ex10_18.htm


     

    Exhibit
      10.18

     


    AMENDED
      AND RESTATED

    VALIDUS
      HOLDINGS, LTD.

    2005
      LONG TERM INCENTIVE PLAN

    


    


    
      	
              1.  

            	
              Purposes.

            


    

     

    The
      purposes of the Amended and Restated 2005 Long Term Incentive Plan are to
      advance the interests of Validus Holdings, Ltd. and its shareholders by
      providing a means to attract, retain, and motivate employees, consultants and directors
      of Validus Holdings, Ltd., 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 shareholders by aligning
      the
      interests of such persons with those of shareholders.

     

    
      	
              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)  “Change
      in Control” means consummation of (i) a sale of all or substantially all of
      the consolidated assets of the Company and its Subsidiaries to a person who
      is
      not either a member of, or an affiliate of a member of, the Initial Investor
      Group (as defined below); or (ii) a sale by the Company, one or more
      members of the Initial Investor Group or any of their respective affiliates
      resulting in more than 50% of the voting stock of the Company (“Voting Shares”)
      being held by a person or group (as such terms are used in the Exchange Act)
      that does not include any member of the Initial Investor Group or any of their
      respective affiliates; or (iii) a merger or consolidation of the Company
      into another person as a result of which a person or group acquires more than
      50% of the Voting Shares of the Company that does not include any member of,
      or
      an affiliate of a member of, the Initial Investor Group; provided,
however, that a Change in Control shall occur if and only if
      after any such event listed in (i)-(iii) above the Initial Investor Group is
      unable to elect a majority of the board of directors (or other governing body
      equivalent thereto) of the entity that purchased the assets in the case of
      an
      event described in (i) above, the Company in the case of an event described
      in
      (ii) above, or the resulting entity in the case of an event described in (iii)
      above, as the case may be.  The “Initial Investor Group” shall mean
      (i) Aquiline Financial Services Fund L.P., and (ii) the other Investors under
      Subscription Agreements with the Company dated December 9, 2005.

     

    (g)  “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.

     

    (h)  “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.

     

    (i)  “Company”
      means Validus Holdings, Ltd., a corporation organized under the laws of Bermuda,
      or any successor corporation.

     

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

     

    (k)  “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.

     

    (l)  “Effective
      Date” has the meaning set forth in Section 7(k) below.

     

    (m)  “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.

     


    
      
         

      

      
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    (n)  “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.

     

    (o)  “Fair
      Market Value” means, with respect to Shares or other property on a day, 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 on a day shall mean the closing
      price per Share on the day (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.

     

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

     

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

     

    (r)  “Offering”
      has the meaning set forth in the Offering Memorandum relating to Company equity
      dated October 13, 2005, as supplemented.

     

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

     

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

     

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

     

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

     

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

     

    (x)  “Plan”
      means this Amended and Restated 2005 Long Term Incentive Plan.

     

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

     

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

     


    
      
         

      

      
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    (aa)  “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.

     

    (bb)  “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.

     

    (cc)  “Shares”
      means common shares, $0.10 par value per share, of the Company, and such other
      securities as may be substituted for Shares pursuant to Section 4(b)
      hereof.

     

    (dd)  “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.

     

    (ee)  “Termination
      of Service” means, unless otherwise defined in an applicable Award Agreement,
      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.  If the Participant has a written employment
      agreement with the Company, a Subsidiary or Affiliate that defines “Date of
      Termination”, unless otherwise determined by the Committee, the Participant
      shall be treated as having terminated employment for purposes of this Plan
      on
      the Date of Termination.

     

    
      	
              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;

     


    
      
         

      

      
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    (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;

     

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

     


    
      
         

      

      
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    (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)  No
      Option or SAR Repricing Without Shareholder Approval.  Except as
      provided in the first sentence of Section 4(b) 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, Options and SARs issued under the Plan will not be
      exchanged for other Options or SARs with lower exercise prices, and no other
      action shall be taken with respect to Options or SARs that would be treated
      as a
      repricing under the rules of the principal stock exchange on which the Shares
      are listed.

     

    (e)  Limitation
      on Committee’s Authority under 409A.  Anything in this Plan to the
      contrary notwithstanding, the Committee’s authority to modify outstanding Awards
      shall be limited to the extent necessary so that the existence of such authority
      does not (i) cause an Award that is not otherwise deferred compensation subject
      to Section 409A of the Code to become deferred compensation subject to Section
      409A of the Code or (ii) cause an

     


    
      
         

      

      
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    Award
      that is otherwise deferred compensation subject to Section 409A of the Code
      to
      fail to meet the requirements prescribed by Section 409A of the
      Code.

     

    
      	
              4.  

            	
              Shares
                Subject to the Plan.

            


    

     

    (a)  Subject
      to adjustment as provided in Section 4(b) hereof, (i) the total number of Shares
      reserved for issuance in connection with Awards under the Plan shall be
      13,076,459 (13,330,541, if the over-allotment option in respect of the Company’s
      initial public offering is exercised in full by the underwriters and, if the
      over-allotment option is exercised in part, then the applicable pro rata number
      between such numbers, based upon the percentage so exercised), and (ii) the
      total number of Shares which may be issued under ISOs granted under the Plan
      shall be 8,571,428.  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 for issuance under
      the Plan in clause (i) 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.

     

    (b)  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, share exchange, extraordinary
      distribution, 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, (i) adjust any or all of (x) the number
      and kind of shares which may thereafter be issued under the Plan, (y) the number
      and kind of shares, other securities or other consideration issued or issuable
      in respect of outstanding Awards, and (z) the exercise price, grant price,
      or
      purchase price relating to any Award or (ii) provide for a distribution of
      cash
      or property in respect of 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;
      providedfurther, however, that no adjustment shall be made
      pursuant to this Section 4 that causes any Award to be treated as deferred
      compensation pursuant to Section 409A of the Code.  If an
      extraordinary cash dividend is declared and paid on Shares after the grant
      of an
      Option or SAR and before the exercise of the Option or SAR, unless otherwise
      expressly provided in an applicable Award Agreement, the holder of the Option
      or
      SAR will have a right to receive an amount equal to the amount of
      the

     


    
      
         

      

      
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    dividend
      per Share times the number of Shares subject to the Option or SAR; provided ,
      however, that, unless otherwise determined by the Committee, no amount will
      be paid in respect of an Option or SAR unless and until the Option or SAR (or
      the portion thereof on which the amount is paid) has vested, and it is intended
      that the dividend right will otherwise be structured to comply with Section
      409A
      of the Code, to the extent applicable.  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.

     

    (c)  In
      the
      event that the Company is a party to a merger or consolidation or a Change
      in
      Control shall occur, outstanding Awards shall be subject to the agreement of
      merger or consolidation or other applicable transaction
      agreement.  Such agreement, without the Participants’ consent, may
      provide for: (i) continuation or assumption of such outstanding Awards under
      the
      Plan by the Company (if it is the surviving corporation) or by the surviving
      corporation or its parent; (ii) substitution by the surviving corporation or
      its
      parent of awards with substantially the same terms for such outstanding Awards
      (and, if the Company is not a publicly traded entity, substitution of shares
      with equity of the surviving corporation or its parent with substantially the
      same terms as the outstanding Shares); (iii) acceleration of the vesting of
      or
      right to exercise such outstanding Awards immediately prior to or as of the
      date
      of the merger or consolidation or Change in Control, and the expiration of
      such
      outstanding Awards to the extent not timely exercised by the date of the merger,
      consolidation, Change in Control or other date thereafter designated by the
      Board; or (iv) cancellation of all or any portion of the outstanding Awards
      by a
      cash payment of the excess, if any, of the Fair Market Value of the shares
      subject to such outstanding Awards or portion thereof being canceled over the
      aggregate exercise price, if any, with respect to such Awards or portion thereof
      being canceled.

     

    (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 7(d)), such
      additional terms and conditions, not inconsistent with the provisions of the
      Plan, as the Committee shall determine,

     


    
      
         

      

      
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    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 shall not be less than the Fair Market Value per Share
      on the date of grant.

     

    (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 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.

     

    (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 with respect to the Shares
      received on exercise.

     

    (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 over (2) the exercise price per Share of the SAR, as determined
      by the Committee as

     


    
      
         

      

      
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    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.

     

    (ii)  Other
      Terms.  The Committee shall determine, at the time of grant, 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.

     

    (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 restrict-

     


    
      
         

      

      
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    tions
      applicable to such Restricted Shares, and, unless otherwise determined by the
      Committee, 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, and subject to such conditions, as determined
      by the Committee, in cash or in restricted or unrestricted Shares having a
      Fair
      Market Value equal to the amount of such dividends.  Unless otherwise
      determined by the Committee, 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 the 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

     


    
      
         

      

      
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    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 the date of grant, Dividend Equivalents on the specified number
      of
      Shares covered by a Restricted Share Unit shall be either (A) paid with respect
      to such Restricted Share Unit at the dividend payment date in cash or in
      restricted or 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 or other periods 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.

     


    
      
         

      

      
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    (iv)  Forfeiture.  Except
      as otherwise determined by the Committee, at the date of grant or thereafter,
      upon Termination of 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, unless otherwise determined by the
      Committee, Dividend Equivalents (other than freestanding Dividend Equivalents)
      shall be subject to all conditions and restrictions of any underlying Awards
      to
      which they relate.

     

    (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).

     


    
      
         

      

      
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              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(d) 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, in the case of ISOs, 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, solicit
      customers or employees of, or disclose or use confidential information of the
      Company or its Affiliates.

     

    
      	
              7.  

            	
              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 any
      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; provided,
however, that the amount of tax withholding to be satisfied by
      withholding Shares shall be limited to the minimum amount of taxes, including
      employment taxes, required to be withheld under applicable Federal, state and
      local law.

     


    
      
         

      

      
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    (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.

     

    (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

     


    
      
         

      

      
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    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.  This Amendment and Restatement of the
      Plan shall become effective as of January 1, 2007 (the “Effective Date”),
      subject to approval by the shareholders of the Company.  The Plan
      shall terminate as to future awards on the date which is ten (10) years after
      the Effective Date.

     

    (l)  Section
      409A .   It is intended that the Plan and Awards issued
      thereunder will comply with Section 409A of the Code (and any regulations and
      guidelines issued thereunder) to the extent the Awards are subject thereto,
      and
      the Plan and such Awards shall be interpreted on a basis consistent with such
      intent.  The Plan and any Award Agreements issued thereunder may be
      amended in any respect deemed by the Board or the Committee to be necessary
      in
      order to preserve compliance with Section 409A of the Code.

     

    (m)  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.

     

    
 

     

     

    -17-