Document:

Exhibit 4.4.1.12

 

RGL

 

Performance Share

Plan

 

Plan
Rules

 

 

Rinker
Group Limited (Company)

 

 

 

 

RGL
Performance Share Plan - Plan Rules

 

	
  Plan rules

  	
  3

  
	
   

  	
   

  
	
  1.

  	
  Purpose

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Definitions and
  interpretation

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Operation of the plan

  	
  8

  
	
   

  	
   

  	
   

  
	
  4.

  	
  How
  the plan works

  	
  9

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Qualification
  of securities resulting from performance

  	
  10

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Withdrawals

  	
  11

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Restrictions
  in dealing with plan securities

  	
  12

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Distributions and
  other benefits

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Corporate control event

  	
  14

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Constitution
  of plan committee on occurrence of corporate control event

  	
  15

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Capital reconstruction

  	
  16

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Forfeiture

  	
  16

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Plan
  account

  	
  18

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Authorised deductions

  	
  19

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Voting
  rights

  	
  20

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Use
  of nominees

  	
  20

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Variation of rules

  	
  20

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Termination
  and suspension of the plan

  	
  21

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Connection with other
  plans

  	
  21

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Notices

  	
  21

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Governing
  law

  	
  22

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Administration of the
  plan

  	
  22

  
	
   

  	
   

  	
   

  
	
  23.

  	
  General

  	
  23

  

 

 

Plan
rules

 

1.                                   Purpose

 

1.1                              The Company is establishing the Plan to:

 

(a)                                provide Eligible Employees with the opportunity to share in any
future growth in value of the Company;

 

(b)                               align the interests of Eligible Employees more closely to the
interests of the Company’s shareholders;

 

(c)                                assist in the retention and motivation of Eligible Employees; and

 

(d)                               provide greater incentive for Eligible Employees to focus on the
Company’s longer term goals.

 

1.2                              Subject to these Rules and relevant
Terms of Offer it is intended that an Eligible Employee will have the
opportunity under the Plan to receive Plan Securities in the Company provided
that certain vesting criteria are satisfied and both the Company and the
Eligible Employee have met pre-determined performance goals.

 

1.3                              It is the Company’s expectation that
Participants will use Plan Securities acquired under the Plan to facilitate
their compliance with the Company’s share ownership guidelines. For the
avoidance of doubt, this Rule 1.3 is not intended to limit Participants’
legal rights to request withdrawal of Plan Securities from the Plan under these
Rules.

 

1.4                              Non-executive directors of Group
Companies are not eligible to participate in the Plan.

 

2.                                   Definitions
and interpretation

 

2.1                              In these Rules, the following terms have
these meanings unless the contrary intention appears:

 

ADRs mean American Depositary Receipts which evidence and represent a
specified number of underlying shares.

 

ASX means the Australian Stock Exchange Limited.

 

Australian
Plan Company means Readymix Holdings Pty
Limited ACN 099 732 297 or such other person nominated by the Plan Committee as
a replacement Australian Plan Company to facilitate acquisitions, disposals or
forfeitures of Plan Securities in respect of Eligible Australian Employees from
time to time.

 

Authorised
Deductions means a deduction authorised by Rule 14.

 

Capital
Reconstruction Event is defined in Rule 11.1.

 

Company means Rinker Group Limited ACN 003 433 118.

 

Corporate
Control Event is defined in Rule 9.1.

 

Corporations
Act means the Corporations
Act 2001 (Cth).

 

Eligible
Australian Employee means an Eligible
Employee who is an Australian resident for taxation purposes.

 

 

Eligible Employee means any senior part-time or full-time employee or executive
director of the Company or of any Participating Group Company who has been
invited by the Plan Committee to participate in the Plan.

 

Eligible
Non-Australian Employee means an Eligible
Employee who is not an Eligible Australian Employee.

 

Forfeited
Securities means Plan Securities forfeited
under Rule 12.

 

Group
Company means the Company and any body
corporate which is a related body corporate of the Company under Part 1.2
Division 6 of the Corporations Act.

 

Listing
Rules means such of the official
listing rules of the ASX and NYSE as apply to the Company from time to
time.

 

Market
Value:

 

(a)                                in relation to shares on a particular date, means the market value
of those shares calculated in accordance with subdivision F of Division 13A of Part III
of the Income Tax Assessment Act 1936 (Cth)
(but if section 139FA(2) applies, the market value will be calculated
on a particular date by reference to prices or offers on ASX unless the Plan
Committee determines to the contrary); and

 

(b)                               in relation to ADRs on a particular date, means the specified number
of shares underlying each ADR multiplied by the Market Value of the underlying
Shares on that date.

 

Note:                 Market
Value can be converted to any currency at the exchange rate determined by the
Plan Committee in accordance with Rule 22.6.

 

Multi-Year
TSR, of a particular company for a specified
period, means the average of the following TSRs for that company:

 

(a)                               the TSR from the beginning of the specified period until 31 March (or,
if earlier, the end of the specified period) next following;

 

(b)                              the TSR for each period of one year thereafter, from 1 April until
the 31 March next following, which is wholly within the specified period;
and

 

(c)                               the TSR for any remaining period of less than one year from 1 April thereafter
until the end of the specified period.

 

Note:                 The
effect of this definition is that the Multi-Year TSR for a company for the
normal Performance Period will be the average of the TSRs for the three years
ended 31 March in the Performance Period.

 

Notice
of Withdrawal of Securities means a duly
completed and executed request for permission to withdraw some or all of
his/her Plan Securities from the Plan submitted by a Participant to the Plan
Company, in respect of Plan Securities previously notified by the Plan Company
as having been allocated to that Participant. Such Notice of Withdrawal of
Securities shall specify the number of Plan Securities to be withdrawn and be
submitted on the form approved by the Plan Committee.

 

NYSE
means the New York Stock Exchange, Inc.

 

Parcel
means, subject to the relevant Terms of Offer,
all the Plan Securities acquired and Registered in the name of a Participant
under the Plan in accordance with Rule 4.8 as a result of one particular
offer or grant.

 

Participant means an Eligible Employee who has accepted an offer to
participate, or has been granted participation, in the Plan.

 

 

Participating
Group Company means a Group Company (other
than the Company) which has agreed to be bound by these Rules as required
by Rule 3.2.

 

Peer
Group, in relation to a Parcel of Plan
Securities, means:

 

(a)                                subject to paragraph (b), the list of companies (including the
Company) specified in, or accompanying, the Terms of Offer for that Parcel and
selected by the Plan Committee as appropriate for the purpose of measuring the
Company’s performance (Peer Group List);

 

(b)                               the Plan Committee may omit companies from, or add companies to, the
Peer Group List if the Plan Committee, in its absolute discretion, determines
that it would be appropriate, for the purpose of measuring the Company’s
performance, to do so (which omission or addition will be taken to have effect
at the beginning of the Performance Period for the Parcel).

 

Note:                 Without
limitation, it may be appropriate for the Plan Committee to exercise its
discretion under paragraph (b) if:

 

•             there is a substantial
change in a company’s business profile;

 

•             a company ceases trading
or becomes insolvent;

 

•             a company is subject to a
successful takeover or merges with another company;

 

•             a company undertakes a
demerger; or

 

•             other significant events
occur affecting a company’s shares or capitalisation.

 

Percentile
Ranking, for a parcel of Plan Securities on
a specified date, means:

 

(a)                                except where paragraph (b) applies, the percentile ranking of
the Company’s Multi-Year TSR in relation to the Multi-Year TSRs of the Peer
Group calculated by, or in accordance with recommendations from, an external
consultant to the Company approved by the Plan Committee from time to time; or

 

(b)                               a percentile ranking calculated in a different way specified, at any
time, by the Plan Committee in relation to that Parcel.  However, the Plan Committee may only specify a
different calculation of the percentile ranking under this paragraph if, in the
Plan Committee’s opinion, the new calculation is an appropriate incentive to
encourage, or an appropriate way to recognise, the performance of Participants
and is in the best interests of the Company.

 

The Multi-Year
TSRs for paragraph (a) are to be calculated for the period beginning at
the commencement of the Performance Period for the Parcel and ending on the
specified date.

 

Performance
Period, in relation to any Parcel, means:

 

(a)                                unless paragraph (b) applies, the period commencing on 1 April in
the calendar year in which Eligible Employees are first offered, or first
notified of a proposed grant of, Plan Securities in the Parcel and ending on 31
March in the third calendar year after that year; or

 

(b)                               if the Plan Committee determines, in the best interests of the
Company, that another period should apply in relation to Plan Securities in the
Parcel either generally or in relation to specified Participants, that other
period.

 

Note:                 Paragraph
(a) has the effect that if, for example, Plan Securities are acquired in November 2004,
then the Performance Period would commence on 1 April 2004 and end on 31 March 2007
(unless a determination is made under paragraph (b)).

 

Plan means the RGL Performance Share Plan established and operated in
accordance with these Rules.

 

 

Plan
Account means an account at a financial
institution established and administered by a Plan Company for the purposes of Rule 13.1,
which may also, if the Plan Committee agrees, be used for purposes not related
to the Plan.

 

Plan
Committee means:

 

(a)                                except when Rule 10 applies, all or some of the directors of
the Company acting as a board as constituted from time to time, including a
committee of the board as constituted from time to time whose purpose includes
administering the Plan;

 

(b)                               when Rule 10 applies, the committee of persons referred to in Rule 10.2(a) from
time to time, including any subcommittee of that committee constituted from
time to time whose purpose includes administering the Plan.

 

Plan
Company means:

 

(a)                                except where paragraph (c) applies, the Australian Plan Company
in respect of Eligible Australian Employees;

 

(b)                               except where paragraph (c) applies, the US Plan Company in
respect of Eligible Non-Australian Employees; and

 

(c)                                any other person nominated by the Plan Committee as a replacement
Plan Company to facilitate acquisitions, disposals or forfeitures of Plan
Securities in respect of a specified Eligible Employee or Eligible Employees
from time to time.

 

Plan
Securities means Rinker Shares or Rinker
ADRs and, except in Rule 11, any other shares or ADRs which are to be held
under the Plan pursuant to that Rule.

 

Qualification
Requirements means the following
requirements which must be satisfied or waived before Plan Securities to which
an offer or grant relates may be withdrawn from the Plan by a Participant:

 

(a)                                unless otherwise specified in the relevant Terms of Offer, the
requirement that a member of the Plan Committee (other than a Participant)
certify in writing that the Plan Securities are qualified securities under the
qualification schedule set out in the relevant Terms of Offer;

 

(b)                               in the case of an Eligible Non-Australian Employee, the requirement
that the Eligible Non-Australian Employee has not, prior to particular Plan
Securities becoming qualified securities under the qualification schedule set
out in the relevant Terms of Offer (as referred to in paragraph (a)), requested
(in the form and at the time permitted by the Plan Committee) a substitute
benefit be given by any Participating Group Company in lieu of those Plan
Securities; and

 

(c)                                the further performance, vesting or other requirements (if any)
specified in the relevant Terms of Offer.

 

Qualified
Securities means Plan Securities Registered
in the name of a Participant and held under the Plan for which all the
Qualification Requirements have been satisfied or waived.

 

Registered, subject to Rule 16, means:

 

(a)                                in the case of Rinker Shares, entered in the register of members of
the Company; and

 

(b)                               in the case of Rinker ADRs, entered in the register of ADR holders
maintained by the Company’s ADR depository.

 

Note:                 Rule16 applies when Plan Securities are held in the name of a
nominee.  If Plan Securities are held in
the name of a nominee, a requirement under these Rules for the Plan
Securities to be Registered

 

 

in the name of
a Participant will be satisfied by registering the Plan Securities in the name
of the nominee and vesting beneficial ownership of the Plan Securities in the
Participant.

 

Rights
is defined in Rule 8.4.

 

Rinker
ADRs means ADRs which evidence and represent
Rinker Shares and which are listed for quotation on the NYSE.

 

Rinker
Shares means fully paid ordinary shares in
the capital of the Company which rank equally with and have the same rights as
other fully paid ordinary shares in the capital of the Company and which are
listed for quotation on the ASX.

 

Rules means the rules governing the operation of this Plan set out in
this instrument, as amended from time to time.

 

Security
Interest means a mortgage, charge, pledge,
lien or other encumbrance of any nature.

 

Special
Circumstance is defined in Rule 12.1.

 

Tax includes any tax, levy, impost, deduction, charge, rate,
contribution, duty or withholding which is assessed (or deemed to be assessed),
levied, imposed or made by any government or any governmental,
semi-governmental or judicial entity or authority together with any interest,
penalty, fine, charge, fee or other amount assessed (or deemed to be assessed),
levied, imposed or made on or in respect of any or all of the foregoing.

 

Terms
of Offer means the terms and conditions of
each offer to participate, or grant of participation, made, or notified, at the
time Eligible Employees are invited to participate, or given notice of a
proposed grant, which are referred to in Rule 4.1.

 

Trading
Lock means a mechanism or mechanisms
approved by, and administered by or on behalf of the Company (including through
its share registry) that prevents Plan Securities acquired under the Plan being
disposed of by a Participant until they are withdrawn from the Plan under Rule 6
or the Plan Committee determines that ownership of the Plan Securities is to be
forfeited in accordance with Rule 12.

 

TSR, of a particular company listed on a stock exchange for a specified
period, means the total shareholder return of
that company taking into account share price appreciation and dividends
received over the specified period expressed as a ratio of the share price at
the beginning of the specified period. 
The TSR will be calculated by, or in accordance with recommendations
from, an external consultant to the Company approved by the Plan Committee from
time to time.  Unless the Plan Committee
determines to the contrary in the best interests of the Company:

 

(a)                                the opening share price of the particular company for the specified
period will be taken to be the average of the closing prices of that company
for the 30 trading days commencing at the beginning of the specified period on
the exchange that in the Plan Committee’s opinion is the primary exchange for
that company;

 

(b)                               the closing share price of the particular company for the specified
period will be taken to be the average of the closing prices of that company
for the 30 trading days ending at the end of the specified period on that
exchange; and

 

(c)                                calculations for the particular company will be made in the currency
in which the shares are quoted on that exchange (and any fluctuations in the
exchange rate between Australian currency or United States currency and that
currency will be ignored).

 

Unqualified
Securities means Plan Securities Registered
in the name of a Participant and held under the Plan which are not Qualified
Securities.

 

 

US
Plan Company means Rinker Materials
Corporation or such other person nominated by the Plan Committee as a
replacement US Plan Company to facilitate acquisitions, disposals or
forfeitures of Plan Securities in respect of Eligible Non-Australian Employees
from time to time.

 

2.2                              In these Rules, unless the contrary
intention appears:

 

(a)                                reference to any legislation or any provision of any legislation
includes any modification or re-enactment of the legislation or any legislative
provision substituted for, and all legislation and statutory instruments and
regulations issued under the legislation;

 

(b)                               words denoting the singular include the plural and vice versa;

 

(c)                                words denoting a gender include the other genders;

 

(d)                               words denoting an individual or persons include bodies corporate and
trusts and vice versa;

 

(e)                                headings are for convenience only and do not affect the
interpretation of these Rules;

 

(f)                                  reference to a clause or paragraph is a reference to a clause or
paragraph of these Rules, or the corresponding Rule or Rules of this
Plan as amended from time to time;

 

(g)                               reference to any document or agreement includes reference to that
document or agreement as amended, novated, supplemented, varied or replaced
from time to time;

 

(h)                               where any word or phrase is given a definite meaning in these Rules,
any part of speech or other grammatical form of that word or phrase has a
corresponding meaning; and

 

(i)                                   a reference to a person includes a reference to the person’s legal
personal representatives, executors, administrators and successors, a firm or a
body corporate.

 

3.                                   Operation of the plan

 

3.1                              The Plan commences on the date these Rules are
approved by the Plan Committee with effect from 1 April 2004 or any later
date the Plan Committee decides.

 

3.2                              The Plan will be operated in accordance
with these Rules which bind the Company, the Plan Companies, each
Participant and each Group Company (other than the Company) which has agreed
with the Company to be bound by these Rules.

 

3.3                              Except to the extent that the Plan is
administered by, or at the direction of, the Plan Committee under Rule 22,
the Plan is administered by each Plan Company in relation to the Eligible
Employees for which the Plan Company is responsible.

 

3.4                              Subject to these Rules, the Listing Rules and
any law to the contrary, the Plan Companies must follow any direction given to
them by the Plan Committee as to the operation of the Plan.

 

3.5                              All the expenses, costs and charges incurred
by a Plan Company in operating the Plan (other than Authorised Deductions) must
be paid:

 

(a)                                from the Plan Account; and

 

(b)                               to the extent that there are not sufficient funds in the Plan
Account, by the Company or a Participating Group Company.

 

3.6                              Each Participant must grant an
irrevocable power of attorney, in the form determined by the Plan Committee
from time to time, to the Plan Company and to any other person or persons
nominated by the Plan Committee, authorising the attorney:

 

(a)                                to acquire Plan Securities in the Participant’s name in accordance
with Rule 4 (if applicable) and to execute any documents necessary to
subscribe for Plan Securities on

 

 

behalf of the Participant or to arrange for the
transfer of Plan Securities to the Participant for the purposes of these Rules;

 

(b)                               to transfer Plan Securities to the Participant including after the
withdrawal of those Plan Securities from the Plan in accordance with Rule 6;

 

(c)                                to dispose of, or otherwise deal with, any Plan Securities required
to be forfeited under Rule 12;

 

(d)                               to dispose of, or otherwise deal with, any Plan Securities in
accordance with any directions given by the Plan Committee under Rule 9.2
in the event of a Corporate Control Event;

 

(e)                                to sell, in the manner and at the time determined by the attorney,
any Qualified Securities Registered in the name of the Participant to pay for
or reimburse Authorised Deductions;

 

(f)                                  to agree to nominee or sub-nominee arrangements and deal with the
Participant’s beneficial interest in those arrangements as contemplated in Rule 16
(if applicable);

 

(g)                               to deal with rights arising in respect of Plan Securities held under
the Plan on the Participant’s behalf;

 

(h)                               to take any actions that are necessary or desirable to give effect
to the treatment described in Rule 11.2 in respect of shares or ADRs
resulting from a Capital Reconstruction Event;

 

(i)                                   to delegate its powers to any person or persons determined by the
attorney from time to time; and

 

(j)                                   to engage in such other activities as are specified by the Plan
Committee at the time of the offer or when notice of a proposed grant is given.

 

4.                                   How the plan works

 

4.1                              The Plan Committee may from time to time
in its absolute discretion make an offer to participate, or give notice of a
proposed grant of participation, in the Plan to any Eligible Employee. The
offers or notices of proposed grants may be on whatever terms, consistent with
these Rules, the Plan Committee decides. 
The Peer Group initially applying and full details of all applicable
Qualification Requirements must be set out in the offer or notice of proposed
grant.

 

4.2                              The Plan Committee may, at any time, in
its absolute discretion waive any Qualification Requirement applicable to any
Plan Securities held under this Plan in whole or in part if it forms the
opinion that doing so is in the best interests of the Company.

 

4.3                              On and from the commencement of the
Plan, the Company and any relevant Participating Group Company must pay the
appropriate Plan Company contributions determined by the Plan Committee from
time to time to fund the acquisition of Plan Securities consistent with the
Terms of Offers to Participants.

 

4.4                              The Plan Companies must use each such
contribution to acquire, or to fund the acquisition of, Plan Securities in the
ordinary course of trading on the ASX, NYSE or from a new issue of Plan
Securities referred to in Rule 8 as directed from time to time by the Plan
Committee.  The Plan Companies need not
acquire, or fund the acquisition of, the Plan Securities promptly after
acceptance of an offer, or receipt of a notice of a proposed grant, by a
Participant, but must acquire, or fund the acquisition of, the Plan Securities
at the time determined by the Plan Committee.

 

 

4.5                              The Terms of Offer may provide that a
Participant will be compensated for any dividend payable on Plan Securities as
from a specified date or a specified dividend. 
If so, Rule 8.7 applies.

 

Note:                 If Participants are entitled to compensation for dividends, they
will also be entitled to compensation for returns of capital and other
distributions in accordance with Rule 8.7.

 

4.6                              Unless the Terms of Offer provide to the
contrary or the relevant Participant has agreed with the relevant Plan Company
to the contrary:

 

(a)                                the Australian Plan Company will acquire Rinker Shares on behalf of
Participants or convert Rinker ADRs into Rinker Shares to be held on behalf of
Participants; and

 

(b)                               the US Plan Company will acquire Rinker ADRs on behalf of
Participants or convert Rinker Shares into Rinker ADRs to be held on behalf of
Participants.

 

4.7                              Any funds held by a Plan Company from
time to time and not required for the purposes of Rule 4.4 are to be paid
into a Plan Account.

 

4.8                              Plan Securities acquired under the Plan
for a Participant are to be Registered in the name of the Participant (1) nominated
by the Plan Committee within 14 days of the acquisition by the relevant Plan
Company subject to the terms of these Rules.

 

4.9                              Participants cannot receive fractions of
Plan Securities.  Any Plan Securities
remaining after the allocation of whole Plan Securities are to be treated as
Forfeited Securities and any funds remaining after the acquisition of whole
Plan Securities are to be treated as the proceeds of sale of Forfeited
Securities.

 

4.10                        The relevant Plan Company must notify
each Participant in writing within 90 days from the date on which Plan
Securities are acquired by that Participant under the Plan.

 

5.                                   Qualification
of securities resulting from performance

 

5.1                              Except as may be set out in the relevant
Terms of Offer, the Percentile Ranking will be calculated as of the following
days for each Parcel of Plan Securities acquired on behalf of a Participant
under the Plan:

 

(a)                                the last day of the Performance Period for that Parcel;

 

(b)                               subject to Rule 5.4, the day on which any Corporate Control
Event occurs but only if the Plan Committee determines (before or after the
relevant Corporate Control Event occurs) that this Rule 5.1(b) should
apply; and

 

(c)                                any other day or days on which the Plan Committee in its absolute
discretion determines for a specified Participant, specified Participants or
Participants generally if it forms the opinion that such a determination is in
the best interests of the Company.

 

5.2                              When the Percentile Ranking is
calculated for any Parcel of Plan Securities, a percentage of Plan Securities
in the Parcel may become qualified securities under the qualification schedule as
set out in the relevant Terms of Offer.

 

Note:                 The consequence of Plan Securities being
qualified securities under the qualification schedule set out in the
relevant Terms of Offer is only that the Plan Securities will have satisfied
paragraph (a) of the definition of Qualification Requirements where a
member of the Plan Committee has certified that they are so qualified.  Additional requirements may have to be met
before the Plan Securities satisfy the definition of Qualified Securities.

 

(1)  As noted in
the definition of Registered, if Plan Securities are to be held in nominee
form, the Plan Securities will be registered in the name of the nominee with
only beneficial ownership vested in the Participant.

 

 

5.3                              If the Percentile Ranking is calculated
more than once under Rule 5.1 for any Parcel of Plan Securities and any
Plan Securities in the Parcel have previously become qualified securities under
the qualification schedule set out in the relevant Terms of Offer:

 

(a)                                those Plan Securities will remain qualified securities to the extent
previously calculated even if the Percentile Ranking is lower than previously calculated;

 

(b)                               those Plan Securities (whether or not withdrawn from the Plan) will
comprise part (or all) of the Plan Securities in the Parcel that are qualified
securities as a result of a later calculation of the Percentile Ranking; and

 

(c)                                if some Unqualified Securities in the Parcel have been forfeited
subsequently to the Plan Securities becoming qualified securities, a
corresponding proportion of the qualified securities must be disregarded in
applying Rule 5.3(b) subsequently.

 

5.4                              If the event in Rule 9.1(e) has
occurred, the Percentile Ranking will not be calculated under Rule 5.1(b) for
any Participant who is a person to whom section 200C of the Corporations Act applies.

 

6.                                   Withdrawals

 

6.1                              Plan Securities acquired by a
Participant will be held in the Plan, under the administrative control of a
Plan Company and subject to these Rules, the Trading Lock referred to in Rule 7.2,
and satisfaction or waiver of any Qualification Requirements applicable to such
Plan Securities, unless and until the Plan Securities are released from the
Plan under this Rule 6 or ownership of the Plan Securities has been
forfeited under Rule 12.

 

6.2                              The Plan Company will be entitled to
retain possession of any certificates or other documents evidencing title to
Plan Securities while such Plan Securities are held in the Plan.

 

6.3                              Subject to Rule 6.5, if Plan
Securities have not been forfeited under Rule 12, a Participant may submit
a Notice of Withdrawal of Securities to the relevant Plan Company, which Notice
is effective if and when approved by the Plan Committee.

 

6.4                              Where a Notice of Withdrawal of
Securities has been submitted by a Participant under Rule 6.3, the Plan
Company shall notify the Plan Committee and, subject to these Rules, approval
for withdrawal of Plan Securities will only be given by the Plan Committee
where:

 

(a)                                the Plan Committee has determined that approval is appropriate
(having regard to, among other things, whether or not circumstances have arisen
which give the Plan Committee reasonable grounds to suspect that a Participant’s
right or interest in the Plan Securities would or might be forfeited under Rule 12);
and

 

(b)                               the Plan Securities are Qualified Securities or any remaining
Qualification Requirements have been waived.

 

6.5                              At the time Plan Securities become
Qualified Securities, a Participant will be deemed to have submitted a Notice
of Withdrawal of Securities to the relevant Plan Company in respect of those
Plan Securities, and approval of withdrawal of those Plan Securities will be
deemed to have been given by the Plan Committee, if:

 

(a)                                the Participant is an Eligible Non-Australian Employee; and

 

(b)                               the Plan Securities have not been forfeited under Rule 12; and

 

(c)                                no circumstances have arisen which give the Plan Committee
reasonable grounds to suspect that a Participant’s right or interest in the
Plan Securities would or might be forfeited under Rule 12.

 

 

6.6                              If a Notice of Withdrawal of Securities
is approved by the Plan Committee, or deemed to be approved by the Plan
Committee under Rule 6.5, the Company and the Plan Company must take all
reasonable steps to release those Plan Securities from the Plan, including
(without limitation) procuring the removal of the Trading Lock applied to those
Plan Securities and will, if requested, notify the Participant of the
particular time when the Trading Lock is removed.

 

6.7                              If a Participant ceases to be an
employee of all Group Companies (including by virtue of the employer of the
Participant ceasing to be a Group Company), the Participant will be deemed to
have submitted a Notice of Withdrawal of Securities in respect of all Plan
Securities held on behalf of the Participant (except for any Plan Securities
which are Forfeited Securities). For the avoidance of doubt, a Participant will
not cease to be an employee of all Group Companies where the Participant ceases
to be an employee of one Group Company and, in connection with such cessation,
becomes an employee of any other Group Company.

 

Note:                 Plan
Securities will not necessarily be withdrawn from the Plan unless the Plan
Committee determines, under Rule 6.4, that approval is appropriate for
particular Participants or classes of Participants.

 

6.8                              If a Participant owes money to any Group
Company, Plan Company or nominee, the Plan Committee may decline to act on a
Notice of Withdrawal of Securities submitted by the Participant (or a deemed
Notice of Withdrawal) until arrangements (which are satisfactory to the Plan
Committee) have been made for the payment of the money.

 

7.                                   Restrictions
in dealing with plan securities

 

7.1                              A Participant may not dispose of or
grant a Security Interest over any Plan Securities held under the Plan on his
or her behalf without a Notice of Withdrawal of Securities having been
submitted, or deemed to have been submitted in accordance with Rule 6.5,
and such Notice having been approved, or deemed to have been approved under Rule 6.5,
by the Plan Committee.

 

7.2                              Subject to the Listing Rules, a Trading
Lock will be applied by the Company to all Plan Securities held in the Plan under
Rule 6.1, and the relevant Plan Company may take any other steps it
considers necessary or appropriate to enforce and give effect to the
Qualification Requirements or the disposal restrictions under Rule 7.1.  Each Participant:

 

(a)                                irrevocably authorises the Company to apply a Trading Lock to Plan
Securities held by that Participant; and

 

(b)                               undertakes not to request the removal of the Trading Lock (or permit
or authorise another person to do so),

 

while those Plan Securities are held in the
Plan under Rule 6.1.

 

8.                                   Distributions
and other benefits

 

8.1                              Except as set out below, a Participant
is entitled to receive any dividend, return of capital or other distribution
(less Authorised Deductions) made in respect of Plan Securities Registered in
his or her name and held under the Plan (other than Forfeited Securities). This
applies notwithstanding that the Plan Securities remain subject to the
Qualification Requirements and the provisions of Rule 6.1.

 

Note:                 Participants
may be entitled to compensation for dividends, returns of capital or other
distributions paid before Plan Securities have been acquired on their behalf in
accordance with Rule 8.7.

 

8.2                              Where any bonus Plan Securities are
issued by the Company in respect of Plan Securities Registered in the name of a
Participant and held under the Plan (other than Forfeited Securities):

 

 

(a)                                the bonus Plan Securities will be regarded as Qualified Securities
to the extent that the bonus Plan Securities are a dividend; and

 

(b)                               any other bonus Plan Securities received by a Participant, except
where the Plan Committee determines to the contrary, will be regarded for the
purposes of the Plan as having been acquired and Registered in the name of the
Participant as part of the same Parcel, and be subject to the same
Qualification Requirements, as the Plan Securities to which the bonus is
attributable.

 

8.3                              Except where the Plan Committee decides
to apply Rules 8.4, 8.5 and 8.6 to a renounceable rights issue, where any
renounceable rights issue is made by the Company in respect of Plan Securities
Registered in the name of a Participant and held under the Plan (other than
Forfeited Securities):

 

(a)                                the relevant Plan Company must:

 

(i)                                  at the time and in the manner determined by it, sell a sufficient
number of rights so that the proceeds of sale equals or exceeds the exercise
price of the remaining rights; and

 

(ii)                               exercise those remaining rights;

 

(b)                               any of the Plan Securities received by the Plan Company on the
exercise of the rights, except where the Plan Committee determines to the
contrary, will be regarded for the purposes of the Plan as having been acquired
and Registered in the name of the Participant as part of the same Parcel, and,
except where the Plan Committee determines to the contrary, be subject to the
same Qualification Requirements, as the Plan Securities to which the rights are
attributable; and

 

(c)                                any funds remaining after the exercise of the rights and the payment
of any applicable expenses and Taxes are to be treated as the proceeds of sale
of Forfeited Securities.

 

8.4                              Where any rights issue (other than a
rights issue dealt with in Rule 8.3) is made by the Company in respect of
Plan Securities Registered in the name of a Participant and held under the Plan
(other than Forfeited Securities), a Participant may exercise such rights (Rights) if, and only if, the exercise price is funded by
either or both of:

 

(a)                                a contribution paid by the Company or a Participating Group Company
on behalf of a Participant for this purpose, the amount of such contribution
(if any) to be determined by the Plan Committee in its absolute discretion;
and/or

 

(b)                               a contribution paid by the Participant.

 

8.5                              Except where the Plan Committee
determines to the contrary, to the extent that a Participant acquires Plan
Securities by exercising Rights using a contribution paid by the Company or a
Participating Group Company under Rule 8.4(a), the new Plan Securities
acquired by the Participant will be regarded for the purposes of the Plan as
having been acquired and Registered in the name of the Participant as part of
the same Parcel, and, except where the Plan Committee determines to the
contrary, be subject to the same Qualification Requirements, as the Plan
Securities to which the Rights are attributable.

 

8.6                              To the extent that Plan Securities are
acquired as a result of the exercise of Rights using a contribution paid by the
Participant under Rule 8.4(b) (Participant’s Contribution):

 

(a)                                a number of the new Plan Securities acquired equal to the amount of
the Participant’s Contribution divided by the Market Value of Plan Securities
on the day the Rights were exercised (rounded up) will be regarded as Qualified
Securities acquired and Registered in the name of the Participant; and

 

 

(b)                               the remainder of the new Plan Securities acquired by the
Participant, except where the Plan Committee decides to the contrary, will be
regarded for the purposes of the Plan as having been acquired and Registered in
the name of the Participant as part of the same Parcel, and, except where the Plan
Committee determines to the contrary, be subject to the same Qualification
Requirements, as the Plan Securities to which the Rights are attributable.

 

8.7                              If a date is specified for the purposes
of Rule 4.5, each relevant Participant will be entitled to receive a
payment or payments in compensation for all dividends, returns of capital or
other distributions payable on Plan Securities which the Participant has not
received, but which would have been received by the Participant if the Plan
Securities offered to and accepted by, or of which notice of grant has been
given to and not refused by, the Participant had been acquired and Registered
in the name of the Participant as at the specified date or immediately before
the record date for the specified dividend. 
The amount of the payment is to be calculated as determined by the Plan
Committee in its absolute discretion. 
The calculation must have regard to the value of any Australian dividend
imputation (franking) credits in the case of relevant Participants who would
receive a benefit from receiving such credits.

 

9.                                   Corporate control event

 

9.1                              A corporate control event occurs where:

 

(a)                                an offer is made for Rinker Shares pursuant to a takeover bid under
Chapter 6 of the Corporations Act; or

 

(b)                               the Court sanctions under Part 5.1 of the Corporations
Act a compromise or arrangement relating to the Company or a
compromise or arrangement proposed for the purposes of or in connection with a
scheme for the reconstruction of the Company or its amalgamation with any other
company or companies; or

 

(c)                                any other merger, consolidation or amalgamation involving the
Company occurs which results in the holders of the Plan Securities immediately
prior to the merger, consolidation or amalgamation being entitled to 50 per
cent or less of the voting shares in the body corporate resulting from the
merger, consolidation or amalgamation; or

 

(d)                               Plan Securities held under the Plan are subject to compulsory
acquisition or cancelled (on a non pro-rata basis) under any law (including as
a result of a reduction of capital); or

 

(e)                                any Group Company or Group Companies enter into agreements to sell
in aggregate a majority in value of the businesses or assets (whether or not in
the form of shares in a Group Company) of all the Group Companies to a person,
or a number of related companies, none of which are Group Companies; or

 

(f)                                  notice is duly given to members of a proposed resolution for the
voluntary winding up of the Company; or

 

(g)                               an administrator, liquidator, provisional liquidator, receiver or
receiver and manager is appointed in respect of substantially all of the assets
of the Company.

 

9.2                              Without limitation to any other
provisions of these Rules, if a Corporate Control Event occurs, the Plan
Committee may, in its absolute discretion:

 

(a)                                waive or modify (but not add to) any or all of the Qualification
Requirements in relation to all or any specified Participants;

 

(b)                               add to or vary any of these Rules without the need for consent
or approval under Rule 17.2;

 

 

(c)                                direct the relevant Plan Company to dispose of Plan Securities held
under the Plan (on behalf of all or any specified Participants) in such number
and on such terms as the Plan Committee determines; or

 

(d)                               take any other actions, or direct the relevant Plan Company to take
any other actions, as the Plan Committee determines,

 

provided that
any actions taken under this Rule (when considered together with the terms
of any other arrangement or offer made available to Participants in connection
with the actions) do not, in the Plan Committee’s opinion, materially
disadvantage Participants.

 

9.3                              Without limiting Rule 9.2(d), if
the Plan Committee directs the relevant Plan Company to dispose of Plan
Securities in accordance with Rule 9.2(c), the Plan Committee may, in its
absolute discretion, direct the Plan Company to use the proceeds of such
disposal to acquire additional Plan Securities to be held under the Plan on
behalf of Participants (whether or not those Participants include the
Participants whose Plan Securities were sold).

 

9.4                              To the extent of any inconsistency
between Rule 9.2(d) and Rule 8, Rule 9.2(d) will
prevail.

 

10.                            Constitution
of plan committee on occurrence of corporate control event

 

10.1                        If a Corporate Control Event occurs,
this Rule 10 applies, unless the committee of persons referred to in Rule 10.2(a) by
majority resolution determine to the contrary.

 

10.2                        When this Rule 10 applies:

 

(a)                                all powers and discretions (including powers and discretions to make
determinations, make decisions, give approvals and form opinions) vested in the
Plan Committee under these Rules will be vested in, and exclusively
exercisable by, a committee of persons comprising the persons who held office
as directors of the Company immediately prior to the relevant Corporate Control
Event;

 

(b)                               the Plan Committee must only act in a way which, in the reasonable
opinion of that committee, causes the Plan to operate in a fair manner in
respect of existing Participants under the Plan (taken as a whole) and in so
acting the Plan Committee will be taken to be acting in the best interests of
the Company;

 

(c)                                any powers or discretions (including powers and discretions to make
determinations, make decisions, give approvals and form opinions) which are
only exercisable by the Plan Committee after it forms the opinion (however
expressed) that the exercise would be in the best interests of the Company,
will be exercisable if the Plan Committee acts in accordance with Rule 10.2(b);

 

(d)                               the provisions of the Company’s Constitution (as in force
immediately prior to the relevant Corporate Control Event) relating to
committees of directors apply to the Plan Committee with any necessary changes
on the basis that the Plan Committee is entitled to sub-delegate, except that
no member of the Plan Committee need be a director of the Company;

 

(e)                                a majority of the remaining members of the Plan Committee may
continue to act despite any vacancy or vacancies resulting from any
resignation, or other loss of office, of any member or members of the Plan
Committee, but if there are fewer than three members of the Plan Committee
remaining, the majority may only act to fill some or all of those vacancies
under Rule 10.2(f);

 

 

(f)                                  a majority of the remaining members of the Plan Committee may fill
any vacancy resulting from any resignation, or other loss of office, of any
member of the Plan Committee; and

 

(g)                               the Plan Committee may act, and confer benefits on any one or more
members of the Plan Committee, despite any one or more members of the Plan
Committee being interested in the subject matter of its deliberations.

 

11.                            Capital reconstruction

 

11.1                        A capital reconstruction event occurs
where:

 

(a)                                Plan Securities are consolidated or subdivided; or

 

(b)                               shares or ADRs other than Plan Securities, in the Plan Committee’s
opinion, are substituted for, or replace, Plan Securities; or

 

(c)                                shares or ADRs other than Plan Securities are issued to or acquired
by persons holding Plan Securities in circumstances where, in the Plan
Committee’s opinion, the transaction under which the shares or ADRs are issued
or acquired is in substance a division of the business activities carried on by
the Company and the Group Companies into two or more separate groups.

 

11.2                        Unless the Plan Committee determines
that it is undesirable for this Rule to apply, if a Capital Reconstruction
Event occurs, any resulting shares or ADRs will be held under the Plan and the
Plan will apply to such shares or ADRs in a manner that is as near as possible
to the way the Plan applies to Plan Securities. In this regard, any or all
references to the Company in these Rules will, if the Plan Committee so
determines, be taken to be references to, or to include, the issuer of any such
shares or shares underlying such ADRs. The provisions of rule 17.2 do not
apply to any addition to or variation of these Rules which is considered
by the Plan Committee to be reasonably necessary to give effect to this Rule 11.2.

 

11.3                        If a Capital Reconstruction Event
referred to in paragraphs (b) or (c) of Rule 11.1 occurs, in
addition to any Notice of Withdrawal of Securities deemed to have been
submitted under Rule 6.7, each Participant will be deemed to have
submitted:

 

(a)                                a Notice of Withdrawal of Securities in respect of all Plan
Securities held on behalf of the Participant (except for any Plan Securities
which are Forfeited Securities); and

 

(b)                               a separate Notice of Withdrawal of Securities in respect of all
shares or ADRs other than Plan Securities held on behalf of the Participant
(except for any such shares or ADRs resulting from Forfeited Securities).

 

Note:                 Plan
Securities of either type will not necessarily be withdrawn from the Plan
unless the Plan Committee determines, under Rule 6.4, that approval is
appropriate for particular Participants or classes of Participants.

 

11.4                        To the extent of any inconsistency
between Rule 11.2 and Rule 8, Rule 11.2 will prevail.

 

12.                            Forfeiture

 

12.1                        Each of the following events will be a
special circumstance in relation to a Participant:

 

(a)                                (retirement) the voluntary
cessation of a Participant’s employment with the Company or a Participating
Group Company in circumstances where, in the opinion of the Plan Committee, the
Participant intends to no longer work on a full-time or permanent part-time
basis;

 

 

(b)                               (permanent disablement) the
disablement of the Participant the effect of which, in the opinion of the Plan
Committee, is likely to be permanent and will stop the Participant continuing
his or her current employment with a Group Company;

 

(c)                                (death) the death of the Participant;

 

(d)                               (Terms of Offer) any other
circumstances in relation to specified Participants or Participants generally
stated to constitute specified circumstances in the Terms of Offer of
particular Plan Securities; or

 

(e)                                (other circumstances) any other
circumstance as determined by the Plan Committee in its absolute discretion and
notified to the Participant in writing or by email.

 

12.2                        The Plan Committee may, in its absolute
discretion, decide that a Participant (and any person claiming through him or
her) will forfeit any right or interest in any Unqualified Securities or other
entitlements under the Plan to a Plan Company (or as otherwise directed by the
Plan Committee) if:

 

(a)                                the Performance Period has expired for the Parcel of which the Plan
Securities form part (whether or not the Plan Committee has previously become
empowered to decide that the Participant will forfeit such right or interest
under any other provision of this Rule 12 and whether or not the
Participant is an Eligible Employee when he or she would be required to forfeit
such right or interest); or

 

(b)                               except as otherwise provided in Rule 12.3, the Participant
ceases to be an employee of all Group Companies (including by virtue of the
employer of the Participant ceasing to be a Group Company or the occurrence of
a Special Circumstance) at a time when the Plan Securities acquired on behalf
of the Participant under the Plan are Unqualified Securities. For the avoidance
of doubt, a Participant will not cease to be an employee of all Group Companies
where the Participant ceases to be an employee of one Group Company and, in
connection with such cessation, becomes an employee of any other Group Company.

 

12.3                        If a Special Circumstance in relation to
a Participant occurs at least 12 months after the commencement of the
Performance Period for any Parcel of which Unqualified Securities form part,
the Plan Committee may, in its absolute discretion, decide that the Participant
(and any person claiming through him or her) will forfeit a percentage of any
right or interest in the Plan Securities or other entitlements under the Plan
to the Plan Company (or as otherwise directed by the Plan Committee)
proportionate to the period remaining until the expiry of the Performance
Period.  The Percentile Ranking will be
calculated for any Plan Securities not forfeited under this Rule 12.3 in
accordance with Rule 5 as if, subject to Rule 5.3(c), the relevant
Parcel comprised only Plan Securities not forfeited.

 

12.4                        Unless otherwise determined by the Plan
Committee, a Participant (and any person claiming through him or her) will
forfeit any right or interest in any Plan Securities (whether Qualified
Securities or Unqualified Securities) or other entitlements under the Plan to
the Plan Company (or as otherwise directed by the Plan Committee) if the
Participant has, in the opinion of the Plan Committee, been dismissed for a
reason which entitles the Company or a Group Company to dismiss the Participant
without notice, or has committed any act of fraud, defalcation or gross
misconduct in relation to the affairs of the Company or any Group Company
(whether or not charged with an offence).

 

12.5                        If the Plan Committee has formed the
view, in its reasonable opinion, that any Plan Securities held by a Participant
under the Plan could be forfeited under these Rules, as an alternative to the
Participant forfeiting any right or interest in the Plan Securities the Plan
Committee may, in its absolute discretion and despite Rule 7.1, allow a
person other than a Plan Company, the Company or any Group Company (or any
entity controlled by any of those persons) to acquire from the

 

 

Participant for a
nominal amount all right or interest the Participant may have in the relevant
Plan Securities (Participant’s Interest), provided
that the Participant executes any document necessary or desirable for
transferring such right or interest and that person has executed any documents
required by the Plan Committee.  At any
time after a person (Transferee)
acquires the Participant’s Interest in accordance with this Rule, the Plan
Committee may, in its absolute discretion, decide that the Transferee (and any
person claiming through the Transferee) will forfeit all right or interest in
the Plan Securities (or other entitlements under the Plan) to which the
Participant’s Interest relate and, immediately after such a decision, the
relevant Plan Securities are, and must be treated as, Forfeited Securities.

 

12.6                        By notice in writing, the Plan Committee
may require the relevant Plan Company:

 

(a)                                to re-allocate any Forfeited Securities to one or more Eligible
Employees as determined by the Plan Committee, subject to any conditions
specified by the Plan Committee, within 60 days of the Forfeited Securities
being transferred to a Plan Company; or

 

(b)                               in the case of the US Plan Company, to transfer any Forfeited
Securities to Merrill Lynch Trust Company, FSB or such other person appointed
to act as trustee under the Trust Agreement No. 2 dated 16 November 2004
(as amended) for the Rinker Materials Corporation Supplemental Executive Profit
Sharing 401(k) Plan, within 60 days of the Forfeited Securities being
transferred to the US Plan Company (or to any nominee for that trustee); or

 

(c)

 

(i)                                  to sell any Forfeited Securities on a financial market operated by
ASX or NYSE within 60 days of the Forfeited Securities being transferred to a
Plan Company; and

 

(ii)                               to apply part or all of the proceeds of sale of any Forfeited
Securities to satisfy any expenses (including Taxes) incurred in connection
with the Plan or to reimburse the Plan Company for any such expenses paid by
it; and

 

(iii)                            to deposit the proceeds of sale (after deducting any amounts
referred to in Rule 12.6(c)(ii)) of any Forfeited Securities in a Plan
Account in accordance with Rule 13.1.

 

12.7                        A Plan Company:

 

(a)                                subject to paragraph (b), must hold Forfeited Securities until it
receives a notice from the Plan Committee under Rule 12.6; and

 

(b)                               regardless of whether or not it has received a notice from the Plan
Committee under Rule 12.6, promptly sell on a financial market operated by
ASX or NYSE any Forfeited Securities still held by it after 55 days to ensure
that Forfeited Securities are disposed of within 60 days.

 

12.8                        Unless it is permitted to do so by the Corporations Act, a Plan Company must not transfer the
Forfeited Securities to the Company or any Group Company (other than another
Plan Company).

 

13.                            Plan account

 

13.1                        There will be paid into a Plan Account:

 

(a)                                the proceeds of sale of any Forfeited Securities under Rule 12.6(c)(iii);

 

(b)                               any income (including any dividend, bonus issue or other benefit)
received in connection with any Forfeited Securities held by a Plan Company;

 

 

(c)                                the proceeds of any investment of the moneys held in a Plan Account,
in accordance with Rule 13.4; and

 

(d)                               any amounts payable to a Plan Account under Rule 4.7 or 18.3.

 

13.2                        A Plan Company is authorised to pay from
a Plan Account:

 

(a)                                all outgoings and expenses the Plan Company properly incurs in
buying, selling and otherwise dealing with Plan Securities for Participants
under the Plan;

 

(b)                               if and to the extent authorised by any agreement between the Plan
Company and the Company or any Participating Group Company, any Tax properly
payable by or imposed upon the Plan Company in connection with performing its
functions under these Rules (except for any Tax payable by the Plan
Company in respect of any fees payable to the Plan Company under any such
agreement);

 

(c)                                any other amounts that the Plan Committee authorises from time to
time; and

 

(d)                               amounts paid or applied under Rule 13.3.

 

13.3                        Any balance in a Plan Account from time
to time will either be:

 

(a)                                paid by a Plan Company to the Company or a Participating Group
Company (or as otherwise directed by the Plan Committee); or

 

(b)                               applied by a Plan Company to fund the acquisition of Plan Securities
for Participants in accordance with Rule 4.4, as though the relevant
amount were a contribution made under Rule 4.3,

 

as and when directed by the Plan Committee.

 

13.4                        Pending dealing with any amount in a
Plan Account under Rule 13.3, the Plan Company may invest the amount in
short term deposits or otherwise apply the amount for the purposes of the Plan.

 

14.                            Authorised deductions

 

14.1                        If a Plan Company, Group Company or
nominee (Relevant Person):

 

(a)                                incurs any brokerage, commissions or similar fees in buying, selling
or otherwise dealing with Plan Securities for Participants (other than the
initial acquisition of Plan Securities on behalf of a Participant and the
Registration of those Plan Securities in the name of the Participant under Rule 4);
or

 

(b)                               reasonably considers that any Tax is or will be payable by it in
connection with the operation of the Plan,

 

then any such
amounts referable to a Participant:

 

(c)                                may be deducted by the Plan Company from any contributions made in
respect of the Participant and paid to the Relevant Person,

 

and, to the
extent that amounts referred to in Rules 14.1(a) and 14.1(b) are
not recovered under Rule 14.1(c), they:

 

(d)                               may be deducted from the proceeds of the sale of any Qualified
Securities which the Plan Company (or other agent or attorney) sells under any
authority or instruction given by the Participant (including a power of
attorney granted in accordance with Rule 3.6) and paid to the Relevant
Person; and

 

 

(e)                                constitute money owed by the Participant to the Relevant Person for
the purposes of Rules 6.8.

 

15.                            Voting rights

 

15.1                        Subject to the Listing Rules and
the terms of issue of relevant Plan Securities, a Participant may, from the
time that Plan Securities are acquired on behalf of the Participant and
Registered in the name of the Participant under Rule 4.8, either:

 

(a)                                exercise any voting rights attaching to Rinker Securities held in
the Plan and Registered in his or her name, or may appoint a proxy to represent
or vote for him or her, at any meeting of the members of the Company; or

 

(b)                               direct any nominee holding Plan Securities on the Participant’s
behalf as to how any voting rights attaching to the Plan Securities are to be
exercised.

 

Note:                 Participants
will not be able to exercise voting rights until Plan Securities are acquired
in accordance with Rule 4.4.

 

15.2                        Voting rights attaching to Plan
Securities acquired under the Plan may not otherwise be exercised by any Group
Company or Plan Company.

 

16.                            Use of nominees

 

16.1                        Subject to any restrictions imposed by
the Plan Committee from time to time in relation to specified Participants or
Participants generally, Plan Securities to be:

 

(a)                                registered in the name of a Participant under the Plan; or

 

(b)                               acquired, forfeited, disposed of or otherwise dealt with under the
Plan,

 

may be:

 

(c)                                registered in the name of a nominee or nominees with beneficial
ownership of the Plan Securities vested in the Participant (whether directly or
via a sub-nominee arrangement or arrangements); and

 

(d)                               acquired, forfeited, disposed of or otherwise dealt with under the
Plan by way of the Participant’s beneficial interest under the nominee (or
sub-nominee) arrangement.

 

16.2                        The Plan Committee may from time to time
determine the terms of any nominee or sub-nominee arrangement applying to any
Participant, class of Participants or Participants generally.

 

16.3                        The Plan Committee may from time to time
specify how these Rules are to apply in relation to Plan Securities
registered, or to be registered, in the name of a nominee or held, or to be
held, via a sub-nominee arrangement.

 

16.4                        These Rules, and all references to Plan
Securities being Registered in the name of Participants, are to be interpreted
accordingly.  Each Participant acknowledges
and agrees that each Plan Company and the Plan Committee may fulfil their
obligations and exercise their powers and discretions under the Plan as
authorised by this Rule 16.

 

17.                            Variation of rules

 

17.1                        The Plan Committee may add to or vary
any of these Rules, or waive or vary the application of any of these Rules in
relation to any Participant, at any time by resolution of the Plan Committee.

 

 

17.2                        If all additions or variations proposed
at any one time under Rule 17.1 (when considered together with the terms
of any other arrangement or offer made available to Participants) would, in the
Plan Committee’s reasonable opinion, materially disadvantage Participants in
respect of Plan Securities held under the Plan, the Plan Committee must obtain:

 

(a)                                the written consent of three-quarters of the Participants affected
by such addition or variation; or

 

(b)                               the approval of a majority consisting of three-quarters of those who
vote of the Participants affected by such addition or variation at a meeting or
by ballot (postal or otherwise) conducted in accordance with procedures
approved by the Plan Committee.

 

17.3                        In addition to its powers under Rule 17.1,
the Plan Committee, acting reasonably, may add to or vary any of these Rules,
or waive or vary the application of any of these Rules without the consent
or approval of any Participant so that offers or grants to Eligible Employees,
and Plan Securities held under the Plan, are eligible for any taxation
concessions available to employee share plans that are similar to the taxation
concessions available under the Plan at the time the Plan commences, if:

 

(a)                                the provisions of Division 13A of Part III of the Income Tax Assessment Act 1936 (Cth) are amended, or
repealed and replaced with new legislation (whether such new legislation is
located in the Income Tax Assessment Act 1936
(Cth), Income Tax Assessment Act 1997 (Cth) or
in any other Act); and

 

(b)                               as a result, offers or grants to Eligible Employees, or Plan
Securities held under the Plan, are not eligible for all the taxation
concessions that were available under the Plan at the time the Plan commenced.

 

18.                            Termination
and suspension of the plan

 

18.1                        The operation of the Plan may be
terminated or suspended at any time by resolution of the Plan Committee.

 

18.2                        Where the Plan is terminated or
suspended, each Participant who holds Plan Securities subject to the Plan is
deemed to have submitted a Notice of Withdrawal of Securities in respect of all
of the Participant’s Plan Securities. 
Notwithstanding Rules 6.4 and 6.5, but subject to Rules 7 and
12, the Plan Committee may decide to permit Plan Securities then held by a
Participant under the Plan which are Unqualified Securities to be withdrawn
from the Plan or give directions as to how such Plan Securities are to be dealt
with, and must give such other directions to the Plan Companies regarding the
operation of the Plan as the Plan Companies may request.

 

18.3                        Upon termination of the Plan, any Plan
Securities remaining in the Plan after determinations under Rules 18.2
must be forfeited and sold and the proceeds paid into a Plan Account.

 

19.                            Connection with other plans

 

Participation
in the Plan does not affect, and is not affected by, participation in any other
incentive or other scheme operated by the Company unless the terms of that
other scheme provide otherwise.

 

20.                            Notices

 

Any notice or
direction given under these Rules is validly given if it is:

 

(a)                                handed to the person concerned; or

 

 

(b)                               sent by ordinary prepaid post to the person’s last known address; or

 

(c)                                sent by electronic means to the person’s last known electronic
address; or

 

(d)                               given in such manner as the Plan Committee from time to time
determines.

 

21.                            Governing law

 

This Plan and
the rights of the Participants under the terms and conditions of the Plan shall
be governed by the laws of the State of New South Wales, Australia.

 

22.                            Administration of the plan

 

22.1                        The Plan will be administered by the
Plan Committee in accordance with these Rules. The Plan Committee may make
regulations for the operation of the Plan which are consistent with these
Rules.

 

22.2                        Where the Rules provide for a
determination, decision, approval or opinion of the Plan Committee, such
determination, decision, approval or opinion of the Plan Committee shall be in
its absolute discretion.

 

22.3                        Any power or discretion which is
conferred on the Plan Committee by these Rules may be exercised by the
Plan Committee in the interests or for the benefit of the Company, and the Plan
Committee is not, in exercising any such power or discretion under any
fiduciary or other obligation to any other person.

 

22.4                        Where the Rules refer to an opinion
or state of mind (however expressed) of a group of persons, including the Plan
Committee, the group of persons will be taken to have that opinion or state of
mind if persons constituting a majority of the group each have that opinion or
state of mind.

 

22.5                        The determination, decision, approval or
opinion of the Plan Committee as to the interpretation, effect or application
of these Rules will be final.

 

22.6                        If, at any time, it is convenient to
convert currencies, including Australian currency to United States currency and
United States currency to Australian currency, the Plan Committee may determine
the exchange rates which are to apply for the purposes of the Plan.

 

22.7                        The Plan Committee or the Company may
take and rely upon independent professional or expert advice in or in relation
to the exercise of any of their powers or discretions under these Rules.  Where the Plan Committee or the Company does
take and rely upon advice, the Plan Committee, each member of the Plan
Committee and the Company are not liable to either Plan Committee or any
Participant for any loss suffered or incurred as a result of such reliance.

 

22.8                        Any Plan Company may take and rely upon
independent professional or expert advice in or in relation to the exercise of
any of their powers or discretions under these Rules.  Where a Plan Company does take and rely upon
advice, the Plan Company is not liable to the Plan Committee, the Company, the
other Plan Company or any Participant for any loss suffered or incurred as a
result of such reliance.

 

22.9                        The Plan Committee or the Company may
delegate any functions and powers under these Rules to any person or
persons in its absolute discretion.  In
particular, the Plan Committee or the Company may appoint, and delegate the
responsibilities of administration of the Plan to, a specialist administration
service provider or providers.  The Plan
Companies must each give effect to any such appointment.

 

 

23.                            General

 

23.1                        The entitlement of the Participants and
these Rules are subject to the Company’s Constitution, the Listing Rules and
the Corporations Act.

 

23.2                        Notwithstanding any Rule, Plan
Securities may not be issued, assigned or dealt with under the Plan if to do so
would contravene the Corporations Act,
the Listing Rules or any other applicable laws.Exhibit 10.1

 

PLC SYSTEMS INC.

 

2005 STOCK INCENTIVE PLAN

 

1.                                       Purpose

 

The purpose of this 2005 Stock Incentive Plan (the “Plan”)
of PLC Systems Inc., a Yukon Territory corporation
(the “Company”), is to advance the interests of the Company’s shareholders by
enhancing the Company’s ability to attract, retain and motivate persons who are
expected to make important contributions to the Company and by providing such
persons with equity ownership opportunities and performance-based incentives
that are intended to align their interests with those of the Company’s
shareholders.  Except where the context
otherwise requires, the term “Company” shall include any of the Company’s
present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”) and any other
business venture (including, without limitation, joint venture or limited
liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the “Board”).

 

2.                                       Eligibility

 

All of the Company’s employees, officers, directors,
consultants and advisors are eligible to receive options to purchase common
stock (each, an “Option”) under the Plan. 
Each person who receives an Option under the Plan is deemed a “Participant.”

 

3.                                       Administration
and Delegation

 

(a)                                  Administration
by Board of Directors.  The Plan will
be administered by the Board.  The Board
shall have authority to grant Options and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as it shall
deem advisable.  The Board may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Option in the manner and to the extent it shall deem expedient to carry the
Plan into effect and it shall be the sole and final judge of such
expediency.  All decisions by the Board
shall be made in the Board’s sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Option.  No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.

 

(b)                                 Appointment
of Committees.  To the extent permitted by
applicable law, the Board may delegate any or all of its powers under the Plan
to one or more committees or subcommittees of the Board (a “Committee”).  All references in the Plan to the “Board”
shall mean the Board or a Committee of the Board or the officers referred to in
Section 3(c) to the extent that the Board’s powers or authority under
the Plan have been delegated to such Committee or officers.

 

(c)                                  Delegation
to Officers.  To the extent permitted
by applicable law, the Board may delegate to one or more officers of the
Company the power to grant Options to employees or officers of the Company or
any of its present or future subsidiary corporations and to exercise

 

 

such other powers under the Plan as the Board may
determine, provided that the Board shall fix the terms of the Options to be
granted by such officers (including the exercise price of such Options, which
may include a formula by which the exercise price will be determined) and the
maximum number of shares subject to Options that the officers may grant;
provided further, however, that no officer shall be authorized to grant Options
to any “executive officer” of the Company (as defined by Rule 3b-7
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or
to any “officer” of the Company (as defined by Rule 16a-1 under the
Exchange Act).

 

4.                                       Stock
Available for Options

 

(a)                                  Number
of Shares.  Subject to adjustment
under Section 6, Options may be made under the Plan for up to 2,000,000
shares of common stock, no par value per share, of the Company (the “Common
Stock”), plus (x) such number of shares as are available for grant under the
Company’s 1997 Executive Stock Option Plan, 2000 Equity Incentive Plan, 2000
Non-Statutory Stock Option Plan and 2000 Non-Qualified Performance and
Retention Equity Plan (collectively, the “Previous Plans”) on the date that
shareholder approval is obtained for this Plan (the “Shareholder Approval Date”),
under which Previous Plans no further awards may be granted after the
Shareholder Approval Date, and (y) such number of shares as may become
available under the Previous Plans because any award previously granted under
any such plan expires or is terminated, surrendered or cancelled without having
been fully exercised or is forfeited in whole or in part (including as the
result of shares of Common Stock subject to such previously-granted award being
repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) or results in any Common Stock not being issued,
the unused Common Stock covered by such previously-granted award shall again be
available for the grant of Options under the Plan, provided that the sum of (x)
and (y) shall not exceed 2,691,667 shares. 
If any Option expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part (including as
the result of shares of Common Stock subject to such Option being repurchased
by the Company at the original issuance price pursuant to a contractual
repurchase right) or results in any Common Stock not being issued, the unused
Common Stock covered by such Option shall again be available for the grant of
Options under the Plan.  Further, shares
of Common Stock tendered to the Company by a Participant to exercise an Option
shall be added to the number of shares of Common Stock available for the grant
of Options under the Plan.  However, in
the case of Incentive Stock Options (as hereinafter defined), the foregoing
provisions shall be subject to any limitations under the Code.  Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.

 

(b)                                 Section 162(m)
Per-Participant Limit.  The maximum
number of shares of Common Stock with respect to which Options may be granted
to any Participant under the Plan shall be 300,000 per
calendar year.  The per-Participant limit
described in this Section 4(b)(1) shall be
construed and applied consistently with Section 162(m) of the Code or any
successor provision thereto, and the regulations thereunder (“Section 162(m)”).

 

2

 

5.                                       Stock
Options

 

(a)                                  General.  The Board may grant Options and determine the
number of shares of Common Stock to be covered by each Option, the exercise
price of each Option and the conditions and limitations applicable to the
exercise of each Option, including conditions relating to applicable federal or
state securities laws, as it considers necessary or advisable.  An Option which is not intended to be an
Incentive Stock Option (as hereinafter defined) shall be designated a “Non-statutory
Stock Option.”

 

(b)                                 Incentive
Stock Options.  An Option that the
Board intends to be an “incentive stock option” as defined in Section 422
of the Code (an “Incentive Stock Option”) shall only be granted to employees of
PLC Systems Inc., any of PLC Systems Inc.’s present or future parent or
subsidiary corporations as defined in Sections 424(e) or (f) of the
Code, and any other entities the employees of which are eligible to receive
Incentive Stock Options under the Code, and shall be subject to and shall be
construed consistently with the requirements of Section 422 of the
Code.  The Company shall have no
liability to a Participant, or any other party, if an Option (or any part
thereof) that is intended to be an Incentive Stock Option is not an Incentive
Stock Option or for any action taken by the Board pursuant to Section 7(f),
including without limitation the conversion of an Incentive Stock Option to a
Non-statutory Stock Option.

 

(c)                                  Exercise
Price.  The Board shall establish the
exercise price of each Option and specify such exercise price in the applicable
option agreement; provided, however, that the exercise price of Incentive Stock
Options shall be not less than 100% of the Fair Market Value (as defined below)
at the time the Option is granted and that the exercise price of Non-statutory
Stock Options shall be not less than 85% of the Fair Market Value at the time
the Option is granted.

 

(d)                                 Duration
of Options.  Each Option shall be
exercisable at such times and subject to such terms and conditions as the Board
may specify in the applicable option agreement; provided, however, that no
Option will be granted for a term in excess of 10 years.

 

(e)                                  Exercise
of Option.  Options may be exercised
by delivery to the Company of a written notice of exercise signed by the proper
person or by any other form of notice (including electronic notice) approved by
the Board together with payment in full as specified in Section 5(g) for
the number of shares for which the Option is exercised.  Shares of Common Stock subject to the Option
will be delivered by the Company following exercise either as soon as
practicable or, subject to such conditions as the Board shall specify, on a
deferred basis (with the Company’s obligation to be evidenced by an instrument
providing for future delivery of the deferred shares at the time or times
specified by the Board).

 

(f)                                    Payment
Upon Exercise. 
Common Stock purchased upon the exercise of an Option granted under the
Plan shall be paid for as follows:

 

(1)                                  in cash or by check, payable to the order of the Company;

 

(2)                                  except
as the Board may otherwise provide in an option agreement, by (i) delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price and
any required tax

 

3

 

withholding or (ii) delivery
by the Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash
or a check sufficient to pay the exercise price and any required tax
withholding;

 

(3)                                  when
the Common Stock is registered under the Exchange Act, by delivery of shares of
Common Stock owned by the Participant valued at their fair market value as
determined by (or in a manner approved by) the Board (“Fair Market Value”),
provided (i) such method of payment is then permitted under applicable
law, (ii) such Common Stock, if acquired directly from the Company, was
owned by the Participant for such minimum period of time, if any, as may be
established by the Board in its discretion and (iii) such Common Stock is
not subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements;

 

(4)                                  to
the extent permitted by applicable law and by the Board, by (i) delivery
of a promissory note of the Participant to the Company on terms determined by
the Board, or (ii) payment of such other lawful consideration as the Board
may determine; or

 

(5)                                  by any combination of the above permitted forms of payment.

 

(g)                                 Substitute
Options.  In connection with a merger
or consolidation of an entity with the Company or the acquisition by the
Company of property or stock of an entity, the Board may grant Options in
substitution for any options or other stock or stock-based awards granted by
such entity or an affiliate thereof. 
Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5 or in Section 2.

 

6.                                       Adjustments
for Changes in Common Stock and Certain Other Events.

 

(a)                                  Changes
in Capitalization.  In the event of
any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or other similar
change in capitalization or event, or any distribution to holders of Common
Stock other than an ordinary cash dividend, (i) the number and class of
securities available under this Plan, (ii) the limit set forth in Section 4(b),
and (iii) the number and class of securities and exercise price per share
of each outstanding Option, shall be appropriately adjusted by the Company (or
substituted Options may be made, if applicable) to the extent determined by the
Board.

 

(b)                                 Reorganization
Events.

 

(1)                                  Definition.  A “Reorganization Event” shall mean:  (a) any merger or consolidation of the
Company with or into another entity as a result of which all of the Common
Stock of the Company is converted into or exchanged for the right to receive
cash, securities or other property or is cancelled, (b) any exchange of
all of the Common Stock of the Company for cash, securities or other property
pursuant to a share exchange transaction or (c) any liquidation or
dissolution of the Company.

 

(2)                                  Consequences
of a Reorganization Event on Options. 
In connection with a Reorganization Event, the Board shall take any one
or more of the following actions as to all or any outstanding Options on such
terms as the Board determines:  (i) provide
that Options shall be

 

4

 

assumed, or substantially equivalent Options shall be substituted, by
the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon
written notice to a Participant, provide that the Participant’s unexercised
Options or other unexercised Options shall become exercisable in full and will
terminate immediately prior to the consummation of such Reorganization Event
unless exercised by the Participant within a specified period following the
date of such notice, (iii) provide that outstanding Options shall become
realizable or deliverable, or restrictions applicable to an Option shall lapse,
in whole or in part prior to or upon such Reorganization Event, (iv) in
the event of a Reorganization Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share
surrendered in the Reorganization Event (the “Acquisition Price”), make or
provide for a cash payment to a Participant equal to (A) the Acquisition
Price times the number of shares of Common Stock subject to the Participant’s
Options or other Options (to the extent the exercise price does not exceed the
Acquisition Price) minus (B) the aggregate exercise price of all such
outstanding Options or other Options, in exchange for the termination of such
Options or other Options, (v) provide that, in connection with a
liquidation or dissolution of the Company, Options shall convert into the right
to receive liquidation proceeds (if applicable, net of the exercise price
thereof) and (vi) any combination of the foregoing.

 

For purposes of clause (i) above,
an Option shall be considered assumed if, following consummation of the
Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of
the Reorganization Event, the consideration (whether cash, securities or other
property) received as a result of the Reorganization Event by holders of Common
Stock for each share of Common Stock held immediately prior to the consummation
of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if the
consideration received as a result of the Reorganization Event is not solely
common stock of the acquiring or succeeding corporation (or an affiliate
thereof), the Company may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be received upon the exercise of
Options to consist solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in fair market value to the
per share consideration received by holders of outstanding shares of Common
Stock as a result of the Reorganization Event.

 

To the extent all or any
portion of an Option becomes exercisable solely as a result of clause (ii) above,
the Board may provide that upon exercise of such Option the Participant shall
receive shares subject to a right of repurchase by the Company or its successor
at the Option exercise price; such repurchase right (x) shall lapse at the same
rate as the Option would have become exercisable under its terms and (y) shall
not apply to any shares subject to the Option that were exercisable under its
terms without regard to clause (ii) above.

 

7.                                       General
Provisions Applicable to Options

 

(a)                                  Transferability
of Options.  Except as the Board may
otherwise determine or provide in an Option, Options shall not be sold,
assigned, transferred, pledged or otherwise encumbered by the person to whom
they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution or, other than in the case of an Incentive
Stock Option, pursuant to a qualified domestic relations order, and, during the
life of the

 

5

 

Participant,
shall be exercisable only by the Participant. 
References to a Participant, to the extent relevant in the context,
shall include references to authorized transferees.

 

(b)                                 Documentation.  Each Option shall be evidenced in such form
(written, electronic or otherwise) as the Board shall determine.  Each Option may contain terms and conditions
in addition to those set forth in the Plan.

 

(c)                                  Board
Discretion.  Except
as otherwise provided by the Plan, each Option may be made alone or in addition
or in relation to any other Option. 
The terms of each Option need not be identical, and the Board need not
treat Participants uniformly.

 

(d)                                 Termination
of Status.  The Board shall determine
the effect on an Option of the disability, death, retirement, authorized leave
of absence or other change in the employment or other status of a Participant
and the extent to which, and the period during which, the Participant, or the
Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Option.

 

(e)                                  Withholding.  Each Participant shall pay to the Company, or
make provision satisfactory to the Company for payment of, any taxes required
by law to be withheld in connection with an Option to such Participant.  If provided for in an Option or approved by
the Company, in its sole discretion, a Participant may satisfy such tax
obligations in whole or in part by delivery of shares of Common Stock, including
shares retained from the Option creating the tax obligation, valued at their
Fair Market Value; provided, however, except as otherwise provided by the
Board, that the total tax withholding where stock is being used to satisfy such
tax obligations cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal and state
tax purposes, including payroll taxes, that are applicable to such supplemental
taxable income).  Shares surrendered to satisfy
tax withholding requirements cannot be subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements.  The Company may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind otherwise due
to a Participant.

 

(f)                                    Amendment
of Option.  The Board may amend,
modify or terminate any outstanding Option, including but not limited to,
substituting therefor another Option of the same or a different type, changing
the date of exercise or realization, and converting an Incentive Stock Option
to a Non-statutory Stock Option, provided that the Participant’s consent to
such action shall be required unless the Board determines that the action,
taking into account any related action, would not materially and adversely
affect the Participant.

 

(g)                                 Conditions
on Delivery of Stock.  The Company
will not be obligated to deliver any shares of Common Stock pursuant to the
Plan or to remove restrictions from shares previously delivered under the Plan
until (i) all conditions of the Option have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel,
all other legal matters in connection with the issuance and delivery of such
shares have been satisfied, including any applicable securities laws and any
applicable stock exchange or stock market rules and regulations, and (iii) the
Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements
of any applicable laws, rules or regulations.

 

6

 

(h)                                 Acceleration.  The Board may at any time provide that any
Option shall become immediately exercisable in full or in part, free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be.

 

8.                                       Miscellaneous

 

(a)                                  No
Right To Employment or Other Status.  No person shall have any claim or right to be
granted an Option, and the grant of an Option shall not be construed as giving
a Participant the right to continued employment or any other relationship with
the Company.  The Company expressly
reserves the right at any time to dismiss or otherwise terminate its relationship
with a Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Option.

 

(b)                                 No
Rights As Shareholder.  Subject to the provisions of the applicable
Option, no Participant or Designated Beneficiary shall have any rights as a
shareholder with respect to any shares of Common Stock to be distributed with
respect to an Option until becoming the record holder of such shares.  Notwithstanding the foregoing, in the event
the Company effects a split of the Common Stock by means of a stock dividend
and the exercise price of and the number of shares subject to such Option are
adjusted as of the date of the distribution of the dividend (rather than as of
the record date for such dividend), then an optionee who exercises an Option
between the record date and the distribution date for such stock dividend shall
be entitled to receive, on the distribution date, the stock dividend with
respect to the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.

 

(c)                                  Effective
Date and Term of Plan.  The Plan
shall become effective on the date on which it is adopted by the Board, but no
Option may be granted unless and until the Plan has been approved by the
Company’s shareholders.  No Options shall
be granted under the Plan after the completion of 10 years from the earlier of (i) the
date on which the Plan was adopted by the Board or (ii) the Shareholder
Approval Date, but Options previously granted may extend beyond that date.

 

(d)                                 Amendment
of Plan.  The Board may amend,
suspend or terminate the Plan or any portion thereof at any time, provided
that, to the extent required by Section 162(m), no Option granted to a
Participant that is intended to comply with Section 162(m) after the date
of such amendment shall become exercisable, realizable or vested, as applicable
to such Option, unless and until such amendment shall have been approved by the
Company’s shareholders if required by Section 162(m) (including the vote
required under Section 162(m)); and provided further that, without
approval of the Company’s shareholders, no amendment may (i) increase the
number of shares authorized under the Plan (other than pursuant to Section 6),
(ii) materially increase the benefits provided under the Plan, (iii) materially
expand the class of participants eligible to participate in the Plan, (iv) expand
the types of Options provided under the Plan or (v) make any other changes
that require shareholder approval under the rules of the American Stock
Exchange.  In addition, if at any time
the approval of the Company’s shareholders is required as to any other
modification or amendment under Section 422 of the Code or any successor
provision with respect to Incentive Stock Options, the Board may not effect
such modification or

 

7

 

amendment
without such approval.  No Option shall
be made that is conditioned upon shareholder approval of any amendment to the
Plan.

 

(e)                                  Provisions
for Foreign Participants.  The Board
may modify Options or Options granted to Participants who are foreign nationals
or employed outside the United States or establish subplans or procedures under
the Plan to recognize differences in laws, rules, regulations or customs of
such foreign jurisdictions with respect to tax, securities, currency, employee
benefit or other matters.

 

(f)                                    Compliance
with Code Section 409A.    No Option shall provide
for deferral of compensation that does not comply with Section 409A of the
Code, unless the Board, at the time of grant, specifically provides that the
Option is not intended to comply with Section 409A of the Code.

 

(g)                                 Governing
Law.  The provisions of the Plan and
all Options made hereunder shall be governed by and interpreted in accordance
with the laws of the Commonwealth of Massachusetts, without regard to any
applicable conflicts of law.

 

 

	
   

  	
  Adopted
  by the Board of Directors

  
	
   

  	
  on March 28,
  2005

  
	
   

  	
   

  
	
   

  	
  Approved by the shareholders on

  
	
   

  	
  May 18, 2005

  

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]