exv4w1






Exhibit 4.1




EXTERRAN HOLDINGS, INC.

2011 EMPLOYMENT INDUCEMENT LONG-TERM EQUITY PLAN




I. PURPOSE


The purposes of this Exterran Holdings, Inc. 2011 Employment Inducement Long-Term Equity Plan are
to provide a means through which Exterran Holdings, Inc., a Delaware corporation, and its
Affiliates may attract highly-qualified persons to enter the employ of the Company and its
Affiliates, to provide a means through which such individuals, whose present and potential
contributions to the Company and its Affiliates are of importance, can acquire and maintain stock
ownership, thereby strengthening their concern for the welfare of the Company and its Affiliates,
and to provide such individuals with additional incentive and reward opportunities designed to
enhance the profitable growth of the Company and its Affiliates. Accordingly, the Plan provides for
the grant of Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights and
Performance Awards, or any combination of the foregoing, as is best suited to the circumstances of
the particular Employee as determined by the Committee in its sole discretion.




II. DEFINITIONS




     The following definitions shall be applicable throughout the Plan unless specifically modified
by any paragraph hereof:



     (a) “Affiliate” means any corporation, partnership, limited liability company or partnership,
association, trust or other organization which, directly or indirectly, controls, is controlled by,
or is under common control with, the Company. For purposes of the preceding sentence, “control”
(including, with correlative meanings, the terms “controlled by” and “under common control with”),
as used with respect to any entity or organization, shall mean the possession, directly or
indirectly, of the power (i) to vote more than fifty percent (50%) of the securities having
ordinary voting power for the election of directors of the controlled entity or organization, or
(ii) to direct or cause the direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by contract or otherwise.



     (b) “Award” means, individually or collectively, any Options, Restricted Stock, Restricted
Stock Units, Stock Appreciation Rights or Performance Awards granted under the terms of the Plan.



     (c) “Award Notice” means a written notice setting forth the terms and conditions of an Award,
consistent with and subject to the terms and conditions of the Plan.



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



     (e) “Cause” means (i) the commission by a Participant of an act of fraud, embezzlement or
willful breach of a fiduciary duty to the Company or an Affiliate (including the unauthorized
disclosure of confidential or proprietary material information of the Company or an Affiliate),
(ii) conviction of a Participant for (or entry by a Participant of a plea of nolo contendere to) a
felony or a crime involving fraud, dishonesty or moral turpitude, (iii) willful failure of a
Participant to follow the written directions of the Chief Executive Officer of the Company or the
Board, in the case of executive officers of the Company; (iv) willful misconduct by a Participant
as an Employee of the Company or an Affiliate; (v) willful failure of a Participant to render
services to the Company or an Affiliate in accordance with his or her employment arrangement, which
failure amounts to a material neglect of his or her duties to the Company or an Affiliate; or (vi)
substantial dependence by a Participant, as determined by the Committee, in its sole discretion, on
any drug, immediate precursor or other substance listed on Schedule IV of the Federal Comprehensive
Drug Abuse Prevention and Control Act of 1970, as amended. With



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respect to any Participant residing outside of the United States, the Committee may revise the
definition of “Cause” as appropriate to conform to the laws of the applicable non-U.S.
jurisdiction.




     (f) “Code” means the U.S. Internal Revenue Code of 1986, as amended. References in the Plan to
any section of the Code shall be deemed to include any amendments or successor provisions to such
section and any Department of Treasury regulations and related guidance issued under such section.



     (g) “Committee” has the meaning set forth in Paragraph IV(a) of the Plan.



     (h) “Common Stock” means the common stock, par value $.01 per share, of the Company, or any
other security into which such common stock may be changed by reason of any transaction or event of
the type described in Paragraph XII of the Plan.



     (i) “Company” means Exterran Holdings, Inc., a Delaware corporation, or any successors
thereto.



     (j) “Corporate Change” means:




     (i) The acquisition by any individual, entity or group (within the meaning of Sections
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 forty percent (40%) or more of
either (A) the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) 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 for purposes of this
Subsection (i), any acquisition by any Person pursuant to a transaction which complies with
clause (A) of Subsection (iii) of this definition shall not constitute a Corporate Change;




     (ii) Individuals, who, as of the date hereof, 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 date hereof whose
election, or nomination for election by the Company’s stockholders, was approved by a vote
of at least a majority of the Directors then comprising the Incumbent Board shall be
considered for purposes of this definition as though such individual was a member of the
Incumbent Board, but excluding, for these purposes, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election contest with
respect to the election or removal of Directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board; or




     (iii) The consummation of a reorganization, merger or consolidation involving the
Company or any of its subsidiaries, or the sale, lease or other disposition of all or
substantially all of the assets of the Company and its subsidiaries, taken as a whole (other
than to an entity wholly-owned, directly or indirectly, by the Company) (each, a “Corporate
Transaction”), in each case, unless, following such Corporate Transaction, (A) all or
substantially all of the individuals and entities who were the beneficial owners of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Corporate Transaction beneficially own, directly or indirectly, more than sixty
percent (60%) 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 Resulting Corporation in substantially the
same proportions as their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case
may be, and (B) at



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least a majority of the members of the board of directors of the Resulting Corporation
were members of the Incumbent Board at the time of the execution of the initial agreement or
the action of the Board providing for such Corporate Transaction. The term “Resulting
Corporation” means (1) the Company or its successor, or (2) if as a result of a Corporate
Transaction the Company or its successor becomes a subsidiary of another entity, then such
entity or the parent of such entity, as applicable, or (3) in the event of a Corporate
Transaction involving the sale, lease or other disposition of all or substantially all of
the assets of the Company and its subsidiaries, taken as a whole, then the transferee of
such assets in such Corporate Transaction. Notwithstanding the foregoing, neither the sale,
lease or other disposition of assets by the Company or its subsidiaries to Universal
Compression Partners, L.P. or its subsidiaries or their successor nor the sale, lease or
other disposition of any interest in Universal Compression Partners, L.P., its general
partner or its subsidiaries or their successors shall, in and of itself, constitute a
Corporate Change for purposes of this Plan.



     (k) “Director” means an individual elected to the Board by the stockholders of the Company or
by the Board under applicable corporate law and who is serving on the Board on the date the Plan is
adopted by the Board, or is subsequently elected to the Board.



     (l) “Disability” means any physical or mental condition for which the Participant would be
eligible to receive long-term disability benefits under the Company’s long-term disability plan.
With respect to any Participant residing outside of the United States, the Committee may revise the
definition of “Disability” as appropriate to conform to the laws of the applicable non-U.S.
jurisdiction.



     (m) “Eligible Participant” means any Employee who (i) has not previously been an Employee of
the Company or an Affiliate, or (ii) is rehired following a bona fide period of non-employment by
the Company or an Affiliate, and is granted an Award in connection with his or her commencement of
employment with the Company or an Affiliate. The Board may in its discretion adopt procedures from
time to time to ensure that an Employee is eligible to participate in the Plan prior to the
granting of any Award to such Employee under the Plan (including, without limitation, a
requirement, if any, that each such Employee certify to the Company prior to the receipt of an
Award under the Plan that he or she has not previously been employed by the Company or its
Affiliates or, if previously employed, has had a bona fide period of non-employment, and that the
grant of Awards under the Plan is an inducement material to his or her agreement to enter into
employment with the Company or an Affiliate).



     (n) “Employee” means any person who is an employee of the Company or any Affiliate. If an
entity ceases to be an Affiliate of the Company, a Participant employed by such entity shall be
deemed to have terminated his or her employment with the Company and its Affiliates and shall cease
to be an Employee under the Plan. For any and all purposes under the Plan, the term “Employee”
shall exclude an individual hired as an independent contractor, leased employee, consultant, or a
person otherwise designated by the Committee, the Company or an Affiliate at the time of hire as
not eligible to participate in or receive benefits under the Plan, even if such ineligible
individual is subsequently determined to be an employee by any governmental or judicial authority.
For purposes of any Award granted to a person residing outside of the United States, the Committee
may revise the definition of “Employee” as appropriate to conform to the laws of the applicable
non-U.S. jurisdiction.



     (o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     (p) “Fair Market Value” of a share of Common Stock means, as of any specified date: (i) if the
Common Stock is listed on the New York Stock Exchange (“NYSE”) or any other national securities
exchange, the closing sales price of a share of Common Stock on that date, or if no prices are
reported on that date, on the last preceding day on which the Common Stock was traded, as reported
by such exchange; and (ii) if the Common Stock is not listed on the NYSE or any other national
securities



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exchange, but is traded in the over-the-counter market, the average of the bid and asked
prices for a share of Common Stock on the most recent date on which the Common Stock was publicly
traded. In the event the Common Stock is not publicly traded at the time a determination of its
value is required to be made hereunder, the determination of its Fair Market Value shall be made by
the Committee in such manner as it deems appropriate.




     (q) “Independent Director” means a Director of the Company who is not an Employee and who
qualifies as “independent” within the meaning of NYSE Listed Company Manual Section 303A.02 or the
requirements of any other established stock exchange on which the Company’s securities are traded.



     (r) “Non-Qualified Stock Option” means an Option granted under Paragraph VII of the Plan that
is not an “incentive stock option” within the meaning of Section 422 of the Code.



     (s) “Option” means an option to purchase shares of Common Stock granted under Paragraph VII of
the Plan.



     (t) “Participant” means an Employee who has been granted an Award under the Plan.



     (u) “Performance Award” means an opportunity for a Participant to earn additional compensation
if certain Performance Measures or other criteria are met, as described in Paragraph XI of the
Plan.



     (v) “Performance Measure” means any performance objective established by the Committee in its
sole discretion, including, but not limited to, one or more of the following: (1) the price of a
share of Common Stock; (2) the Company’s earnings per share; (3) the Company’s market share; (4)
the market share of a business unit of the Company designated by the Committee; (5) the Company’s
sales; (6) the sales of a business unit of the Company designated by the Committee; (7) the net
income (before or after taxes) of the Company or any business unit of the Company designated by the
Committee; (8) the cash flow return on investment, cash value added, and/or working cash flow of
the Company or any business unit of the Company designated by the Committee; (9) the earnings
before or after interest, leasing expense, taxes, depreciation, distributions on mandatorily
redeemable preferred stock, and/or amortization of the Company or any business unit of the Company
designated by the Committee; (10) the economic value added; (11) the return on stockholders’ equity
achieved by the Company; (12) the return on capital employed of the Company or any business unit of
the Company designated by the Committee; or (13) the total stockholders’ return achieved by the
Company.


A Performance Measure may be subject to adjustment for changes in accounting standards required by
the Financial Accounting Standards Board after the goal is established, for specified significant
items or events, and may be absolute, relative to one or more other companies, or relative to one
or more indexes, and may be contingent upon future performance of the Company or any Affiliate,
division, or department thereof.




     (w) “Plan” means this Exterran Holdings, Inc. 2011 Employment Inducement Long-Term Equity
Plan, as amended from time to time.



     (x) “Restricted Stock” means Common Stock subject to certain restrictions, as described in
Paragraph VIII of the Plan.



     (y) “Restricted Stock Unit” means a promise to deliver a share of Common Stock, or the Fair
Market Value of such share in cash, in the future if certain criteria are met, as described in
Paragraph IX of the Plan.



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     (z) “Retirement” means a Termination of Service, other than due to Cause or death, on or after
the Participant attains (i) age sixty-five (65) or (ii) age fifty-five (55) and with the written
consent of the Committee. Notwithstanding the foregoing, with respect to a Participant residing
outside of the United States, the Committee may revise the definition of “Retirement” as
appropriate to conform to the laws of the applicable non-U.S. jurisdiction.



     (aa) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, or any successor to
Rule 16b-3, as in effect from time to time.



     (bb) “Securities Act” means the Securities Act of 1933, as amended.



     (cc) “Stock Appreciation Right” means a right entitling the Participant to the difference
between the Fair Market Value of a share of Common Stock on the date of exercise and the Fair
Market Value of a share of Common Stock on the date of grant, as described in Paragraph X of the
Plan.



     (dd) “Termination
of Service” means a Participant’s termination of employment; provided, however, that if a Participant
continues to serve as a Director following the Participant’s termination of employment, then the Committee may,
in its sole discretion, determine that the Participant shall not incur a Termination of Service until the Participant’s
 service as a Director also terminates (in which case, the Participant shall incur a Termination of Service upon
such subsequent termination as a Director).


III. EFFECTIVE DATE AND DURATION OF THE PLAN




     The Plan shall become effective upon the date of its adoption by the Board. No further Awards
may be granted under the Plan after seven (7) years from the effective date of the Plan. The Plan
shall remain in effect until all Awards granted under the Plan have been exercised or expired or
vested or forfeited.



IV. ADMINISTRATION




     (a) Composition of Committee. The Plan shall be administered by the Compensation Committee of
the Board (the “Committee”); provided, however, that (i) any and all members of the Committee shall
satisfy any independence requirements prescribed by any stock exchange on which the Company lists
its Common Stock; and (ii) Awards may be granted to individuals who are subject to Section 16(b) of
the Exchange Act only if the Committee is comprised solely of two or more “Non-Employee Directors”
as defined in Rule 16b-3. Notwithstanding anything herein to the contrary, any action taken by the
Committee in connection with the administration of the Plan shall not be deemed approved by the
Committee unless such Committee is comprised solely of two or more Independent Directors.



     (b) Powers. Subject to Paragraph IV(d) below and the other express provisions of the Plan,
the Committee shall have authority, in its discretion, to determine which Employees shall receive
an Award, the time or times when such Award shall be made, the terms and conditions of an Award,
the type of Award that shall be made, the number of shares subject to an Award and the value of an
Award. In making such determinations, the Committee shall take into account the nature of the
services rendered by such Employees, their present and potential contributions to the Company’s
success and such other factors as the Committee, in its sole discretion, shall deem relevant.



     (c) Additional Powers. The Committee shall have such additional powers as are delegated to it
by the other provisions of the Plan. Subject to the express provisions of the Plan, this shall
include the power to construe the Plan and the respective notices provided hereunder, to prescribe
rules and regulations relating to the Plan, and to determine the terms, restrictions and provisions
of the notice relating to each Award, and to make all other determinations necessary or advisable
for administering the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any notice relating to an Award in the manner and to
the extent it shall deem expedient to carry



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it into effect. Any determination or decision made by the Committee or its delegate (pursuant
to Paragraph IV(d)) under the terms of the Plan shall be made in the sole discretion of the
Committee or such delegate and shall be final and binding on all persons, including the Company and
Participants, subject to ratification by the Board if the Board so provides.




     (d) Delegation of Powers. Subject to Paragraph IV(a) above, the Committee may delegate to the
Board the authority to grant Awards to Employees who are not subject to Section 16(b) of the
Exchange Act; provided, however, that any action taken by the Board in connection with the
administration of the Plan shall not be deemed approved by the Board unless such action is approved
by a majority of the Independent Directors. Any delegation described in this Subparagraph (d) shall
contain such limitations and restrictions as the Committee may provide and shall comply in all
respects with the requirements of applicable law, including the Delaware General Corporation Law.
The Committee may engage or authorize the engagement of a third party administrator or
administrators to carry out administrative functions under the Plan.



     No member of the Committee or individual to whom the Committee has delegated authority in
accordance with the provisions of Paragraph IV of this Plan shall be liable for anything done or
omitted to be done by him or her or by any member of the Committee in connection with the
performance of any duties under this Plan, except for his or her own willful misconduct or as
expressly provided by statute.



     (e) Awards Outside of the United States. With respect to any Participant or eligible Employee
who resides outside of the United States, the Committee may, in its sole discretion, amend or vary
the terms of the Plan in order to conform such terms with the requirements of local law, to meet
the goals and objectives of the Plan, and may, in its sole discretion, establish administrative
rules and procedures to facilitate the operation of the Plan in such non-U.S. jurisdictions. The
Committee may, where it deems appropriate in its sole discretion, establish one or more sub-plans
of the Plan for these purposes.



V. SHARES SUBJECT TO THE PLAN; AWARD LIMITATIONS




     (a) Shares Subject to the Plan. Subject to adjustment as provided in Paragraph XII, the
aggregate number of shares of Common Stock that may be issued under the Plan shall not exceed
one  million (1,000,000) shares. If (a) any Options or other stock-settled Awards are cancelled,
expired, forfeited, settled in cash, or otherwise terminated without issuing the underlying shares
of Common Stock to the Participant, or (b) issued but unvested shares of Restricted Stock are
forfeited, such shares shall remain or become available, as applicable, for future grants under the
Plan. Shares of Common Stock that are otherwise issuable to the Participant pursuant to an Award
that are withheld to satisfy tax withholding obligations or to pay the exercise price of an Option
shall be counted against the aggregate limitation of the Plan as provided herein and shall not
become available for future grants under the Plan.



     (b) Stock Offered. Subject to the limitations set forth in Paragraph V(a), the stock to be
offered pursuant to the grant of an Award may be authorized but unissued Common Stock or Common
Stock previously issued and outstanding and reacquired by the Company. Any of such shares which
remain unissued and which are not subject to outstanding Awards at the termination of the Plan
shall cease to be subject to the Plan but, until termination of the Plan, the Company shall at all
times make available a sufficient number of shares to meet the requirements of the Plan.



VI. ELIGIBILITY AND GRANT OF AWARDS




     Subject to the delegation of power in Paragraph IV(d), the Committee, in its sole discretion,
may from time to time grant Awards under the Plan as provided herein to any individual who, at the
time of grant, is an Eligible Participant. An Award may be granted on more than one occasion to the
same person, subject to the limitations set forth in the Plan. Awards may include Options,
Restricted Stock, Restricted



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Stock Units, Stock Appreciation Rights, Performance Awards or any combination thereof. The
Plan is discretionary in nature, and the grant of Awards by the Committee is voluntary and
occasional. The Committee’s selection of an Employee to receive an Award in any year or at any
time, or to receive a certain type of Award under the Plan, shall not require the Committee to
select such Employee to receive an Award in any other year or at any other time, or to receive any
other type of Award under the Plan. The Committee shall consider such factors as it deems pertinent
in selecting Participants and in determining the type and amount of their respective Awards.




VII. STOCK OPTIONS




     (a) Option Types and Option Period. All Options granted under the Plan shall be Non-Qualified
Stock Options. Except as otherwise provided in Subparagraph (c) below or such shorter term as may
be provided in an Award Notice, each Option shall expire seven (7) years from its date of grant
and, unless provided otherwise in the Award Notice, shall be subject to earlier termination as
follows: Options, to the extent vested as of the date a Participant incurs a Termination of
Service, may be exercised only within three (3) months of such date, unless such Termination of
Service results from (i) death, Retirement or Disability of the Participant, in which case all
vested Options held by such Participant may be exercised by the Participant, the Participant’s
legal representative, heir or devisee, as the case may be, within two (2) years from the date of
the Participant’s Termination of Service, or (ii) Cause, in which event all outstanding vested
Options held by such Participant shall be automatically forfeited unexercised on such termination.
Notwithstanding the foregoing, no termination event described in (i) above shall extend the
expiration date of an Option beyond the seventh (7th) anniversary of its date of grant
or, such shorter period, if any, as may be provided in the Award Notice.



     (b) Vesting. Subject to the further provisions of the Plan, Options shall vest and become
exercisable in accordance with such vesting schedule as the Committee may establish in its sole
discretion, including vesting upon the satisfaction of one or more Performance Measures. A
Participant may not exercise an Option except to the extent it has become vested. Unless otherwise
provided in the Award Notice, all unvested Options shall automatically become fully vested upon a
Participant’s Termination of Service due to his or her death, Disability or Retirement. Options
that are not vested on a Participant’s Termination of Service shall automatically terminate and be
cancelled unexercised on such date.



     (c) Award Notice. Each Option shall be evidenced by an Award Notice in such form and
containing such provisions not inconsistent with the provisions of the Plan and under such terms as
the Committee from time to time shall establish. An Award Notice may provide for the payment of the
Option price, in whole or in part, by cash, a check acceptable to the Company, the delivery of a
number of already-owned shares of Common Stock (plus cash if necessary) having a Fair Market Value
equal to such Option price (provided such shares have been owned for more than six (6) months by
the Participant), a “cashless broker exercise” of the Option through any other procedures
established or approved by the Committee with respect thereto, or any combination of the foregoing.
Further, an Award Notice may provide, in the sole discretion of the Committee, for the surrender of
the right to purchase shares under the Option in return for a payment in cash or shares of Common
Stock or a combination of cash and shares of Common Stock equal in value to the excess of the Fair
Market Value of the shares with respect to which the right to purchase is surrendered over the
Option price thereof, on such terms and conditions as the Committee in its sole discretion may
prescribe. The terms and conditions of the Award Notices need not be identical. Subject to the
consent of the applicable Participant, the Committee may, in its sole discretion, amend an
outstanding Award Notice from time to time in any manner that is not inconsistent with the
provisions of the Plan (including, without limitation, an amendment that accelerates the time at
which the Option, or a portion thereof, may be exercisable).



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     (d) Option Price and Payment. The price at which a share of Common Stock may be purchased
upon exercise of an Option shall be determined by the Committee, provided, that such purchase price
shall not be less than the Fair Market Value of a share of Common Stock on the date such Option is
granted, subject to adjustment as provided in Paragraph XII. The Option or any portion thereof
shall be exercised, and any applicable taxes shall be withheld, in accordance with such procedures
as are established or approved by the Committee.



     (e) Restrictions on Repricing of Options. Except as provided in Paragraph XII, the Committee
may not amend any outstanding Award Notice to lower the exercise price (or cancel and replace any
outstanding Options with Options having a lower exercise price).



     (f) Stockholder Rights and Privileges. The Participant shall be entitled to all the
privileges and rights of a stockholder only with respect to such shares of Common Stock as have
been purchased upon exercise of the Option and registered in the Participant’s name.



     (g) Options in Substitution for Options Granted by Other Employers. Options may be granted
under the Plan from time to time or approved by the Committee or the Board, as applicable, in
substitution of options held by individuals providing services to corporations or other entities
who become Eligible Participants as result of a merger or consolidation or other business
transaction with the Company or any Affiliate.



VIII. RESTRICTED STOCK




     (a) Restrictions to be Established by the Committee. Restricted Stock shall be subject to
restrictions on disposition by the Participant and an obligation of the Participant to forfeit and
surrender the shares to the Company under certain circumstances, and any other restrictions
determined by the Committee in its sole discretion on the date of grant; provided, however, that
such restrictions shall lapse upon:




     (i) the attainment of one or more Performance Measures;




     (ii) the
Participant’s continued employment with the Company and its Affiliates
(or, if the Committee so determines, in its sole discretion, such Participant’s continued service as a Director following any termination of such employment)
for a
specified period of time;




     (iii) the occurrence of any event or the satisfaction of any other condition specified
by the Committee in its sole discretion; or




     (iv) a combination of any of the foregoing.


Each grant of Restricted Stock may have different restrictions as established in the sole
discretion of the Committee.




     (b) Other Terms and Conditions. Restricted Stock shall be registered in the name of the
Participant. Unless provided otherwise in an Award Notice, the Participant shall have the right to
receive dividends with respect to Restricted Stock, to vote Restricted Stock, and to enjoy all
other stockholder rights, except that: (i) the Company shall retain custody of the Restricted Stock
until the Restrictions have expired; (ii) the Participant may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the Restricted Stock until the restrictions have expired; and
(iii) a breach of the terms and conditions established by the Committee pursuant to the applicable
Award Notice shall cause a forfeiture of the Restricted Stock. If a Participant’s Termination of
Service is due to his or her death or Disability, all Awards of Restricted Stock of such
Participant then outstanding shall immediately vest in full and all restrictions applicable to such
Awards shall terminate as of such date with all performance criteria, if any,



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applicable to such Awards deemed met at one hundred percent (100%) of target. At the time of
grant, the Committee may, in its sole discretion, establish additional terms, conditions or
restrictions relating to the Restricted Stock. Such additional terms, conditions or restrictions
shall be set forth in an Award Notice delivered in conjunction with the Award.




     (c) Payment for Restricted Stock. The Committee shall determine the amount and form of
payment required from the Participant in exchange for a grant of Restricted Stock, if any, provided
that in the absence of such a determination, a Participant shall not be required to make any
payment for Restricted Stock, except to the extent otherwise required by law.



     (d) Committee’s Discretion to Accelerate Vesting of Restricted Stock. The Committee may, in
its discretion and as of a date determined by the Committee, fully vest any or all of a
Participant’s Restricted Stock and, upon such vesting, all restrictions applicable to such
Restricted Stock shall terminate as of such date. Any action by the Committee pursuant to this
Subparagraph (d) may vary among individual Participants and among the Restricted Stock held by any
individual Participant.



     (e) Award Notice. Each grant of Restricted Stock shall be evidenced by an Award Notice in
such form and containing such provisions not inconsistent with the provisions of the Plan and under
such terms as the Committee from time to time shall establish. The terms and provisions of the
respective Award Notices need not be identical. Subject to the consent of the Participant and the
restriction set forth in the last sentence of Subparagraph (d) above, the Committee may, in its
sole discretion, amend an outstanding Award Notice from time to time in any manner that is not
inconsistent with the provisions of the Plan.



IX. RESTRICTED STOCK UNITS




     (a) Restrictions to be Established by the Committee. Restricted Stock Units shall be subject
to a restriction on disposition by the Participant and an obligation of the Participant to forfeit
the Restricted Stock Units under certain circumstances, and any other restrictions determined by
the Committee in its sole discretion on the date of grant; provided, however, that such
restrictions shall lapse upon:




     (i) the attainment of one or more Performance Measures;




     (ii) the
Participant’s continued employment with the Company and its Affiliates
(or, if the Committee so determines, in its sole discretion, such Participant’s continued
service as a Director following any termination of such employment)
for a
specified period of time;




     (iii) the occurrence of any event or the satisfaction of any other condition specified
by the Committee in its sole discretion; or




     (iv) a combination of any of the foregoing.


Each Award of Restricted Stock Units may have different restrictions as established in the sole
discretion of the Committee.




     (b) Other Terms and Conditions. The Participant shall not be entitled to vote the shares of
Common Stock underlying the Restricted Stock Units or enjoy any other stockholder rights unless and
until the restrictions have lapsed and such shares have been registered in the Participant’s name.
If a Participant’s Termination of Service is due to his or her death or Disability, all Restricted
Stock Units of such Participant then outstanding shall immediately vest in full and all
restrictions applicable to such Restricted Stock Units shall terminate as of such date with all
performance criteria, if any, applicable to such Restricted Stock Units deemed met at one hundred
percent (100%) of target. At the time of grant, the Committee may, in its sole discretion,
establish additional terms, conditions or restrictions relating to the



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Restricted Stock Units. Such additional terms, conditions or restrictions shall be set forth
in an Award Notice delivered in conjunction with the Award.




     (c) Payment. Upon the lapse of the restrictions described in the Award Notice, the
Participant shall receive as soon as practicable payment equal to the Fair Market Value of the
shares of Common Stock underlying the Restricted Stock Units on the vesting date, less applicable
withholding. Payment shall be in the form of shares of Common Stock, cash, other equity
compensation, or a combination thereof, as determined by the Committee. Any cash payment shall be
made in a lump sum or in installments, as prescribed in the Award Notice. Payment shall be made no
later than two and one-half (2 1/2) months following the end of the year in which the Restricted
Stock Units vest, unless payment is to be made in installments, in which case such installments
shall comply with the rules under Section 409A of the Code.



     (d) Committee’s Discretion to Accelerate Vesting of Restricted Stock Units. The Committee
may, in its discretion and as of a date determined by the Committee, fully vest any portion or all
of a Participant’s Restricted Stock Units and, upon such vesting, all restrictions applicable to
such Restricted Stock Units shall terminate as of such date. Any action by the Committee pursuant
to this Subparagraph (d) may vary among Participants and among the Restricted Stock Units held by
any Participant.



     (e) Award Notice. Restricted Stock Units shall be evidenced by an Award Notice in such form
and containing such provisions not inconsistent with the provisions of the Plan and under such
terms as the Committee from time to time shall establish. The terms and provisions of the Award
Notices need not be identical. Subject to the consent of the Participant and the restriction set
forth in the last sentence of Subparagraph (d) above, the Committee may, in its sole discretion,
amend an outstanding Award Notice from time to time in any manner that is not inconsistent with the
provisions of the Plan.



X. STOCK APPRECIATION RIGHTS




     (a) Restrictions to be Established by the Committee. Stock Appreciation Rights shall be
subject to a restriction on disposition by the Participant and an obligation of the Participant to
forfeit the Stock Appreciation Rights under certain circumstances, and any other restrictions
determined by the Committee in its sole discretion on the date of grant; provided, however, that
such restrictions shall lapse upon:




     (i) the attainment of one or more Performance Measures;




     (ii) the
Participant’s continued employment with the Company and its Affiliates
(or, if the Committee so determines, in its sole discretion, such Participant’s continued service as a Director following any termination of such employment)
for a
specified period of time;




     (iii) the occurrence of any event or the satisfaction of any other condition specified
by the Committee in its sole discretion; or




     (iv) a combination of any of the foregoing.


Each Award of Stock Appreciation Rights may have different restrictions as established in the sole
discretion of the Committee.




     (b) Other Terms and Conditions. If a Participant’s Termination of Service is due to his or
her death or Disability, all Stock Appreciation Rights of such Participant then outstanding shall
immediately vest in full and all restrictions applicable to such Stock Appreciation Rights shall
terminate as of such date with all performance criteria, if any, applicable to such Stock
Appreciation Rights deemed met at one hundred percent (100%) of target. At the time of grant, the
Committee may, in its sole discretion, establish additional terms, conditions or restrictions
relating to the Stock Appreciation Rights. Such



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additional terms, conditions or restrictions shall be set forth in the Award Notice delivered
in conjunction with the Award.




     (c) Exercise Price and Payment. Subject to adjustment as provided in Paragraph XII, the
exercise price of the Stock Appreciation Rights shall not be less than the Fair Market Value of the
shares of Common Stock underlying the Stock Appreciation Rights on the date of grant. Upon the
lapse of the restrictions described in the Award Notice, the Participant shall be entitled to
exercise his or her Stock Appreciation Rights at any time up until the end of the period specified
in the Award Notice. The Stock Appreciation Rights, or portion thereof, shall be exercised and any
applicable taxes withheld, in accordance with such procedures as are established or approved by the
Committee. Upon exercise of the Stock Appreciation Rights, the Participant shall be entitled to
receive payment in an amount equal to: (i) the difference between the Fair Market Value of one
underlying share of Common Stock subject to the Stock Appreciation Rights on the date of exercise
and the exercise price; times (ii) the number of shares of Common Stock with respect to which the
Stock Appreciation Rights are exercised; less (iii) any applicable withholding taxes. Payment shall
be made in the form of shares of Common Stock or cash, or a combination thereof, as determined by
the Committee. Cash shall be paid in a lump sum and shall be based on the Fair Market Value of the
underlying Common Stock on the exercise date.



     (d) Committee’s Discretion to Accelerate Vesting of Stock Appreciation Rights. The Committee
may, in its discretion and as of a date determined by the Committee, fully vest any portion or all
of a Participant’s Stock Appreciation Rights and, upon such vesting, all restrictions applicable to
such Stock Appreciation Rights shall terminate as of such date. Any action by the Committee
pursuant to this Subparagraph (d) may vary among Participants and among the Stock Appreciation
Rights held by any Participant.



     (e) Award Notice. Stock Appreciation Rights shall be evidenced by an Award Notice in such
form and containing such provisions not inconsistent with the provisions of the Plan and under such
terms as the Committee from time to time shall establish. The terms and provisions of the Award
Notices need not be identical. Subject to the consent of the Participant and the restriction set
forth in the last sentence of Subparagraph (d) above, the Committee may, in its sole discretion,
amend an outstanding Award Notice from time to time in any manner that is not inconsistent with the
provisions of the Plan.



XI. PERFORMANCE AWARDS




     (a) Performance Period. The Committee shall establish, with respect to and at the time of
each Performance Award, the maximum value of the Performance Award and the performance period over
which the performance applicable to the Performance Award shall be measured.



     (b) Performance Measures and Other Criteria. A Performance Award shall be awarded to a
Participant contingent upon future performance of the Company or any Affiliate, or a division or
department of the Company or any Affiliate, during the performance period. The Committee shall
provide that the vesting of the Performance Award will be based upon the Participant’s continued
employment with the Company or its Affiliates
(or, if the Committee so determines, in its sole discretion, such Participant’s continued service as a Director following any termination of such employment)
for a specified period of time and




     (i) the attainment of one or more Performance Measures, or a combination thereof;




     (ii) the occurrence of any event or the satisfaction of any other condition specified
by the Committee in its sole discretion; or




     (iii) a combination of any of the foregoing.



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The Committee, in its sole discretion, may also provide for an adjustable Performance Award
value-based upon the level of achievement of Performance Measures.




     (c) Vesting. If a Participant’s Termination of Service is due to his or her death or
Disability, all Performance Awards of such Participant then outstanding shall immediately vest in
full and all restrictions applicable to such Awards shall terminate as of such date with all
performance criteria, if any, applicable to such Awards deemed met at one hundred percent (100%) of
target.



     (d) Award Criteria. In determining the value of a Performance Award, the Committee shall take
into account a Participant’s responsibility level, performance, potential, other Awards, total
annual compensation and such other considerations as it deems appropriate. The Committee, in its
sole discretion, may provide for a reduction in the value of a Participant’s Performance Award
during the performance period.



     (e) Payment. Following the end of the performance period, the holder of a Performance Award
shall be entitled to receive payment as soon as practicable of an amount not exceeding the maximum
value of the Performance Award, based on the achievement of the Performance Measures for such
performance period, as determined and certified in writing by the Committee. Payment of a
Performance Award may be made in cash, Common Stock, Options or other equity compensation, or a
combination thereof, as determined by the Committee. Payment shall be made in a lump sum or in
installments as prescribed in the Award Notice. If a Performance Award covering shares of Common
Stock is to be paid in cash, such payment shall be based on the Fair Market Value of a share of
Common Stock on the payment date. Payment shall be made no later than two and one-half (2 1/2) months
following the end of the year in which the Performance Award vests, unless payment is to be made in
installments, in which case such installments shall comply with the rules under Section 409A of the
Code.



     (f) Award Notice. Each Performance Award shall be evidenced by an Award Notice in such form
and containing such provisions not inconsistent with the provisions of the Plan and under such
terms as the Committee from time to time shall establish. The terms and provisions of the Award
Notices need not be identical. Subject to the consent of the Participant, the Committee may, in its
sole discretion, amend an outstanding Award Notice from time to time in any manner that is not
inconsistent with the provisions of the Plan.



XII. RECAPITALIZATION OR REORGANIZATION




     (a) No Effect on Right or Power. The existence of the Plan and the Awards granted hereunder
shall not affect in any way the right or power of the Board or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s
or any Affiliate’s capital structure or business, any merger or consolidation of the Company or any
Affiliate, any issue of debt or equity securities ahead of or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any Affiliate, any sale, lease, exchange
or other disposition of all or any part of the assets or business of the Company or any Affiliate
or any other corporate act or proceeding.



     (b) Subdivision or Consolidation of Shares; Stock Dividends. If and when, prior to the
expiration of an Award previously granted, the Company shall effect a subdivision or consolidation
of shares of Common Stock or the payment of a dividend on Common Stock which is paid in the form of
Company stock without receipt of consideration by the Company, the number of shares of Common Stock
with respect to which such Award may thereafter be exercised or satisfied, shall be adjusted as
follows: (i) in the event of an increase in the number of outstanding shares, the number shares of
Common Stock subject to the Award shall be proportionately increased, and the purchase price per
share shall be proportionately reduced; and (ii) in the event of a reduction in the number of
outstanding shares, the number shares of Common Stock subject to the Award shall be proportionately
reduced, and the



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purchase price per share shall be proportionately increased, other than in the event of a
Company-directed share repurchase program. Any fractional share resulting from such adjustment
shall be rounded up to the next whole share. Such proportionate adjustments will be made for
purposes of making sure that to the extent possible, the fair value of the Awards after the
subdivision, consolidation or dividend is equal to the fair value before the change.




     (c) Corporate Changes. Except as otherwise specifically provided in an Award Notice,
effective upon a Corporate Change (or at such earlier time as the Committee may provide), all
Options then outstanding shall immediately become exercisable in full, all Restricted Stock shall
vest in full and cease to be subject to any restrictions, all Restricted Stock Units shall vest in
full and cease to be subject to any restrictions, any Stock Appreciation Rights shall immediately
be exercisable in full, and all Awards, the payout of which is subject to Performance Measures,
shall vest in full and become immediately payable at such levels as the Committee in its sole
discretion shall determine. In addition, the Committee, acting in its sole discretion without the
consent or approval of any Participant, may effect one or more of the following alternatives, which
alternatives may vary among individual Participants and which may vary among Awards held by any
individual Participant: (i) require the mandatory surrender to the Company by selected Participants
of some or all of the outstanding Options, stock-settled Restricted Stock Units and stock-settled
Stock Appreciation Rights held by such Participants as of a date, before or after such Corporate
Change, specified by the Committee, in which event the Committee shall thereupon cancel such Awards
and the Company shall pay (or cause to be paid) to each such Participant an amount of cash per
share equal to the excess, if any, of the amount calculated in Subparagraph (d) below of the shares
subject to such Awards over the exercise price(s), if any, under such Awards for such shares, or
(ii) provide that the number and class of shares of Common Stock covered by such Awards shall be
adjusted so that such Awards shall thereafter cover securities of the surviving or acquiring
corporation or other property (including, without limitation, cash) as determined by the Committee
in its sole discretion.



     (d) Change of Control Value. For the purposes of clause (i) in Subparagraph (c) above, the
“Change of Control Value” shall equal the amount determined in clause (i), (ii) or (iii) of this
Subparagraph (d), whichever is applicable, as follows: (i) the per share price offered to
stockholders of the Company in any such merger, consolidation, sale of assets or dissolution
transaction, (ii) the price per share offered to stockholders of the Company in any tender offer or
exchange offer whereby a Corporate Change takes place, or (iii) if such Corporate Change occurs
other than pursuant to a tender or exchange offer, the fair market value per share of the shares
into which such Awards being surrendered are exercisable or payable, as determined by the Committee
as of the date determined by the Committee to be the date of cancellation and surrender of such
Awards. In the event that the consideration offered to stockholders of the Company in any
transaction described in this Subparagraph (d) or Subparagraph (c) above consists of anything other
than cash, the Committee shall determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.



     (e) Other Changes in the Common Stock. In the event of changes in the outstanding Common
Stock by reason of recapitalization, reorganization, merger, consolidation, combination, stock
split, stock dividend, spin-off, exchange or other relevant changes in capitalization or
distributions to the holders of Common Stock occurring after the date of the grant of any Award and
not otherwise provided for by this Paragraph XII, which would have the effect of diluting or
enlarging the rights of Participants, such Award and any applicable Award Notice shall be subject
to equitable or proportionate adjustment by the Committee at its sole discretion as to the number
and price of shares of Common Stock or other consideration subject to such Award. In the event of
any such change in the outstanding Common Stock or distribution to the holders of Common Stock, or
upon the occurrence of any other event described in this Paragraph XII, the aggregate number of
shares available under the Plan and the maximum number of shares that may be subject to Awards
granted to any one individual may be appropriately adjusted to the extent, if any, determined by
the Committee, whose determination shall be conclusive. Such proportionate



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adjustments will be made for purposes of making sure that to the extent possible, the fair
value of the Awards after the subdivision, consolidation or dividend is equal to the fair value
before the change.




     (f) No Adjustments Unless Otherwise Provided. Except as expressly provided above, the
issuance by the Company of shares of stock of any class or securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of
rights or warrants to subscribe thereto, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or not for fair value,
shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to Awards theretofore granted or the purchase price per share, if
applicable.



XIII. AMENDMENT AND TERMINATION OF THE PLAN




     The Board in its discretion may terminate the Plan at any time with respect to any shares of
Common Stock for which Awards have not been granted. The Board shall have the right to alter or
amend the Plan or any part thereof from time to time; provided, that no change in the Plan may be
made that would impair the rights of a Participant with respect to any outstanding Award without
the consent of the Participant.



XIV. MISCELLANEOUS




     (a) Stockholder Approval Not Required. It is expressly intended that approval of the
Company’s stockholders not be required as a condition of the effectiveness of the Plan, and the
Plan’s provisions shall be interpreted in a manner consistent with such intent for all purposes.
Specifically, NYSE Listed Company Manual Section 303A.08 generally requires stockholder approval
for stock option plans or other equity compensation arrangements adopted by companies whose
securities are listed on the NYSE, pursuant to which stock awards or stock may be acquired by
officers, directors, employees or consultants of such companies. NYSE Listed Company Manual Section
303A.08 provides an exception to this requirement for issuances of securities to a person not
previously an employee of the issuer, or following a bona fide period of non-employment, as an
inducement material to the individual’s entering into employment with the issuer, provided such
issuances are approved by either the issuer’s independent compensation committee or a majority of
the issuer’s independent directors. Notwithstanding anything to the contrary herein, Awards under
the Plan may only be made to Employees who have not previously been an Employee, or following a
bona fide period of non-employment by the Company or an Affiliate, as an inducement material to the
Employee’s entering into employment with the Company or an Affiliate. Awards under the Plan will be
approved as set forth herein by: (i) the Committee, provided it is comprised solely of two (2) or
more Independent Directors, or (ii) a majority of the Company’s Independent Directors.
Accordingly, pursuant to NYSE Listed Company Manual Section 303A.08, the issuance of Awards and the
shares of Common Stock issuable upon exercise or vesting of such Awards pursuant to this Plan are
not subject to the approval of the Company’s stockholders.



     (b) No Right To An Award. Neither the adoption of the Plan nor any action of the Board or the
Committee, as applicable, shall be deemed to give any individual any right to be granted an Option,
Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, or a Performance Award, or any
other rights hereunder except as may be evidenced by an Award Notice, and then only to the extent
and on the terms and conditions expressly set forth therein.



     (c) Unfunded Status of Plan. The Plan is intended to constitute an “unfunded” plan for
incentive and deferred compensation purposes, including Section 409A of the Code. The Committee may
authorize the creation of trusts or other arrangements to meet the obligations created under the
Plan to deliver shares of Common Stock or make payments; provided that the Committee first
determines in its



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sole discretion that the structure of such trusts or other arrangements shall not cause any
change in the “unfunded” status of the Plan.




     (d) No Employment/Membership Rights Conferred. Nothing contained in the Plan or any Award
shall (i) confer upon any Employee any right to continued employment with the Company or any
Affiliate or (ii) interfere in any way with the right of the Company or any Affiliate to terminate
his or her employment at any time.
Nothing contained in the Plan shall confer upon any Director any right to service or interfere in any way
with the right of the Company to terminate his or her service at any time.





     (e) Compliance with Securities Laws. The Company shall not be obligated to issue any shares
of Common Stock pursuant to an Award granted under the Plan at any time when the shares covered by
such Award have not been registered pursuant to applicable U.S. federal, state or non-U.S.
securities laws, or, in the opinion of legal counsel for the Company, the issuance and sale of such
shares is not covered under an applicable exemption from such registration requirements.



     (f) No Fractional Shares. No fractional shares of Common Stock or cash in lieu of fractional
shares of Common Stock shall be distributed or paid pursuant to an Award. For purposes of the
foregoing, any fractional shares of Common Stock shall be rounded up to the nearest whole share.



     (g) Tax Obligations; Withholding of Shares. Except as otherwise provided under the Plan, no
later than the date as of which an amount first becomes includible in a Participant’s taxable
income for U.S. federal, state, local or non-U.S. income or social insurance tax purposes with
respect to an Award granted under the Plan, the Participant shall pay to the Company or the
Affiliate employing the Participant, or make arrangements satisfactory to the Company or the
Affiliate employing the Participant for the payment of, any such income or social insurance taxes
of any kind required by law to be withheld with respect to such taxable amount. Notwithstanding the
foregoing, the Company or an Affiliate may, in its sole discretion, withhold a sufficient number of
shares of Common Stock that are otherwise issuable to the Participant pursuant to an Award to
satisfy any such income or social insurance taxes of any kind required by law to be withheld, as
may be necessary in the opinion of the Company or the Affiliate to satisfy all obligations for the
payment of such taxes. For purposes of the foregoing, the Committee may establish such rules,
regulations and procedures as it deems necessary or appropriate.



     (h) No Restriction on Corporate Action. Nothing contained in the Plan shall be construed to
prevent the Company or an Affiliate from taking any action that is deemed by the Company or such
Affiliate to be appropriate or in its best interest, regardless of whether such action would have
an adverse effect on the Plan or any Award made under the Plan. No Employee, Participant,
representative of an Employee or Participant, or other person shall have any claim against the
Company or any Affiliate as a result of any such action.



     (i) Restrictions on Transfer. An Award shall not be transferable otherwise than (i) by will
or the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder, or (iii) if vested, with the consent of the Committee, in its sole
discretion, provided that any such transfer is permitted under the applicable securities laws.
Notwithstanding the foregoing, Restricted Stock, once vested and free of any restrictions, may be
transferred at will.



     (j) Limitations Period. Any Participant who believes he or she is being denied any benefit or
right under the Plan may file a written claim with the Committee. Any claim must be delivered to
the Committee within forty-five (45) days of the specific event giving rise to the claim. Untimely
claims will not be processed and shall be deemed denied. The Committee, or its designee, will
notify the Participant of its decision in writing as soon as administratively practicable. Claims
not responded to by the Committee in writing within one hundred and twenty (120) days of the date
the written claim is delivered to the Committee shall be deemed denied. The Committee’s decision is
final and conclusive and binding



 Page  15 









 




on all persons. No lawsuit relating to the Plan may be filed before a written claim is filed
with the Committee and is denied or deemed denied and any lawsuit must be filed within one (1) year
of such denial or deemed denial or be forever barred.




     (k) Section 409A of the Code. It is intended that any Awards granted under the Plan satisfy
the requirements of Section 409A of the Code to avoid imposition of applicable taxes thereunder.
To the extent applicable, the Plan and Award Notices shall be interpreted in accordance with
Section 409A of the Code. Notwithstanding anything herein to the contrary, if the Committee
determines that any Plan provision or Award granted under the Plan may be subject to Section 409A
of the Code, the Committee may adopt such amendments to the Plan and the applicable Award Notice or
adopt other policies and procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions that the Committee determines, in its sole discretion, are
necessary or appropriate to (i) exempt the Award from Section 409A of the Code and/or preserve the
intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the
requirements of Section 409A of the Code. No such action taken to comply with Section 409A under
this Subparagraph (k) shall be deemed to adversely affect the Participant’s rights to any Award.



     (l) Governing Law. The Plan shall be governed by, and construed in accordance with, the laws
of the State of Delaware, without regard to its conflicts of laws principles.




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