Exhibit 4.1


 


REDDY ICE HOLDINGS, INC. 2005 LONG
TERM

INCENTIVE AND SHARE AWARD PLAN


 


(as Amended)


 


1.     Purposes.


 


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


 


2.     Definitions.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(k) 
“Eligible Person” means (i) an employee or consultant of the Company, a
Subsidiary or an 


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(bb) “Termination
of Service” means the termination of the Participant’s employment, consulting
services or directorship with the Company, its Subsidiaries and its Affiliates,
as the case may be. A Participant employed by a Subsidiary of the Company or
one of its Affiliates shall also be deemed to incur a Termination of Service if
the Subsidiary of the Company or Affiliate ceases to be such a Subsidiary or an



 

















 


Affiliate, as the case
may be, and the Participant does not immediately thereafter become an employee
or director of, or a consultant to, the Company, another Subsidiary of the
Company or an Affiliate. Temporary absences from employment because of illness,
vacation or leave of absence and transfers among the Company and its
Subsidiaries and Affiliates shall not be considered a Termination of Service.


 


3.   Administration.


 


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


 


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


 


(ii) to
designate Affiliates;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


4.   Shares
Subject to the Plan.


 


(a) Subject
to adjustment as provided in Section 4(c) hereof, the total number of
the Shares reserved for issuance in connection with Awards under the Plan shall
not exceed an aggregate of 2,750,000; provided, however, that with respect to
grants on or after April 14, 2009, no more than 1,000,000 Shares may be
issued in a form of an Award other than an Option or SAR.  No Award may be granted if the number of
Shares to which such Award relates, when added to the number of Shares
previously issued under the Plan, exceeds the number of Shares reserved under
the applicable provisions of the preceding sentence.  If any Awards are forfeited, canceled,
terminated, exchanged or surrendered or such Award is settled 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, be again available for Awards
under the Plan; provided, however, that any Shares surrendered or withheld as
payment of either the exercise price of an Award and/or withholding taxes with
respect to an Award shall not again be made available for Awards under the
Plan.  The Company may not make available
for future Awards Shares that are purchased using the proceeds from the exercise
of Options.  Notwithstanding anything to
the contrary contained herein, all Shares covered by an SAR, to the extent that
it is exercised and settled in Shares, shall be considered issued or
transferred pursuant to the Plan.  Upon
the exercise of any Award granted in tandem with any other Awards, such related
Awards shall be cancelled to the extent the number of Shares as to which the
Award is exercised.


 


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


 


(c)  In the event
that the Committee shall determine that any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Shares such that an adjustment
is appropriate in order to prevent dilution or enlargement of the rights of
Eligible Persons under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems appropriate and, in such manner as it may
deem equitable, adjust any or all of (i) the number and kind of shares
which may thereafter be issued under the Plan, (ii) the number and kind of
shares, other securities or other consideration issued or issuable in respect
of outstanding Awards, and (iii) the exercise price, grant price, 


 

















 


or purchase price
relating to any Award; provided, however,
in each case that, with respect to ISOs, such adjustment shall be made in
accordance with Section 424(a) of the Code, unless the Committee
determines otherwise. In addition, the Committee is authorized to make
adjustments in the terms and conditions of, and the criteria and performance
objectives, if any, included in, Awards in recognition of unusual or non-recurring
events (including, without limitation, events described in the preceding
sentence) affecting the Company or any Subsidiary or Affiliate or the financial
statements of the Company or any Subsidiary or Affiliate, or in response to
changes in applicable laws, regulations, or accounting principles; provided, however, that, if an Award
Agreement specifically so provides, the Committee shall not have discretion to
increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of
the Code and the regulations thereunder.


 


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


 


5.   Specific
Terms of Awards.


 


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


 


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


 


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


 


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


 


(iii)      Time and Method of Exercise. The Committee
shall determine at the date of grant or thereafter the time or times at which
an Option may be exercised in whole or in part (including, without limitation,
upon achievement of performance criteria if deemed appropriate by the Committee),
the methods by which such exercise price may be paid or deemed to be paid
(including, without limitation, broker-assisted exercise arrangements), the
form of such payment (including, without limitation, cash, Shares, notes or
other property), and the methods by which Shares will be delivered or deemed to
be delivered to Eligible Persons; provided,
however, that in no event may any portion of the exercise price be
paid with Shares acquired either under an Award granted pursuant to this Plan,
upon exercise of a stock option granted under another Company plan or as a
stock bonus or other stock award granted under another Company plan unless, in
any such case, the Shares were acquired and vested more than six months in
advance of the date of exercise.


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(iv)      Forfeiture. Except as otherwise determined by the Committee, at the date of
grant or thereafter, upon Termination Service during the applicable Performance
Period, Performance Shares 


 

















 


and
Performance Units for which the Performance Period was prescribed shall be forfeited;
provided, however, that the
Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in an individual case, that restrictions or forfeiture conditions
relating to Performance Shares and Performance Units will be waived in whole or
in part in the event of Terminations of Service resulting from specified
causes, and the Committee may in other cases waive in whole or in part the
forfeiture of Performance Shares and Performance Units.


 


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


 


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


 


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


 


6.   Certain
Provisions Applicable to Awards.


 


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


 


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


 


(c) 
Form of Payment Under Awards.
Subject to the terms of the Plan and any applicable Award Agreement, payments
to be made by the Company or a Subsidiary or Affiliate upon the grant,
maturation, or exercise of an Award may be made in such forms as the Committee
shall determine at the date of grant or thereafter, including, without
limitation, cash, Shares, notes or other property, and may be made in a single
payment or transfer, in installments, or on a deferred basis. The Committee may
make rules relating 


 
















 


to installment or
deferred payments with respect to Awards, including the rate of interest to be
credited with respect to such payments, and the Committee may require deferral
of payment under an Award if, in the sole judgment of the Committee, it may be necessary
in order to avoid nondeductibility of the payment under Section 162(m) of
the Code.


 


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


 


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


 


7.   Performance
Awards.


 


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


 


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


 


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


 


(iii)      Performance Period; Timing for Establishing
Performance Goals; Per-Person Limit. 


 

















 


Achievement
of performance goals in respect of such Performance Awards shall be measured
over a performance period, as specified by the Committee. A performance goal
shall be established not later than the earlier of (A) 90 days after the
beginning of any performance period applicable to such Performance Award or (B) the
time 25% of such performance period has elapsed. In all cases, the maximum
Performance Award of any Participant shall be subject to the limitation set
forth in Section 4(b).


 


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


 


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


 


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


 


8.   Change of
Control Provisions.


 


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


 


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


 


(i)        the acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act (a “Person”), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 50% of either (1) the
outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (2) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company (other than by exercise of a conversion privilege); (ii) any
acquisition by the Company or any of its Subsidiaries; (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its Subsidiaries; (iv) any acquisition
by any Person who owns 10% or more of the Outstanding Company Common Stock or
the Outstanding Company Voting Securities on the Effective Date; or (v) any
acquisition by any corporation with respect to which, following such
acquisition, more than 70% of, 


 

















 


respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such acquisition in substantially the same proportions as their
ownership, immediately prior to such acquisition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be;


 


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


 


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


 


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


 


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


 


9.   General
Provisions.


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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