Exhibit 10.25

 

Appendix 1

 

REDDY ICE HOLDINGS, INC.
2005 LONG TERM INCENTIVE AND SHARE AWARD PLAN

 

1. Purposes.

 

The purposes of the 2005 Long Term Incentive and Share Award Plan are to advance
the interests of Reddy Ice Holdings, Inc. and its shareholders by providing a
means to attract, retain, and motivate employees, consultants and directors of
the Company, its subsidiaries and affiliates, to provide for competitive
compensation opportunities, to encourage long term service, to recognize
individual contributions and reward achievement of performance goals, and to
promote the creation of long term value for stockholders by aligning the
interests of such persons with those of stockholders.

 

2. Definitions.

 

For purposes of the Plan, the following terms shall be defined as set forth
below:

 

(a)   “Affiliate” means any entity other than the Company and its Subsidiaries
that is designated by the Board or the Committee as a participating employer
under the Plan; provided, however, that the Company directly or indirectly owns
at least 20% of the combined voting power of all classes of stock of such entity
or at least 20% of the ownership interests in such entity.

 

(b)   “Award” means any Option, SAR, Restricted Share, Restricted Share Unit,
Performance Share, Performance Unit, Dividend Equivalent, or Other Share-Based
Award granted to an Eligible Person under the Plan.

 

(c)   “Award Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award.

 

(d)   “Beneficiary” means the person, persons, trust or trusts which have been
designated by an Eligible Person in his or her most recent written beneficiary
designation filed with the Company to receive the benefits specified under this
Plan upon the death of the Eligible Person, or, if there is no designated
Beneficiary or surviving designated Beneficiary, then the person, persons, trust
or trusts entitled by will or the laws of descent and distribution to receive
such benefits.

 

(e)   “Board” means the Board of Directors of the Company.

 

(f)    “Code” means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

 

(g)   “Committee” means the Compensation Committee of the Board, or such other
Board committee (which may include the entire Board) as may be designated by the
Board to administer the Plan; provided, however, that, unless otherwise
determined by the Board, the Committee shall consist of two or more directors of
the Company, each of whom is a “non-employee director” within the meaning of
Rule 16b-3 under the Exchange Act, to the extent applicable, and each of whom is
an “outside director” within the meaning of Section 162(m) of the Code, to the
extent applicable; provided, further, that the mere fact that the Committee
shall fail to qualify under either of the foregoing requirements shall not
invalidate any Award made by the Committee which Award is otherwise validly made
under the Plan.

 

(h)   “Company” means Reddy Ice Holdings, Inc., a corporation organized under
the laws of Delaware, or any successor corporation.

 

(i)    “Director” means a member of the Board who is not an employee of the
Company, a Subsidiary or an Affiliate.

 

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(j)    “Dividend Equivalent” means a right, granted under Section 5(g), to
receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded on
a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.

 

(k)   “Eligible Person” means (i) an employee or consultant of the Company, a
Subsidiary or an Affiliate, including any director who is an employee, or (ii) a
Director. Notwithstanding any provisions of this Plan to the contrary, an Award
may be granted to an employee, consultant or Director, in connection with his or
her hiring or retention prior to the date the employee, consultant or Director
first performs services for the Company, a Subsidiary or an Affiliate; provided,
however, that any such Award shall not become vested or exercisable prior to the
date the employee, consultant or Director first performs such services.

 

(l)    “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time. References to any provision of the Exchange Act shall be deemed to
include successor provisions thereto and regulations thereunder.

 

(m)  “Fair Market Value” means, with respect to Shares or other property, the
fair market value of such Shares or other property determined by such methods or
procedures as shall be established from time to time by the Committee. If the
Shares are listed on any established stock exchange or a national market system,
unless otherwise determined by the Committee in good faith, the Fair Market
Value of Shares shall mean the mean between the high and low selling prices per
Share on the immediately preceding date (or, if the Shares were not traded on
that day, the next preceding day that the Shares were traded) on the principal
exchange or market system on which the Shares are traded, as such prices are
officially quoted on such exchange.

 

(n)   “ISO” means any Option intended to be and designated as an incentive stock
option within the meaning of Section 422 of the Code.

 

(o)   “NQSO” means any Option that is not an ISO.

 

(p)   “Option” means a right, granted under Section 5(b), to purchase Shares.

 

(q)   “Other Share-Based Award” means a right, granted under Section 5(h), that
relates to or is valued by reference to Shares.

 

(r)    “Participant” means an Eligible Person who has been granted an Award
under the Plan.

 

(s)   “Performance Share” means a performance share granted under Section 5(f).

 

(t)    “Performance Unit” means a performance unit granted under Section 5(f).

 

(u)   “Plan” means this 2005 Long Term Incentive and Share Award Plan.

 

(v)   “Restricted Shares” means an Award of Shares under Section 5(d) that may
be subject to certain restrictions and to a risk of forfeiture.

 

(w)  “Restricted Share Unit” means a right, granted under Section 5(e), to
receive Shares or cash at the end of a specified deferral period.

 

(x)    “Rule 16b-3” means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

 

(y)   “SAR” or “Share Appreciation Right” means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.

 

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(z)    “Shares” means common stock, $0.01 par value per share, of the Company,
and such other securities as may be substituted for Shares pursuant to
Section 4(c) hereof.

 

(aa) “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
(other than the last corporation in the unbroken chain) owns shares possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.

 

(bb) “Termination of Service” means the termination of the Participant’s
employment, consulting services or directorship with the Company, its
Subsidiaries and its Affiliates, as the case may be. A Participant employed by a
Subsidiary of the Company or one of its Affiliates shall also be deemed to incur
a Termination of Service if the Subsidiary of the Company or Affiliate ceases to
be such a Subsidiary or an Affiliate, as the case may be, and the Participant
does not immediately thereafter become an employee or director of, or a
consultant to, the Company, another Subsidiary of the Company or an Affiliate.
Temporary absences from employment because of illness, vacation or leave of
absence and transfers among the Company and its Subsidiaries and Affiliates
shall not be considered a Termination of Service.

 

3.   Administration.

 

(a)   Authority of the Committee. The Plan shall be administered by the
Committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:

 

(i)            to select Eligible Persons to whom Awards may be granted;

 

(ii)           to designate Affiliates;

 

(iii)          to determine the type or types of Awards to be granted to each
Eligible Person;

 

(iv)          to determine the type and number of Awards to be granted, the
number of Shares to which an Award may relate, the terms and conditions of any
Award granted under the Plan (including, but not limited to, any exercise price,
grant price, or purchase price, any restriction or condition, any schedule for
lapse of restrictions or conditions relating to transferability or forfeiture,
exercisability, or settlement of an Award, and waiver or accelerations thereof,
and waivers of performance conditions relating to an Award, based in each case
on such considerations as the Committee shall determine), and all other matters
to be determined in connection with an Award;

 

(v)           to determine whether, to what extent, and under what circumstances
an Award may be settled, or the exercise price of an Award may be paid, in cash,
Shares, other Awards, or other property, or an Award may be canceled, forfeited,
exchanged, or surrendered;

 

(vi)          to determine whether, to what extent, and under what circumstances
cash, Shares, other Awards, or other property payable with respect to an Award
will be deferred either automatically, at the election of the Committee, or at
the election of the Eligible Person;

 

(vii)         to prescribe the form of each Award Agreement, which need not be
identical for each Eligible Person;

 

(viii)        to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;

 

(ix)           to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any Award,
rules and regulations, Award Agreement, or other instrument hereunder;

 

(x)            to accelerate the exercisability or vesting of all or any portion
of any Award or to extend the period during which an Award is exercisable;

 

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(xi)           to determine whether uncertificated Shares may be used in
satisfying Awards and otherwise in connection with the Plan; and

 

(xii)          to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or advisable
for the administration of the Plan.

 

(b)   Manner of Exercise of Committee Authority. The Committee shall have sole
discretion in exercising its authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, Subsidiaries, Affiliates, Eligible Persons,
any person claiming any rights under the Plan from or through any Eligible
Person, and shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee.  The Committee may delegate
to other members of the Board or officers or managers of the Company or any
Subsidiary or Affiliate the authority, subject to such terms as the Committee
shall determine, to perform administrative functions and, with respect to Awards
granted to persons not subject to Section 16 of the Exchange Act, to perform
such other functions as the Committee may determine, to the extent permitted
under Rule 16b-3 (if applicable) and applicable law.

 

(c)   Limitation of Liability. Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information furnished to
him or her by any officer or other employee of the Company or any Subsidiary or
Affiliate, the Company’s independent certified public accountants, or other
professional retained by the Company to assist in the administration of the
Plan. No member of the Committee, and no officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination, or interpretation.

 

(d)   Limitation on Committee’s Discretion. Anything in this Plan to the
contrary notwithstanding, in the case of any Award which is intended to qualify
as “performance-based compensation” within the meaning of
Section 162(m)(4)(C) of the Code, if the Award Agreement so provides, the
Committee shall have no discretion to increase the amount of compensation
payable under the Award to the extent such an increase would cause the Award to
lose its qualification as such performance-based compensation.

 

(e)   No Option or SAR Repricing Without Shareholder Approval. Except as
provided in the first sentence of Section 4(c) hereof relating to certain
antidilution adjustments, unless the approval of shareholders of the Company is
obtained, Options and SARs issued under the Plan shall not be amended to lower
their exercise price and Options and SARs issued under the Plan will not be
exchanged for other Options or SARs with lower exercise prices.

 

4.     Shares Subject to the Plan.

 

(a)   Subject to adjustment as provided in Section 4(c) hereof, the total number
of Shares reserved for issuance in connection with Awards under the Plan shall
be 1,250,000. No Award may be granted if the number of Shares to which such
Award relates, when added to the number of Shares previously issued under the
Plan, exceeds the number of Shares reserved under the applicable provisions of
the preceding sentence. If any Awards are forfeited, canceled, terminated,
exchanged or surrendered or such Award is settled in cash or otherwise
terminates without a distribution of Shares to the Participant, any Shares
counted against the number of Shares reserved and available under the Plan with
respect to such Award shall, to the extent of any such forfeiture, settlement,
termination, cancellation, exchange or surrender, again be available for Awards
under the Plan. Upon the exercise of any Award granted in tandem with any other
Awards, such related Awards shall be canceled to the extent of the number of
Shares as to which the Award is exercised.

 

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(b)   Subject to adjustment as provided in Section 4(c) hereof, the maximum
number of Shares (i) with respect to which Options or SARs may be granted during
a calendar year to any Eligible Person under this Plan shall be 500,000 Shares,
and (ii) with respect to Performance Shares, Performance Units, Restricted
Shares or Restricted Share Units intended to qualify as performance-based
compensation within the meaning of Section 162(m)(4)(C) of the Code shall be the
equivalent of 500,000 Shares during a calendar year to any Eligible Person under
this Plan.

 

(c)   In the event that the Committee shall determine that any dividend in
Shares, recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Eligible Persons under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate and, in such manner as
it may deem equitable, adjust any or all of (i) the number and kind of shares
which may thereafter be issued under the Plan, (ii) the number and kind of
shares, other securities or other consideration issued or issuable in respect of
outstanding Awards, and (iii) the exercise price, grant price, or purchase price
relating to any Award; provided, however, in each case that, with respect to
ISOs, such adjustment shall be made in accordance with Section 424(a) of the
Code, unless the Committee determines otherwise. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
and performance objectives, if any, included in, Awards in recognition of
unusual or non-recurring events (including, without limitation, events described
in the preceding sentence) affecting the Company or any Subsidiary or Affiliate
or the financial statements of the Company or any Subsidiary or Affiliate, or in
response to changes in applicable laws, regulations, or accounting principles;
provided, however, that, if an Award Agreement specifically so provides, the
Committee shall not have discretion to increase the amount of compensation
payable under the Award to the extent such an increase would cause the Award to
lose its qualification as performance-based compensation for purposes of
Section 162(m)(4)(C) of the Code and the regulations thereunder.

 

(d)   Any Shares distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or treasury Shares including Shares
acquired by purchase in the open market or in private transactions.

 

5.     Specific Terms of Awards.

 

(a)   General. Awards may be granted on the terms and conditions set forth in
this Section 5. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 9(d)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms regarding forfeiture
of Awards or continued exercisability of Awards in the event of Termination of
Service by the Eligible Person.

 

(b)   Options. The Committee is authorized to grant Options, which may be NQSOs
or ISOs, to Eligible Persons on the following terms and conditions:

 

(i)           Exercise Price. The exercise price per Share purchasable under an
Option shall be determined by the Committee; provided, however, that the
exercise price per Share of an Option shall not be less than the Fair Market
Value of a Share on the date of grant of the Option. The Committee may, without
limitation, set an exercise price that is based upon achievement of performance
criteria if deemed appropriate by the Committee.

 

(ii)          Option Term. The term of each Option shall be determined by the
Committee; provided, however, that such term shall not be longer than ten years
from the date of grant of the Option.

 

(iii)         Time and Method of Exercise. The Committee shall determine at the
date of grant or thereafter the time or times at which an Option may be
exercised in whole or in part (including, without limitation, upon achievement
of performance criteria if deemed appropriate by the

 

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Committee), the methods by which such exercise price may be paid or deemed to be
paid (including, without limitation, broker-assisted exercise arrangements), the
form of such payment (including, without limitation, cash, Shares, notes or
other property), and the methods by which Shares will be delivered or deemed to
be delivered to Eligible Persons; provided, however, that in no event may any
portion of the exercise price be paid with Shares acquired either under an Award
granted pursuant to this Plan, upon exercise of a stock option granted under
another Company plan or as a stock bonus or other stock award granted under
another Company plan unless, in any such case, the Shares were acquired and
vested more than six months in advance of the date of exercise.

 

(iv)          Early Exercise. The Committee may provide at the time of grant or
any time thereafter, in its sole discretion, that any Option shall be
exercisable with respect to Shares that otherwise would not then be exercisable,
provided that, in connection with such exercise, the Participant enters into a
form of Restricted Share agreement approved by the Committee.

 

(v)           ISOs. The terms of any ISO granted under the Plan shall comply in
all respects with the provisions of Section 422 of the Code, including but not
limited to the requirement that the ISO shall be granted within ten years from
the earlier of the date of adoption or shareholder approval of the Plan. ISOs
may only be granted to employees of the Company or a Subsidiary.

 

(c)   SARs. The Committee is authorized to grant SARs (Share Appreciation
Rights) to Eligible Persons on the following terms and conditions:

 

(i)            Right to Payment. A SAR shall confer on the Eligible Person to
whom it is granted a right to receive with respect to each Share subject
thereto, upon exercise thereof, the excess of (1) the Fair Market Value of one
Share on the date of exercise (or, if the Committee shall so determine in the
case of any such right, the Fair Market Value of one Share at any time during a
specified period before or after the date of exercise) over (2) the exercise
price per Share of the SAR as determined by the Committee as of the date of
grant of the SAR (which shall not be less than the Fair Market Value per Share
on the date of grant of the SAR and, in the case of a SAR granted in tandem with
an Option, shall be equal to the exercise price of the underlying Option).

 

(ii)           Other Terms. The Committee shall determine, at the time of grant
or thereafter, the time or times at which a SAR may be exercised in whole or in
part (which shall not be more than ten years after the date of grant of the
SAR), the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or deemed to be
delivered to Eligible Persons, whether or not a SAR shall be in tandem with any
other Award, and any other terms and conditions of any SAR. Unless the Committee
determines otherwise, a SAR (1) granted in tandem with an NQSO may be granted at
the time of grant of the related NQSO or at any time thereafter and (2) granted
in tandem with an ISO may only be granted at the time of grant of the related
ISO.

 

(d)   Restricted Shares. The Committee is authorized to grant Restricted Shares
to Eligible Persons on the following terms and conditions:

 

(i)            Issuance and Restrictions. Restricted Shares shall be subject to
such restrictions on transferability and other restrictions, if any, as the
Committee may impose at the date of grant or thereafter, which restrictions may
lapse separately or in combination at such times, under such circumstances
(including, without limitation, upon achievement of performance criteria if
deemed appropriate by the Committee), in such installments, or otherwise, as the
Committee may determine. Except to the extent restricted under the Award
Agreement relating to the Restricted Shares, an Eligible Person granted
Restricted Shares shall have all of the rights of a shareholder including,
without limitation, the right to vote Restricted Shares and the right to receive
dividends thereon.

 

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(ii)           Forfeiture. Except as otherwise determined by the Committee, at
the date of grant or thereafter, upon Termination of Service during the
applicable restriction period, Restricted Shares and any accrued but unpaid
dividends or Dividend Equivalents that are at that time subject to restrictions
shall be forfeited; provided, however, that the Committee may provide, by
rule or regulation or in any Award Agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to Restricted Shares
will be waived in whole or in part in the event of Termination of Service
resulting from specified causes, and the Committee may in other cases waive in
whole or in part the forfeiture of Restricted Shares.

 

(iii)          Certificates for Shares. Restricted Shares granted under the Plan
may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Shares are registered in the name of the
Eligible Person, such certificates shall bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Shares,
the Company shall retain physical possession of the certificate and the
Participant shall deliver a stock power to the Company, endorsed in blank,
relating to the Restricted Shares.

 

(iv)          Dividends. Dividends paid on Restricted Shares shall be either
paid at the dividend payment date, or deferred for payment to such date as
determined by the Committee, in cash or in unrestricted Shares having a Fair
Market Value equal to the amount of such dividends. Shares distributed in
connection with a Share split or dividend in Shares, and other property
distributed as a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Shares with respect to which
such Shares or other property has been distributed.

 

(v)           Early Exercise Options. The Committee shall award Restricted
Shares to a Participant upon the Participant’s early exercise of an Option under
Section 5(b)(iv) hereof. Unless otherwise determined by the Committee, the lapse
of restrictions with respect to such Restricted Shares shall occur on the same
schedule as the exercisability of the Option for which the Restricted Shares
were exercised.

 

(e)   Restricted Share Units. The Committee is authorized to grant Restricted
Share Units to Eligible Persons, subject to the following terms and conditions:

 

(i)            Award and Restrictions. Delivery of Shares or cash, as the case
may be, will occur upon expiration of the deferral period specified for
Restricted Share Units by the Committee (or, if permitted by the Committee, as
elected by the Eligible Person). In addition, Restricted Share Units shall be
subject to such restrictions as the Committee may impose, if any (including,
without limitation, the achievement of performance criteria if deemed
appropriate by the Committee), at the date of grant or thereafter, which
restrictions may lapse at the expiration of the deferral period or at earlier or
later specified times, separately or in combination, in installments or
otherwise, as the Committee may determine.

 

(ii)           Forfeiture. Except as otherwise determined by the Committee at
date of grant or thereafter, upon Termination of Service during the applicable
deferral period or portion thereof to which forfeiture conditions apply (as
provided in the Award Agreement evidencing the Restricted Share Units), or upon
failure to satisfy any other conditions precedent to the delivery of Shares or
cash to which such Restricted Share Units relate, all Restricted Share Units
that are at that time subject to deferral or restriction shall be forfeited;
provided, however, that the Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in any individual case, that restrictions
or forfeiture conditions relating to Restricted Share Units will be waived in
whole or in part in the event of Termination of Service resulting from specified
causes, and the Committee may in other cases waive in whole or in part the
forfeiture of Restricted Share Units.

 

(iii)          Dividend Equivalents. Unless otherwise determined by the
Committee at date of grant, Dividend Equivalents on the specified number of
Shares covered by a Restricted Share Unit shall be

 

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either (A) paid with respect to such Restricted Share Unit at the dividend
payment date in cash or in unrestricted Shares having a Fair Market Value equal
to the amount of such dividends, or (B) deferred with respect to such Restricted
Share Unit and the amount or value thereof automatically deemed reinvested in
additional Restricted Share Units or other Awards, as the Committee shall
determine or permit the Participant to elect.

 

(f)    Performance Shares and Performance Units. The Committee is authorized to
grant Performance Shares or Performance Units or both to Eligible Persons on the
following terms and conditions:

 

(i)            Performance Period. The Committee shall determine a performance
period (the “Performance Period”) of one or more years and shall determine the
performance objectives for grants of Performance Shares and Performance Units.
Performance objectives may vary from Eligible Person to Eligible Person and
shall be based upon the performance criteria as the Committee may deem
appropriate. The performance objectives may be determined by reference to the
performance of the Company, or of a Subsidiary or Affiliate, or of a division or
unit of any of the foregoing. Performance Periods may overlap and Eligible
Persons may participate simultaneously with respect to Performance Shares and
Performance Units for which different Performance Periods are prescribed.

 

(ii)           Award Value. At the beginning of a Performance Period, the
Committee shall determine for each Eligible Person or group of Eligible Persons
with respect to that Performance Period the range of number of Shares, if any,
in the case of Performance Shares, and the range of dollar values, if any, in
the case of Performance Units, which may be fixed or may vary in accordance with
such performance or other criteria specified by the Committee, which shall be
paid to an Eligible Person as an Award if the relevant measure of Company
performance for the Performance Period is met.

 

(iii)          Significant Events. If during the course of a Performance Period
there shall occur significant events as determined by the Committee which the
Committee expects to have a substantial effect on a performance objective during
such period, the Committee may revise such objective; provided, however, that,
if an Award Agreement so provides, the Committee shall not have any discretion
to increase the amount of compensation payable under the Award to the extent
such an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of the Code
and the regulations thereunder.

 

(iv)          Forfeiture. Except as otherwise determined by the Committee, at
the date of grant or thereafter, upon Termination Service during the applicable
Performance Period, Performance Shares and Performance Units for which the
Performance Period was prescribed shall be forfeited; provided, however, that
the Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in an individual case, that restrictions or forfeiture conditions
relating to Performance Shares and Performance Units will be waived in whole or
in part in the event of Terminations of Service resulting from specified causes,
and the Committee may in other cases waive in whole or in part the forfeiture of
Performance Shares and Performance Units.

 

(v)           Payment. Each Performance Share or Performance Unit may be paid in
whole Shares, or cash, or a combination of Shares and cash either as a lump sum
payment or in installments, all as the Committee shall determine, at the time of
grant of the Performance Share or Performance Unit or otherwise, commencing as
soon as practicable after the end of the relevant Performance Period.

 

(g)   Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Eligible Persons. The Committee may provide, at the date of grant
or thereafter, that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional Shares, or
other investment vehicles as the Committee may specify; provided, however, that
Dividend Equivalents (other than freestanding Dividend Equivalents) shall be
subject to all conditions and restrictions of the underlying Awards to which
they relate.

 

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(h)   Other Share-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Eligible Persons such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Shares, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without limitation,
unrestricted shares awarded purely as a “bonus” and not subject to any
restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
notes or other property, as the Committee shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, shall also be
authorized pursuant to this Section 5(h).

 

6.     Certain Provisions Applicable to Awards.

 

(a)   Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted to Eligible
Persons either alone or in addition to, in tandem with, or in exchange or
substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of an Eligible Person to receive payment from the
Company or any Subsidiary or Affiliate. Awards may be granted in addition to or
in tandem with such other Awards or awards, and may be granted either as of the
same time as or a different time from the grant of such other Awards or awards.
Subject to the provisions of Section 3(e) hereof prohibiting Option and SAR
repricing without shareholder approval, the per Share exercise price of any
Option, or grant price of any SAR, which is granted, in connection with the
substitution of awards granted under any other plan or agreement of the Company
or any Subsidiary or Affiliate or any business entity to be acquired by the
Company or any Subsidiary or Affiliate, shall be determined by the Committee, in
its discretion.

 

(b)   Term of Awards. The term of each Award granted to an Eligible Person shall
be for such period as may be determined by the Committee; provided, however,
that in no event shall the term of any Option or SAR exceed a period of ten
years from the date of its grant (or such shorter period as may be applicable
under Section 422 of the Code).

 

(c)   Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a Subsidiary
or Affiliate upon the grant, maturation, or exercise of an Award may be made in
such forms as the Committee shall determine at the date of grant or thereafter,
including, without limitation, cash, Shares, notes or other property, and may be
made in a single payment or transfer, in installments, or on a deferred basis.
The Committee may make rules relating to installment or deferred payments with
respect to Awards, including the rate of interest to be credited with respect to
such payments, and the Committee may require deferral of payment under an Award
if, in the sole judgment of the Committee, it may be necessary in order to avoid
nondeductibility of the payment under Section 162(m) of the Code.

 

(d)   Nontransferability. Unless otherwise set forth by the Committee in an
Award Agreement, Awards shall not be transferable by an Eligible Person except
by will or the laws of descent and distribution (except pursuant to a
Beneficiary designation) and shall be exercisable during the lifetime of an
Eligible Person only by such Eligible Person or his guardian or legal
representative. An Eligible Person’s rights under the Plan may not be pledged,
mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to
claims of the Eligible Person’s creditors.

 

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(e)   Noncompetition. The Committee may, by way of the Award Agreements or
otherwise, establish such other terms, conditions, restrictions and/or
limitations, if any, of any Award, provided they are not inconsistent with the
Plan, including, without limitation, the requirement that the Participant not
engage in competition with the Company.

 

7.     Performance Awards.

 

(a)   Performance Awards Granted to Covered Employees. If the Committee
determines that an Award (other than an Option or SAR) to be granted to an
Eligible Person should qualify as “performance-based compensation” for purposes
of Section 162(m) of the Code, the grant, vesting, exercise and/or settlement of
such Award (each, a “Performance Award”) shall be contingent upon achievement of
preestablished performance goals and other terms set forth in this Section 7(a).

 

(i)            Performance Goals Generally. The performance goals for such
Performance Awards shall consist of one or more business criteria and a targeted
level or levels of performance with respect to each of such criteria, as
specified by the Committee consistent with this Section 7(a). The performance
goals shall be objective and shall otherwise meet the requirements of
Section 162(m) of the Code and regulations thereunder (including Treasury
Regulation 1.162-27 and successor regulations thereto), including the
requirement that the level or levels of performance targeted by the Committee
result in the achievement of performance goals being “substantially uncertain.” 
The Committee may determine that such Performance Awards shall be granted,
vested, exercised and/or settled upon achievement of any one performance goal or
that two or more of the performance goals must be achieved as a condition to
grant, vesting, exercise and/or settlement of such Performance Awards.
Performance goals may differ for Performance Awards granted to any one
Participant or to different Participants.

 

(ii)           Business Criteria. One or more of the following business criteria
for the Company, on a consolidated basis, and/or for specified Subsidiaries or
Affiliates or other business units or lines of business of the Company shall be
used by the Committee in establishing performance goals for such Performance
Awards: (1) earnings per share (basic or fully diluted); (2) revenues;
(3) earnings, before or after taxes, from operations (generally or specified
operations), or before or after interest expense, depreciation, amortization,
incentives, or extraordinary or special items; (4) cash flow, free cash flow,
cash flow return on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital; (5) return on net assets,
return on assets, return on investment, return on capital, return on equity;
(6) economic value added; (7) operating margin or operating expense; (8) net
income; (9) Share price or total stockholder return; (10) earnings before income
taxes, interest, depreciation and amortization expenses as further adjusted to
give effect to unusual items, non-cash items and other adjustments, (11) earned
distributable cash per share and (12) strategic business criteria, consisting of
one or more objectives based on meeting specified market penetration, geographic
business expansion goals, cost targets, customer satisfaction, supervision of
litigation and information technology, and goals relating to acquisitions or
divestitures of Subsidiaries, Affiliates or joint ventures. The targeted level
or levels of performance with respect to such business criteria may be
established at such levels and in such terms as the Committee may determine, in
its discretion, including in absolute terms, as a goal relative to performance
in prior periods, or as a goal compared to the performance of one or more
comparable companies or an index covering multiple companies.

 

(iii)          Performance Period; Timing for Establishing Performance Goals;
Per-Person Limit. Achievement of performance goals in respect of such
Performance Awards shall be measured over a performance period, as specified by
the Committee. A performance goal shall be established not later than the
earlier of (A) 90 days after the beginning of any performance period applicable
to such Performance Award or (B) the time 25% of such performance period has
elapsed.  In all cases, the

 

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maximum Performance Award of any Participant shall be subject to the limitation
set forth in Section 4(b).

 

(iv)          Settlement of Performance Awards; Other Terms. Settlement of such
Performance Awards shall be in cash, Shares, other Awards or other property, in
the discretion of the Committee. The Committee may, in its discretion, reduce
the amount of a settlement otherwise to be made in connection with such
Performance Awards, but may not exercise discretion to increase any such amount
payable to the Participant in respect of a Performance Award subject to this
Section 7(a). Any settlement which changes the form of payment from that
originally specified shall be implemented in a manner such that the Performance
Award and other related Awards do not, solely for that reason, fail to qualify
as “performance-based compensation” for purposes of Section 162(m) of the Code.
The Committee shall specify the circumstances in which such Performance Awards
shall be paid or forfeited in the event of Termination of Service of the
Participant or other event (including a Change of Control) prior to the end of a
performance period or settlement of such Performance Awards.

 

(v)           Maximum Annual Cash Award. The maximum amount payable upon
settlement of a cash-settled Performance Unit (or other cash-settled Award)
granted under this Plan for any calendar year to any Eligible Person that is
intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code shall not exceed $2.0 million.

 

(b)   Written Determinations. Determinations by the Committee as to the
establishment of performance goals, the amount potentially payable in respect of
Performance Awards, the level of actual achievement of the specified performance
goals relating to Performance Awards and the amount of any final Performance
Award shall be recorded in writing in the case of Performance Awards intended to
qualify under Section 162(m) of the Code. Specifically, the Committee shall
certify in writing, in a manner conforming to applicable regulations under
Section 162(m), prior to settlement of each such Award, that the performance
objective relating to the Performance Award and other material terms of the
Award upon which settlement of the Award was conditioned have been satisfied.

 

8.     Change of Control Provisions.

 

(a)   Acceleration of Exercisability and Lapse of Restrictions. Unless otherwise
provided by the Committee at the time of the Award grant, in the event of a
Change of Control, (i) all outstanding Awards pursuant to which the Participant
may have rights the exercise of which is restricted or limited, shall become
fully exercisable at the time of the Change of Control, and (ii) unless the
right to lapse of restrictions or limitations is waived or deferred by a
Participant prior to such lapse, all restrictions or limitations (including
risks of forfeiture and deferrals) on outstanding Awards subject to restrictions
or limitations under the Plan shall lapse, and all performance criteria and
other conditions to payment of Awards under which payments of cash, Shares or
other property are subject to conditions shall be deemed to be achieved or
fulfilled and shall be waived by the Company at the time of the Change of
Control.

 

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(b)   Definition of Change of Control. For purposes of this Plan, “Change of
Control” shall mean:

 

(i)            the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (1) the then outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or (2) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that the following acquisitions
shall not constitute a Change of Control: (i) any acquisition directly from the
Company (other than by exercise of a conversion privilege); (ii) any acquisition
by the Company or any of its Subsidiaries; (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of
its Subsidiaries; (iv) any acquisition by any Person who owns 10% or more of the
Outstanding Company Common Stock or the Outstanding Company Voting Securities on
the Effective Date; or (v) any acquisition by any corporation with respect to
which, following such acquisition, more than 70% of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
acquisition in substantially the same proportions as their ownership,
immediately prior to such acquisition, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be;

 

(ii)           during any period of two consecutive years, individuals who, as
of the beginning of such period, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the beginning of
such period whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act);

 

(iii)          consummation of a reorganization, merger or consolidation, in
each case, with respect to which all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and outstanding Company Voting Securities immediately prior
to such reorganization, merger or consolidation, do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 70% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger or
consolidation;

 

(iv)          consummation of a sale or other disposition of all or
substantially all of the assets of the Company, other than to a corporation with
respect to which following such sale or other disposition, more than 70% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in substantially the same
proportions as their ownership, immediately prior to such sale or other
disposition; or

 

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(v)           approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

 

9.     General Provisions.

 

(a)   Compliance with Legal and Trading Requirements. The Plan, the granting and
exercising of Awards thereunder, and the other obligations of the Company under
the Plan and any Award Agreement, shall be subject to all applicable federal,
state and foreign laws, rules and regulations, and to such approvals by any
stock exchange, regulatory or governmental agency as may be required. The
Company, in its discretion, may postpone the issuance or delivery of Shares
under any Award until completion of such stock exchange or market system listing
or registration or qualification of such Shares or other required action under
any state, federal or foreign law, rule or regulation as the Company may
consider appropriate, and may require any Participant to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Shares in compliance with applicable
laws, rules and regulations. No provisions of the Plan shall be interpreted or
construed to obligate the Company to register any Shares under federal, state or
foreign law. The Shares issued under the Plan may be subject to such other
restrictions on transfer as determined by the Committee.

 

(b)   No Right to Continued Employment or Service. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee, consultant or
director the right to be retained in the employ or service of the Company or any
of its Subsidiaries or Affiliates, nor shall it interfere in any way with the
right of the Company or any of its Subsidiaries or Affiliates to terminate any
employee’s, consultant’s or director’s employment or service at any time.

 

(c)   Taxes. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to an Eligible Person, amounts of withholding and other taxes due in connection
with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company and Eligible Persons to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to
withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of an Eligible Person’s tax obligations.

 

(d)   Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee’s authority to grant Awards
under the Plan without the consent of shareholders of the Company or
Participants, except that any such amendment or alteration shall be subject to
the approval of the Company’s shareholders (i) to the extent such shareholder
approval is required under the rules of any stock exchange or automated
quotation system on which the Shares may then be listed or quoted, or (ii) as it
applies to ISOs, to the extent such shareholder approval is required under
Section 422 of the Code; provided, however, that, without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him or her. The Committee may
waive any conditions or rights under, amend any terms of, or amend, alter,
suspend, discontinue or terminate, any Award theretofore granted, prospectively
or retrospectively; provided, however, that, without the consent of a
Participant, no amendment, alteration, suspension, discontinuation or
termination of any Award may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him or her.

 

(e)   No Rights to Awards; No Shareholder Rights. No Eligible Person or employee
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons and employees. No
Award shall confer on any Eligible Person any of the rights of a shareholder of
the Company unless and until Shares are duly issued or transferred to the
Eligible Person in accordance with the terms of the Award.

 

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(f)    Unfunded Status of Awards. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award shall give any such Participant any rights that are greater than those of
a general creditor of the Company; provided, however, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company’s obligations under the Plan to deliver cash, Shares, other Awards, or
other property pursuant to any Award, which trusts or other arrangements shall
be consistent with the “unfunded” status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant.

 

(g)   Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board
nor its submission 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 options and other awards otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.

 

(h)   Not Compensation for Benefit Plans. No Award payable under this Plan shall
be deemed salary or compensation for the purpose of computing benefits under any
benefit plan or other arrangement of the Company for the benefit of its
employees, consultants or directors unless the Company shall determine
otherwise.

 

(i)    No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine whether cash,
other Awards, or other property shall be issued or paid in lieu of such
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.

 

(j)    Governing Law. The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of New York without giving effect to
principles of conflict of laws thereof.

 

(k)   Effective Date; Plan Termination. The Plan became effective as of
August 8, 2005 (the “Effective Date”). The Plan shall terminate as to future
awards on the date which is ten (10) years after the Effective Date.

 

(l)    Titles and Headings. The titles and headings of the sections in the Plan
are for convenience of reference only. In the event of any conflict, the text of
the Plan, rather than such titles or headings, shall control.

 

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