOARD.

 

(N)                                 “ELIGIBLE DIRECTOR” MEANS A PERSON WHO IS
(I) A “NON-EMPLOYEE DIRECTOR” WITHIN THE MEANING OF RULE 16B-3 UNDER THE
EXCHANGE ACT, AND (II) AN “OUTSIDE DIRECTOR” WITHIN THE MEANING OF
SECTION 162(M) OF THE CODE.

 

(O)                                 “ELIGIBLE PERSON” MEANS ANY (I) INDIVIDUAL
EMPLOYED BY THE COMPANY OR AN AFFILIATE; PROVIDED, HOWEVER, THAT NO SUCH
EMPLOYEE COVERED BY A COLLECTIVE BARGAINING AGREEMENT SHALL BE AN ELIGIBLE
PERSON UNLESS AND TO THE EXTENT THAT SUCH ELIGIBILITY IS SET FORTH IN SUCH
COLLECTIVE BARGAINING AGREEMENT OR IN AN AGREEMENT OR INSTRUMENT RELATING
THERETO; (II) DIRECTOR OF THE COMPANY OR AN AFFILIATE; (III) CONSULTANT OR
ADVISOR TO THE COMPANY OR AN AFFILIATE, PROVIDED THAT IF THE SECURITIES ACT
APPLIES SUCH PERSONS MUST BE ELIGIBLE TO BE OFFERED SECURITIES REGISTRABLE ON
FORM S-8 UNDER THE SECURITIES ACT; OR (IV) PROSPECTIVE EMPLOYEES, DIRECTORS,
OFFICERS, CONSULTANTS OR ADVISORS WHO HAVE ACCEPTED OFFERS OF EMPLOYMENT OR
CONSULTANCY FROM THE COMPANY OR ITS AFFILIATES (AND WOULD SATISFY THE PROVISIONS
OF CLAUSES (I) THROUGH (III) ABOVE ONCE HE OR SHE BEGINS EMPLOYMENT WITH OR
BEGINS PROVIDING SERVICES TO THE COMPANY OR ITS AFFILIATES).

 

(P)                                 “EXCHANGE ACT” HAS THE MEANING GIVEN SUCH
TERM IN THE DEFINITION OF “CHANGE IN CONTROL,” AND ANY REFERENCE IN THE PLAN TO
ANY SECTION OF (OR RULE PROMULGATED UNDER) THE EXCHANGE ACT SHALL BE DEEMED TO
INCLUDE ANY RULES, REGULATIONS OR OTHER INTERPRETATIVE GUIDANCE UNDER SUCH
SECTION OR RULE, AND ANY AMENDMENTS OR SUCCESSOR PROVISIONS TO SUCH SECTION,
RULES, REGULATIONS OR GUIDANCE.

 

(Q)                                 “EXERCISE PRICE” HAS THE MEANING GIVEN SUCH
TERM IN SECTION 7(B) OF THE PLAN.

 

(R)                                    “FAIR MARKET VALUE” MEANS, AS OF ANY
DATE, THE VALUE OF COMMON SHARES DETERMINED AS FOLLOWS:

 

(I)                                     IF THE COMMON SHARES ARE LISTED ON ANY
ESTABLISHED STOCK EXCHANGE OR A NATIONAL MARKET SYSTEM WILL BE THE CLOSING SALES
PRICE FOR SUCH SHARES (OR THE CLOSING BID, IF NO SALES WERE REPORTED) AS QUOTED
ON SUCH EXCHANGE OR SYSTEM ON THE DAY OF DETERMINATION, AS REPORTED IN THE WALL
STREET JOURNAL OR SUCH OTHER SOURCE AS THE COMMITTEE DEEMS RELIABLE;

 

(II)                                  IF THE COMMON SHARES ARE REGULARLY QUOTED
BY A RECOGNIZED SECURITIES DEALER BUT SELLING PRICES ARE NOT REPORTED, THE FAIR
MARKET VALUE OF A COMMON SHARE WILL BE THE MEAN BETWEEN THE HIGH BID AND LOW
ASKED PRICES FOR THE COMMON SHARES ON THE DAY OF DETERMINATION, AS REPORTED IN
THE WALL STREET JOURNAL OR SUCH OTHER SOURCE AS THE COMMITTEE DEEMS RELIABLE; OR

 

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(iii)                               In the absence of an established market for
the Common Shares, the Fair Market Value will be determined in good faith by the
Committee in accordance with Section 409A of the Code.

 

(S)                                  “IMMEDIATE FAMILY MEMBERS” SHALL HAVE THE
MEANING SET FORTH IN SECTION 16(B).

 

(T)                                    “INCENTIVE STOCK OPTION” MEANS AN OPTION
THAT IS DESIGNATED BY THE COMMITTEE AS AN INCENTIVE STOCK OPTION AS DESCRIBED IN
SECTION 422 OF THE CODE AND OTHERWISE MEETS THE REQUIREMENTS SET FORTH IN THE
PLAN.

 

(U)                                 “INDEMNIFIABLE PERSON” SHALL HAVE THE
MEANING SET FORTH IN SECTION 4(E) OF THE PLAN.

 

(V)                                 “INTELLECTUAL PROPERTY PRODUCTS” SHALL HAVE
THE MEANING SET FORTH IN SECTION 15(C) OF THE PLAN.

 

(W)                               “MATURE SHARES” MEANS COMMON SHARES OWNED BY A
PARTICIPANT THAT ARE NOT SUBJECT TO ANY PLEDGE OR SECURITY INTEREST AND THAT
HAVE BEEN EITHER PREVIOUSLY ACQUIRED BY THE PARTICIPANT ON THE OPEN MARKET OR
MEET SUCH OTHER REQUIREMENTS, IF ANY, AS THE COMMITTEE MAY DETERMINE ARE
NECESSARY IN ORDER TO AVOID AN ACCOUNTING EARNINGS CHARGE ON ACCOUNT OF THE USE
OF SUCH SHARES TO PAY THE EXERCISE PRICE OR SATISFY A WITHHOLDING OBLIGATION OF
THE PARTICIPANT.

 

(X)                                   “NEGATIVE DISCRETION” SHALL MEAN THE
DISCRETION AUTHORIZED BY THE PLAN TO BE APPLIED BY THE COMMITTEE TO ELIMINATE OR
REDUCE THE SIZE OF A PERFORMANCE COMPENSATION AWARD CONSISTENT WITH
SECTION 162(M) OF THE CODE.

 

(Y)                                 “NONQUALIFIED STOCK OPTION” MEANS AN OPTION
THAT IS NOT DESIGNATED BY THE COMMITTEE AS AN INCENTIVE STOCK OPTION.

 

(Z)                                   “OPTION” MEANS AN AWARD GRANTED UNDER
SECTION 7 OF THE PLAN.

 

(AA)                            “OPTION PERIOD” HAS THE MEANING GIVEN SUCH TERM
IN SECTION 7(C) OF THE PLAN.

 

(BB)                          “OUTSTANDING COMPANY COMMON SHARES” HAS THE
MEANING GIVEN SUCH TERM IN THE DEFINITION OF “CHANGE IN CONTROL.”

 

(CC)                            “OUTSTANDING COMPANY VOTING SECURITIES” HAS THE
MEANING GIVEN SUCH TERM IN THE DEFINITION OF “CHANGE IN CONTROL.”

 

(DD)                          “PARTICIPANT” MEANS AN ELIGIBLE PERSON WHO HAS
BEEN SELECTED BY THE COMMITTEE TO PARTICIPATE IN THE PLAN AND TO RECEIVE AN
AWARD PURSUANT TO SECTION 6 OF THE PLAN.

 

(EE)                            “PERFORMANCE COMPENSATION AWARD” SHALL MEAN ANY
AWARD DESIGNATED BY THE COMMITTEE AS A PERFORMANCE COMPENSATION AWARD PURSUANT
TO SECTION 11 OF THE PLAN.

 

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(FF)                                “PERFORMANCE CRITERIA” SHALL MEAN THE
CRITERION OR CRITERIA THAT THE COMMITTEE SHALL SELECT FOR PURPOSES OF
ESTABLISHING THE PERFORMANCE GOAL(S) FOR A PERFORMANCE PERIOD WITH RESPECT TO
ANY PERFORMANCE COMPENSATION AWARD UNDER THE PLAN.

 

(GG)                          “PERFORMANCE FORMULA” SHALL MEAN, FOR A
PERFORMANCE PERIOD, THE ONE OR MORE OBJECTIVE FORMULAE APPLIED AGAINST THE
RELEVANT PERFORMANCE GOAL TO DETERMINE, WITH REGARD TO THE PERFORMANCE
COMPENSATION AWARD OF A PARTICULAR PARTICIPANT, WHETHER ALL, SOME PORTION BUT
LESS THAN ALL, OR NONE OF THE PERFORMANCE COMPENSATION AWARD HAS BEEN EARNED FOR
THE PERFORMANCE PERIOD.

 

(HH)                          “PERFORMANCE GOALS” SHALL MEAN, FOR A PERFORMANCE
PERIOD, THE ONE OR MORE GOALS ESTABLISHED BY THE COMMITTEE FOR THE PERFORMANCE
PERIOD BASED UPON THE PERFORMANCE CRITERIA.

 

(II)                                  “PERFORMANCE PERIOD” SHALL MEAN THE ONE OR
MORE PERIODS OF TIME, AS THE COMMITTEE MAY SELECT, OVER WHICH THE ATTAINMENT OF
ONE OR MORE PERFORMANCE GOALS WILL BE MEASURED FOR THE PURPOSE OF DETERMINING A
PARTICIPANT’S RIGHT TO, AND THE PAYMENT OF, A PERFORMANCE COMPENSATION AWARD.

 

(JJ)                                  “PERMITTED TRANSFEREE” SHALL HAVE THE
MEANING SET FORTH IN SECTION 16(B) OF THE PLAN.

 

(KK)                            “PERSON” HAS THE MEANING GIVEN SUCH TERM IN THE
DEFINITION OF “CHANGE IN CONTROL.”

 

(LL)                                  “PLAN” MEANS THIS AVENTINE RENEWABLE
ENERGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN.

 

(MM)                      “RESTRICTED PERIOD” MEANS THE PERIOD OF TIME
DETERMINED BY THE COMMITTEE DURING WHICH AN AWARD IS SUBJECT TO RESTRICTIONS OR,
AS APPLICABLE, THE PERIOD OF TIME WITHIN WHICH PERFORMANCE IS MEASURED FOR
PURPOSES OF DETERMINING WHETHER AN AWARD HAS BEEN EARNED.

 

(NN)                          “RESTRICTED STOCK UNIT” MEANS AN UNFUNDED AND
UNSECURED PROMISE TO DELIVER COMMON SHARES, CASH, OTHER SECURITIES OR OTHER
PROPERTY, SUBJECT TO CERTAIN RESTRICTIONS (INCLUDING, WITHOUT LIMITATION, A
REQUIREMENT THAT THE PARTICIPANT REMAIN CONTINUOUSLY EMPLOYED OR PROVIDE
CONTINUOUS SERVICES FOR A SPECIFIED PERIOD OF TIME), GRANTED UNDER SECTION 9 OF
THE PLAN.

 

(OO)                          “RESTRICTED STOCK” MEANS COMMON SHARES, SUBJECT TO
CERTAIN SPECIFIED RESTRICTIONS (INCLUDING, WITHOUT LIMITATION, A REQUIREMENT
THAT THE PARTICIPANT REMAIN CONTINUOUSLY EMPLOYED OR PROVIDE CONTINUOUS SERVICES
FOR A SPECIFIED PERIOD OF TIME), GRANTED UNDER SECTION 9 OF THE PLAN.

 

(PP)                          “SAR PERIOD” HAS THE MEANING GIVEN SUCH TERM IN
SECTION 8(B) OF THE PLAN.

 

(QQ)                          “SECURITIES ACT” MEANS THE SECURITIES ACT OF 1933,
AS AMENDED, AND ANY SUCCESSOR THERETO.  REFERENCE IN THE PLAN TO ANY SECTION OF
THE SECURITIES ACT SHALL BE DEEMED TO

 

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INCLUDE ANY RULES, REGULATIONS OR OTHER INTERPRETATIVE GUIDANCE UNDER SUCH
SECTION, AND ANY AMENDMENTS OR SUCCESSOR PROVISIONS TO SUCH SECTION, RULES,
REGULATIONS OR GUIDANCE.

 

(RR)                                “STOCK APPRECIATION RIGHT” OR “SAR” MEANS AN
AWARD GRANTED UNDER SECTION 8 OF THE PLAN.

 

(SS)                            “STOCK BONUS AWARD” MEANS AN AWARD GRANTED UNDER
SECTION 10 OF THE PLAN.

 

(TT)                                “STRIKE PRICE” MEANS, EXCEPT AS OTHERWISE
PROVIDED BY THE COMMITTEE IN THE CASE OF SUBSTITUTE AWARDS, (I) IN THE CASE OF A
SAR GRANTED IN TANDEM WITH AN OPTION, THE EXERCISE PRICE OF THE RELATED OPTION,
OR (II) IN THE CASE OF A SAR GRANTED INDEPENDENT OF AN OPTION, THE FAIR MARKET
VALUE ON THE DATE OF GRANT.

 

(UU)                          “SUBSIDIARY” MEANS, WITH RESPECT TO ANY SPECIFIED
PERSON:

 

(1)                                  ANY CORPORATION, ASSOCIATION OR OTHER
BUSINESS ENTITY OF WHICH MORE THAN 50% OF THE TOTAL VOTING POWER OF SHARES OF
OUTSTANDING COMPANY VOTING SECURITIES (WITHOUT REGARD TO THE OCCURRENCE OF ANY
CONTINGENCY AND AFTER GIVING EFFECT TO ANY VOTING AGREEMENT OR SHAREHOLDERS’
AGREEMENT THAT EFFECTIVELY TRANSFERS VOTING POWER) IS AT THE TIME OWNED OR
CONTROLLED, DIRECTLY OR INDIRECTLY, BY THAT PERSON OR ONE OR MORE OF THE OTHER
SUBSIDIARIES OF THAT PERSON (OR A COMBINATION THEREOF); AND

 

(2)                                  ANY PARTNERSHIP (OR ANY COMPARABLE FOREIGN
ENTITY (A) THE SOLE GENERAL PARTNER (OR FUNCTIONAL EQUIVALENT THEREOF) OR THE
MANAGING GENERAL PARTNER OF WHICH IS SUCH PERSON OR SUBSIDIARY OF SUCH PERSON OR
(B) THE ONLY GENERAL PARTNERS (OR FUNCTIONAL EQUIVALENTS THEREOF) OF WHICH ARE
THAT PERSON OR ONE OR MORE SUBSIDIARIES OF THAT PERSON (OR ANY COMBINATION
THEREOF).

 

(VV)                          “SUBSTITUTE AWARD” HAS THE MEANING GIVEN SUCH TERM
IN SECTION 5(E).

 

3.                                       EFFECTIVE DATE; DURATION.  THE PLAN
SHALL BE EFFECTIVE AS OF THE EFFECTIVE DATE.  THE EXPIRATION DATE OF THE PLAN,
ON AND AFTER WHICH DATE NO AWARDS MAY BE GRANTED HEREUNDER, SHALL BE THE TENTH
ANNIVERSARY OF THE EFFECTIVE DATE; PROVIDED, HOWEVER, THAT SUCH EXPIRATION SHALL
NOT AFFECT AWARDS THEN OUTSTANDING, AND THE TERMS AND CONDITIONS OF THE PLAN
SHALL CONTINUE TO APPLY TO SUCH AWARDS.

 

4.                                       ADMINISTRATION.  (A) THE COMMITTEE
SHALL ADMINISTER THE PLAN.  TO THE EXTENT REQUIRED TO COMPLY WITH THE PROVISIONS
OF RULE 16B-3 PROMULGATED UNDER THE EXCHANGE ACT (IF THE BOARD IS NOT ACTING AS
THE COMMITTEE UNDER THE PLAN) OR NECESSARY TO OBTAIN THE EXCEPTION FOR
PERFORMANCE-BASED COMPENSATION UNDER SECTION 162(M) OF THE CODE, AS APPLICABLE,
IT IS INTENDED THAT EACH MEMBER OF THE COMMITTEE SHALL, AT THE TIME HE TAKES ANY
ACTION WITH RESPECT TO AN AWARD UNDER THE PLAN, BE AN ELIGIBLE DIRECTOR. 
HOWEVER, THE FACT THAT A COMMITTEE MEMBER SHALL FAIL TO QUALIFY AS AN ELIGIBLE
DIRECTOR SHALL NOT INVALIDATE ANY AWARD GRANTED BY THE COMMITTEE THAT IS
OTHERWISE VALIDLY GRANTED UNDER THE PLAN.  THE ACTS OF A MAJORITY OF THE MEMBERS
PRESENT AT ANY MEETING AT WHICH A QUORUM IS PRESENT OR ACTS APPROVED IN WRITING
BY A MAJORITY OF THE COMMITTEE SHALL BE DEEMED THE ACTS OF THE COMMITTEE. 
WHETHER A QUORUM IS PRESENT SHALL BE DETERMINED BASED ON THE COMMITTEE’S CHARTER
AS APPROVED BY THE BOARD.

 

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(B)                                 SUBJECT TO THE PROVISIONS OF THE PLAN AND
APPLICABLE LAW, THE COMMITTEE SHALL HAVE THE SOLE AND PLENARY AUTHORITY, IN
ADDITION TO OTHER EXPRESS POWERS AND AUTHORIZATIONS CONFERRED ON THE COMMITTEE
BY THE PLAN, TO:  (I) DESIGNATE PARTICIPANTS; (II) DETERMINE THE TYPE OR TYPES
OF AWARDS TO BE GRANTED TO A PARTICIPANT; (III) DETERMINE THE NUMBER OF COMMON
SHARES TO BE COVERED BY, OR WITH RESPECT TO WHICH PAYMENTS, RIGHTS, OR OTHER
MATTERS ARE TO BE CALCULATED IN CONNECTION WITH, AWARDS; (IV) DETERMINE THE
TERMS AND CONDITIONS OF ANY AWARD; (V) DETERMINE WHETHER, TO WHAT EXTENT, AND
UNDER WHAT CIRCUMSTANCES AWARDS MAY BE SETTLED OR EXERCISED IN CASH, COMMON
SHARES, OTHER SECURITIES, OTHER AWARDS OR OTHER PROPERTY, OR CANCELED,
FORFEITED, OR SUSPENDED AND THE METHOD OR METHODS BY WHICH AWARDS MAY BE
SETTLED, EXERCISED, CANCELED, FORFEITED, OR SUSPENDED; (VI) DETERMINE WHETHER,
TO WHAT EXTENT, AND UNDER WHAT CIRCUMSTANCES THE DELIVERY OF CASH, COMMON
SHARES, OTHER SECURITIES, OTHER AWARDS OR OTHER PROPERTY AND OTHER AMOUNTS
PAYABLE WITH RESPECT TO AN AWARD SHALL BE DEFERRED EITHER AUTOMATICALLY OR AT
THE ELECTION OF THE PARTICIPANT OR OF THE COMMITTEE; (VII) INTERPRET,
ADMINISTER, RECONCILE ANY INCONSISTENCY IN, CORRECT ANY DEFECT IN AND/OR SUPPLY
ANY OMISSION IN THE PLAN AND ANY INSTRUMENT OR AGREEMENT RELATING TO, OR AWARD
GRANTED UNDER, THE PLAN; (VIII) ESTABLISH, AMEND, SUSPEND, OR WAIVE ANY
RULES AND REGULATIONS AND APPOINT SUCH AGENTS AS THE COMMITTEE SHALL DEEM
APPROPRIATE FOR THE PROPER ADMINISTRATION OF THE PLAN; (IX) ACCELERATE THE
VESTING OR EXERCISABILITY OF, PAYMENT FOR OR LAPSE OF RESTRICTIONS ON, AWARDS;
AND (X) MAKE ANY OTHER DETERMINATION AND TAKE ANY OTHER ACTION THAT THE
COMMITTEE DEEMS NECESSARY OR DESIRABLE FOR THE ADMINISTRATION OF THE PLAN.

 

(C)                                  THE COMMITTEE MAY DELEGATE TO ONE OR MORE
OFFICERS OF THE COMPANY OR ANY AFFILIATE THE AUTHORITY TO ACT ON BEHALF OF THE
COMMITTEE WITH RESPECT TO ANY MATTER, RIGHT, OBLIGATION, OR ELECTION THAT IS THE
RESPONSIBILITY OF OR THAT IS ALLOCATED TO THE COMMITTEE HEREIN, AND THAT MAY BE
SO DELEGATED AS A MATTER OF LAW, EXCEPT FOR GRANTS OF AWARDS TO PERSONS
(I) SUBJECT TO SECTION 16 OF THE EXCHANGE ACT OR (II) WHO ARE, OR WHO ARE
REASONABLY EXPECTED TO BE, “COVERED EMPLOYEES” FOR PURPOSES OF SECTION 162(M) OF
THE CODE.

 

(D)                                 UNLESS OTHERWISE EXPRESSLY PROVIDED IN THE
PLAN, ALL DESIGNATIONS, DETERMINATIONS, INTERPRETATIONS, AND OTHER DECISIONS
UNDER OR WITH RESPECT TO THE PLAN OR ANY AWARD OR ANY DOCUMENTS EVIDENCING
AWARDS GRANTED PURSUANT TO THE PLAN SHALL BE WITHIN THE SOLE DISCRETION OF THE
COMMITTEE, MAY BE MADE AT ANY TIME AND SHALL BE FINAL, CONCLUSIVE AND BINDING
UPON ALL PERSONS OR ENTITIES, INCLUDING, WITHOUT LIMITATION, THE COMPANY, ANY
AFFILIATE, ANY PARTICIPANT, ANY HOLDER OR BENEFICIARY OF ANY AWARD, AND ANY
SHAREHOLDER OF THE COMPANY.

 

(E)                                  NO MEMBER OF THE BOARD, THE COMMITTEE,
DELEGATE OF THE COMMITTEE OR ANY EMPLOYEE OR AGENT OF THE COMPANY (EACH SUCH
PERSON, AN “INDEMNIFIABLE PERSON”) SHALL BE LIABLE FOR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN OR ANY DETERMINATION MADE IN GOOD FAITH WITH RESPECT TO THE
PLAN OR ANY AWARD HEREUNDER.  EACH INDEMNIFIABLE PERSON 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 INCURRED BY SUCH
INDEMNIFIABLE PERSON IN CONNECTION WITH OR RESULTING FROM ANY ACTION, SUIT OR
PROCEEDING TO WHICH SUCH INDEMNIFIABLE PERSON MAY BE A PARTY OR IN WHICH SUCH
INDEMNIFIABLE PERSON MAY BE INVOLVED BY REASON OF ANY ACTION TAKEN OR OMITTED TO
BE TAKEN UNDER THE PLAN OR ANY AWARD AGREEMENT AND AGAINST AND FROM ANY AND ALL
AMOUNTS PAID BY SUCH INDEMNIFIABLE PERSON WITH THE COMPANY’S APPROVAL, IN
SETTLEMENT THEREOF, OR PAID BY SUCH INDEMNIFIABLE PERSON IN SATISFACTION OF ANY
JUDGMENT IN ANY SUCH ACTION, SUIT OR PROCEEDING AGAINST SUCH INDEMNIFIABLE
PERSON, PROVIDED, THAT THE COMPANY SHALL HAVE THE RIGHT, AT ITS OWN EXPENSE, TO
ASSUME AND DEFEND ANY SUCH ACTION, SUIT OR PROCEEDING

 

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AND ONCE THE COMPANY GIVES NOTICE OF ITS INTENT TO ASSUME THE DEFENSE, THE
COMPANY SHALL HAVE SOLE CONTROL OVER SUCH DEFENSE WITH COUNSEL OF THE COMPANY’S
CHOICE.  THE FOREGOING RIGHT OF INDEMNIFICATION SHALL NOT BE AVAILABLE TO AN
INDEMNIFIABLE PERSON TO THE EXTENT THAT A FINAL JUDGMENT OR OTHER FINAL
ADJUDICATION (IN EITHER CASE NOT SUBJECT TO FURTHER APPEAL) BINDING UPON SUCH
INDEMNIFIABLE PERSON DETERMINES THAT THE ACTS OR OMISSIONS OF SUCH INDEMNIFIABLE
PERSON GIVING RISE TO THE INDEMNIFICATION CLAIM RESULTED FROM SUCH INDEMNIFIABLE
PERSON’S BAD FAITH, FRAUD OR WILLFUL CRIMINAL ACT OR OMISSION OR THAT SUCH RIGHT
OF INDEMNIFICATION IS OTHERWISE PROHIBITED BY LAW OR BY THE COMPANY’S
CERTIFICATE OF INCORPORATION OR BYLAWS.  THE FOREGOING RIGHT OF INDEMNIFICATION
SHALL NOT BE EXCLUSIVE OF ANY OTHER RIGHTS OF INDEMNIFICATION TO WHICH SUCH
INDEMNIFIABLE PERSONS MAY BE ENTITLED UNDER THE COMPANY’S CERTIFICATE OF
INCORPORATION OR BYLAWS, AS A MATTER OF LAW, OR OTHERWISE, OR ANY OTHER POWER
THAT THE COMPANY MAY HAVE TO INDEMNIFY SUCH INDEMNIFIABLE PERSONS OR HOLD THEM
HARMLESS.

 

(F)                                    NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THE PLAN, THE BOARD MAY, IN ITS SOLE DISCRETION, AT ANY TIME AND
FROM TIME TO TIME, GRANT AWARDS AND ADMINISTER THE PLAN WITH RESPECT TO SUCH
AWARDS.  IN ANY SUCH CASE, THE BOARD SHALL HAVE ALL THE AUTHORITY GRANTED TO THE
COMMITTEE UNDER THE PLAN.

 

5.                                       GRANT OF AWARDS; SHARES SUBJECT TO THE
PLAN; LIMITATIONS.  (A) THE COMMITTEE MAY, FROM TIME TO TIME, GRANT OPTIONS,
STOCK APPRECIATION RIGHTS, RESTRICTED STOCK, RESTRICTED STOCK UNITS, STOCK BONUS
AWARDS AND/OR PERFORMANCE COMPENSATION AWARDS TO ONE OR MORE ELIGIBLE PERSONS.

 

(B)                                 AWARDS GRANTED UNDER THE PLAN SHALL BE
SUBJECT TO THE FOLLOWING LIMITATIONS:  (I) SUBJECT TO SECTION 12 OF THE PLAN,
THE COMMITTEE IS AUTHORIZED TO DELIVER UNDER THE PLAN 855,000 COMMON SHARES.

 

(C)                                  USE OF COMMON SHARES TO PAY THE REQUIRED
EXERCISE PRICE OR TAX OBLIGATIONS, OR THAT ARE USED OR WITHHELD TO SATISFY TAX
OBLIGATIONS OF THE PARTICIPANT SHALL, NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, NOT BE AVAILABLE AGAIN FOR OTHER AWARDS UNDER THE PLAN.  SHARES
UNDERLYING AWARDS UNDER THIS PLAN THAT ARE FORFEITED, CANCELLED, EXPIRE
UNEXERCISED, OR ARE SETTLED IN CASH ARE AVAILABLE AGAIN FOR AWARDS UNDER THE
PLAN.

 

(D)                                 COMMON SHARES DELIVERED BY THE COMPANY IN
SETTLEMENT OF AWARDS MAY BE AUTHORIZED AND UNISSUED SHARES, SHARES HELD IN THE
TREASURY OF THE COMPANY, SHARES PURCHASED ON THE OPEN MARKET OR BY PRIVATE
PURCHASE, OR A COMBINATION OF THE FOREGOING.

 

(E)                                  AWARDS MAY, IN THE SOLE DISCRETION OF THE
COMMITTEE, BE GRANTED UNDER THE PLAN IN ASSUMPTION OF, OR IN SUBSTITUTION FOR,
OUTSTANDING AWARDS PREVIOUSLY GRANTED BY AN ENTITY ACQUIRED BY THE COMPANY OR
WITH WHICH THE COMPANY COMBINES (“SUBSTITUTE AWARDS”).  THE NUMBER OF COMMON
SHARES UNDERLYING ANY SUBSTITUTE AWARDS SHALL BE COUNTED AGAINST THE AGGREGATE
NUMBER OF COMMON SHARES AVAILABLE FOR AWARDS UNDER THE PLAN.

 

6.                                       ELIGIBILITY.  PARTICIPATION SHALL BE
LIMITED TO ELIGIBLE PERSONS WHO HAVE ENTERED INTO AN AWARD AGREEMENT OR WHO HAVE
RECEIVED WRITTEN NOTIFICATION FROM THE COMMITTEE, OR FROM A PERSON DESIGNATED BY
THE COMMITTEE, THAT THEY HAVE BEEN SELECTED TO PARTICIPATE IN THE PLAN.

 

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7.                                       OPTIONS.  (A) GENERALLY.  EACH OPTION
GRANTED UNDER THE PLAN SHALL BE EVIDENCED BY AN AWARD AGREEMENT (WHETHER IN
PAPER OR ELECTRONIC MEDIUM (INCLUDING EMAIL OR THE POSTING ON A WEB SITE
MAINTAINED BY THE COMPANY OR A THIRD PARTY UNDER CONTRACT WITH THE COMPANY)). 
EACH OPTION SO GRANTED SHALL BE SUBJECT TO THE CONDITIONS SET FORTH IN THIS
SECTION 7, AND TO SUCH OTHER CONDITIONS NOT INCONSISTENT WITH THE PLAN AS MAY BE
REFLECTED IN THE APPLICABLE AWARD AGREEMENT.  ALL OPTIONS GRANTED UNDER THE PLAN
SHALL BE NONQUALIFIED STOCK OPTIONS UNLESS THE APPLICABLE AWARD AGREEMENT
EXPRESSLY STATES THAT THE OPTION IS INTENDED TO BE AN INCENTIVE STOCK OPTION. 
INCENTIVE STOCK OPTIONS SHALL BE GRANTED ONLY TO ELIGIBLE PERSONS WHO ARE
EMPLOYEES OF THE COMPANY AND ITS AFFILIATES, AND NO INCENTIVE STOCK OPTION SHALL
BE GRANTED TO ANY ELIGIBLE PERSON WHO IS INELIGIBLE TO RECEIVE AN INCENTIVE
STOCK OPTION UNDER THE CODE.  NO OPTION SHALL BE TREATED AS AN INCENTIVE STOCK
OPTION UNLESS THE PLAN HAS BEEN APPROVED BY THE SHAREHOLDERS OF THE COMPANY IN A
MANNER INTENDED TO COMPLY WITH THE STOCKHOLDER APPROVAL REQUIREMENTS OF
SECTION 422(B)(1) OF THE CODE, PROVIDED THAT ANY OPTION INTENDED TO BE AN
INCENTIVE STOCK OPTION SHALL NOT FAIL TO BE EFFECTIVE SOLELY ON ACCOUNT OF A
FAILURE TO OBTAIN SUCH APPROVAL, BUT RATHER SUCH OPTION SHALL BE TREATED AS A
NONQUALIFIED STOCK OPTION UNLESS AND UNTIL SUCH APPROVAL IS OBTAINED.  IN THE
CASE OF AN INCENTIVE STOCK OPTION, THE TERMS AND CONDITIONS OF SUCH GRANT SHALL
BE SUBJECT TO AND COMPLY WITH SUCH RULES AS MAY BE PRESCRIBED BY SECTION 422 OF
THE CODE.  IF FOR ANY REASON AN OPTION INTENDED TO BE AN INCENTIVE STOCK OPTION
(OR ANY PORTION THEREOF) SHALL NOT QUALIFY AS AN INCENTIVE STOCK OPTION, THEN,
TO THE EXTENT OF SUCH NONQUALIFICATION, SUCH OPTION OR PORTION THEREOF SHALL BE
REGARDED AS A NONQUALIFIED STOCK OPTION APPROPRIATELY GRANTED UNDER THE PLAN.

 

(B)                                 EXERCISE PRICE.  THE EXERCISE PRICE
(“EXERCISE PRICE”) PER COMMON SHARE FOR EACH OPTION SHALL NOT BE LESS THAN 100%
OF THE FAIR MARKET VALUE OF SUCH SHARE DETERMINED AS OF THE DATE OF GRANT;
PROVIDED, HOWEVER, THAT IN THE CASE OF AN INCENTIVE STOCK OPTION GRANTED TO AN
EMPLOYEE WHO, AT THE TIME OF THE GRANT OF SUCH OPTION, OWNS SHARES REPRESENTING
MORE THAN 10% OF THE VOTING POWER OF ALL CLASSES OF SHARES OF THE COMPANY OR ANY
AFFILIATE, THE EXERCISE PRICE PER SHARE SHALL NOT BE LESS THAN 110% OF THE FAIR
MARKET VALUE PER SHARE ON THE DATE OF GRANT AND PROVIDED FURTHER THAT,
NOTWITHSTANDING ANY PROVISION HEREIN TO THE CONTRARY, THE EXERCISE PRICE SHALL
NOT BE LESS THAN THE PAR VALUE PER COMMON SHARE.

 

(C)                                  VESTING AND EXPIRATION.  OPTIONS SHALL VEST
AND BECOME EXERCISABLE IN SUCH MANNER AND ON SUCH DATE OR DATES DETERMINED BY
THE COMMITTEE AND SHALL EXPIRE AFTER SUCH PERIOD, NOT TO EXCEED TEN YEARS, AS
MAY BE DETERMINED BY THE COMMITTEE (THE “OPTION PERIOD”); PROVIDED, HOWEVER,
THAT THE OPTION PERIOD SHALL NOT EXCEED FIVE YEARS FROM THE DATE OF GRANT IN THE
CASE OF AN INCENTIVE STOCK OPTION GRANTED TO A PARTICIPANT WHO ON THE DATE OF
GRANT OWNS SHARES REPRESENTING MORE THAN 10% OF THE VOTING POWER OF ALL CLASSES
OF SHARES OF THE COMPANY OR ANY AFFILIATE; PROVIDED, FURTHER, THAT
NOTWITHSTANDING ANY VESTING DATES SET BY THE COMMITTEE, THE COMMITTEE MAY, IN
ITS SOLE DISCRETION, ACCELERATE THE EXERCISABILITY OF ANY OPTION, WHICH
ACCELERATION SHALL NOT AFFECT THE TERMS AND CONDITIONS OF SUCH OPTION OTHER THAN
WITH RESPECT TO EXERCISABILITY.  UNLESS OTHERWISE PROVIDED BY THE COMMITTEE IN
AN AWARD AGREEMENT:  (I) AN OPTION SHALL VEST AND BECOME EXERCISABLE WITH
RESPECT TO 100% OF THE COMMON SHARES SUBJECT TO SUCH OPTION ON THE THIRD
ANNIVERSARY OF THE DATE OF GRANT; (II) THE UNVESTED PORTION OF AN OPTION SHALL
EXPIRE UPON TERMINATION OF EMPLOYMENT OR SERVICE OF THE PARTICIPANT GRANTED THE
OPTION, AND THE VESTED PORTION OF SUCH OPTION SHALL REMAIN EXERCISABLE FOR (A)
ONE YEAR FOLLOWING TERMINATION OF EMPLOYMENT OR SERVICE BY REASON OF SUCH
PARTICIPANT’S DEATH OR DISABILITY (AS DETERMINED BY THE COMMITTEE), BUT NOT
LATER THAN THE EXPIRATION OF THE OPTION PERIOD OR (B) 90

 

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DAYS FOLLOWING TERMINATION OF EMPLOYMENT OR SERVICE FOR ANY REASON OTHER THAN
SUCH PARTICIPANT’S DEATH OR DISABILITY, AND OTHER THAN SUCH PARTICIPANT’S
TERMINATION OF EMPLOYMENT OR SERVICE FOR CAUSE, BUT NOT LATER THAN THE
EXPIRATION OF THE OPTION PERIOD; AND (III) BOTH THE UNVESTED AND THE VESTED
PORTION OF AN OPTION SHALL EXPIRE UPON THE TERMINATION OF THE PARTICIPANT’S
EMPLOYMENT OR SERVICE BY THE COMPANY FOR CAUSE.

 

(D)                                 METHOD OF EXERCISE AND FORM OF PAYMENT.  NO
COMMON SHARES SHALL BE DELIVERED PURSUANT TO ANY EXERCISE OF AN OPTION UNTIL
PAYMENT IN FULL OF THE EXERCISE PRICE THEREFOR IS RECEIVED BY THE COMPANY AND
THE PARTICIPANT HAS PAID TO THE COMPANY AN AMOUNT EQUAL TO ANY FEDERAL, STATE,
LOCAL AND NON-U.S. INCOME AND EMPLOYMENT TAXES REQUIRED TO BE WITHHELD.  OPTIONS
THAT HAVE BECOME EXERCISABLE MAY BE EXERCISED BY DELIVERY OF WRITTEN OR
ELECTRONIC NOTICE OF EXERCISE TO THE COMPANY IN ACCORDANCE WITH THE TERMS OF THE
OPTION ACCOMPANIED BY PAYMENT OF THE EXERCISE PRICE.  THE EXERCISE PRICE SHALL
BE PAYABLE (I) IN CASH, CHECK, CASH EQUIVALENT AND/OR COMMON SHARES VALUED AT
THE FAIR MARKET VALUE AT THE TIME THE OPTION IS EXERCISED (INCLUDING, PURSUANT
TO PROCEDURES APPROVED BY THE COMMITTEE, BY MEANS OF ATTESTATION OF OWNERSHIP OF
A SUFFICIENT NUMBER OF COMMON SHARES IN LIEU OF ACTUAL DELIVERY OF SUCH SHARES
TO THE COMPANY); PROVIDED, THAT SUCH COMMON SHARES ARE NOT SUBJECT TO ANY PLEDGE
OR OTHER SECURITY INTEREST AND ARE MATURE SHARES AND; (II) BY SUCH OTHER METHOD
AS THE COMMITTEE MAY PERMIT IN ACCORDANCE WITH APPLICABLE LAW, IN ITS SOLE
DISCRETION, INCLUDING WITHOUT LIMITATION:  (A) IN OTHER PROPERTY HAVING A FAIR
MARKET VALUE ON THE DATE OF EXERCISE EQUAL TO THE EXERCISE PRICE OR (B) IF THERE
IS A PUBLIC MARKET FOR THE COMMON SHARES AT SUCH TIME, BY MEANS OF A
BROKER-ASSISTED “CASHLESS EXERCISE” PURSUANT TO WHICH THE COMPANY IS DELIVERED A
COPY OF IRREVOCABLE INSTRUCTIONS TO A STOCKBROKER TO SELL THE COMMON SHARES
OTHERWISE DELIVERABLE UPON THE EXERCISE OF THE OPTION AND TO DELIVER PROMPTLY TO
THE COMPANY AN AMOUNT EQUAL TO THE EXERCISE PRICE OR (C) BY A “NET EXERCISE”
METHOD WHEREBY THE COMPANY WITHHOLDS FROM THE DELIVERY OF THE COMMON SHARES FOR
WHICH THE OPTION WAS EXERCISED THAT NUMBER OF COMMON SHARES HAVING A FAIR MARKET
VALUE EQUAL TO THE AGGREGATE EXERCISE PRICE FOR THE COMMON SHARES FOR WHICH THE
OPTION WAS EXERCISED.  ANY FRACTIONAL COMMON SHARES SHALL BE SETTLED IN CASH.

 

(E)                                  NOTIFICATION UPON DISQUALIFYING DISPOSITION
OF AN INCENTIVE STOCK OPTION.  EACH PARTICIPANT AWARDED AN INCENTIVE STOCK
OPTION UNDER THE PLAN SHALL NOTIFY THE COMPANY IN WRITING IMMEDIATELY AFTER THE
DATE HE MAKES A DISQUALIFYING DISPOSITION OF ANY COMMON SHARES ACQUIRED PURSUANT
TO THE EXERCISE OF SUCH INCENTIVE STOCK OPTION.  A DISQUALIFYING DISPOSITION IS
ANY DISPOSITION (INCLUDING, WITHOUT LIMITATION, ANY SALE) OF SUCH COMMON SHARES
BEFORE THE LATER OF (A) TWO YEARS AFTER THE DATE OF GRANT OF THE INCENTIVE STOCK
OPTION OR (B) ONE YEAR AFTER THE DATE OF EXERCISE OF THE INCENTIVE STOCK
OPTION.  THE COMPANY MAY, IF DETERMINED BY THE COMMITTEE AND IN ACCORDANCE WITH
PROCEDURES ESTABLISHED BY THE COMMITTEE, RETAIN POSSESSION OF ANY COMMON SHARES
ACQUIRED PURSUANT TO THE EXERCISE OF AN INCENTIVE STOCK OPTION AS AGENT FOR THE
APPLICABLE PARTICIPANT UNTIL THE END OF THE PERIOD DESCRIBED IN THE PRECEDING
SENTENCE.

 

(F)                                    COMPLIANCE WITH LAWS, ETC. 
NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL A PARTICIPANT BE PERMITTED TO
EXERCISE AN OPTION IN A MANNER THAT THE COMMITTEE DETERMINES WOULD VIOLATE THE
SARBANES-OXLEY ACT OF 2002, IF APPLICABLE, OR ANY OTHER APPLICABLE LAW OR THE
APPLICABLE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION OR
THE APPLICABLE RULES AND REGULATIONS OF ANY SECURITIES EXCHANGE OR INTER-DEALER
QUOTATION SYSTEM ON WHICH THE SECURITIES OF THE COMPANY ARE LISTED OR TRADED.

 

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8.                                       STOCK APPRECIATION RIGHTS. 
(A) GENERALLY.  EACH SAR GRANTED UNDER THE PLAN SHALL BE EVIDENCED BY AN AWARD
AGREEMENT (WHETHER IN PAPER OR ELECTRONIC MEDIUM (INCLUDING EMAIL OR THE POSTING
ON A WEB SITE MAINTAINED BY THE COMPANY OR A THIRD PARTY UNDER CONTRACT WITH THE
COMPANY)).  EACH SAR SO GRANTED SHALL BE SUBJECT TO THE CONDITIONS SET FORTH IN
THIS SECTION 8, AND TO SUCH OTHER CONDITIONS NOT INCONSISTENT WITH THE PLAN AS
MAY BE REFLECTED IN THE APPLICABLE AWARD AGREEMENT.  ANY OPTION GRANTED UNDER
THE PLAN MAY INCLUDE TANDEM SARS.  THE COMMITTEE ALSO MAY AWARD SARS TO ELIGIBLE
PERSONS INDEPENDENT OF ANY OPTION.

 

(B)                                 EXERCISE PRICE.  THE EXERCISE PRICE PER
COMMON SHARE FOR EACH OPTION SHALL NOT BE LESS THAN 100% OF THE FAIR MARKET
VALUE OF SUCH SHARE DETERMINED AS OF THE DATE OF GRANT

 

(C)                                  VESTING AND EXPIRATION.  A SAR GRANTED IN
CONNECTION WITH AN OPTION SHALL BECOME EXERCISABLE AND SHALL EXPIRE ACCORDING TO
THE SAME VESTING SCHEDULE AND EXPIRATION PROVISIONS AS THE CORRESPONDING
OPTION.  A SAR GRANTED INDEPENDENT OF AN OPTION SHALL VEST AND BECOME
EXERCISABLE AND SHALL EXPIRE IN SUCH MANNER AND ON SUCH DATE OR DATES DETERMINED
BY THE COMMITTEE AND SHALL EXPIRE AFTER SUCH PERIOD, NOT TO EXCEED TEN YEARS, AS
MAY BE DETERMINED BY THE COMMITTEE (THE “SAR PERIOD”); PROVIDED, HOWEVER, THAT
NOTWITHSTANDING ANY VESTING DATES SET BY THE COMMITTEE, THE COMMITTEE MAY, IN
ITS SOLE DISCRETION, ACCELERATE THE EXERCISABILITY OF ANY SAR, WHICH
ACCELERATION SHALL NOT AFFECT THE TERMS AND CONDITIONS OF SUCH SAR OTHER THAN
WITH RESPECT TO EXERCISABILITY.  UNLESS OTHERWISE PROVIDED BY THE COMMITTEE IN
AN AWARD AGREEMENT:  (I) A SAR SHALL VEST AND BECOME EXERCISABLE WITH RESPECT TO
100% OF THE COMMON SHARES SUBJECT TO SUCH SAR ON THE THIRD ANNIVERSARY OF THE
DATE OF GRANT; (II) THE UNVESTED PORTION OF A SAR SHALL EXPIRE UPON TERMINATION
OF EMPLOYMENT OR SERVICE OF THE PARTICIPANT GRANTED THE SAR, AND THE VESTED
PORTION OF SUCH SAR SHALL REMAIN EXERCISABLE FOR (A) ONE YEAR FOLLOWING
TERMINATION OF EMPLOYMENT OR SERVICE BY REASON OF SUCH PARTICIPANT’S DEATH OR
DISABILITY (AS DETERMINED BY THE COMMITTEE), BUT NOT LATER THAN THE EXPIRATION
OF THE SAR PERIOD OR (B) 90 DAYS FOLLOWING TERMINATION OF EMPLOYMENT OR SERVICE
FOR ANY REASON OTHER THAN SUCH PARTICIPANT’S DEATH OR DISABILITY, AND OTHER THAN
SUCH PARTICIPANT’S TERMINATION OF EMPLOYMENT OR SERVICE FOR CAUSE, BUT NOT LATER
THAN THE EXPIRATION OF THE SAR PERIOD; AND (III) BOTH THE UNVESTED AND THE
VESTED PORTION OF A SAR SHALL EXPIRE UPON THE TERMINATION OF THE PARTICIPANT’S
EMPLOYMENT OR SERVICE BY THE COMPANY FOR CAUSE.

 

(D)                                 METHOD OF EXERCISE.  SARS THAT HAVE BECOME
EXERCISABLE MAY BE EXERCISED BY DELIVERY OF WRITTEN OR ELECTRONIC NOTICE OF
EXERCISE TO THE COMPANY IN ACCORDANCE WITH THE TERMS OF THE AWARD, SPECIFYING
THE NUMBER OF SARS TO BE EXERCISED AND THE DATE ON WHICH SUCH SARS WERE
AWARDED.  NOTWITHSTANDING THE FOREGOING, IF ON THE LAST DAY OF THE OPTION PERIOD
(OR IN THE CASE OF A SAR INDEPENDENT OF AN OPTION, THE SAR PERIOD), THE FAIR
MARKET VALUE EXCEEDS THE STRIKE PRICE, THE PARTICIPANT HAS NOT EXERCISED THE SAR
OR THE CORRESPONDING OPTION (IF APPLICABLE), AND NEITHER THE SAR NOR THE
CORRESPONDING OPTION (IF APPLICABLE) HAS EXPIRED, SUCH SAR SHALL BE DEEMED TO
HAVE BEEN EXERCISED BY THE PARTICIPANT ON SUCH LAST DAY AND THE COMPANY SHALL
MAKE THE APPROPRIATE PAYMENT THEREFOR.

 

(E)                                  PAYMENT.  UPON THE EXERCISE OF A SAR, THE
COMPANY SHALL PAY TO THE PARTICIPANT AN AMOUNT EQUAL TO THE NUMBER OF SHARES
SUBJECT TO THE SAR THAT ARE BEING EXERCISED MULTIPLIED BY THE EXCESS, IF ANY, OF
THE FAIR MARKET VALUE OF ONE COMMON SHARE ON THE EXERCISE DATE OVER THE STRIKE
PRICE, LESS AN AMOUNT EQUAL TO ANY FEDERAL, STATE, LOCAL AND NON-U.S. INCOME

 

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AND EMPLOYMENT TAXES REQUIRED TO BE WITHHELD.  THE COMPANY SHALL PAY SUCH AMOUNT
IN CASH, IN COMMON SHARES VALUED AT FAIR MARKET VALUE, OR ANY COMBINATION
THEREOF, AS DETERMINED BY THE COMMITTEE.  ANY FRACTIONAL COMMON SHARE SHALL BE
SETTLED IN CASH.

 

9.                                       RESTRICTED STOCK AND RESTRICTED STOCK
UNITS.  (A) GENERALLY.  EACH GRANT OF RESTRICTED STOCK AND RESTRICTED STOCK
UNITS SHALL BE EVIDENCED BY AN AWARD AGREEMENT (WHETHER IN PAPER OR ELECTRONIC
MEDIUM (INCLUDING EMAIL OR THE POSTING ON A WEB SITE MAINTAINED BY THE COMPANY
OR A THIRD PARTY UNDER CONTRACT WITH THE COMPANY)).  EACH SUCH GRANT SHALL BE
SUBJECT TO THE CONDITIONS SET FORTH IN THIS SECTION 9, AND TO SUCH OTHER
CONDITIONS NOT INCONSISTENT WITH THE PLAN AS MAY BE REFLECTED IN THE APPLICABLE
AWARD AGREEMENT.

 

(B)                                 RESTRICTED ACCOUNTS; ESCROW OR SIMILAR
ARRANGEMENT.  UPON THE GRANT OF RESTRICTED STOCK, A BOOK ENTRY IN A RESTRICTED
ACCOUNT SHALL BE ESTABLISHED IN THE PARTICIPANT’S NAME AT THE COMPANY’S TRANSFER
AGENT AND, IF THE COMMITTEE DETERMINES THAT THE RESTRICTED STOCK SHALL BE HELD
BY THE COMPANY OR IN ESCROW RATHER THAN HELD IN SUCH RESTRICTED ACCOUNT PENDING
THE RELEASE OF THE APPLICABLE RESTRICTIONS, THE COMMITTEE MAY REQUIRE THE
PARTICIPANT TO ADDITIONALLY EXECUTE AND DELIVER TO THE COMPANY (I) AN ESCROW
AGREEMENT SATISFACTORY TO THE COMMITTEE, IF APPLICABLE, AND (II) THE APPROPRIATE
SHARE POWER (ENDORSED IN BLANK) WITH RESPECT TO THE RESTRICTED STOCK COVERED BY
SUCH AGREEMENT.  IF A PARTICIPANT SHALL FAIL TO EXECUTE AN AGREEMENT EVIDENCING
AN AWARD OF RESTRICTED STOCK AND, IF APPLICABLE, AN ESCROW AGREEMENT AND BLANK
SHARE POWER WITHIN THE AMOUNT OF TIME SPECIFIED BY THE COMMITTEE, THE AWARD
SHALL BE NULL AND VOID.  SUBJECT TO THE RESTRICTIONS SET FORTH IN THIS SECTION 9
AND THE APPLICABLE AWARD AGREEMENT, THE PARTICIPANT GENERALLY SHALL HAVE THE
RIGHTS AND PRIVILEGES OF A SHAREHOLDER AS TO SUCH RESTRICTED STOCK, INCLUDING
WITHOUT LIMITATION THE RIGHT TO VOTE SUCH RESTRICTED STOCK AND THE RIGHT TO
RECEIVE DIVIDENDS, IF APPLICABLE.  TO THE EXTENT SHARES OF RESTRICTED STOCK ARE
FORFEITED, ANY SHARE CERTIFICATES ISSUED TO THE PARTICIPANT EVIDENCING SUCH
SHARES SHALL BE RETURNED TO THE COMPANY, AND ALL RIGHTS OF THE PARTICIPANT TO
SUCH SHARES AND AS A SHAREHOLDER WITH RESPECT THERETO SHALL TERMINATE WITHOUT
FURTHER OBLIGATION ON THE PART OF THE COMPANY.

 

(C)                                  VESTING; ACCELERATION OF LAPSE OF
RESTRICTIONS.  UNLESS OTHERWISE PROVIDED BY THE COMMITTEE IN AN AWARD
AGREEMENT:  (I) THE RESTRICTED PERIOD SHALL LAPSE WITH RESPECT TO 100% OF THE
RESTRICTED STOCK AND RESTRICTED STOCK UNITS ON THE THIRD ANNIVERSARY OF THE DATE
OF GRANT; AND (II) THE UNVESTED PORTION OF RESTRICTED STOCK AND RESTRICTED STOCK
UNITS SHALL TERMINATE AND BE FORFEITED UPON TERMINATION OF EMPLOYMENT OR SERVICE
OF THE PARTICIPANT GRANTED THE APPLICABLE AWARD.

 

(D)                                 DELIVERY OF RESTRICTED STOCK AND SETTLEMENT
OF RESTRICTED STOCK UNITS.  (I) UPON THE EXPIRATION OF THE RESTRICTED PERIOD
WITH RESPECT TO ANY SHARES OF RESTRICTED STOCK, THE RESTRICTIONS SET FORTH IN
THE APPLICABLE AWARD AGREEMENT SHALL BE OF NO FURTHER FORCE OR EFFECT WITH
RESPECT TO SUCH SHARES, EXCEPT AS SET FORTH IN THE APPLICABLE AWARD AGREEMENT. 
IF AN ESCROW ARRANGEMENT IS USED, UPON SUCH EXPIRATION, THE COMPANY SHALL
DELIVER TO THE PARTICIPANT, OR HIS BENEFICIARY, WITHOUT CHARGE, THE SHARE
CERTIFICATE EVIDENCING THE SHARES OF RESTRICTED STOCK THAT HAVE NOT THEN BEEN
FORFEITED AND WITH RESPECT TO WHICH THE RESTRICTED PERIOD HAS EXPIRED (ROUNDED
DOWN TO THE NEAREST FULL SHARE).  DIVIDENDS, IF ANY, THAT MAY HAVE BEEN WITHHELD
BY THE COMMITTEE AND ATTRIBUTABLE TO ANY PARTICULAR SHARE OF RESTRICTED STOCK
SHALL BE DISTRIBUTED TO THE COMMITTEE AND ATTRIBUTABLE TO ANY PARTICULAR SHARE
OF RESTRICTED STOCK SHALL BE DISTRIBUTED TO THE PARTICIPANT IN CASH OR, AT THE
SOLE DISCRETION OF THE COMMITTEE, IN SHARES OF COMMON STOCK HAVING

 

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A FAIR MARKET VALUE EQUAL TO THE AMOUNT OF SUCH DIVIDENDS, UPON THE RELEASE OF
RESTRICTIONS ON SUCH SHARE AND, IF SUCH SHARE IS FORFEITED, THE PARTICIPANT
SHALL HAVE NO RIGHT TO SUCH DIVIDENDS (EXCEPT AS OTHERWISE SET FORTH BY THE
COMMITTEE IN THE APPLICABLE AWARD AGREEMENT).

 

(II)                                  UNLESS OTHERWISE PROVIDED BY THE COMMITTEE
IN AN AWARD AGREEMENT, UPON THE EXPIRATION OF THE RESTRICTED PERIOD WITH RESPECT
TO ANY OUTSTANDING RESTRICTED STOCK UNITS, THE COMPANY SHALL DELIVER TO THE
PARTICIPANT, OR HIS BENEFICIARY, WITHOUT CHARGE, ONE COMMON SHARE FOR EACH SUCH
OUTSTANDING RESTRICTED STOCK UNIT; PROVIDED, HOWEVER, THAT THE COMMITTEE MAY, IN
ITS SOLE DISCRETION, ELECT TO (I) PAY CASH OR PART CASH AND PART COMMON SHARE IN
LIEU OF DELIVERING ONLY COMMON SHARES IN RESPECT OF SUCH RESTRICTED STOCK UNITS
OR (II) DEFER THE DELIVERY OF COMMON SHARES (OR CASH OR PART COMMON SHARES AND
PART CASH, AS THE CASE MAY BE) BEYOND THE EXPIRATION OF THE RESTRICTED PERIOD IF
SUCH DELIVERY WOULD RESULT IN A VIOLATION OF APPLICABLE LAW UNTIL SUCH TIME AS
IS NO LONGER THE CASE.  IF A CASH PAYMENT IS MADE IN LIEU OF DELIVERING COMMON
SHARES, THE AMOUNT OF SUCH PAYMENT SHALL BE EQUAL TO THE FAIR MARKET VALUE OF
THE COMMON SHARES AS OF THE DATE ON WHICH THE RESTRICTED PERIOD LAPSED WITH
RESPECT TO SUCH RESTRICTED STOCK UNITS, LESS AN AMOUNT EQUAL TO ANY FEDERAL,
STATE, LOCAL AND NON-U.S. INCOME AND EMPLOYMENT TAXES REQUIRED TO BE WITHHELD.

 

10.                                 STOCK BONUS AWARDS.  THE COMMITTEE MAY ISSUE
UNRESTRICTED COMMON SHARES, OR OTHER AWARDS DENOMINATED IN COMMON SHARES, UNDER
THE PLAN TO ELIGIBLE PERSONS, EITHER ALONE OR IN TANDEM WITH OTHER AWARDS, IN
SUCH AMOUNTS AS THE COMMITTEE SHALL FROM TIME TO TIME IN ITS SOLE DISCRETION
DETERMINE.  EACH STOCK BONUS AWARD GRANTED UNDER THE PLAN SHALL BE EVIDENCED BY
AN AWARD AGREEMENT (WHETHER IN PAPER OR ELECTRONIC MEDIUM (INCLUDING EMAIL OR
THE POSTING ON A WEB SITE MAINTAINED BY THE COMPANY OR A THIRD PARTY UNDER
CONTRACT WITH THE COMPANY)).  EACH STOCK BONUS AWARD SO GRANTED SHALL BE SUBJECT
TO SUCH CONDITIONS NOT INCONSISTENT WITH THE PLAN AS MAY BE REFLECTED IN THE
APPLICABLE AWARD AGREEMENT.

 

11.                                 PERFORMANCE COMPENSATION AWARDS. 
(A) GENERALLY.  THE COMMITTEE SHALL HAVE THE AUTHORITY, AT THE TIME OF GRANT OF
ANY AWARD DESCRIBED IN SECTIONS 7 THROUGH 10 OF THE PLAN, TO DESIGNATE SUCH
AWARD AS A PERFORMANCE COMPENSATION AWARD INTENDED TO QUALIFY AS
“PERFORMANCE-BASED COMPENSATION” UNDER SECTION 162(M) OF THE CODE.  THE
COMMITTEE SHALL HAVE THE AUTHORITY TO MAKE AN AWARD OF A CASH BONUS TO ANY
PARTICIPANT AND DESIGNATE SUCH AWARD AS A PERFORMANCE COMPENSATION AWARD
INTENDED TO QUALIFY AS “PERFORMANCE-BASED COMPENSATION” UNDER SECTION 162(M) OF
THE CODE.

 

(B)                                 DISCRETION OF COMMITTEE WITH RESPECT TO
PERFORMANCE COMPENSATION AWARDS.  WITH REGARD TO A PARTICULAR PERFORMANCE
PERIOD, THE COMMITTEE SHALL HAVE SOLE DISCRETION TO SELECT THE LENGTH OF SUCH
PERFORMANCE PERIOD, THE TYPE(S) OF PERFORMANCE COMPENSATION AWARDS TO BE ISSUED,
THE PERFORMANCE CRITERIA THAT WILL BE USED TO ESTABLISH THE PERFORMANCE GOAL(S),
THE KIND(S) AND/OR LEVEL(S) OF THE PERFORMANCE GOALS(S) THAT IS (ARE) TO APPLY
AND THE PERFORMANCE FORMULA.  WITHIN THE FIRST 90 DAYS OF A PERFORMANCE PERIOD
(OR, IF LONGER OR SHORTER, WITHIN THE MAXIMUM PERIOD ALLOWED UNDER
SECTION 162(M) OF THE CODE, IF APPLICABLE), THE COMMITTEE SHALL, WITH REGARD TO
THE PERFORMANCE COMPENSATION AWARDS TO BE ISSUED FOR SUCH PERFORMANCE PERIOD,
EXERCISE ITS DISCRETION WITH RESPECT TO EACH OF THE MATTERS ENUMERATED IN THE
IMMEDIATELY PRECEDING SENTENCE AND RECORD THE SAME IN WRITING.

 

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(C)                                  PERFORMANCE CRITERIA.  THE PERFORMANCE
CRITERIA THAT WILL BE USED TO ESTABLISH THE PERFORMANCE GOAL(S) SHALL BE BASED
ON THE ATTAINMENT OF SPECIFIC LEVELS OF PERFORMANCE OF THE COMPANY (AND/OR ONE
OR MORE AFFILIATES, DIVISIONS OR OPERATIONAL UNITS, OR ANY COMBINATION OF THE
FOREGOING) AND SHALL INCLUDE THE FOLLOWING:  (I) NET EARNINGS OR NET INCOME
(BEFORE OR AFTER TAXES); (II) BASIC OR DILUTED EARNINGS PER SHARE (BEFORE OR
AFTER TAXES); (III) NET REVENUE OR REVENUE GROWTH; (IV) GROSS PROFIT OR GROSS
PROFIT GROWTH; (V) OPERATING PROFIT (BEFORE OR AFTER TAXES); (VI) RETURN
MEASURES (INCLUDING, BUT NOT LIMITED TO, RETURN ON ASSETS, CAPITAL, INVESTED
CAPITAL, EQUITY, OR SALES); (VII) CASH FLOW (INCLUDING, BUT NOT LIMITED TO,
OPERATING CASH FLOW, FREE CASH FLOW, AND CASH FLOW RETURN ON CAPITAL);
(VIII) EARNINGS BEFORE OR AFTER TAXES, INTEREST, DEPRECIATION AND/OR
AMORTIZATION; (IX) GROSS OR OPERATING MARGINS; (X) PRODUCTIVITY RATIOS;
(XI) SHARE PRICE (INCLUDING, BUT NOT LIMITED TO, GROWTH MEASURES AND TOTAL
SHAREHOLDER RETURN); (XII) EXPENSE TARGETS; (XIII) MARGINS; (XIV) OPERATING
EFFICIENCY; (XV) OBJECTIVE MEASURES OF CUSTOMER SATISFACTION; (XVI) WORKING
CAPITAL TARGETS; (XVII) MEASURES OF ECONOMIC VALUE ADDED; (XVIII) INVENTORY
CONTROL; (XIX) ENTERPRISE VALUE; (XX) SALES; (XXI) DEBT LEVELS AND NET DEBT;
(XXII) COMBINED RATIO; (XXIII) TIMELY LAUNCH OF NEW FACILITIES; (XXIV) CLIENT
RETENTION; (XXV) EMPLOYEE RETENTION; (XXVI) TIMELY COMPLETION OF NEW PRODUCT
ROLLOUTS; AND (XXVII)  OBJECTIVE MEASURES OF PERSONAL TARGETS, GOALS OR
COMPLETION OF PROJECTS.  ANY ONE OR MORE OF THE PERFORMANCE CRITERIA MAY BE USED
ON AN ABSOLUTE OR RELATIVE BASIS TO MEASURE THE PERFORMANCE OF THE COMPANY
AND/OR ONE OR MORE AFFILIATES AS A WHOLE OR ANY BUSINESS UNIT(S) OF THE COMPANY
AND/OR ONE OR MORE AFFILIATES OR ANY COMBINATION THEREOF, AS THE COMMITTEE MAY
DEEM APPROPRIATE, OR ANY OF THE ABOVE PERFORMANCE CRITERIA MAY BE COMPARED TO
THE PERFORMANCE OF A SELECTED GROUP OF COMPARISON COMPANIES, OR A PUBLISHED OR
SPECIAL INDEX THAT THE COMMITTEE, IN ITS SOLE DISCRETION, DEEMS APPROPRIATE, OR
AS COMPARED TO VARIOUS STOCK MARKET INDICES.  THE COMMITTEE ALSO HAS THE
AUTHORITY TO PROVIDE FOR ACCELERATED VESTING OF ANY AWARD BASED ON THE
ACHIEVEMENT OF PERFORMANCE GOALS PURSUANT TO THE PERFORMANCE CRITERIA SPECIFIED
IN THIS PARAGRAPH.  TO THE EXTENT REQUIRED UNDER SECTION 162(M) OF THE CODE, THE
COMMITTEE SHALL, WITHIN THE FIRST 90 DAYS OF A PERFORMANCE PERIOD (OR, IF LONGER
OR SHORTER, WITHIN THE MAXIMUM PERIOD ALLOWED UNDER SECTION 162(M) OF THE CODE),
DEFINE IN AN OBJECTIVE FASHION THE MANNER OF CALCULATING THE PERFORMANCE
CRITERIA IT SELECTS TO USE FOR SUCH PERFORMANCE PERIOD AND THEREAFTER PROMPTLY
COMMUNICATE SUCH PERFORMANCE CRITERIA TO THE PARTICIPANT.

 

(D)                                 MODIFICATION OF PERFORMANCE GOAL(S).  IN THE
EVENT THAT APPLICABLE TAX AND/OR SECURITIES LAWS CHANGE TO PERMIT COMMITTEE
DISCRETION TO ALTER THE GOVERNING PERFORMANCE CRITERIA WITHOUT OBTAINING
SHAREHOLDER APPROVAL OF SUCH ALTERATIONS, THE COMMITTEE SHALL HAVE SOLE
DISCRETION TO MAKE SUCH ALTERATIONS WITHOUT OBTAINING SHAREHOLDER APPROVAL.  THE
COMMITTEE IS AUTHORIZED AT ANY TIME DURING THE FIRST 90 DAYS OF A PERFORMANCE
PERIOD (OR, IF LONGER OR SHORTER, WITHIN THE MAXIMUM PERIOD ALLOWED UNDER
SECTION 162(M) OF THE CODE, IF APPLICABLE), OR AT ANY TIME THEREAFTER TO THE
EXTENT THE EXERCISE OF SUCH AUTHORITY AT SUCH TIME WOULD NOT CAUSE THE
PERFORMANCE COMPENSATION AWARDS GRANTED TO ANY PARTICIPANT FOR SUCH PERFORMANCE
PERIOD TO FAIL TO QUALIFY AS “PERFORMANCE-BASED COMPENSATION” UNDER
SECTION 162(M) OF THE CODE, IN ITS SOLE DISCRETION, TO ADJUST OR MODIFY THE
CALCULATION OF A PERFORMANCE GOAL FOR SUCH PERFORMANCE PERIOD, BASED ON AND IN
ORDER TO APPROPRIATELY REFLECT THE FOLLOWING EVENTS:  (I) ASSET WRITE-DOWNS;
(II) LITIGATION OR CLAIM JUDGMENTS OR SETTLEMENTS; (III) THE EFFECT OF CHANGES
IN TAX LAWS, ACCOUNTING PRINCIPLES, OR OTHER LAWS OR REGULATORY RULES AFFECTING
REPORTED RESULTS; (IV) ANY REORGANIZATION AND RESTRUCTURING PROGRAMS;
(V) EXTRAORDINARY NONRECURRING ITEMS AS DESCRIBED IN ACCOUNTING PRINCIPLES BOARD
OPINION NO. 30 (OR ANY SUCCESSOR PRONOUNCEMENT THERETO) AND/OR IN MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
APPEARING

 

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IN THE COMPANY’S ANNUAL REPORT TO SHAREHOLDERS FOR THE APPLICABLE YEAR;
(VI) ACQUISITIONS OR DIVESTITURES; (VII) ANY OTHER SPECIFIC UNUSUAL OR
NONRECURRING EVENTS, OR OBJECTIVELY DETERMINABLE CATEGORY THEREOF;
(VIII) FOREIGN EXCHANGE GAINS AND LOSSES; AND (IX) A CHANGE IN THE COMPANY’S
FISCAL YEAR.

 

(E)                                  PAYMENT OF PERFORMANCE COMPENSATION
AWARDS.  (I) CONDITION TO RECEIPT OF PAYMENT.  UNLESS OTHERWISE PROVIDED IN THE
APPLICABLE AWARD AGREEMENT, A PARTICIPANT MUST BE EMPLOYED BY THE COMPANY ON THE
LAST DAY OF A PERFORMANCE PERIOD TO BE ELIGIBLE FOR PAYMENT IN RESPECT OF A
PERFORMANCE COMPENSATION AWARD FOR SUCH PERFORMANCE PERIOD.

 

(II)                                  LIMITATION.  A PARTICIPANT SHALL BE
ELIGIBLE TO RECEIVE PAYMENT IN RESPECT OF A PERFORMANCE COMPENSATION AWARD ONLY
TO THE EXTENT THAT:  (A) THE PERFORMANCE GOALS FOR SUCH PERIOD ARE ACHIEVED; AND
(B) ALL OR SOME OF THE PORTION OF SUCH PARTICIPANT’S PERFORMANCE COMPENSATION
AWARD HAS BEEN EARNED FOR THE PERFORMANCE PERIOD BASED ON THE APPLICATION OF THE
PERFORMANCE FORMULA TO SUCH ACHIEVED PERFORMANCE GOALS.

 

(III)                               CERTIFICATION.  FOLLOWING THE COMPLETION OF
A PERFORMANCE PERIOD, THE COMMITTEE SHALL REVIEW AND CERTIFY IN WRITING WHETHER,
AND TO WHAT EXTENT, THE PERFORMANCE GOALS FOR THE PERFORMANCE PERIOD HAVE BEEN
ACHIEVED AND, IF SO, CALCULATE AND CERTIFY IN WRITING THAT AMOUNT OF THE
PERFORMANCE COMPENSATION AWARDS EARNED FOR THE PERIOD BASED UPON THE PERFORMANCE
FORMULA.  THE COMMITTEE SHALL THEN DETERMINE THE AMOUNT OF EACH PARTICIPANT’S
PERFORMANCE COMPENSATION AWARD ACTUALLY PAYABLE FOR THE PERFORMANCE PERIOD AND,
IN SO DOING, MAY APPLY NEGATIVE DISCRETION.

 

(IV)                              USE OF NEGATIVE DISCRETION.  IN DETERMINING
THE ACTUAL AMOUNT OF AN INDIVIDUAL PARTICIPANT’S PERFORMANCE COMPENSATION AWARD
FOR A PERFORMANCE PERIOD, THE COMMITTEE MAY REDUCE OR ELIMINATE THE AMOUNT OF
THE PERFORMANCE COMPENSATION AWARD EARNED UNDER THE PERFORMANCE FORMULA IN THE
PERFORMANCE PERIOD THROUGH THE USE OF NEGATIVE DISCRETION IF, IN ITS SOLE
JUDGMENT, SUCH REDUCTION OR ELIMINATION IS APPROPRIATE.  THE COMMITTEE SHALL NOT
HAVE THE DISCRETION, EXCEPT AS IS OTHERWISE PROVIDED IN THE PLAN, TO (A) GRANT
OR PROVIDE PAYMENT IN RESPECT OF PERFORMANCE COMPENSATION AWARDS FOR A
PERFORMANCE PERIOD IF THE PERFORMANCE GOALS FOR SUCH PERFORMANCE PERIOD HAVE NOT
BEEN ATTAINED; OR (B) INCREASE A PERFORMANCE COMPENSATION AWARD ABOVE THE
APPLICABLE LIMITATIONS SET FORTH IN SECTION 5 OF THE PLAN.

 

(F)                                    TIMING OF AWARD PAYMENTS.  PERFORMANCE
COMPENSATION AWARDS GRANTED FOR A PERFORMANCE PERIOD SHALL BE PAID TO
PARTICIPANTS AS SOON AS ADMINISTRATIVELY PRACTICABLE FOLLOWING COMPLETION OF THE
CERTIFICATIONS REQUIRED BY THIS SECTION 11, BUT IN NO EVENT LATER THAN
TWO-AND-ONE-HALF MONTHS FOLLOWING THE END OF THE FISCAL YEAR DURING WHICH THE
PERFORMANCE PERIOD IS COMPLETED.

 

12.                                 CHANGES IN CAPITAL STRUCTURE AND SIMILAR
EVENTS.  IN THE EVENT OF (A) ANY DIVIDEND OR OTHER DISTRIBUTION (WHETHER IN THE
FORM OF CASH, COMMON SHARES, OTHER SECURITIES OR OTHER PROPERTY),
RECAPITALIZATION, STOCK SPLIT, REVERSE STOCK SPLIT, REORGANIZATION, MERGER,
AMALGAMATION, CONSOLIDATION, SPLIT-UP, SPLIT-OFF, COMBINATION, REPURCHASE OR
EXCHANGE OF COMMON SHARES OR OTHER SECURITIES OF THE COMPANY, ISSUANCE OF
WARRANTS OR OTHER RIGHTS TO ACQUIRE COMMON SHARES OR OTHER SECURITIES OF THE
COMPANY, OR OTHER SIMILAR CORPORATE TRANSACTION OR EVENT (INCLUDING,

 

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WITHOUT LIMITATION, A CHANGE IN CONTROL) THAT AFFECTS THE COMMON SHARES, OR
(B) UNUSUAL OR NONRECURRING EVENTS (INCLUDING, WITHOUT LIMITATION, A CHANGE IN
CONTROL) AFFECTING THE COMPANY, ANY AFFILIATE, OR THE FINANCIAL STATEMENTS OF
THE COMPANY OR ANY AFFILIATE, OR CHANGES IN APPLICABLE RULES, RULINGS,
REGULATIONS OR OTHER REQUIREMENTS OF ANY GOVERNMENTAL BODY OR SECURITIES
EXCHANGE OR INTER-DEALER QUOTATION SYSTEM, ACCOUNTING PRINCIPLES OR LAW, SUCH
THAT IN EITHER CASE AN ADJUSTMENT IS DETERMINED BY THE COMMITTEE IN ITS SOLE
DISCRETION TO BE NECESSARY OR APPROPRIATE, THEN THE COMMITTEE SHALL MAKE ANY
SUCH ADJUSTMENTS IN SUCH MANNER AS IT MAY DEEM EQUITABLE, INCLUDING WITHOUT
LIMITATION ANY OR ALL OF THE FOLLOWING:

 

(I)                                     ADJUSTING ANY OR ALL OF (A) THE NUMBER
OF COMMON SHARES OR OTHER SECURITIES OF THE COMPANY (OR NUMBER AND KIND OF OTHER
SECURITIES OR OTHER PROPERTY) THAT MAY BE DELIVERED IN RESPECT OF AWARDS OR WITH
RESPECT TO WHICH AWARDS MAY BE GRANTED UNDER THE PLAN (INCLUDING, WITHOUT
LIMITATION, ADJUSTING ANY OR ALL OF THE LIMITATIONS UNDER SECTION 5 OF THE PLAN)
AND (B) THE TERMS OF ANY OUTSTANDING AWARD, INCLUDING, WITHOUT LIMITATION,
(1) THE NUMBER OF COMMON SHARES OR OTHER SECURITIES OF THE COMPANY (OR NUMBER
AND KIND OF OTHER SECURITIES OR OTHER PROPERTY) SUBJECT TO OUTSTANDING AWARDS OR
TO WHICH OUTSTANDING AWARDS RELATE, (2) THE EXERCISE PRICE OR STRIKE PRICE WITH
RESPECT TO ANY AWARD OR (3) ANY APPLICABLE PERFORMANCE MEASURES (INCLUDING,
WITHOUT LIMITATION, PERFORMANCE CRITERIA AND PERFORMANCE GOALS);

 

(II)                                  PROVIDING FOR A SUBSTITUTION OR ASSUMPTION
OF AWARDS, ACCELERATING THE EXERCISABILITY OF, LAPSE OF RESTRICTIONS ON, OR
TERMINATION OF, AWARDS OR PROVIDING FOR A PERIOD OF TIME FOR EXERCISE PRIOR TO
THE OCCURRENCE OF SUCH EVENT; AND

 

(III)                               CANCELING ANY ONE OR MORE OUTSTANDING AWARDS
AND CAUSING TO BE PAID TO THE HOLDERS THEREOF, IN CASH, COMMON SHARES, OTHER
SECURITIES OR OTHER PROPERTY, OR ANY COMBINATION THEREOF, THE VALUE OF SUCH
AWARDS, IF ANY, AS DETERMINED BY THE COMMITTEE (WHICH IF APPLICABLE MAY BE BASED
UPON THE PRICE PER COMMON SHARE RECEIVED OR TO BE RECEIVED BY OTHER SHAREHOLDERS
OF THE COMPANY IN SUCH EVENT), INCLUDING WITHOUT LIMITATION, IN THE CASE OF AN
OUTSTANDING OPTION OR SAR, A CASH PAYMENT IN AN AMOUNT EQUAL TO THE EXCESS, IF
ANY, OF THE FAIR MARKET VALUE (AS OF A DATE SPECIFIED BY THE COMMITTEE) OF THE
COMMON SHARES SUBJECT TO SUCH OPTION OR SAR OVER THE AGGREGATE EXERCISE PRICE OR
STRIKE PRICE OF SUCH OPTION OR SAR, RESPECTIVELY (IT BEING UNDERSTOOD THAT, IN
SUCH EVENT, ANY OPTION OR SAR HAVING A PER SHARE EXERCISE PRICE OR STRIKE PRICE
EQUAL TO, OR IN EXCESS OF, THE FAIR MARKET VALUE OF A COMMON SHARE SUBJECT
THERETO MAY BE CANCELED AND TERMINATED WITHOUT ANY PAYMENT OR CONSIDERATION
THEREFOR);

 

provided, however, that in the case of any “equity restructuring” (within the
meaning of the Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 123 (revised 2004)), the Committee shall make an
equitable or proportionate adjustment to outstanding Awards to reflect such
equity restructuring.  Any adjustment in Incentive Stock Options under this
Section 12 (other than any cancellation of Incentive Stock Options) shall be
made only to the extent not constituting a “modification” within the meaning of
Section 424(h)(3) of the Code, and any adjustments under this Section 12 shall
be made in a manner that does not adversely affect the exemption provided
pursuant to Rule 16b-3 under the Exchange Act.  The Company shall give each
Participant notice of an adjustment hereunder and, upon notice, such adjustment
shall be conclusive and binding for all purposes.

 

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13.                                 EFFECT OF CHANGE IN CONTROL.  EXCEPT TO THE
EXTENT OTHERWISE PROVIDED IN AN AWARD AGREEMENT, IN THE EVENT OF A CHANGE IN
CONTROL, NOTWITHSTANDING ANY PROVISION OF THE PLAN TO THE CONTRARY, THE
COMMITTEE MAY PROVIDE THAT, WITH RESPECT TO ALL OR ANY PORTION OF A PARTICULAR
OUTSTANDING AWARD OR AWARDS:

 

(A)                                  THE THEN OUTSTANDING OPTIONS AND SARS SHALL
BECOME IMMEDIATELY EXERCISABLE AS OF A TIME PRIOR TO THE CHANGE IN CONTROL;

 

(B)                                 THE RESTRICTED PERIOD SHALL EXPIRE AS OF A
TIME PRIOR TO THE CHANGE IN CONTROL (INCLUDING WITHOUT LIMITATION A WAIVER OF
ANY APPLICABLE PERFORMANCE GOALS);

 

(C)                                  PERFORMANCE PERIODS IN EFFECT ON THE DATE
THE CHANGE IN CONTROL OCCURS SHALL END ON SUCH DATE, AND THE COMMITTEE SHALL
(I) DETERMINE THE EXTENT TO WHICH PERFORMANCE GOALS WITH RESPECT TO EACH SUCH
PERFORMANCE PERIOD HAVE BEEN MET BASED UPON SUCH AUDITED OR UNAUDITED FINANCIAL
INFORMATION OR OTHER INFORMATION THEN AVAILABLE AS IT DEEMS RELEVANT AND
(II) CAUSE THE PARTICIPANT TO RECEIVE PARTIAL OR FULL PAYMENT OF AWARDS FOR EACH
SUCH PERFORMANCE PERIOD BASED UPON THE COMMITTEE’S DETERMINATION OF THE DEGREE
OF ATTAINMENT OF THE PERFORMANCE GOALS, OR ASSUMING THAT THE APPLICABLE “TARGET”
LEVELS OF PERFORMANCE HAVE BEEN ATTAINED OR ON SUCH OTHER BASIS DETERMINED BY
THE COMMITTEE.

 

To the extent practicable, any actions taken by the Committee under the
immediately preceding clauses (a) through (c) shall occur in a manner and at a
time which allows affected Participants the ability to participate in the Change
in Control transactions with respect to the Common Shares subject to their
Awards.

 

14.                                 AMENDMENTS AND TERMINATION.  (A) AMENDMENT
AND TERMINATION OF THE PLAN.  THE BOARD MAY AMEND, ALTER, SUSPEND, DISCONTINUE,
OR TERMINATE THE PLAN OR ANY PORTION THEREOF AT ANY TIME; PROVIDED, THAT (I) NO
AMENDMENT TO SECTION 11(C) OR SECTION 14(B) (TO THE EXTENT REQUIRED BY THE
PROVISO IN SUCH SECTION 14(B)) SHALL BE MADE WITHOUT SHAREHOLDER APPROVAL AND
(II) NO SUCH AMENDMENT, ALTERATION, SUSPENSION, DISCONTINUATION OR TERMINATION
SHALL BE MADE WITHOUT SHAREHOLDER APPROVAL IF SUCH APPROVAL IS NECESSARY TO
COMPLY WITH ANY TAX OR REGULATORY REQUIREMENT APPLICABLE TO THE PLAN (INCLUDING,
WITHOUT LIMITATION, AS NECESSARY TO COMPLY WITH ANY RULES OR REQUIREMENTS OF ANY
SECURITIES EXCHANGE OR INTER-DEALER QUOTATION SYSTEM ON WHICH THE COMMON SHARES
MAY BE LISTED OR QUOTED OR TO PREVENT THE COMPANY FROM BEING DENIED A TAX
DEDUCTION UNDER SECTION 162(M) OF THE CODE); PROVIDED, FURTHER, THAT ANY SUCH
AMENDMENT, ALTERATION, SUSPENSION, DISCONTINUANCE OR TERMINATION THAT WOULD
MATERIALLY AND ADVERSELY AFFECT THE RIGHTS OF ANY PARTICIPANT OR ANY HOLDER OR
BENEFICIARY OF ANY AWARD THERETOFORE GRANTED SHALL NOT TO THAT EXTENT BE
EFFECTIVE WITHOUT THE CONSENT OF THE AFFECTED PARTICIPANT, HOLDER OR
BENEFICIARY.

 

(B)                                 AMENDMENT OF AWARD AGREEMENTS.  THE
COMMITTEE MAY, TO THE EXTENT CONSISTENT WITH THE TERMS OF ANY APPLICABLE AWARD
AGREEMENT, WAIVE ANY CONDITIONS OR RIGHTS UNDER, AMEND ANY TERMS OF, OR ALTER,
SUSPEND, DISCONTINUE, CANCEL OR TERMINATE, ANY AWARD THERETOFORE GRANTED OR THE
ASSOCIATED AWARD AGREEMENT, PROSPECTIVELY OR RETROACTIVELY; PROVIDED THAT ANY
SUCH WAIVER, AMENDMENT, ALTERATION, SUSPENSION, DISCONTINUANCE, CANCELLATION OR
TERMINATION THAT WOULD MATERIALLY AND ADVERSELY AFFECT THE RIGHTS OF ANY
PARTICIPANT WITH RESPECT TO ANY AWARD THERETOFORE GRANTED SHALL NOT TO THAT
EXTENT BE EFFECTIVE WITHOUT THE CONSENT OF THE

 

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AFFECTED PARTICIPANT; PROVIDED, FURTHER, THAT WITHOUT SHAREHOLDER APPROVAL,
EXCEPT AS OTHERWISE PERMITTED UNDER SECTION 12 OF THE PLAN, (I) NO AMENDMENT OR
MODIFICATION MAY REDUCE THE EXERCISE PRICE OF ANY OPTION OR THE STRIKE PRICE OF
ANY SAR, (II) THE COMMITTEE MAY NOT CANCEL ANY OUTSTANDING OPTION OR SAR AND
REPLACE IT WITH A NEW OPTION OR SAR, ANOTHER AWARD OR CASH AND (III) THE
COMMITTEE MAY NOT TAKE ANY OTHER ACTION THAT IS CONSIDERED A “REPRICING” FOR
PURPOSES OF THE SHAREHOLDER APPROVAL RULES OF THE APPLICABLE SECURITIES EXCHANGE
OR INTER-DEALER QUOTATION SYSTEM ON WHICH THE COMMON SHARES ARE LISTED OR
QUOTED.

 

15.                                 RESTRICTIVE COVENANTS.  (A) 
CONFIDENTIALITY.  BY ACCEPTING AN AWARD UNDER THE PLAN, AND AS A CONDITION
THEREOF, EACH PARTICIPANT AGREES NOT TO, AT ANY TIME, EITHER DURING THEIR
EMPLOYMENT OR THEREAFTER, DIVULGE, USE, PUBLISH OR IN ANY OTHER MANNER REVEAL,
DIRECTLY OR INDIRECTLY, TO ANY PERSON, FIRM, CORPORATION OR ANY OTHER FORM OF
BUSINESS ORGANIZATION OR ARRANGEMENT, AND TO KEEP IN THE STRICTEST CONFIDENCE
ANY CONFIDENTIAL INFORMATION, EXCEPT (I) AS MAY BE NECESSARY TO THE PERFORMANCE
OF THE PARTICIPANT’S DUTIES TO THE COMPANY, (II) WITH THE COMPANY’S EXPRESS
WRITTEN CONSENT, (III) TO THE EXTENT THAT ANY SUCH INFORMATION IS IN OR BECOMES
IN THE PUBLIC DOMAIN OTHER THAN AS A RESULT OF THE PARTICIPANT’S BREACH OF ANY
OF HIS OR HER OBLIGATIONS UNDER THIS SECTION 15(A), OR (IV) WHERE REQUIRED TO BE
DISCLOSED BY COURT ORDER, SUBPOENA OR OTHER GOVERNMENT PROCESS AND IN SUCH
EVENT, THE PARTICIPANT SHALL COOPERATE WITH THE COMPANY IN ATTEMPTING TO KEEP
SUCH INFORMATION CONFIDENTIAL TO THE MAXIMUM EXTENT POSSIBLE.  UPON THE REQUEST
OF THE COMPANY OR AN AFFILIATE, THE PARTICIPANT AGREES TO PROMPTLY DELIVER TO
THE COMPANY THE ORIGINALS AND ALL COPIES, IN WHATEVER MEDIUM, OF ALL SUCH
CONFIDENTIAL INFORMATION.

 

(B)                                 NON-DISPARAGEMENT.  BY ACCEPTING AN AWARD
UNDER THE PLAN, AND AS A CONDITION THEREOF, THE PARTICIPANT ACKNOWLEDGES AND
AGREES THAT HE OR SHE WILL NOT DEFAME OR PUBLICLY CRITICIZE THE SERVICES,
BUSINESS, INTEGRITY, VERACITY OR PERSONAL OR PROFESSIONAL REPUTATION OF THE
COMPANY, INCLUDING ITS OFFICERS, DIRECTORS, PARTNERS, EXECUTIVES OR AGENTS, IN
EITHER A PROFESSIONAL OR PERSONAL MANNER AT ANY TIME DURING OR FOLLOWING HIS OR
HER EMPLOYMENT.

 

(C)                                  POST-EMPLOYMENT PROPERTY.  BY ACCEPTING AN
AWARD UNDER THE PLAN, AND AS A CONDITION THEREOF, THE PARTICIPANT AGREES THAT
ANY WORK OF AUTHORSHIP, INVENTION, DESIGN, DISCOVERY, DEVELOPMENT, TECHNIQUE,
IMPROVEMENT, SOURCE CODE, HARDWARE, DEVICE, DATA, APPARATUS, PRACTICE, PROCESS,
METHOD OR OTHER WORK PRODUCT WHATEVER (WHETHER PATENTABLE OR SUBJECT TO
COPYRIGHT, OR NOT, AND HEREINAFTER COLLECTIVELY CALLED “DISCOVERY”) RELATED TO
THE BUSINESS OF THE COMPANY THAT THE PARTICIPANT, EITHER SOLELY OR IN
COLLABORATION WITH OTHERS, HAS MADE OR MAY MAKE, DISCOVER, INVENT, DEVELOP,
PERFECT, OR REDUCE TO PRACTICE DURING HIS OR HER EMPLOYMENT, WHETHER OR NOT
DURING REGULAR BUSINESS HOURS AND CREATED, CONCEIVED OR PREPARED ON THE
COMPANY’S PREMISES OR OTHERWISE SHALL BE THE SOLE AND COMPLETE PROPERTY OF THE
COMPANY.  MORE PARTICULARLY, AND WITHOUT LIMITING THE FOREGOING, THE PARTICIPANT
AGREES THAT ALL OF THE FOREGOING AND ANY (I) INVENTIONS (WHETHER PATENTABLE OR
NOT, AND WITHOUT REGARD TO WHETHER ANY PATENT THEREFOR IS EVER SOUGHT),
(II) MARKS, NAMES, OR LOGOS (WHETHER OR NOT REGISTRABLE AS TRADE OR SERVICE
MARKS, AND WITHOUT REGARD TO WHETHER REGISTRATION THEREFOR IS EVER SOUGHT),
(III) WORKS OF AUTHORSHIP (WITHOUT REGARD TO WHETHER ANY CLAIM OF COPYRIGHT
THEREIN IS EVER REGISTERED), AND (IV) TRADE SECRETS, IDEAS, AND CONCEPTS ((I) —
(IV) COLLECTIVELY, “INTELLECTUAL PROPERTY PRODUCTS”) CREATED, CONCEIVED, OR
PREPARED ON THE COMPANY’S PREMISES OR OTHERWISE, WHETHER OR NOT DURING NORMAL
BUSINESS HOURS, SHALL PERPETUALLY AND THROUGHOUT THE WORLD BE THE EXCLUSIVE
PROPERTY OF THE COMPANY, AS SHALL ALL TANGIBLE MEDIA (INCLUDING, BUT NOT LIMITED
TO, PAPERS,

 

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COMPUTER MEDIA OF ALL TYPES, AND MODELS) IN WHICH SUCH INTELLECTUAL PROPERTY
PRODUCTS SHALL BE RECORDED OR OTHERWISE FIXED.  THE PARTICIPANT FURTHER AGREES
PROMPTLY TO DISCLOSE IN WRITING AND DELIVER TO THE COMPANY ALL INTELLECTUAL
PROPERTY PRODUCTS CREATED DURING HIS OR HER ENGAGEMENT BY THE COMPANY, WHETHER
OR NOT DURING NORMAL BUSINESS HOURS.  THE PARTICIPANT AGREES THAT ALL WORKS OF
AUTHORSHIP CREATED BY THE PARTICIPANT DURING HIS OR HER ENGAGEMENT BY THE
COMPANY SHALL BE WORKS MADE FOR HIRE OF WHICH THE COMPANY IS THE AUTHOR AND
OWNER OF COPYRIGHT.  TO THE EXTENT THAT ANY COMPETENT DECISION-MAKING AUTHORITY
SHOULD EVER DETERMINE THAT ANY WORK OF AUTHORSHIP CREATED BY THE PARTICIPANT
DURING HIS OR HER ENGAGEMENT BY THE COMPANY IS NOT A WORK MADE FOR HIRE, BY
ACCEPTING AN AWARD, THE PARTICIPANT ASSIGNS ALL RIGHT, TITLE AND INTEREST IN THE
COPYRIGHT THEREIN, IN PERPETUITY AND THROUGHOUT THE WORLD, TO THE COMPANY.  TO
THE EXTENT THAT THIS PLAN DOES NOT OTHERWISE SERVE TO GRANT OR OTHERWISE VEST IN
THE COMPANY ALL RIGHTS IN ANY INTELLECTUAL PROPERTY PRODUCT CREATED BY THE
PARTICIPANT DURING HIS OR HER ENGAGEMENT BY THE COMPANY, BY ACCEPTING AN AWARD,
THE PARTICIPANT ASSIGNS ALL RIGHT, TITLE AND INTEREST THEREIN, IN PERPETUITY AND
THROUGHOUT THE WORLD, TO THE COMPANY.  THE PARTICIPANT AGREES TO EXECUTE,
IMMEDIATELY UPON THE COMPANY’S REASONABLE REQUEST AND WITHOUT CHARGE, ANY
FURTHER ASSIGNMENTS, APPLICATIONS, CONVEYANCES OR OTHER INSTRUMENTS, AT ANY
TIME, WHETHER OR NOT THE PARTICIPANT IS ENGAGED BY THE COMPANY AT THE TIME SUCH
REQUEST IS MADE, IN ORDER TO PERMIT THE COMPANY AND/OR ITS RESPECTIVE ASSIGNS TO
PROTECT, PERFECT, REGISTER, RECORD, MAINTAIN, OR ENHANCE THEIR RIGHTS IN ANY
INTELLECTUAL PROPERTY PRODUCT; PROVIDED, THAT, THE COMPANY SHALL BEAR THE COST
OF ANY SUCH ASSIGNMENTS, APPLICATIONS OR CONSEQUENCES.  UPON TERMINATION OF THE
PARTICIPANT’S EMPLOYMENT BY THE COMPANY FOR ANY REASON WHATSOEVER, AND AT ANY
EARLIER TIME THE COMPANY SO REQUESTS, THE PARTICIPANT WILL IMMEDIATELY DELIVER
TO THE CUSTODY OF THE PERSON DESIGNATED BY THE COMPANY ALL ORIGINALS AND COPIES
OF ANY DOCUMENTS AND OTHER PROPERTY OF THE COMPANY IN THE PARTICIPANT’S
POSSESSION, UNDER THE PARTICIPANT’S CONTROL OR TO WHICH HE OR SHE MAY HAVE
ACCESS.

 

FOR PURPOSES OF THIS SECTION 15, THE TERM “COMPANY” SHALL INCLUDE THE COMPANY
AND ITS AFFILIATES.

 

16.                                 GENERAL.  (A) AWARD AGREEMENTS.  EACH AWARD
UNDER THE PLAN SHALL BE EVIDENCED BY AN AWARD AGREEMENT, WHICH SHALL BE
DELIVERED TO THE PARTICIPANT (WHETHER IN PAPER OR ELECTRONIC MEDIUM (INCLUDING
EMAIL OR THE POSTING ON A WEB SITE MAINTAINED BY THE COMPANY OR A THIRD PARTY
UNDER CONTRACT WITH THE COMPANY)) AND SHALL SPECIFY THE TERMS AND CONDITIONS OF
THE AWARD AND ANY RULES APPLICABLE THERETO, INCLUDING WITHOUT LIMITATION, THE
EFFECT ON SUCH AWARD OF THE DEATH, DISABILITY OR TERMINATION OF EMPLOYMENT OR
SERVICE OF A PARTICIPANT, OR OF SUCH OTHER EVENTS AS MAY BE DETERMINED BY THE
COMMITTEE.

 

(B)                                 NONTRANSFERABILITY.  (I) EACH AWARD SHALL BE
EXERCISABLE ONLY BY A PARTICIPANT DURING THE PARTICIPANT’S LIFETIME, OR, IF
PERMISSIBLE UNDER APPLICABLE LAW, BY THE PARTICIPANT’S LEGAL GUARDIAN OR
REPRESENTATIVE.  NO AWARD MAY BE ASSIGNED, ALIENATED, PLEDGED, ATTACHED, SOLD OR
OTHERWISE TRANSFERRED OR ENCUMBERED BY A PARTICIPANT OTHER THAN BY WILL OR BY
THE LAWS OF DESCENT AND DISTRIBUTION AND ANY SUCH PURPORTED ASSIGNMENT,
ALIENATION, PLEDGE, ATTACHMENT, SALE, TRANSFER OR ENCUMBRANCE SHALL BE VOID AND
UNENFORCEABLE AGAINST THE COMPANY OR AN AFFILIATE; PROVIDED THAT THE DESIGNATION
OF A BENEFICIARY SHALL NOT CONSTITUTE AN ASSIGNMENT, ALIENATION, PLEDGE,
ATTACHMENT, SALE, TRANSFER OR ENCUMBRANCE.

 

(II)                                  NOTWITHSTANDING THE FOREGOING, THE
COMMITTEE MAY, IN ITS SOLE DISCRETION, PERMIT AWARDS (OTHER THAN INCENTIVE STOCK
OPTIONS) TO BE TRANSFERRED BY A PARTICIPANT,

 

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WITHOUT CONSIDERATION, SUBJECT TO SUCH RULES AS THE COMMITTEE MAY ADOPT
CONSISTENT WITH ANY APPLICABLE AWARD AGREEMENT TO PRESERVE THE PURPOSES OF THE
PLAN, TO:  (A) ANY PERSON WHO IS A “FAMILY MEMBER” OF THE PARTICIPANT, AS SUCH
TERM IS USED IN THE INSTRUCTIONS TO FORM S-8 UNDER THE SECURITIES ACT
(COLLECTIVELY, THE “IMMEDIATE FAMILY MEMBERS”); (B) A TRUST SOLELY FOR THE
BENEFIT OF THE PARTICIPANT AND HIS OR HER IMMEDIATE FAMILY MEMBERS; OR (C) A
PARTNERSHIP OR LIMITED LIABILITY COMPANY WHOSE ONLY PARTNERS OR STOCKHOLDERS ARE
THE PARTICIPANT AND HIS OR HER IMMEDIATE FAMILY MEMBERS; OR (D) ANY OTHER
TRANSFEREE AS MAY BE APPROVED EITHER (I) BY THE BOARD OR THE COMMITTEE IN ITS
SOLE DISCRETION, OR (II) AS PROVIDED IN THE APPLICABLE AWARD AGREEMENT. (EACH
TRANSFEREE DESCRIBED IN CLAUSES (A), (B) (C) AND (D) ABOVE IS HEREINAFTER
REFERRED TO AS A “PERMITTED TRANSFEREE”); PROVIDED, THAT THE PARTICIPANT GIVES
THE COMMITTEE ADVANCE WRITTEN NOTICE DESCRIBING THE TERMS AND CONDITIONS OF THE
PROPOSED TRANSFER AND THE COMMITTEE NOTIFIES THE PARTICIPANT IN WRITING THAT
SUCH A TRANSFER WOULD COMPLY WITH THE REQUIREMENTS OF THE PLAN.

 

(III)                               THE TERMS OF ANY AWARD TRANSFERRED IN
ACCORDANCE WITH THE IMMEDIATELY PRECEDING SENTENCE SHALL APPLY TO THE PERMITTED
TRANSFEREE AND ANY REFERENCE IN THE PLAN, OR IN ANY APPLICABLE AWARD AGREEMENT,
TO A PARTICIPANT SHALL BE DEEMED TO REFER TO THE PERMITTED TRANSFEREE, EXCEPT
THAT (A) PERMITTED TRANSFEREES SHALL NOT BE ENTITLED TO TRANSFER ANY AWARD,
OTHER THAN BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION; (B) PERMITTED
TRANSFEREES SHALL NOT BE ENTITLED TO EXERCISE ANY TRANSFERRED OPTION UNLESS
THERE SHALL BE IN EFFECT A REGISTRATION STATEMENT ON AN APPROPRIATE FORM
COVERING THE COMMON SHARES TO BE ACQUIRED PURSUANT TO THE EXERCISE OF SUCH
OPTION IF THE COMMITTEE DETERMINES, CONSISTENT WITH ANY APPLICABLE AWARD
AGREEMENT, THAT SUCH A REGISTRATION STATEMENT IS NECESSARY OR APPROPRIATE;
(C) THE COMMITTEE OR THE COMPANY SHALL NOT BE REQUIRED TO PROVIDE ANY NOTICE TO
A PERMITTED TRANSFEREE, WHETHER OR NOT SUCH NOTICE IS OR WOULD OTHERWISE HAVE
BEEN REQUIRED TO BE GIVEN TO THE PARTICIPANT UNDER THE PLAN OR OTHERWISE; AND
(D) THE CONSEQUENCES OF THE TERMINATION OF THE PARTICIPANT’S EMPLOYMENT BY, OR
SERVICES TO, THE COMPANY OR AN AFFILIATE UNDER THE TERMS OF THE PLAN AND THE
APPLICABLE AWARD AGREEMENT SHALL CONTINUE TO BE APPLIED WITH RESPECT TO THE
PARTICIPANT, INCLUDING, WITHOUT LIMITATION, THAT AN OPTION SHALL BE EXERCISABLE
BY THE PERMITTED TRANSFEREE ONLY TO THE EXTENT, AND FOR THE PERIODS, SPECIFIED
IN THE PLAN AND THE APPLICABLE AWARD AGREEMENT.

 

(C)                                  TAX WITHHOLDING.  (I) A PARTICIPANT SHALL
BE REQUIRED TO PAY TO THE COMPANY OR ANY AFFILIATE, AND THE COMPANY OR ANY
AFFILIATE SHALL HAVE THE RIGHT AND IS HEREBY AUTHORIZED TO WITHHOLD, FROM ANY
CASH, COMMON SHARES, OTHER SECURITIES OR OTHER PROPERTY DELIVERABLE UNDER ANY
AWARD OR FROM ANY COMPENSATION OR OTHER AMOUNTS OWING TO A PARTICIPANT, THE
AMOUNT (IN CASH, COMMON SHARES, OTHER SECURITIES OR OTHER PROPERTY) OF ANY
REQUIRED WITHHOLDING TAXES IN RESPECT OF AN AWARD, ITS EXERCISE, OR ANY PAYMENT
OR TRANSFER UNDER AN AWARD OR UNDER THE PLAN AND TO TAKE SUCH OTHER ACTION AS
MAY BE NECESSARY IN THE OPINION OF THE COMMITTEE OR THE COMPANY TO SATISFY ALL
OBLIGATIONS FOR THE PAYMENT OF SUCH WITHHOLDING AND TAXES.

 

(II)                                  WITHOUT LIMITING THE GENERALITY OF CLAUSE
(I) ABOVE, THE COMMITTEE MAY, IN ITS SOLE DISCRETION, PERMIT A PARTICIPANT TO
SATISFY, IN WHOLE OR IN PART, THE FOREGOING WITHHOLDING LIABILITY BY (A) THE
DELIVERY OF COMMON SHARES (WHICH ARE NOT SUBJECT TO ANY PLEDGE OR OTHER SECURITY
INTEREST AND ARE MATURE SHARES) OWNED BY THE PARTICIPANT HAVING A FAIR MARKET
VALUE EQUAL TO SUCH WITHHOLDING LIABILITY OR (B) HAVING THE COMPANY WITHHOLD
FROM THE NUMBER OF COMMON SHARES OTHERWISE ISSUABLE OR DELIVERABLE PURSUANT TO
THE EXERCISE OR SETTLEMENT OF THE

 

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AWARD A NUMBER OF SHARES WITH A FAIR MARKET VALUE EQUAL TO SUCH WITHHOLDING
LIABILITY (BUT NO MORE THAN THE MINIMUM REQUIRED STATUTORY WITHHOLDING
LIABILITY).

 

(D)                                 NO CLAIM TO AWARDS; NO RIGHTS TO CONTINUED
EMPLOYMENT; WAIVER.  NO EMPLOYEE OF THE COMPANY OR AN AFFILIATE, OR OTHER
PERSON, SHALL HAVE ANY CLAIM OR RIGHT TO BE GRANTED AN AWARD UNDER THE PLAN OR,
HAVING BEEN SELECTED FOR THE GRANT OF AN AWARD, TO BE SELECTED FOR A GRANT OF
ANY OTHER AWARD.  THERE IS NO OBLIGATION FOR UNIFORMITY OF TREATMENT OF
PARTICIPANTS OR HOLDERS OR BENEFICIARIES OF AWARDS.  THE TERMS AND CONDITIONS OF
AWARDS AND THE COMMITTEE’S DETERMINATIONS AND INTERPRETATIONS WITH RESPECT
THERETO NEED NOT BE THE SAME WITH RESPECT TO EACH PARTICIPANT AND MAY BE MADE
SELECTIVELY AMONG PARTICIPANTS, WHETHER OR NOT SUCH PARTICIPANTS ARE SIMILARLY
SITUATED.  NEITHER THE PLAN NOR ANY ACTION TAKEN HEREUNDER SHALL BE CONSTRUED AS
GIVING ANY PARTICIPANT ANY RIGHT TO BE RETAINED IN THE EMPLOY OR SERVICE OF THE
COMPANY OR AN AFFILIATE, NOR SHALL IT BE CONSTRUED AS GIVING ANY PARTICIPANT ANY
RIGHTS TO CONTINUED SERVICE ON THE BOARD.  THE COMPANY OR ANY OF ITS AFFILIATES
MAY AT ANY TIME DISMISS A PARTICIPANT FROM EMPLOYMENT OR DISCONTINUE ANY
CONSULTING RELATIONSHIP, FREE FROM ANY LIABILITY OR ANY CLAIM UNDER THE PLAN,
UNLESS OTHERWISE EXPRESSLY PROVIDED IN THE PLAN OR ANY AWARD AGREEMENT.  BY
ACCEPTING AN AWARD UNDER THE PLAN, A PARTICIPANT SHALL THEREBY BE DEEMED TO HAVE
WAIVED ANY CLAIM TO CONTINUED EXERCISE OR VESTING OF AN AWARD OR TO DAMAGES OR
SEVERANCE ENTITLEMENT RELATED TO NON-CONTINUATION OF THE AWARD BEYOND THE PERIOD
PROVIDED UNDER THE PLAN OR ANY AWARD AGREEMENT, NOTWITHSTANDING ANY PROVISION TO
THE CONTRARY IN ANY WRITTEN EMPLOYMENT CONTRACT OR OTHER AGREEMENT BETWEEN THE
COMPANY AND ITS AFFILIATES AND THE PARTICIPANT, WHETHER ANY SUCH AGREEMENT IS
EXECUTED BEFORE, ON OR AFTER THE DATE OF GRANT.

 

(E)                                  INTERNATIONAL PARTICIPANTS.  WITH RESPECT
TO PARTICIPANTS WHO RESIDE OR WORK OUTSIDE OF THE UNITED STATES OF AMERICA, THE
COMMITTEE MAY IN ITS SOLE DISCRETION AMEND THE TERMS OF THE PLAN OR OUTSTANDING
AWARDS WITH RESPECT TO SUCH PARTICIPANTS IN ORDER TO CONFORM SUCH TERMS WITH THE
REQUIREMENTS OF LOCAL LAW OR TO OBTAIN MORE FAVORABLE TAX OR OTHER TREATMENT FOR
A PARTICIPANT, THE COMPANY OR ITS AFFILIATES.

 

(F)                                    DESIGNATION AND CHANGE OF BENEFICIARY. 
EACH PARTICIPANT MAY FILE WITH THE COMMITTEE A WRITTEN DESIGNATION OF ONE OR
MORE PERSONS AS THE BENEFICIARY(IES) WHO SHALL BE ENTITLED TO RECEIVE THE
AMOUNTS PAYABLE WITH RESPECT TO AN AWARD, IF ANY, DUE UNDER THE PLAN UPON HIS
DEATH.  A PARTICIPANT MAY, FROM TIME TO TIME, REVOKE OR CHANGE HIS BENEFICIARY
DESIGNATION WITHOUT THE CONSENT OF ANY PRIOR BENEFICIARY BY FILING A NEW
DESIGNATION WITH THE COMMITTEE.  THE LAST SUCH DESIGNATION RECEIVED BY THE
COMMITTEE SHALL BE CONTROLLING; PROVIDED, HOWEVER, THAT NO DESIGNATION, OR
CHANGE OR REVOCATION THEREOF, SHALL BE EFFECTIVE UNLESS RECEIVED BY THE
COMMITTEE PRIOR TO THE PARTICIPANT’S DEATH, AND IN NO EVENT SHALL IT BE
EFFECTIVE AS OF A DATE PRIOR TO SUCH RECEIPT.  IF NO BENEFICIARY DESIGNATION IS
FILED BY A PARTICIPANT, THE BENEFICIARY SHALL BE DEEMED TO BE HIS OR HER SPOUSE
OR, IF THE PARTICIPANT IS UNMARRIED AT THE TIME OF DEATH, HIS OR HER ESTATE.

 

(G)                                 TERMINATION OF EMPLOYMENT/SERVICE.  UNLESS
DETERMINED OTHERWISE BY THE COMMITTEE AT ANY POINT FOLLOWING SUCH EVENT: 
(I) NEITHER A TEMPORARY ABSENCE FROM EMPLOYMENT OR SERVICE DUE TO ILLNESS,
VACATION OR LEAVE OF ABSENCE NOR A TRANSFER FROM EMPLOYMENT OR SERVICE WITH THE
COMPANY TO EMPLOYMENT OR SERVICE WITH AN AFFILIATE (OR VICE-VERSA) SHALL BE
CONSIDERED A TERMINATION OF EMPLOYMENT OR SERVICE WITH THE COMPANY OR AN
AFFILIATE; AND (II) IF A PARTICIPANT’S EMPLOYMENT WITH THE COMPANY AND ITS
AFFILIATES TERMINATES, BUT SUCH PARTICIPANT

 

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CONTINUES TO PROVIDE SERVICES TO THE COMPANY AND ITS AFFILIATES IN A
NON-EMPLOYEE CAPACITY (OR VICE-VERSA), SUCH CHANGE IN STATUS SHALL NOT BE
CONSIDERED A TERMINATION OF EMPLOYMENT WITH THE COMPANY OR AN AFFILIATE.

 

(H)                                 NO RIGHTS AS A STOCKHOLDER.  EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED IN THE PLAN OR ANY AWARD AGREEMENT, NO PERSON
SHALL BE ENTITLED TO THE PRIVILEGES OF OWNERSHIP IN RESPECT OF COMMON SHARES
THAT ARE SUBJECT TO AWARDS HEREUNDER UNTIL SUCH SHARES HAVE BEEN ISSUED OR
DELIVERED TO THAT PERSON.

 

(I)                                     GOVERNMENT AND OTHER REGULATIONS. 
(I) THE OBLIGATION OF THE COMPANY TO SETTLE AWARDS IN COMMON SHARES OR OTHER
CONSIDERATION SHALL BE SUBJECT TO ALL APPLICABLE LAWS, RULES, AND REGULATIONS,
AND TO SUCH APPROVALS BY GOVERNMENTAL AGENCIES AS MAY BE REQUIRED. 
NOTWITHSTANDING ANY TERMS OR CONDITIONS OF ANY AWARD TO THE CONTRARY, THE
COMPANY SHALL BE UNDER NO OBLIGATION TO OFFER TO SELL OR TO SELL, AND SHALL BE
PROHIBITED FROM OFFERING TO SELL OR SELLING, ANY COMMON SHARES PURSUANT TO AN
AWARD UNLESS SUCH SHARES HAVE BEEN PROPERLY REGISTERED FOR SALE PURSUANT TO THE
SECURITIES ACT WITH THE SECURITIES AND EXCHANGE COMMISSION OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH
SHARES MAY BE OFFERED OR SOLD WITHOUT SUCH REGISTRATION PURSUANT TO AN AVAILABLE
EXEMPTION THEREFROM AND THE TERMS AND CONDITIONS OF SUCH EXEMPTION HAVE BEEN
FULLY COMPLIED WITH.  THE COMPANY SHALL BE UNDER NO OBLIGATION TO REGISTER FOR
SALE UNDER THE SECURITIES ACT ANY OF THE COMMON SHARES TO BE OFFERED OR SOLD
UNDER THE PLAN.  THE COMMITTEE SHALL HAVE THE AUTHORITY TO PROVIDE THAT ALL
CERTIFICATES FOR COMMON SHARES OR OTHER SECURITIES OF THE COMPANY OR ANY
AFFILIATE DELIVERED UNDER THE PLAN SHALL BE SUBJECT TO SUCH STOP TRANSFER ORDERS
AND OTHER RESTRICTIONS AS THE COMMITTEE MAY DEEM ADVISABLE UNDER THE PLAN, THE
APPLICABLE AWARD AGREEMENT, THE FEDERAL SECURITIES LAWS, OR THE RULES,
REGULATIONS AND OTHER REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION,
ANY SECURITIES EXCHANGE OR INTER-DEALER QUOTATION SYSTEM UPON WHICH SUCH SHARES
OR OTHER SECURITIES ARE THEN LISTED OR QUOTED AND ANY OTHER APPLICABLE FEDERAL,
STATE, LOCAL OR NON-U.S. LAWS, AND, WITHOUT LIMITING THE GENERALITY OF SECTION 9
OF THE PLAN, THE COMMITTEE MAY CAUSE A LEGEND OR LEGENDS TO BE PUT ON ANY SUCH
CERTIFICATES TO MAKE APPROPRIATE REFERENCE TO SUCH RESTRICTIONS. 
NOTWITHSTANDING ANY PROVISION IN THE PLAN TO THE CONTRARY, THE COMMITTEE
RESERVES THE RIGHT TO ADD ANY ADDITIONAL TERMS OR PROVISIONS TO ANY AWARD
GRANTED UNDER THE PLAN THAT IT IN ITS SOLE DISCRETION DEEMS NECESSARY OR
ADVISABLE IN ORDER THAT SUCH AWARD COMPLIES WITH THE LEGAL REQUIREMENTS OF ANY
GOVERNMENTAL ENTITY TO WHOSE JURISDICTION THE AWARD IS SUBJECT.

 

(II)                                  THE COMMITTEE MAY CANCEL AN AWARD OR ANY
PORTION THEREOF IF IT DETERMINES, IN ITS SOLE DISCRETION, THAT LEGAL OR
CONTRACTUAL RESTRICTIONS AND/OR BLOCKAGE AND/OR OTHER MARKET CONSIDERATIONS
WOULD MAKE THE COMPANY’S ACQUISITION OF COMMON SHARES FROM THE PUBLIC MARKETS,
THE COMPANY’S ISSUANCE OF COMMON SHARES TO THE PARTICIPANT, THE PARTICIPANT’S
ACQUISITION OF COMMON SHARES FROM THE COMPANY AND/OR THE PARTICIPANT’S SALE OF
COMMON SHARES TO THE PUBLIC MARKETS, ILLEGAL, IMPRACTICABLE OR INADVISABLE.  IF
THE COMMITTEE DETERMINES TO CANCEL ALL OR ANY PORTION OF AN AWARD IN ACCORDANCE
WITH THE FOREGOING, THE COMPANY SHALL PAY TO THE PARTICIPANT AN AMOUNT EQUAL TO
THE EXCESS OF (A) THE AGGREGATE FAIR MARKET VALUE OF THE COMMON SHARES SUBJECT
TO SUCH AWARD OR PORTION THEREOF CANCELED (DETERMINED AS OF THE APPLICABLE
EXERCISE DATE, OR THE DATE THAT THE SHARES WOULD HAVE BEEN VESTED OR DELIVERED,
AS APPLICABLE), OVER (B) THE AGGREGATE EXERCISE PRICE OR STRIKE PRICE (IN THE
CASE OF AN OPTION OR SAR, RESPECTIVELY) OR ANY AMOUNT PAYABLE AS A CONDITION OF
DELIVERY OF COMMON SHARES (IN THE

 

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CASE OF ANY OTHER AWARD).  SUCH AMOUNT SHALL BE DELIVERED TO THE PARTICIPANT AS
SOON AS PRACTICABLE FOLLOWING THE CANCELLATION OF SUCH AWARD OR PORTION THEREOF.

 

(J)                                     PAYMENTS TO PERSONS OTHER THAN
PARTICIPANTS.  IF THE COMMITTEE SHALL FIND THAT ANY PERSON TO WHOM ANY AMOUNT IS
PAYABLE UNDER THE PLAN IS UNABLE TO CARE FOR HIS AFFAIRS BECAUSE OF ILLNESS OR
ACCIDENT, OR IS A MINOR, OR HAS DIED, THEN ANY PAYMENT DUE TO SUCH PERSON OR HIS
ESTATE (UNLESS A PRIOR CLAIM THEREFOR HAS BEEN MADE BY A DULY APPOINTED LEGAL
REPRESENTATIVE) MAY, IF THE COMMITTEE SO DIRECTS THE COMPANY, BE PAID TO HIS
SPOUSE, CHILD, RELATIVE, AN INSTITUTION MAINTAINING OR HAVING CUSTODY OF SUCH
PERSON, OR ANY OTHER PERSON DEEMED BY THE COMMITTEE TO BE A PROPER RECIPIENT ON
BEHALF OF SUCH PERSON OTHERWISE ENTITLED TO PAYMENT.  ANY SUCH PAYMENT SHALL BE
A COMPLETE DISCHARGE OF THE LIABILITY OF THE COMMITTEE AND THE COMPANY THEREFOR.

 

(K)                                  NONEXCLUSIVITY OF THE PLAN.  NEITHER THE
ADOPTION OF THIS PLAN BY THE BOARD NOR THE SUBMISSION OF THIS PLAN TO THE
SHAREHOLDERS OF THE COMPANY FOR APPROVAL SHALL BE CONSTRUED AS CREATING ANY
LIMITATIONS ON THE POWER OF THE BOARD TO ADOPT SUCH OTHER INCENTIVE ARRANGEMENTS
AS IT MAY DEEM DESIRABLE, INCLUDING, WITHOUT LIMITATION, THE GRANTING OF STOCK
OPTIONS OR OTHER EQUITY-BASED AWARDS OTHERWISE THAN UNDER THIS PLAN, AND SUCH
ARRANGEMENTS MAY BE EITHER APPLICABLE GENERALLY OR ONLY IN SPECIFIC CASES.

 

(L)                                     NO TRUST OR FUND CREATED.  NEITHER THE
PLAN NOR ANY AWARD SHALL CREATE OR BE CONSTRUED TO CREATE A TRUST OR SEPARATE
FUND OF ANY KIND OR A FIDUCIARY RELATIONSHIP BETWEEN THE COMPANY OR ANY
AFFILIATE, ON THE ONE HAND, AND A PARTICIPANT OR OTHER PERSON OR ENTITY, ON THE
OTHER HAND.  NO PROVISION OF THE PLAN OR ANY AWARD SHALL REQUIRE THE COMPANY,
FOR THE PURPOSE OF SATISFYING ANY OBLIGATIONS UNDER THE PLAN, TO PURCHASE ASSETS
OR PLACE ANY ASSETS IN A TRUST OR OTHER ENTITY TO WHICH CONTRIBUTIONS ARE MADE
OR OTHERWISE TO SEGREGATE ANY ASSETS, NOR SHALL THE COMPANY MAINTAIN SEPARATE
BANK ACCOUNTS, BOOKS, RECORDS OR OTHER EVIDENCE OF THE EXISTENCE OF A SEGREGATED
OR SEPARATELY MAINTAINED OR ADMINISTERED FUND FOR SUCH PURPOSES.  PARTICIPANTS
SHALL HAVE NO RIGHTS UNDER THE PLAN OTHER THAN AS UNSECURED GENERAL CREDITORS OF
THE COMPANY, EXCEPT THAT INSOFAR AS THEY MAY HAVE BECOME ENTITLED TO PAYMENT OF
ADDITIONAL COMPENSATION BY PERFORMANCE OF SERVICES, THEY SHALL HAVE THE SAME
RIGHTS AS OTHER EMPLOYEES UNDER GENERAL LAW.

 

(M)                               RELIANCE ON REPORTS.  EACH MEMBER OF THE
COMMITTEE AND EACH MEMBER OF THE BOARD SHALL BE FULLY JUSTIFIED IN ACTING OR
FAILING TO ACT, AS THE CASE MAY BE, AND SHALL NOT BE LIABLE FOR HAVING SO ACTED
OR FAILED TO ACT IN GOOD FAITH, IN RELIANCE UPON ANY REPORT MADE BY THE
INDEPENDENT PUBLIC ACCOUNTANT OF THE COMPANY AND ITS AFFILIATES AND/OR ANY OTHER
INFORMATION FURNISHED IN CONNECTION WITH THE PLAN BY ANY AGENT OF THE COMPANY OR
THE COMMITTEE OR THE BOARD, OTHER THAN HIMSELF.

 

(N)                                 RELATIONSHIP TO OTHER BENEFITS.  NO PAYMENT
UNDER THE PLAN SHALL BE TAKEN INTO ACCOUNT IN DETERMINING ANY BENEFITS UNDER ANY
PENSION, RETIREMENT, PROFIT SHARING, GROUP INSURANCE OR OTHER BENEFIT PLAN OF
THE COMPANY EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN SUCH OTHER PLAN.

 

(O)                                 GOVERNING LAW.  THE PLAN SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND

 

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PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.

 

(P)                                 SEVERABILITY.  IF ANY PROVISION OF THE PLAN
OR ANY AWARD OR AWARD AGREEMENT IS OR BECOMES OR IS DEEMED TO BE INVALID,
ILLEGAL, OR UNENFORCEABLE IN ANY JURISDICTION OR AS TO ANY PERSON OR ENTITY OR
AWARD, OR WOULD DISQUALIFY THE PLAN OR ANY AWARD UNDER ANY LAW DEEMED APPLICABLE
BY THE COMMITTEE, SUCH PROVISION SHALL BE CONSTRUED OR DEEMED AMENDED TO CONFORM
TO THE APPLICABLE LAWS, OR IF IT CANNOT BE CONSTRUED OR DEEMED AMENDED WITHOUT,
IN THE DETERMINATION OF THE COMMITTEE, MATERIALLY ALTERING THE INTENT OF THE
PLAN OR THE AWARD, SUCH PROVISION SHALL BE CONSTRUED OR DEEMED STRICKEN AS TO
SUCH JURISDICTION, PERSON OR ENTITY OR AWARD AND THE REMAINDER OF THE PLAN AND
ANY SUCH AWARD SHALL REMAIN IN FULL FORCE AND EFFECT.

 

(Q)                                 OBLIGATIONS BINDING ON SUCCESSORS.  THE
OBLIGATIONS OF THE COMPANY UNDER THE PLAN SHALL BE BINDING UPON ANY SUCCESSOR
CORPORATION OR ORGANIZATION RESULTING FROM THE MERGER, AMALGAMATION,
CONSOLIDATION OR OTHER REORGANIZATION OF THE COMPANY, OR UPON ANY SUCCESSOR
CORPORATION OR ORGANIZATION SUCCEEDING TO SUBSTANTIALLY ALL OF THE ASSETS AND
BUSINESS OF THE COMPANY.

 

(R)                                    CODE SECTION 162(M) APPROVAL.  IF SO
DETERMINED BY THE COMMITTEE, THE PROVISIONS OF THE PLAN REGARDING PERFORMANCE
COMPENSATION AWARDS SHALL BE DISCLOSED AND REAPPROVED BY SHAREHOLDERS NO LATER
THAN THE FIRST SHAREHOLDER MEETING THAT OCCURS IN THE FIFTH YEAR FOLLOWING THE
YEAR IN WHICH SHAREHOLDERS PREVIOUSLY APPROVED SUCH PROVISIONS, IN EACH CASE IN
ORDER FOR CERTAIN AWARDS GRANTED AFTER SUCH TIME TO BE EXEMPT FROM THE DEDUCTION
LIMITATIONS OF SECTION 162(M) OF THE CODE.  NOTHING IN THIS CLAUSE, HOWEVER,
SHALL AFFECT THE VALIDITY OF AWARDS GRANTED AFTER SUCH TIME IF SUCH SHAREHOLDER
APPROVAL HAS NOT BEEN OBTAINED.

 

(S)                                  EXPENSES; GENDER; TITLES AND HEADINGS.  THE
EXPENSES OF ADMINISTERING THE PLAN SHALL BE BORNE BY THE COMPANY AND ITS
AFFILIATES.  MASCULINE PRONOUNS AND OTHER WORDS OF MASCULINE GENDER SHALL REFER
TO BOTH MEN AND WOMEN.  THE TITLES AND HEADINGS OF THE SECTIONS IN THE PLAN ARE
FOR CONVENIENCE OF REFERENCE ONLY, AND IN THE EVENT OF ANY CONFLICT, THE TEXT OF
THE PLAN, RATHER THAN SUCH TITLES OR HEADINGS SHALL CONTROL.

 

(T)                                    OTHER AGREEMENTS.  NOTWITHSTANDING THE
ABOVE, THE COMMITTEE MAY REQUIRE, AS A CONDITION TO THE GRANT OF AND/OR THE
RECEIPT OF COMMON SHARES UNDER AN AWARD, THAT THE PARTICIPANT EXECUTE LOCK-UP,
SHAREHOLDER OR OTHER AGREEMENTS, AS IT MAY DETERMINE IN ITS SOLE AND ABSOLUTE
DISCRETION.

 

(U)                                 PAYMENTS.  PARTICIPANTS SHALL BE REQUIRED TO
PAY, TO THE EXTENT REQUIRED BY APPLICABLE LAW, ANY AMOUNTS REQUIRED TO RECEIVE
COMMON SHARES UNDER ANY AWARD MADE UNDER THE PLAN.

 

*     *      *

 

As adopted by the Board of Directors of Aventine Renewable Energy Holdings, Inc.
on March 15, 2010.

 

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