exv4w3





Exhibit 4.3



rue21, inc.


SECOND AMENDED AND RESTATED 2003 OWNERSHIP INCENTIVE PLAN



	1.	 	Purposes: The purposes of this Plan are (i) to secure for the Company the benefits of
incentives inherent in ownership of Shares by Eligible Persons, (ii) to encourage Eligible
Persons to increase their interest in the future growth and prosperity of the Company and to
stimulate and sustain constructive and imaginative thinking by Eligible Persons, (iii) to
further the identity of interest of those who hold positions of major responsibility in the
Company and its Subsidiaries with the interests of the Company’s owners, and (iv) to enable
the Company to compete with other organizations offering similar or other incentives in
obtaining and retaining the services of competent Service Providers.






	2.	 	Definitions: Unless otherwise required by the context, the following terms when used in
this Plan shall have the meanings set forth in this Section 2.






	 	a.	 	Agreement: An Agreement between the Company and an Eligible Person which
describes the number and terms of the Ownership Incentives granted to an Eligible
Person pursuant to the Plan.






	 	b.	 	Appreciation Right: A right to receive cash having an aggregate value equal to
the excess of the Fair Market Value of one Share on the date of exercise of such right
over the Fair Market Value of one such Share on the date of grant of such right.






	 	c.	 	Board of Directors: The Board of Directors of the Company.






	 	d.	 	Cause: Cause shall mean the occurrence, as determined by the Board of Directors
in its sole and absolute discretion, of any of the following:






	 	i.	 	the failure (other than a failure resulting from an Eligible Person’s incapacity
due to physical illness) by an Eligible Person to perform such duties as are
reasonably imposed on him by the Board of Directors or responsible
officer(s) of the Company in its or their sole and absolute discretion, the
Eligible Person’s violation of the Plan, an Agreement or any applicable
employment or consulting agreement, as determined by the Board of Directors
in its sole and absolute discretion.






	 	ii.	 	the willful and continued engagement by an Eligible Person in
conduct which the Eligible Person knows or reasonably should know is contrary
to the best interests of the Company, as determined by the Board of Directors
in its sole and absolute discretion;






	 	iii.	 	an Eligible Person’s commission of a crime which involves
moral turpitude or which materially impairs such Eligible Person’s ability to
perform his or her duties with the Company as determined by the Board of
Directors in its sole and absolute discretion; or






	 	iv.	 	the Eligible Person’s engaging in conduct which violates any
applicable law, governmental regulation or governmental executive order, which
could reasonably be expected to subject the Company to a material penalty or











 








 











	 	 	 	substantial damages (for example, but without limitation thereto, sexual
harassment or illegal discrimination).






	 	e.	 	Change of Control:






     (i) For
options issued prior to January 1, 2008, the event which shall be deemed to have occurred if, after the date of Reorganization, SK Investment Fund II and
SKM Equity Fund II, L.P. (collectively, the “SKM Group”) collectively own securities of
the Company representing less than 50% of the combined voting power of the Company’s
outstanding voting shares which were owned by the SKM Group as of the date of the
Reorganization; or


     (ii) For options issued
after January 1, 2008, the event which shall be deemed to have occurred if:


     (A)
 a person or group (other than SKM Group, a majority-owned subsidiary or
any employee benefit plan(s) sponsored by the Company or a subsidiary of the
Company) through one or a series of related transactions has acquired beneficial
ownership of securities representing 50% or more of the combined voting power of the
then outstanding securities entitled to vote generally in the election of members of
the Board of Directors (the “Voting Stock”),


     (B) there is a merger,
consolidation, or exchange by the Company with or into another company or other entity, or any other corporate reorganization or sale or
transfer of capital stock (other than through an underwritten, public offering of
Company stock) whether by the Company or its stockholders, in which less than a
majority of the Voting Stock of such company or other entity immediately after such
transaction is held in the aggregate by the holders of Voting Stock of the Company
immediately prior to such transaction, or


     (C) there is a sale of all or
substantially all of the Company’s assets.



	 	f.	 	Committee: The Committee of the Board of Directors designated to administer this Plan
pursuant to the provisions of Section 12; provided, however, if no committee is appointed,
then the full Board of Directors shall administer this Plan.






	 	g.	 	Company: rue21, inc., a Pennsylvania corporation. In addition, “Company” means any
corporation assuming, or issuing new employee stock options in substitution for, Options,
outstanding under the Plan, in a transaction to which Section 424(a) of the Code applies.






	 	h.	 	Effective Date: The date on which this Plan is approved and adopted by the Board of
Directors.






	 	i.	 	Eligible Person: A Service Provider who in the opinion of the Committee can contribute significantly to the growth and successful operations of the Company or a Subsidiary. The
recommendation of the grant of an Ownership Incentive to a Service Provider by the
Committee shall be deemed a determination by the Committee that such person is an Eligible
Person.






	 	j.	 	Fair Market Value: The value of a Share as most recently determined by the Committee in good faith in accordance with the method approved by the Board of Directors.











 








 












	 	k.	 	Incentive Option. An Option granted under this Plan which is designated to be an
incentive stock option under the provisions of Section 422 of the Internal Revenue
Code of 1986, as amended. Any provisions elsewhere in this Plan or in any Agreement
awarding such Incentive Option which would prevent such Option from being an
incentive stock option may be deleted and/or voided retroactively to the date of
the granting of such Option, by action of the Committee.






	 	l.	 	Nonqualified Option. An Option granted under this Plan which is not an Incentive Option. Nonqualified Options shall not be affected by any actions taken
retroactively as provided above with respect to Incentive Options.






	 	m.	 	Option: An option to purchase Shares which is granted to an Eligible Person
under this Plan pursuant to the terms of an Agreement, and which may take the form
either of an Incentive Option or a Nonqualified Option.






	 	n.	 	Ownership Incentive: An Ownership Incentive granted under this Plan in one of the
forms provided for in Section 3.






	 	o.	 	Performance Objectives: Stated criteria which may, but need not be, set forth
in an Agreement at the discretion of the Committee, the successful attainment of which
is specified in the Agreement as a condition precedent to the issuance, transfer or
retention of some or all of the Shares to be issued pursuant to the Ownership
Incentive(s) described in the Agreement. Performance Objectives may be personal and/or
organizational in nature and, at the discretion of the Committee, may include, but
need not be limited to, objectives determined by reference to or changes in (i) the
Fair Market Value, book value or earnings of Shares, or (ii) sales and revenues,
income, profits and losses, return on capital employed, or net worth of the Company
(on a consolidated or unconsolidated basis) or of any or more of its groups,
divisions, Subsidiaries or departments, or (iii) a combination of two or more of the
foregoing or other factors.






	 	p.	 	Plan: The Ownership Incentive Plan herein set forth and as the same may from
time to time be amended.






	 	q.	 	Reorganization: The effective date of the confirmation by any United States
Bankruptcy Court of any plan of reorganization with respect to the Company.






	 	r.	 	Service Provider: An individual who provides services to the Company or any Subsidiary
as an employee or consultant, or as a member of any board of directors or board of
managers of the Company or a Subsidiary.






	 	s.	 	Share Award: An issuance or transfer of Shares at the time the Ownership Incentive is
granted or as soon thereafter as practicable, or an undertaking to issue or transfer
such Shares in the future.






	 	t.	 	Shareholder Agreement: The rue21, inc. Shareholders Agreement, dated as of May 15,
2003.






	 	u.	 	Shares: Shares of the Company’s common stock.






	 	v.	 	Subsidiary: A company or other entity designated by the Committee in which the
Company has a significant equity interest.






	3.	 	Grants of Ownership Incentives:











 








 












	 	a.	 	Subject to the provisions of this Plan, the Committee may at any time, or
from time to time, grant Ownership Incentives under this Plan to, and only to,
Eligible Persons.






	 	b.	 	Ownership Incentives may be granted in one or more of the following
forms:






	 	i.	 	Options,
	 
	 	ii.	 	Appreciation Rights,
	 
	 	iii.	 	Share Awards, or
	 
	 	iv.	 	a combination of Options, Appreciation Rights, and/or Share Awards.






	 	c.	 	Ownership Incentives contingently granted prior to the approval of this Plan by
the Company’s Board of Directors but subject to such approval shall be deemed to be
granted hereunder as of the date of such approval.






	4.	 	Shares Subject to this Plan:






	 	a.	 	The maximum number of Shares that shall be available for grant of Ownership
Incentives under the Plan (including Incentive Options) during its term shall not
exceed 4,743,340 shares, subject to adjustment as provided in Section 9. The maximum
number of Shares with respect to which Ownership Incentives may be granted to any
person during any calendar year shall be 2,000,000. Any Shares related to Ownership
Incentives that are settled in cash in lieu of Shares shall be available again for
grant under the Plan. Similarly, any Shares related to Ownership Incentives that
terminate by expiration, forfeiture, cancellation or otherwise without the issuance of
the related Shares or are exchanged with the Committee’s permission for Awards not
involving Shares, shall be available again for grant under the Plan. Further, any
Shares that are used by a Participant for the full or partial payment to the Company of
the purchase price of Shares upon exercise of an Option, or for withholding taxes due
as a result of that exercise, shall again be available for Ownership Incentives under
the Plan.






	 	b.	 	The issuance of any Appreciation Rights shall reduce the number of Shares
available for the grant of Ownership Incentives on the same basis as the issuance of
Options and Share Awards.






	 	c.	 	The ownership of Shares by an Eligible Person shall be subject to the terms of
the Company’s Shareholders Agreement, as amended and in effect from time to time.






	5.	 	Options: Ownership Incentives in the form of Options shall be subject to the following
provisions:






	 	a.	 	Upon the exercise of an Option, the purchase price shall be paid in cash or,
unless otherwise provided by the Committee (and subject to such terms and conditions as
are specified in the Agreement), in Shares which have been owned by the optionee for at
least six months prior to the date of exercise and which are delivered to the Company
by the optionee. Shares thus delivered shall be valued at their Fair Market Value on
the date on which they are delivered to the Company in payment of the exercise price.






	 	b.	 	Each Agreement shall specify the period during which the Options may be
exercised and shall provide that the Options shall expire at the end of such period (or
periods); provided that such expiration date shall not be later than ten years from the
date of grant thereof. Unless otherwise provided in the Option, an Option, to the
extent it is or becomes










 









 





	 	 	 	exercisable, may be exercised at any time in whole or in part during the period beginning
on the third anniversary of Reorganization and ending upon the expiration or termination
of the Option; provided, however, that the date of exercise of an Option shall be
determined under procedures established by the Committee. Any term or provision in any
outstanding Option specifying that the Option not be immediately exercisable or that it be
exercisable in installments may be modified at any time during the life of the Option by
the Committee; provided, however, no such modifications of an outstanding Option shall,
without the consent of the optionee, (i) permit such option to become exercisable prior to
the third anniversary of Reorganization, or (ii) adversely affect any Option theretofore
granted to the optionee.






	 	c.	 	Subject to the expiration of and the termination of Options under an Agreement, each Option
shall be exercisable during the life of the optionee only by the optionee and, after the
optionee’s death, only by the optionee’s estate or by a person who acquired the right to
exercise the Option by will or the laws of descent and distribution. An Option, to the extent
that it shall not have been exercised, shall terminate at the close of business on the
thirtieth day following the date the optionee ceases to be a Service Provider of the Company
or a Subsidiary, unless the optionee ceases to be a Service Provider because of (i) Cause,
(ii) resignation with the consent of the Committee (which consent may be given before or after
resignation), or (iii) by reason of death, incapacity or retirement under a retirement plan of
the Company or a Subsidiary. If an optionee ceases to be a Service Provider of the Employer
for Cause, then any Option granted hereunder, to the extent it shall not have been exercised,
shall immediately terminate. Except as provided in the next sentence, if the optionee ceases
to be a Service Provider by reason of resignation with the consent of the Committee, the
Option shall terminate three months after the optionee ceases to be a Service Provider. If the
optionee ceases to be a Service Provider by reason of death, incapacity or retirement, or if
the optionee should die during the three-month period referred to in the preceding sentence,
the Option shall terminate fifteen months after the optionee ceases to be a Service Provider.
Where an Option is exercised more than three months after the optionee ceased to be a Service
Provider, the Option may be exercised only to the extent it could have been exercised on the
date three months after the optionee ceased to be a Service Provider. A leave of absence
for military or governmental service or for other purposes shall not, if approved by the
Committee, be deemed a termination of employment within the meaning of this paragraph (c).
Notwithstanding the foregoing provisions of this paragraph (c) or any other provisions of this
Plan, no Option shall be exercisable after expiration of the term for which the Option was
granted, which shall in no event exceed ten years.






	 	d.	 	Options shall be granted for such lawful consideration as the Committee shall determine. No
Option may be granted with an exercise price which is below the Fair Market Value of a Share
on the date of the grant without the approval of the Company’s Board of Directors. The
Committee may, in its discretion and on such terms as it deems appropriate, require as a
condition on the grant of an Option that the Service Provider surrender for cancellation some
or all of the unexercised Options which have been previously granted to him. An Option the
grant of which is conditioned upon such surrender may have an exercise price lower (or higher)
than the exercise price of the surrendered Option, may cover the same (or a lesser or greater)
number of Shares as the surrendered Option, may contain such other terms as the Committee
deems appropriate and shall be exercisable in accordance with its terms, without regard to the
number of Shares, exercise price, Option period or any other term or condition of the
surrendered Option.






	 	e.	 	No Option nor any right thereunder may be assigned or transferred by the optionee except, in
the event of the death of the optionee, by will or the laws of descent and





 








 












	 		 	distribution. If so provided in the Agreement or if so authorized by the Committee
and subject to such terms and conditions as are specified in the Agreement or by
the Committee, the Company shall have the right, upon or without the request of the
holder of the Option and at any time or from time to time, to cancel all or a
portion of the Option then subject to exercise and, at the Company’s election,
either (i) pay the holder an amount of money equal to the excess, if any, of the
Fair Market Value, at such time or times, of the Shares subject to the portion of
the Option so canceled over the aggregate purchase price of such Shares, or (ii)
issue or transfer Shares to the holder with a Fair Market Value, at such time or
times, equal to such excess.






	 	f.	 	Each Option shall be evidenced by a written Agreement, which shall contain such
terms and conditions (including such Performance Objectives as may be determined at the
discretion of the Committee), and shall be in such form as the Committee may determine,
provided the Agreement is consistent with this Plan and incorporates it by reference.
Notwithstanding the preceding sentence, an Agreement if so recommended by the
Committee, may include restrictions and limitations in addition to those provided for
in this Plan.






	 	g.	 	Options may be either Incentive Options or Nonqualified Options at the
discretion of the Committee. Options not otherwise designated shall be
Nonqualified Options. Notwithstanding any other provisions herein, the following
provisions shall apply to Incentive Options: (i) except as set forth in clause (ii),
the exercise price of any Incentive Option shall not be less than the Fair Market Value
of the stock on the date of grant, (ii) the exercise price of any Incentive Option
granted to any person who on the date of grant owns (within the meaning of Section
425(d) of the Internal Revenue Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary shall
not be less than 110% of the Fair Market Value of the stock on the date of grant; (iii)
the maximum term of any Incentive Option granted hereunder shall be ten years, except
that the maximum term of any Incentive Option granted to a person described in clause
(ii) above shall be five years; (iv) no Incentive Option may be granted subsequent to
the tenth anniversary of the Effective Date of this Plan; (v) Incentive Options may
only be granted to persons who are employees of the Company or any Subsidiary within
the meaning of Section 3401 of the Internal Revenue Code; and (vi) Incentive Options
may not be granted with respect to more than an aggregate of 4,743,340 shares of Common
Stock under this Plan. In the event that this Plan is not approved by the
shareholders of the Company within 12 months before or after the Effective Date, then
any Incentive Option shall be treated as a Nonqualified Option.






	 	h.	 	Any federal, state or local withholding taxes payable by an optionee upon the
exercise of an Option shall be paid in cash or, unless otherwise provided by the
Committee, by the surrender of Shares or the withholding of Shares to be issued to the
optionee, or in any combination thereof, or in such other form as the Committee may
authorize from time to time; provided, however, that all such Shares so surrendered or
withheld shall be valued at the Fair Market Value for the date on which they are
surrendered or withheld, and the number of Shares surrendered or withheld shall not
exceed the number of such Shares necessary to satisfy the withholding obligation.






	6.	 	Appreciation Rights: Ownership Incentives in the form of Appreciation Rights shall be subject
to the following provisions:






	 	a.	 	Each grant of Appreciation Rights shall be evidenced by an Agreement specifying the
number of Appreciation Rights granted and containing such other terms and conditions










 









 












	 	 	 	(which may, but need not, include Performance Objectives) as the Committee may determine.






	 	b.	 	Each Agreement shall specify the period during which the pertinent Appreciation Right(s) may
be exercised and shall provide that the Appreciation Right(s) shall expire at the end of such
period (or periods); provided that such expiration date shall not be later than ten years from
the date of grant thereof. Except as otherwise provided herein or in an Agreement, any
Appreciation Right may be exercisable in full or in part in one or more installments at such
time or times as may be specified in the Agreement. Any term or provisions in any
Agreement specifying that the Appreciation Right not be immediately exercisable or
that it is to be exercisable in installments may be modified at any time during the term of
the Agreement by the Committee, provided, however, that no such modifications of any
outstanding Appreciation Right shall, without the consent of the Eligible Person, adversely
affect any Appreciation Right theretofore granted.






	 	c.	 	Subject to the expiration of and the termination of Appreciation Rights under an Agreement,
each Appreciation Right shall be exercisable during the life of the Eligible Person only by
the Eligible Person and, after the Eligible Person’s death, only by the Eligible Person’s
estate or by a person who acquired the right to exercise the Appreciation Right by will or
the laws of descent and distribution. An Appreciation Right, to the extent that it shall not
have been exercised, shall terminate at the close of business on the thirtieth day following
the date the Eligible Person ceases to be a Service Provider of the Company or a Subsidiary,
unless the Eligible Person ceases to be a Service Provider because of (i) Cause, (ii)
resignation with the consent of the Committee (which consent may be given before or after
resignation), or (iii) by reason of death, incapacity or retirement under a retirement plan of
the Company or a Subsidiary. If an Eligible Person ceases to be a Service Provider of the
Employer for Cause, then any Appreciation Right granted hereunder, to the extent it shall not
have been exercised, shall immediately terminate. Except as provided in the next sentence,
if the Eligible Person ceases to be a Service Provider by reason of such resignation, the
Appreciation Right shall terminate three months after the Eligible Person ceases to be a
Service Provider. If the Eligible Person ceases to be a Service Provider by reason of such
death, incapacity or retirement, or if the Eligible Person should die during the three-month
period referred to in the preceding sentence, the Appreciation Right shall terminate fifteen
months after the Eligible Person ceases to be a Service Provider. Where an Appreciation
Right is exercised more than three months after the Eligible Person ceased to be a Service
Provider, the Appreciation Right may be exercised only to the extent it could have been
exercised on the date three months after the Eligible Person ceased to be a Service Provider.
A leave of absence for military or governmental service or for other purposes shall not, if
approved by the Committee, be deemed a termination of employment within the meaning of this
paragraph c.






	 	d.	 	No Appreciation Right may be assigned or transferred by the Eligible Person except by will or
the laws of descent and distribution. If so provided in the Agreement or if so authorized by
the Committee and subject to such terms and conditions as are specified in the Agreement or by
the Committee, the Company shall have the right, upon or without the request of the holder of
an Appreciation Right and at any time or from time to time, to cancel all or a portion of the
Appreciation Right then subject to exercise and pay the holder an amount of cash for each
Appreciation Right equal to the excess, if any, of the Fair Market Value of a Share at the
date of cancellation over the Fair Market Value of a Share at the time the Appreciation Right
was granted.










 









 





	 	e.	 	Any federal, state or local withholding taxes payable upon the exercise of an
Appreciation Right shall be paid in cash by the Eligible Person or withheld from
the cash payment made to the Eligible Person pursuant to the exercise of the
Appreciation Rights.






	7.	 	Share Awards: Ownership Incentives in the form of Share Awards shall be subject to the
following provisions:






	 	a.	 	Shares subject to a Share Award may be issued or transferred to the Eligible
Person at the time the Share Award is granted, or at any time subsequent thereto, or in
installments from time to time, as the Committee shall determine; provided, however,
that no Shares subject to a Share Award may be issued or transferred to an Eligible
Person prior to the third anniversary of Reorganization. In the event that any such
issuance or transfer shall not be made to the Eligible Person at the time the Share
Award is granted, the Committee may provide for payment to such Eligible Person, either
in cash or in Shares from time to time or at the time or times such Shares shall be
issued or transferred to such Eligible Person, of amounts not exceeding the income
distributions which would have been payable to such Eligible Person in respect of such
Shares (as adjusted under Section 9) if they had been issued or transferred to such
Eligible Person at the time such Share Award was granted. Any amount payable in
Shares under the terms of a Share Award may, at the discretion of the Committee, be
paid in cash, on each date on which delivery of Shares would otherwise have been made,
in an amount equal to the Fair Market Value on such date of the Shares which would
otherwise have been delivered.






	 	b.	 	A Share Award shall be subject to such terms and conditions, including, without
limitation, restrictions on sale or other disposition of the Share Award or of the
Shares issued or transferred pursuant to such Share Award, as the Committee shall
determine; provided, however, that upon the issuance or transfer of Shares pursuant to
a Share Award, the recipient shall, with respect to such Shares, be and become a
Shareholder of the Company fully entitled to receive income distributions, to vote and
to exercise all other rights of a Shareholder except to the extent otherwise provided
in the Share Award or in other Agreements. The Committee may, in its sole discretion,
but shall not be required to, specify in any Agreement governing a Share Award that the
issuance, transfer and/or retention of some or all of the Shares covered by the Share
Award shall be subject to the attainment of Performance Objectives. Each Share Award
shall be evidenced by an Agreement.






	 	c.	 	In the event the holder of Shares subject to a Share Award dies prior to the
time such Shares are no longer subject to forfeiture pursuant to the terms of the
Agreement governing the Share Award, the estate of such holder may retain such Shares
subject to the restrictions set forth in the Agreement governing the Share Award.






	8.	 	Combinations of Appreciation Rights, Share Awards and Options: Ownership Incentives in the
form of combinations of Options, Appreciation Rights and/or Share Awards shall be subject to
the following provisions:






	 	a.	 	An Ownership Incentive may be a combination of an Option with a form of
Appreciation Right and/or with any form of Share Award; provided, however, that the
terms and conditions of such Ownership Incentive pertaining to an Option are consistent
with Section 5, the terms and conditions of such Ownership Incentive pertaining to an
Appreciation Right are consistent with Section 6, and the terms and conditions of such
Ownership Incentive pertaining to a Share Award are consistent with Section 7.






	 	b.	 	Such combination Ownership Incentive shall be subject to such other terms and
conditions as the Committee may determine, including, without limitation, a provision





 








 





	 	 	 	terminating in whole or in part a portion thereof upon the exercise in whole or in
part of another portion thereof. Such combination Ownership Incentive shall be
evidenced by a written Agreement in such form as the Committee shall determine,
provided it is consistent with this Plan and incorporates it by reference.






	9.	 	Adjustment Provisions: In the event that any recapitalization, reclassification, or any
similar transaction shall be effected, or the outstanding Shares are, in connection with a
merger or consolidation of the Company or a sale by the Company of all or a part of its
assets, exchanged for a different number or class of Shares or other securities of the Company
or for shares of the stock or other securities of any other company, or a record date for
determination of holders of Shares entitled to receive a share split or a dividend payable in
Shares shall occur, (i) the number of Shares or other securities that may be issued or
transferred pursuant to Ownership Incentives or with respect to which a cash payment pursuant
to the Ownership Incentive is determinable, (ii) the number and class of Shares or other
securities which have not been issued or transferred under outstanding Ownership Incentives,
(iii) the purchase price to be paid per Share or other security under outstanding Options, and
(iv) the price to be paid by the Company or a Subsidiary for Shares or other securities issued
or transferred pursuant to Ownership Incentives which are subject to a right of the Company or
a Subsidiary to reacquire such Shares or other securities, shall in each case be equitably
adjusted; provided, however, that, in the case of Incentive Options, each such adjustment shall
be made in such manner as not to constitute a “modification” within the meaning of Section
424(h)(3) of the Internal Revenue Code unless the Committee determines that such Option is no
longer intended to so qualify as an Incentive Option. Any such adjustment made by the
Committee shall be final and binding upon all optionees, the Company and all other interested
persons.






	10.	 	Acceleration: Unless otherwise provided in an Agreement, upon a Change of Control, of the
Company, as defined herein, one hundred percent (100%) of the Ownership Incentives granted
herein which have then been outstanding hereunder for at least six months (and which have not
previously been terminated under the terms of this Plan or an Agreement) shall vest or be
exercisable by the Eligible Person. Such vesting shall occur without regard to any limitation
imposed by the Plan or the Committee at the time the Ownership Incentive was granted, which
permits all or any part of the Ownership Incentive to be exercised only after the lapse of
time or the attainment of Performance Objectives or other conditions to exercise, and such
Ownership Incentives will remain vested and exercisable until the expiration of the Ownership
Incentive.






	11.	 	Term: This Plan shall be deemed adopted and shall become effective on the Effective Date.
This Plan shall remain in effect until such time as it is terminated by the Board of
Directors; provided, however, that no Incentive Options may be granted after the tenth
anniversary of the Effective Date of the Plan.






	12.	 	Administration:






	 	a.	 	The Plan shall be administered by the Committee, which shall consist of not
less than three individuals designated by the Board of Directors. Grants of Ownership
Incentives may be recommended by the Committee either with or without consultation with
Service Providers, but, anything in this Plan to the contrary notwithstanding, the
Committee shall have full authority to act in the matter of selection of all Eligible
Persons and in recommending Ownership Incentives to be granted to them.






	 	b.	 	Subject to the provisions of this Plan, the Committee shall specify in each
Agreement the terms of each Ownership Incentive, including, where applicable, the
exercise price, any provisions regarding redemption or forfeiture of Ownership
Incentives or Shares, acceleration or extension of exercise dates, and such other
matters as the Committee





 








 





	 	 	 	determines to be appropriate. The Committee may in its discretion establish such
rules and regulations, not inconsistent with the provisions of this Plan, as it
deems necessary to determine eligibility to participate in this Plan and for the
proper administration of this Plan, and may amend or revoke any rule or regulation
so established. The Committee may in its discretion make such determinations and
interpretations under or in connection with this Plan as it deems necessary or
advisable. All such rules, regulations, determinations and interpretations shall be
binding and conclusive upon the Company, its Subsidiaries, its Shareholders and all
Service Providers, and upon their respective legal representatives, beneficiaries,
successors and assigns and upon all other persons claiming under or through any of
them.






	 	c.	 	Members of the Board of Directors and members of the Committee acting under this Plan
shall be indemnified, if applicable, in accordance with the terms of the Company’s
Articles of Incorporation and Code of Regulations.






	13.	 	Changes in Form or Acquisitions: If the Company or any Subsidiary should, either pursuant to
an initial public offering or otherwise, merge or consolidate, or purchase or exchange stock
or assets with another entity, the Company in connection therewith, upon the recommendation of
the Committee and the approval of the Board of Directors, (i) may assume, in whole or in part
and with or without modifications or conditions, any ownership incentives granted by such
other entity to its Service Providers, in their capacity as such, (ii) may grant new Ownership
Incentives in substitution therefore; provided that the granting of an Ownership Incentive
with the terms and conditions of the assumed or substitute Ownership Incentives is permissible
under this Plan, or (iii) may cause such other entity to assume the obligations of the Plan
and substitute ownership incentives in such other entity for the Ownership Incentives granted
hereunder, provided that such assumption shall not, without the consent of the Eligible
Person, adversely affect any Ownership Incentive theretofore granted to such Eligible Person.






	14.	 	General Provisions:






	 	a.	 	Nothing in this Plan or in any instrument executed pursuant hereto shall confer
upon any Service Provider any right to continue in his or her relationship with the
Company or a Subsidiary, or shall affect the right of the Company or of a Subsidiary to
terminate any Service Provider at any time with or without cause.






	 	b.	 	No Shares shall be issued or transferred pursuant to an Ownership Incentive
unless and until all legal requirements applicable to the issuance or transfer of such
Shares have been complied with. In connection with any such issuance or transfer the
person acquiring the Shares shall, if requested by the Company, give assurances
satisfactory to counsel to the Company that the Shares are being acquired for
investment and not with a view to resale or distribution thereof and assurances in
respect of such other matters as the Company or a Subsidiary may deem desirable to
assure compliance with all applicable legal requirements. No Service Provider
(individually or as a member of a group), and no beneficiary or other person claiming
under or through him, shall have any right, title or interest in or to any Shares
allocated or reserved for the purposes of this Plan or subject to any Ownership
Incentive except as to Shares, if any, as shall have been issued or transferred to him.






	 	c.	 	The Company or a Subsidiary may, with the approval of the Committee, enter into
an agreement or other commitment to grant an Ownership Incentive in the future to a
person who is or will be an Eligible Person at the time of grant, and, notwithstanding
any other provision of this Plan, any such agreement or commitment shall not be deemed
the grant of an Ownership Incentive until the date on which the Company takes action to
implement such agreement or commitment.





 








 












	 	d.	 	In the case of a grant of an Ownership Incentive to a Service Provider of a
Subsidiary, such grant may, if the Committee so directs, be implemented by the
Company issuing or transferring the Shares, if any, covered by the Ownership
Incentive to the Subsidiary, for such lawful consideration as the Committee may
specify, upon the condition or understanding that the Subsidiary will transfer the
Shares to the Service Provider in accordance with the terms of the Ownership
Incentive specified by the Committee pursuant to the provisions of this Plan.
Notwithstanding any other provision hereof, such Ownership Incentive may be issued
by and in the name of the Subsidiary and shall be deemed granted on the date it is
approved by the Committee on the date it is delivered by the Subsidiary or on such
other date between said two dates, as the Committee shall specify.






	 	e.	 	The Company or a Subsidiary may make such provisions as it may deem appropriate
for the withholding of any taxes which the Company or a Subsidiary determines it is
required to withhold in connection with any Ownership Incentive.






	 	f.	 	Nothing in this Plan is intended to be a substitute for, or shall preclude or
limit the establishment or continuation of, any other plan, practice or arrangement for
the payment of compensation or fringe benefits to employees generally, or to any class
or group of employees, which the Company or any Subsidiary or other affiliate now has
or may hereafter lawfully put into effect, including, without limitation, any
retirement, pension, or group insurance plan.






	 	g.	 	The invalidity or unenforceability of any provision of the Plan or an Agreement
shall not affect the validity of the other provisions, and this Plan and any Agreement
shall be construed in all respects as if the invalid or unenforceable provision(s) were
omitted.






	 	h.	 	Any Shares acquired pursuant to an Ownership Incentive shall be subject to the
provisions of the Shareholder Agreement and such other restrictions on transfer as may
be set forth in the applicable Agreement. As a condition to the receipt of any Shares
pursuant to an Ownership Incentive, the Eligible Person shall execute a copy of the
Shareholder Agreement, and shall be bound by the terms and conditions thereof. In the
event of any conflict between the provisions of this Plan and the Shareholder
Agreement, the Shareholder Agreement shall control.






	15.	 	Amendments and Discontinuance:






	 	a.	 	This Plan may be amended by the Board of Directors upon the recommendation of the
Committee.






	 	b.	 	The Board of Directors may by resolution adopted by a majority of the entire
Board of Directors discontinue this Plan.






	 	c.	 	No amendment or discontinuance of this Plan by the Board of Directors of the
Company shall, without the consent of the Eligible Person, adversely affect any
Ownership Incentive theretofore granted to him.