Exhibit 10.25


 


Appendix 1


 


REDDY ICE HOLDINGS, INC.

2005 LONG TERM INCENTIVE AND SHARE AWARD PLAN


 


1. Purposes.


 


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


 


2. Definitions.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3.   Administration.


 


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


 


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


 


(ii)           to
designate Affiliates;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


4.     Shares Subject to the Plan.


 


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


 


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


 


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


 


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


 


5.     Specific Terms of Awards.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6.     Certain Provisions
Applicable to Awards.


 


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


 


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


 


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


 


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


 


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


 


7.     Performance Awards.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


8.     Change of Control
Provisions.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


9.     General Provisions.


 


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


 


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


 


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


 


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


 


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


 


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


 


(g)   Nonexclusivity of the Plan. Neither
the adoption of the Plan by the Board nor its submission to the shareholders of
the Company for approval shall be construed as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of options and other
awards otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.


 


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


 


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


 


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


 


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


 


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


 


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