exv4w3



 




EXHIBIT
4.3




ATHERSYS, INC.




EQUITY INCENTIVE COMPENSATION PLAN




     1. Purpose. The purpose of this Equity Incentive Compensation Plan is to attract and retain
officers, other employees, Directors, consultants and other
independent contractors of Athersys,
Inc., a Delaware corporation (the “Company”), and its Subsidiaries and to provide to such persons
incentives and rewards for performance.



     2. Definitions. As used in this Plan,



          (a) “Appreciation Right” means a right granted pursuant to Section 5 of this Plan, and will
include both Free-Standing Appreciation Rights and Tandem Appreciation Rights.




          (b) “Base Price” means the price to be used as the basis for determining the Spread upon the
exercise of a Free-Standing Appreciation Right or a Tandem Appreciation Right.




          (c) “Board” means the Board of Directors of the Company and, to the extent of any delegation
by the Board to a committee (or subcommittee thereof) pursuant to Section 10 of this Plan, such
committee (or subcommittee).




          (d) “Change in Control” has the meaning set forth in Section 12 of this Plan.




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




          (f) “Common Shares” means the shares of common stock, par value $0.001 per share, of the
Company or any security into which such Common Shares may be changed by reason of any transaction
or event of the type referred to in Section 11 of this Plan.




          (g)
“Company” means Athersys, Inc., a Delaware corporation and its successors.




          (h) “Date of Grant” means the date specified by the Board on which a grant of Option Rights,
Appreciation Rights, Performance Shares, Performance Units or other awards contemplated by Section
9 of this Plan, or a grant or sale of Restricted Stock, Restricted Stock Units, or other awards
contemplated by Section 9 of this Plan will become effective (which date will not be earlier than
the date on which the Board takes action with respect thereto).




          (i) “Director” means a member of the Board of Directors of the Company.




          (j) “Effective Date” means the date of approval of the Plan by the Company’s Board of
Directors.




          (k) “Evidence of Award” means an agreement, certificate, resolution or other type or form of
writing or other evidence approved by the Board that sets forth the terms and



 









 






conditions of the awards granted. An Evidence of Award may be in an electronic medium, may be
limited to notation on the books and records of the Company and, with the approval of the Board,
need not be signed by a representative of the Company or a Participant.




          (l) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as such law, rules and regulations may be amended from time to time.




          (m) “Free-Standing Appreciation Right” means an Appreciation Right granted pursuant to Section
5 of this Plan that is not granted in tandem with an Option Right.




          (n) “Incumbent Directors” means the individuals who, as of the Effective Date, are Directors
of the Company and any individual becoming a Director subsequent to the Effective Date whose
election, nomination for election by the Company’s stockholders, or appointment was approved by a
vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as a nominee for
director, without objection to such nomination), including, without limitation, after consummation
of the proposed transaction (the “Transaction”) contemplated by that certain non-binding letter of
intent, dated as of April 18, 2007, to which the Company is a party; provided,
however, that an individual shall not be an Incumbent Director if such individual’s
election or appointment to the Board occurs as a result of an actual or threatened election contest
(as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of
Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.




          (o) “Management Objectives” means the measurable performance objective or objectives
established pursuant to this Plan for Participants who have received grants of Performance Shares
or Performance Units or, when so determined by the Board, Option Rights, Appreciation Rights,
Restricted Stock, Restricted Stock Units, dividend credits and other awards pursuant to this Plan.
Management Objectives may be described in terms of Company-wide objectives or objectives that are
related to the performance of the individual Participant or of a Subsidiary, division, department
or function within the Company or a Subsidiary. The Board may provide, in connection with the
setting of the Management Objectives, that any evaluation of performance may include or exclude
certain items that may occur during any fiscal year, including, but not limited to the following:
(i) asset write downs; (ii) litigation or claim judgments or settlements; (iii) the effect of
changes in tax laws, accounting principles, or other laws or provisions affecting reported results;
(iv) any reorganization and restructuring programs; (v) extraordinary nonrecurring items as
described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and
analysis of financial condition and results of operations appearing in the Company’s annual report
to stockholders for the applicable year; (vi) acquisitions or divestitures; and (vii) foreign
exchange gains and losses. It is intended generally that the Management Objectives applicable to
any award will be based on specified levels of, or relative peer company performance in any one or
more of the following objectives, or any combination thereof, as determined by the Board in its
sole discretion:





	 	(i)	 	Adjusted net earnings
	 
	 	(ii)	 	Cash flow (including free cash flow)




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	 	(iii)	 	Cost of capital
	 
	 	(iv)	 	Cost reduction
	 
	 	(v)	 	Customer service
	 
	 	(vi)	 	Debt reduction
	 
	 	(vii)	 	Development milestone achievement
	 
	 	(viii)	 	Earnings and earnings growth (including earnings per share and earnings
before taxes and earnings before interest and taxes)
	 
	 	(ix)	 	Economic value added
	 
	 	(x)	 	Establishment of partnerships and collaborations
	 
	 	(xi)	 	Financing proceeds
	 
	 	(xii)	 	Gross profit
	 
	 	(xiii)	 	Inventory management
	 
	 	(xiv)	 	Market share
	 
	 	(xv)	 	Market value added
	 
	 	(xvi)	 	Net income
	 
	 	(xvii)	 	Operating profit and operating income
	 
	 	(xviii)	 	Partnership milestone achievement
	 
	 	(xix)	 	Productivity improvement
	 
	 	(xx)	 	Profit after taxes
	 
	 	(xxi)	 	Project execution
	 
	 	(xxii)	 	Quality
	 
	 	(xxiii)	 	Recruitment and development of associates
	 
	 	(xxiv)	 	Reduction of fixed costs
	 
	 	(xxv)	 	Return on assets and return on net assets
	 
	 	(xxvi)	 	Return on equity
	 
	 	(xxvii)	 	Return on invested capital
	 
	 	(xxviii)	 	Sales and sales growth
	 
	 	(xxix)	 	Successful start-up of new facility
	 
	 	(xxx)	 	Successful acquisition/divestiture
	 
	 	(xxxi)	 	Total stockholder return and improvement of stockholder return
	 
	 	(xxxii)	 	Unit volume
	 
	 	(xxxiii)	 	Unit cost
	 
	 	(xxxiv)	 	Pricing
	 
	 	(xxxv)	 	Working capital





     If the Board determines that a change in the business, operations, corporate structure or
capital structure of the Company, or the manner in which it conducts its business, or other events
or circumstances render the Management Objectives unsuitable, the Board may in its discretion
modify such Management Objectives or the related levels of achievement, in whole or in part, as the
Board deems appropriate and equitable.



          (p) “Market Value per Share” means, as of any particular date, the closing sales price of the
Common Shares or, as determined by the Board, the average closing sales price of the Common Shares
over a period of time, either before or after any particular date, of one to ten days, as reported
on the Nasdaq Stock Market (including, without limitation, the Nasdaq Global Select Market, the
Nasdaq Global Market or the Nasdaq Capital Market, as



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applicable) or, if not listed on such exchange, on any other national securities exchange on
which the Common Shares are listed or, if not listed on any such other national securities
exchange, the NASD OTC Bulletin Board or any other quotation facility on which the Common Shares
are quoted. If there is no regular trading market for such Common Shares, the Market Value per
Share shall be determined by the Board.




          (q) “Non-Employee Director” means a Director who is not an employee of the Company or any
Subsidiary.




          (r) “Optionee” means the optionee named in an Evidence of Award evidencing an outstanding
Option Right.




          (s) “Option Price” means the purchase price payable on exercise of an Option Right.




          (t) “Option Right” means the right to purchase Common Shares upon exercise of an option
granted pursuant to Section 4 of this Plan.




          (u) “Participant” means a person who is selected by the Board to receive benefits under this
Plan and who is at the time an officer or other employee of the Company or any one or more of its
Subsidiaries, or who has agreed to commence serving in such capacities within 90 days of the Date
of Grant, or who is a consultant or other independent contractor, or a Non-Employee Director of the
Company or a Subsidiary.




          (v) “Performance Period” means, in respect of a Performance Share or Performance Unit, a
period of time established pursuant to Section 8 of this Plan within which the Management
Objectives relating to such Performance Share or Performance Unit are to be achieved.




          (w) “Performance Share” means a bookkeeping entry that records the equivalent of one Common
Share awarded pursuant to Section 8 of this Plan.




          (x) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 8 of this Plan
that records a unit equivalent to $1.00 or such other value as is determined by the Board.




          (y)
“Plan” means this Athersys, Inc. Equity Incentive Compensation Plan, as may be amended from
time to time.




          (z) “Restricted Stock” means Common Shares granted or sold pursuant to Section 6 of this Plan
as to which neither the substantial risk of forfeiture nor the prohibition on transfers has
expired.




          (aa) “Restriction Period” means the period of time during which Restricted Stock Units are
subject to restrictions, as provided in Section 7 of this Plan.




          (bb) “Restricted Stock Unit” means an award made pursuant to Section 7 of this Plan of the
right to receive Common Shares or cash at the end of a specified period.




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          (cc) “Spread” means the excess of the Market Value per Share on the date when an Appreciation
Right is exercised, or on the date when Option Rights are surrendered in payment of the Option
Price of other Option Rights, over the Option Price or Base Price provided for in the related
Option Right or Free-Standing Appreciation Right, respectively.




          (dd) “Subsidiary” means a corporation, company or other entity (i) at least 50 percent of
whose outstanding shares or securities (representing the right to vote for the election of
directors or other managing authority) are, or (ii) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture or unincorporated association), but
at least 50 percent of whose ownership interest representing the right generally to make decisions
for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the
Company.




          (ee) “Tandem Appreciation Right” means an Appreciation Right granted pursuant to Section 5 of
this Plan that is granted in tandem with an Option Right.




          (ff) “Voting Stock” means securities entitled to vote generally in the election of directors.




     3. Shares Available Under the Plan.



          (a) Maximum Shares Available Under Plan. Subject to adjustment as provided in Section
11 of this Plan, the number of Common Shares that may be issued or transferred (i) upon the
exercise of Option Rights or Appreciation Rights, (ii) in payment of Restricted Stock and released
from substantial risks of forfeiture thereof, (iii) as Restricted Stock Units, (iv) in payment of
Performance Shares or Performance Units that have been earned, (v) as awards contemplated by
Section 9 of this Plan, or (vi) in payment of dividend equivalents paid with respect to awards made
under the Plan will not exceed in the aggregate 1,465,000 Common Shares. Common Shares covered by
an award granted under the Plan shall not be counted as used unless and until they are actually
issued and delivered to a Participant. Without limiting the generality of the foregoing, the
number of Common Shares available under this Plan will be adjusted to account for shares relating
to awards that expire, are forfeited, terminated or cancelled without the issuance of Common Shares
and to awards settled in cash in lieu of Common Shares. Shares issued under the Plan may be shares
of original issuance or treasury shares or a combination of the foregoing.




          (b) Life of Plan Limits. Awards will not be granted under Section 9 of the Plan to
the extent they would involve the issuance of more than 1,465,000 shares in the aggregate.




          (c) Individual Participant Limits. Notwithstanding anything in this Section 3, or
elsewhere in this Plan to the contrary, and subject to adjustment as provided in Section 11 of this
Plan:





	 	(i)	 	No Participant will be granted Option Rights or Appreciation
Rights, in the aggregate, for more than 750,000 Common Shares during any
calendar year.




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	 	(ii)	 	No Participant will be granted Restricted Stock or Restricted
Stock Units that specify Management Objectives, Performance Shares or other
awards under Section 9 of this Plan, in the aggregate, for more than 750,000
Common Shares during any calendar year.
	 
	 	(iii)	 	Notwithstanding any other provision of this Plan to the
contrary, in no event will any Participant in any calendar year receive an
award of Performance Units having an aggregate maximum value as of their
respective Dates of Grant in excess of $3,000,000.





          (d) Impact of Election on the Limit. If, under this Plan, a Participant has elected
to give up the right to receive compensation in exchange for Common Shares based on fair market
value, such Common Shares will be counted against the number of shares available in Section 3(a)
above.




     4. Option Rights. The Board may, from time to time and upon such terms and conditions as it
may determine, authorize the granting to Participants of options to purchase Common Shares. Each
such grant will be subject to all of the requirements contained in the following provisions:



          (a) Each grant will specify the number of Common Shares to which it pertains subject to the
limitations set forth in Section 3 of this Plan.




          (b) Each grant will specify an Option Price per share, which may not be less than the Market
Value per Share on the Date of Grant.




          (c) Each grant will specify whether the Option Price will be payable (i) in cash or by check
acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or
constructive transfer to the Company of Common Shares owned by the Optionee having a value at the
time of exercise equal to the total Option Price (or other consideration authorized pursuant to
Section 4(d)), (iii) by a combination of such methods of payment, or (iv) by such other methods as
may be approved by the Board.




          (d) The Board may determine, at the Date of Grant, that payment of the Option Price of any
Option Right may also be made in whole or in part in the form of Restricted Shares or other Common
Shares that are forfeitable or subject to restrictions on transfer. Unless otherwise determined by
the Board at the Date of Grant, whenever any Option Price is paid in whole or in part by means of
any of the forms of consideration specified in this Section 4(d), the Common Shares received upon
the exercise of the Option Rights shall be subject to the same risks of forfeiture or restrictions
on transfer as may correspond to any that apply to the consideration surrendered; provided,
however, that such risks of forfeiture or restrictions on transfer shall apply only to the
same number of Common Shares received by the Optionee as applied to the forfeitable or restricted
Common Shares surrendered by the Optionee.




          (e) To the extent permitted by law, any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of
some or all of the shares to which such exercise relates.




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          (f) To the extent permitted by law, any grant may provide for payment of the Option Price, at
the election of the Optionee, in installments, with or without interest, upon terms determined by
the Board.




          (g) Successive grants may be made to the same Participant whether or not any Option Rights
previously granted to such Participant remain unexercised.




          (h) Each grant will specify the period or periods of continuous service by the Optionee with
the Company or any Subsidiary that is necessary before the Option Rights or installments thereof
will become exercisable. A grant of Option Rights may provide for the earlier exercise of such
Option Rights in the event of the retirement, death or disability of a Participant or a Change in
Control.




          (i) Any grant of Option Rights may specify Management Objectives that must be achieved as a
condition to the exercise of such rights.




          (j) Option Rights granted under this Plan will be nonqualified options under the Code.




          (k) The exercise of an Option Right will result in the cancellation on a share- for-share
basis of any Tandem Appreciation Right authorized under Section 5 of this Plan.




          (l) No Option Right will be exercisable more than 10 years from the Date of Grant.




          (m) The Board may, at the Date of Grant of any Option Rights, provide for the payment of
dividend equivalents to the Optionee on either a current or deferred or contingent basis or may
provide that such equivalents shall be credited against the Option Price.




          (n) Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of
Award shall be subject to this Plan and shall contain such terms and provisions, consistent with
this Plan, as the Board may approve.




     5. Appreciation Rights.



          (a) The Board may also authorize the granting (i) to any Optionee, of Tandem Appreciation
Rights in respect of Option Rights granted hereunder, and (ii) to any Participant, of Free-Standing
Appreciation Rights. A Tandem Appreciation Right will be a right of the Optionee, exercisable by
surrender of the related Option Right, to receive from the Company an amount determined by the
Board, which will be expressed as a percentage of the Spread (not exceeding 100 percent) at the
time of exercise. Tandem Appreciation Rights may be granted at any time prior to the exercise or
termination of the related Option Rights. A Free-Standing Appreciation Right will be a right of
the Participant to receive from the Company an amount determined by the Board, which will be
expressed as a percentage of the Spread (not exceeding 100 percent) at the time of exercise.




          (b) Each grant of Appreciation Rights will be subject to all of the requirements contained in
the following provisions:




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	 	(i)	 	Any grant may specify that the amount payable on exercise of an
Appreciation Right may be paid by the Company in cash, in Common Shares or in
any combination thereof and may either grant to the Participant or retain in
the Board the right to elect among those alternatives.
	 
	 	(ii)	 	Any grant may specify that the amount payable on exercise of an
Appreciation Right may not exceed a maximum specified by the Board at the Date
of Grant.
	 
	 	(iii)	 	Any grant may specify waiting periods before exercise and
permissible exercise dates or periods.
	 
	 	(iv)	 	Any grant may specify that such Appreciation Right may be
exercised only in the event of, or earlier in the event of, the retirement,
death or disability of a Participant or a Change in Control.
	 
	 	(v)	 	Any grant of Appreciation Rights may specify Management
Objectives that must be achieved as a condition of the exercise of such
Appreciation Rights.
	 
	 	(vi)	 	To the extent permitted by law, any grant may provide for the
payment to the Participant of dividend equivalents thereon in cash or Common
Shares on a current, deferred or contingent basis.
	 
	 	(vii)	 	Each grant of Appreciation Rights will be evidenced by an
Evidence of Award, which Evidence of Award will describe such Appreciation
Rights, identify the related Option Rights (if applicable), and contain such
other terms and provisions, consistent with this Plan, as the Board may
approve.





          (c) Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights
may be exercised only at a time when the related Option Right is also exercisable and at a time
when the Spread is positive, and by surrender of the related Option Right for cancellation.
Successive grants of Tandem Appreciation Rights may be made to the same Participant regardless of
whether any Tandem Appreciation Rights previously granted to the Participant remain unexercised.




          (d) Regarding Free-Standing Appreciation Rights only:





	 	(i)	 	Each grant will specify in respect of each Free-Standing
Appreciation Right a Base Price, which may not be less than the Market Value
per Share on the Date of Grant;
	 
	 	(ii)	 	Successive grants may be made to the same Participant
regardless of whether any Free-Standing Appreciation Rights previously
granted to the Participant remain unexercised; and




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	 	(iii)	 	No Free-Standing Appreciation Right granted under this
Plan may be exercised more than 10 years from the Date of Grant.





     6. Restricted Stock. The Board may also authorize the grant or sale of Restricted Stock to
Participants. Each such grant or sale will be subject to all of the requirements contained in the
following provisions:



          (a) Each such grant or sale will constitute an immediate transfer of the ownership of Common
Shares to the Participant in consideration of the performance of services, entitling such
Participant to voting, dividend and other ownership rights, but subject to the substantial risk of
forfeiture and restrictions on transfer hereinafter referred to.




          (b) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.




          (c) Each such grant or sale will provide that the Restricted Stock covered by such grant or
sale that vests upon the passage of time will be subject to a “substantial risk of forfeiture”
within the meaning of Section 83 of the Code for a period to be determined by the Board at the Date
of Grant, or may provide that the Restricted Stock will vest upon the achievement of Management
Objectives (as provided in Section 6(e) below); provided, however, that if
Restricted Stock vests based on the passage of time rather than the achievement of Management
Objectives, the period of time will be no shorter than three years, except that the restrictions
may be removed on an annual, ratable basis during the three year period.




          (d) Each such grant or sale will provide that during the period for which such substantial
risk of forfeiture is to continue, the transferability of the Restricted Stock will be prohibited
or restricted in the manner and to the extent prescribed by the Board at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase or first refusal in the Company
or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture in the
hands of any transferee).




          (e) Any grant of Restricted Stock may specify Management Objectives that, if achieved, will
result in termination or early termination of the restrictions applicable to such Restricted Stock;
provided, however, that notwithstanding subparagraph (c) above, restrictions
relating to Restricted Stock that vests upon the achievement of Management Objectives may not
terminate sooner than one year from the Date of Grant. Each grant may specify in respect of such
Management Objectives a minimum acceptable level of achievement and may set forth a formula for
determining the number of shares of Restricted Stock on which restrictions will terminate if
performance is at or above the minimum level, but falls short of maximum achievement of the
specified Management Objectives. The grant of Restricted Stock will specify that, before the
termination or early termination of restrictions applicable to such Restricted Stock, the Board
must determine that the Management Objectives have been satisfied; provided,
however, that notwithstanding Section 6(c) above, the substantial risk of forfeiture
relating to Restricted Stock that vests upon the achievement of Management Objections may not
terminate sooner than one year from the Date of Grant.




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          (f) Notwithstanding anything to the contrary contained in this Plan, any grant or sale of
Restricted Stock may provide for the earlier lapse of the substantial risk of forfeiture in the
event of the retirement, death or disability of a Participant or a Change in Control.




          (g) Any such grant or sale of Restricted Stock may require that any or all dividends or other
distributions paid thereon during the period of such restrictions be automatically deferred and
reinvested in additional shares of Restricted Stock, which may be subject to the same restrictions
as the underlying award.




          (h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award and will
contain such terms and provisions, consistent with this Plan, as the Board may approve. Unless
otherwise directed by the Board, all certificates representing shares of Restricted Stock will be
held in custody by the Company until all restrictions thereon will have lapsed, together with a
stock power or powers executed by the Participant in whose name such certificates are registered,
endorsed in blank and covering such Shares.




     7. Restricted Stock Units. The Board may also authorize the granting or sale of Restricted
Stock Units to Participants. Each such grant or sale will be subject to all of the requirements
contained in the following provisions:



          (a) Each such grant or sale will constitute the agreement by the Company to deliver Common
Shares or cash to the Participant in the future in consideration of the performance of services,
but subject to the fulfillment of such conditions (which may include the achievement of Management
Objectives) during the Restriction Period as the Board may specify. If a grant of Restricted Stock
Units specifies that the Restriction Period will terminate upon the achievement of Management
Objectives, then, notwithstanding anything to the contrary contained in subparagraph (c) below,
such Restriction Period may not terminate sooner than one year from the Date of Grant. Each grant
may specify in respect of such Management Objectives a minimum acceptable level of achievement and
may set forth a formula for determining the number of shares of Restricted Stock Units on which
restrictions will terminate if performance is at or above the minimum level, but falls short of
maximum achievement of the specified Management Objectives. The grant of such Restricted Stock
Units will specify that, before the termination or early termination of restrictions applicable to
such Restricted Stock Units, the Board must determine that the Management Objectives have been
satisfied.




          (b) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.




          (c) If the Restriction Period lapses only by the passage of time rather than the achievement
of Management Objectives as provided in subparagraph (a) above. Each such grant or sale will be
subject to a Restriction Period of not less than one year.




          (d) Notwithstanding anything to the contrary contained in this Plan, any grant or sale of
Restricted Stock Units may provide for the earlier lapse or other modification of

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the Restriction Period in the event of the retirement, death or disability of a Participant or
a Change in Control.




          (e) During the Restriction Period, the Participant will have no right to transfer any rights
under his or her award and will have no rights of ownership in the Restricted Stock Units and will
have no right to vote them, but the Board may at the Date of Grant, authorize the payment of
dividend equivalents on such Restricted Stock Units on either a current or deferred or contingent
basis, either in cash or in additional Common Shares.




          (f) Each grant or sale will specify the time and manner of payment of the Restricted Stock
Units that have been earned. Any grant or sale may specify that the amount payable with respect
thereto may be paid by the Company in cash, in Common Shares or in any combination thereof and may
either grant to the Participant or retain in the Board the right to elect among those alternatives.




          (g) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award and
will contain such terms and provisions, consistent with this Plan, as the Board may approve.




     8. Performance Shares and Performance Units. The Board may also authorize the granting of
Performance Shares and Performance Units that will become payable to a Participant upon achievement
of specified Management Objectives during the Performance Period. Each such grant will be subject
to all of the requirements contained in the following provisions:



          (a) Each grant will specify the number of Performance Shares or Performance Units to which it
pertains, which number may be subject to adjustment to reflect changes in compensation or other
factors.




          (b) The Performance Period with respect to each Performance Share or Performance Unit will be
such period of time (not less than three years) as will be determined by the Board at the time of
grant, which may be subject to earlier lapse or other modification in the event of the retirement,
death or disability of a Participant or a Change in Control.




          (c) Any grant of Performance Shares or Performance Units will specify Management Objectives
which, if achieved, will result in payment or early payment of the award, and each grant may
specify in respect of such specified Management Objectives a level or levels of achievement and
will set forth a formula for determining the number of Performance Shares or Performance Units that
will be earned if performance is at or above the minimum level or levels, but falls short of
maximum achievement of the specified Management Objectives. The grant of Performance Shares or
Performance Units will specify that, before the Performance Shares or Performance Units will be
earned and paid, the Board must determine that the Management Objectives have been satisfied.




          (d) Each grant will specify the time and manner of payment of Performance Shares or
Performance Units that have been earned. Any grant may specify that the amount payable with
respect thereto may be paid by the Company in cash, in Common Shares or in any

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combination thereof and may either grant to the Participant or retain in the Board the right
to elect among those alternatives.




          (e) Any grant of Performance Shares may specify that the amount payable with respect thereto
may not exceed a maximum specified by the Board at the Date of Grant. Any grant of Performance
Units may specify that the amount payable or the number of Common Shares issued with respect
thereto may not exceed maximums specified by the Board at the Date of Grant.




          (f) The Board may at the Date of Grant of Performance Shares, provide for the payment of
dividend equivalents to the holder thereof on either a current or deferred or contingent basis,
either in cash or in additional Common Shares.




          (g) Each grant of Performance Shares or Performance Units will be evidenced by an Evidence of
Award and will contain such other terms and provisions, consistent with this Plan, as the Board may
approve.




     9. Other Awards.



          (a) The Board may, subject to limitations under applicable law, grant to any Participant 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, Common Shares or factors that may influence the value of such
shares, including, without limitation, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Common Shares, purchase rights for Common Shares, awards with
value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates
or other business units thereof or any other factors designated by the Board, and awards valued by
reference to the book value of Common Shares or the value of securities of, or the performance of
specified Subsidiaries or affiliates or other business units of the Company. The Board shall
determine the terms and conditions of such awards. Common Shares delivered pursuant to an award in
the nature of a purchase right granted under this Section 9 shall be purchased for such
consideration, paid for at such time, by such methods, and in such forms, including, without
limitation, cash, Common Shares, other awards, notes or other property, as the Board shall
determine.




          (b) Cash awards, as an element of or supplement to any other award granted under this Plan,
may also be granted pursuant to this Section 9 of this Plan.




          (c) The Board may grant Common Shares as a bonus, or may grant other awards in lieu of
obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or
under other plans or compensatory arrangements, subject to such terms as shall be determined by the
Board.




     10. Administration of the Plan.



          (a) This Plan will be administered by the Board, which may from time to time delegate all or
any part of its authority under this Plan to a committee of the Board (or a subcommittee thereof)
consisting of non-employee Directors, as constituted from time to time.




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To the extent of any such delegation, references in this Plan to the Board will be deemed to
be references to such committee or subcommittee.




          (b) The interpretation and construction by the Board of any provision of this Plan or of any
agreement, notification or document evidencing the grant of Option Rights, Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units or other awards
pursuant to Section 9 of this Plan and any determination by the Board pursuant to any provision of
this Plan or of any such agreement, notification or document will be final and conclusive.




          (c) The Board or, to the extent of any delegation as provided in Section 10(a), the committee,
may delegate to one or more of its members or to one or more officers of the Company, or to one or
more agents or advisors, such administrative duties or powers as it may deem advisable, and the
Board, the committee, or any person to whom duties or powers have been delegated as aforesaid, may
employ one or more persons to render advice with respect to any responsibility the Board, the
committee or such person may have under the Plan. The Board or the committee may, by resolution,
authorize one or more officers of the Company to do one or both of the following on the same basis
as the Board or the committee: (i) designate employees to be recipients of awards under this Plan;
(ii) determine the size of any such awards; (B) the resolution providing for such authorization
sets forth the total number of Common Shares such officer(s) may grant; and (iii) the officer(s)
shall report periodically to the Board or the committee, as the case may be, regarding the nature
and scope of the awards granted pursuant to the authority delegated.




     11. Adjustments. The Board shall make or provide for such adjustments in the numbers of
Common Shares authorized under the Plan, subject to limits contained in Section 3 of the Plan, and
covered by outstanding Option Rights, Appreciation Rights, Restricted Stock Units, Performance
Shares and Performance Units granted hereunder and, if applicable, in the number of Common Shares
covered by other awards granted pursuant to Section 9 hereof, in the Option Price and Base Price,
and in the kind of shares covered thereby, as the Board, in its sole discretion may determine is
equitably required to prevent dilution or enlargement of the rights of Participants or Optionees
that otherwise would result from (a) any stock dividend, extraordinary dividend, stock split,
combination of shares, recapitalization or other change in the capital structure of the Company, or
(b) any Change in Control, merger, consolidation, spin-off, split- off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets, issuance of rights
or warrants to purchase securities, or (c) any other corporate transaction or event having an
effect similar to any of the foregoing. Moreover, in the event of any such transaction or event,
the Board, in its discretion, may provide in substitution for any or all outstanding awards under
this Plan such alternative consideration (including cash), if any, as it may determine to be
equitable in the circumstances and may require in connection therewith the surrender of all awards
so replaced. The Board shall also make or provide for such adjustments in the numbers of shares
specified in Section 3 of this Plan as the Board in its sole discretion, exercised in good faith,
may determine is appropriate to reflect any transaction or event described in this Section 11;
provided, however, that any such adjustment to the number specified in Section 3(b)
will be made only if and to the extent that such adjustment would not result in negative tax
consequences under Section 409A of the Code. Without limiting the generality of the foregoing, in
the event that the Company issues warrants or other rights to



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acquire Common Shares on a pro rata basis to all stockholders, the Board shall make such
adjustments in the number of Common Shares authorized under the Plan and in the limits contained
herein as it may deem to be equitable, including, without limitation, proportionately increasing
the number of authorized Common Shares or any such limit.



     12. Change in Control. For purposes of this Plan, except as may be otherwise prescribed by
the Board in an Evidence of Award made under this Plan, a “Change in Control” shall be deemed to
have occurred upon the occurrence of any of the following events:



          (a) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a “Person”) is or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:





	 	(i)	 	for purposes of this Section 12(a), the following acquisitions
shall not constitute a Change in Control: (A) any acquisition of Voting Stock
of the Company directly from the Company that is approved by a majority of the
Incumbent Directors, (B) any acquisition of Voting Stock of the Company by the
Company or any Subsidiary, (C) any acquisition of Voting Stock of the Company
by the trustee or other fiduciary holding securities under any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
Subsidiary, and (D) any acquisition of Voting Stock of the Company by any
Person pursuant to a Business Transaction that complies with clauses (i), (ii)
and (iii) of Section 12(c) below;
	 
	 	(ii)	 	a Change in Control will not be deemed to have occurred if a
Person is or becomes the beneficial owner of 50% or more of the Voting Stock of
the Company as a result of a reduction in the number of shares of Voting Stock
of the Company outstanding pursuant to a transaction or series of transactions
that is approved by a majority of the Incumbent Directors unless and until such
Person thereafter becomes the beneficial owner of any additional shares of
Voting Stock of the Company representing 1% or more of the then-outstanding
Voting Stock of the Company, other than as a result of a stock dividend, stock
split or similar transaction effected by the Company in which all holders of
Voting Stock are treated equally;
	 
	 	(iii)	 	if at least a majority of the Incumbent Directors determine in
good faith that a Person has acquired beneficial ownership of 50% or more of
the Voting Stock of the Company inadvertently, and such Person divests as
promptly as practicable but no later than the date, if any, set by the
Incumbent Board a sufficient number of shares so that such Person beneficially
owns less than 50% of the Voting Stock of the Company, then no Change in
Control shall have occurred as a result of such Person’s acquisition;
	 
	 	(iv)	 	the consummation of the Transaction shall not constitute a
Change in Control; or




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          (b) a majority of the Board ceases to be comprised of Incumbent Directors; or




          (c) the consummation of a reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of the
stock or assets of another corporation, or other transaction (each, a “Business Transaction”),
unless, in each case, immediately following such Business Transaction (i) the Voting Stock of the
Company outstanding immediately prior to such Business Transaction continues to represent (either
by remaining outstanding or by being converted into Voting Stock of the surviving entity or any
parent thereof), more than 60% of the combined voting power of the then outstanding shares of
Voting Stock of the entity resulting from such Business Transaction (including, without limitation,
an entity which as a result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries), (ii) no Person (other than
the Company, such entity resulting from such Business Transaction, or any employee benefit plan (or
related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from
such Business Transaction) beneficially owns, directly or indirectly, 50% or more of the combined
voting power of the then outstanding shares of Voting Stock of the entity resulting from such
Business Transaction, and (iii) at least a majority of the members of the Board of Directors of the
entity resulting from such Business Transaction were Incumbent Directors at the time of the
execution of the initial agreement or of the action of the Board providing for such Business
Transaction; or




          (d) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company, except pursuant to a Business Transaction that complies with clauses (i), (ii) and
(iii) of Section 12(c).




     13. Non U.S. Participants. In order to facilitate the making of any grant or combination of
grants under this Plan, the Board may provide for such special terms for awards to Participants who
are foreign nationals or who are employed by the Company or any Subsidiary outside of the United
States of America or who provide services to the Company under an agreement with a foreign nation
or agency, as the Board may consider necessary or appropriate to accommodate differences in local
law, tax policy or custom. Moreover, the Board may approve such supplements to or amendments,
restatements or alternative versions of this Plan (including, without limitation, sub-plans) as it
may consider necessary or appropriate for such purposes, without thereby affecting the terms of
this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the
Company may certify any such document as having been approved and adopted in the same manner as
this Plan. No such special terms, supplements, amendments or restatements, however, will include
any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan
could have been amended to eliminate such inconsistency without further approval by the
stockholders of the Company.



     14. Transferability.



          (a) Except as otherwise determined by the Board, no Option Right, Appreciation Right or other
derivative security granted under the Plan shall be transferable by the Participant except by will
or the laws of descent and distribution. Except as otherwise

15









 








determined by the Board, Option Rights and Appreciation Rights will be exercisable during the
Participant’s lifetime only by him or her or, in the event of the Participant’s legal incapacity to
do so, by his or her guardian or legal representative acting on behalf of the Participant in a
fiduciary capacity under state law and/or court supervision.




          (b) The Board may specify at the Date of Grant that part or all of the Common Shares that are
(i) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation
Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon
payment under any grant of Performance Shares or Performance Units or (ii) no longer subject to the
substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan,
will be subject to further restrictions on transfer.




     15. Withholding Taxes. To the extent that the Company is required to withhold federal, state,
local or foreign taxes in connection with any payment made or benefit realized by a Participant or
other person under this Plan, and the amounts available to the Company for such withholding are
insufficient, it will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory to the Company for
payment of the balance of such taxes required to be withheld, which arrangements (in the discretion
of the Board) may include relinquishment of a portion of such benefit. If a Participant’s benefit
is to be received in the form of Common Shares, and such Participant fails to make arrangements for
the payment of tax, the Company shall withhold such Common Shares having a value equal to the
amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to
pay the Company an amount required to be withheld under applicable income and employment tax laws,
the Participant may elect to satisfy the obligation, in whole or in part, by electing to have
withheld, from the shares required to be delivered to the Participant, Common Shares having a value
equal to the amount required to be withheld (except in the case of Restricted Stock where an
election under Section 83(b) of the Code has been made), or by delivering to the Company other
Common Shares held by such Participant. The shares used for tax withholding will be valued at an
amount equal to the Market Value per Share of such Common Shares on the date the benefit is to be
included in Participant’s income. In no event shall the Market Value per Share of the Common
Shares to be withheld and/or delivered pursuant to this Section to satisfy applicable withholding
taxes in connection with the benefit exceed the minimum amount of taxes required to be withheld.
Participants shall also make such arrangements as the Company may require for the payment of any
withholding tax obligation that may arise in connection with the disposition of Common Shares
acquired upon the exercise of Option Rights.



     16. Compliance with Section 409A of the Code.



          (a) To the extent applicable, it is intended that this Plan and any grants made hereunder
comply with the provisions of Section 409A of the Code. This Plan and any grants made hereunder
shall be administrated in a manner consistent with this intent, and any provision that would cause
this Plan or any grant made hereunder to fail to satisfy Section 409A of the Code shall have no
force and effect until amended to comply with Section 409A of the Code (which amendment may be
retroactive to the extent permitted by Section 409A of the Code and may be made by the Company
without the consent of Participants). Any reference in this Plan to Section 409A of the Code will
also include any proposed, temporary or final regulations, or

16









 








any other guidance, promulgated with respect to such Section by the U.S. Department of the
Treasury or the Internal Revenue Service.




          (b) In order to determine for purposes of Section 409A of the Code whether a Participant is
employed by a member of the Company’s controlled group of corporations under Section 414(b) of the
Code (or by a member of a group of trades or businesses under common control with the Company under
Section 414(c) of the Code) and, therefore, whether the Common Shares that are or have been
purchased by or awarded under this Plan to the Participant are shares of “service recipient” stock
within the meaning of Section 409A of the Code:





	 	(i)	 	In applying Code Section 1563(a)(1), (2) and (3) for purposes
of determining the Company’s controlled group under Section 414(b) of the Code,
the language “at least 50 percent” is to be used instead of “at least 80
percent” each place it appears in Code Section 1563(a)(1), (2) and (3), and
	 
	 	(ii)	 	In applying Treasury Regulation Section 1.414(c)-2 for purposes
of determining trades or businesses under common control with the Company for
purposes of Section 414(c) of the Code, the language “at least 50 percent” is
to be used instead of “at least 80 percent” each place it appears in Treasury
Regulation Section 1.414(c)-2.





     17. Amendments.



          (a) The Board may at any time and from time to time amend this Plan in whole or in part;
provided, however, that if an amendment to this Plan (i) would materially increase
the benefits accruing to participants under this Plan, (ii) would materially increase the number of
securities which may be issued under this Plan, (iii) would materially modify the requirements for
participation in this Plan or (iv) must otherwise be approved by the stockholders of the Company in
order to comply with applicable legal requirements or the requirements of the principal national
securities exchange upon which the Common Shares are traded or quoted, then, such amendment will be
subject to stockholder approval and will not be effective unless and until such approval has been
obtained.




          (b) The Board will not, without the further approval of the stockholders of the Company,
authorize the amendment of any outstanding Option Right to reduce the Option Price. Furthermore,
no Option Right will be cancelled and replaced with awards having a lower Option Price without
further approval of the stockholders of the Company. This Section 17(b) is intended to prohibit
the repricing of “underwater” Option Rights and will not be construed to prohibit the adjustments
provided for in Section 11 of this Plan.




          (c) If permitted by Section 409A of the Code, in case of termination of employment by reason
of death, disability or normal or early retirement, or in the case of unforeseeable emergency or
other special circumstances, of a Participant who holds an Option Right or Appreciation Right not
immediately exercisable in full, or any shares of Restricted Stock as to which the substantial risk
of forfeiture or the prohibition or restriction on transfer

17









 








has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been
completed, or any Performance Shares or Performance Units which have not been fully earned, or any
other awards made pursuant to Section 9 subject to any vesting schedule or transfer restriction, or
who holds Common Shares subject to any transfer restriction imposed pursuant to Section 14(b) of
this Plan, the Board may, in its sole discretion, accelerate the time at which such Option Right,
Appreciation Right or other award may be exercised or the time at which such substantial risk of
forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction
Period will end or the time at which such Performance Shares or Performance Units will be deemed to
have been fully earned or the time when such transfer restriction will terminate or may waive any
other limitation or requirement under any such award.




          (d) Subject to Section 17(b) hereof, the Board may amend the terms of any award theretofore
granted under this Plan prospectively or retroactively. Subject to Section 11 above, no such
amendment shall impair the rights of any Participant without his or her consent. The Board may, in
its discretion, terminate this Plan at any time. Termination of this Plan will not affect the
rights of Participants or their successors under any awards outstanding hereunder and not exercised
in full on the date of termination.




     18. Governing Law. The Plan and all grants and awards and actions taken thereunder shall be
governed by and construed in accordance with the internal substantive laws of the State of
Delaware.



     19. Effective Date/Termination. This Plan will be effective as of the Effective Date. No
grant will be made under this Plan more than 10 years after the Effective Date, but all grants made
on or prior to such date will continue in effect thereafter subject to the terms thereof and of
this Plan.



     20. Miscellaneous Provisions.



          (a) The Company will not be required to issue any fractional Common Shares pursuant to this
Plan. The Board may provide for the elimination of fractions or for the settlement of fractions in
cash.




          (b) This Plan will not confer upon any Participant any right with respect to continuance of
employment or other service with the Company or any Subsidiary, nor will it interfere in any way
with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s
employment or other service at any time.




          (c) Any Evidence of Award may provide, in the event that the Participant engages in any
activity that is detrimental to the Company (as such activity may be defined in any Evidence of
Award): (i) for the forfeiture of any award granted under the Plan, (ii) that the Participant
return to the Company any Common Shares that the Participant has not disposed of that were offered
pursuant to the Plan, and/or (iii) that the Participant pay to the Company in cash the difference
between any amount actually paid by a Participant for any Common Shares received under the Plan
that the Participant has disposed of and the Market Value per Share of the Common Shares on the
date the Participant acquired the Common Shares under the Plan.




18









 








          (d) No award under this Plan may be exercised by the holder thereof if such exercise, and the
receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Board,
contrary to law or the regulations of any duly constituted authority having jurisdiction over this
Plan.




          (e) Absence on leave approved by a duly constituted officer of the Company or any of its
Subsidiaries shall not be considered interruption or termination of service of any employee for any
purposes of this Plan or awards granted hereunder, except that no awards may be granted to an
employee while he or she is absent on leave.




          (f) No Participant shall have any rights as a stockholder with respect to any shares subject
to awards granted to him or her under this Plan prior to the date as of which he or she is actually
recorded as the holder of such shares upon the stock records of the Company.




          (g) The Board may condition the grant of any award or combination of awards authorized under
this Plan on the surrender or deferral by the Participant of his or her right to receive a cash
bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.




          (h) Participants shall provide the Company with a written election form setting forth the name
and contact information of the person who will have beneficial ownership rights upon the death of
the Participant.




          (i) If any provision of this Plan is or becomes invalid, illegal or unenforceable in any
jurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the
Board, such provision shall be construed or deemed amended or limited in scope to conform to
applicable laws or, in the discretion of the Board, it shall be stricken and the remainder of this
Plan shall remain in full force and effect.



Amended
by the Board —November 12, 2007



Adopted
by the Board —June 8, 2007





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