Document:

TBS INTERNATIONAL LIMITED
                           2005 EQUITY INCENTIVE PLAN

         1. Purpose.

         The TBS International Limited Equity Incentive Plan (the "Plan") is
intended to provide an incentive to employees, consultants and non-employee
directors of TBS International Limited, a Bermuda company (the "Company"), and
its Subsidiaries to remain in the service of the Company and its Subsidiaries
and to increase their interest in the success of the Company in order to promote
the long-term interests of the Company. The Plan seeks to promote the highest
level of performance by providing an economic interest in the long-term
performance of the Company.

         2. Definitions.

         For purposes of the Plan, the following terms have the following
meanings:

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" or "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.

         "Agreement" means an agreement between the Company and an Eligible
Person providing for the grant of an Award hereunder.

         "Award" means any Option, Share Appreciation Right, Restricted Shares,
Bonus Share, Share Unit, Performance Share, or other incentive payable in cash
or in Common Shares as may be designated by the Compensation Committee from time
to time under the Plan.

         "Beneficial Owner" has the meaning set forth in Rule 13d-3 under the
1934 Act.

         "Beneficiary" or "Beneficiaries" means the person(s) designated by a
Participant in writing to the Company to receive payments or other distributions
or rights pursuant to the Plan upon the death of such Participant. If no
Beneficiary is so designated or if no Beneficiary is living at the time a
payment, distribution or right becomes payable or distributable pursuant to the
Plan, such payment, distribution or right shall be made to the estate of the
Participant. The Participant shall have the right to change the designated
Beneficiaries from time to time by written instrument filed with the
Compensation Committee in accordance with such rules as may be specified by the
Compensation Committee.

         "Board of Directors" means the Board of Directors of the Company.

         "Bonus Shares" mean an Award of Common Shares issued in exchange for
services rendered to the Company and/or its Subsidiaries or Affiliates under
Section 9 that are fully vested when granted.

         "Cashless Exercise" means an exercise of Vested Options outstanding
under the Plan through the delivery of irrevocable instructions to a broker to
make a sale of a number of Option Shares that results in proceeds thereon in an
amount required to pay the aggregate exercise price for all the shares
underlying such Vested Options being so exercised and any required withholding
tax and to deliver such proceeds to the Company in satisfaction of such
aggregate exercise price.

         "Cause" means, with respect to any Participant, (a) "cause" as defined
in an employment agreement applicable to the Participant, or (b) in the case of
a Participant who does not have an employment agreement that defines "cause":

                  (i) any act or omission that constitutes a material breach by
         the Participant of any of the Participant's obligations under his or
         her employment agreement with the Company or any of its Subsidiaries,
         the applicable Agreement or any other agreement with the Company or any
         of its Subsidiaries;

                  (ii) the willful and continued failure or refusal of the
         Participant substantially to perform the duties required of him or her
         as an employee of the Company or any of its Subsidiaries, or
         performance significantly below the level required or expected of the
         Participant, as determined by the Compensation Committee;

                  (iii) any willful violation by the Participant of any federal
         or state law or regulation applicable to the business of the Company or
         any of its Subsidiaries or Affiliates, or the Participant's commission
         of any felony or other crime involving moral turpitude, or any willful
         perpetration by the Participant of a common law fraud; or

                  (iv) any other misconduct by the Participant that is
         materially injurious to the financial condition or business reputation
         of, or is otherwise materially injurious to, the Company or any of its
         Subsidiaries or Affiliates.

         "Change in Control" means: (a) the sale or disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Company to any "person" or "group" (as such terms are defined in Sections
13(d)(3) and 14(d)(2) of the 1934 Act) other than the holders of the Common
Shares immediately prior to the initial Public Offering or any of their
respective Affiliates or (b) any person (other than the holders of the Common
Shares immediately prior to the initial Public Offering or any of their
respective Affiliates) or group (other than the holders of the Common Shares
immediately prior to the initial Public Offering or any of their respective
Affiliates) is or becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the total voting power of the voting shares of the Company,
including by way of merger, amalgamation, consolidation or otherwise.

         "Code" means the United States Internal Revenue Code of 1986, as
amended, including the rules and regulations promulgated thereunder.

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         "Common Shares" means Class A Common Shares, par value US$0.01 per
share, of the Company.

         "Compensation Committee" means the Compensation Committee of the Board
of Directors.

         "Competing Business" means a business or enterprise (other than the
Company and its direct or indirect Subsidiaries) that is engaged in (a) ocean
transportation services through liner, parcel, bulk and/or vessel chartering
services, or (b) any other product or service provided by the Company at the
time of an Eligible Person's termination of service.

         "Date of Grant" means the date of grant of an Award as set forth in the
applicable Agreement.

         "Eligible Persons" means employees, consultants and non-employee
directors of the Company and its Subsidiaries.

         "Fair Market Value" means, with respect to a Common Share on any
relevant day: (a) if such Common Shares are traded on a national securities
exchange, the closing price on such day, or if the Common Shares did not trade
on such day, the closing price on the most recent preceding day on which there
was a trade, (b) if such Common Shares are quoted on an automated quotation
system, the closing price on such day, or if the Common Shares did not trade on
such day, the mean between the closing bid and asked prices on such day, or (c)
in all other cases, the "fair market value" as determined by the Compensation
Committee in good faith and using such financial sources as it deems relevant
and reliable; provided, however, that Fair Market Value shall not be less than
the par value of the Common Shares.

         "Good Reason" means, with respect to any Participant, (a) "good reason"
as defined in an employment agreement applicable to such Participant, or (b) in
the case of a Participant who does not have an employment agreement that defines
"good reason", a failure by the Company, its Affiliates and its Subsidiaries to
pay material compensation due and payable to the Participant in connection with
his employment.

         "Incentive Share Option" means an Option granted with the intention
that it qualify as an "incentive stock option" as that term is defined in
Section 422 of the Code or any successor provision.

         "1933 Act" means the United States Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.

         "1934 Act" means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.

         "Nonqualified Share Option" means an Option other than an Incentive
Share Option.

         "Option" means a right to purchase Common Shares granted pursuant to
Section 8.

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         "Option Price" means, with respect to any Option, the exercise price
per Common Share to which it relates.

         "Option Shares" means Common Shares acquired by a Participant upon
exercise of an Option.

         "Outstanding", with respect to any Common Shares, means, as of any date
of determination, all shares that have been issued on or prior to such date,
other than shares repurchased or otherwise reacquired by the Company or any
Subsidiary, on or prior to such date.

         "Participant" means any Eligible Person who has been granted an Award.

         "Performance Share" has the meaning set forth in Section 12.

         "Permanent Disability", with respect to any Participant who is an
employee of the Company or any of its Subsidiaries, shall be defined in the same
manner as such term or a similar term is defined in an employment agreement
applicable to the Participant or, in the case of a Participant who does not have
an employment agreement that defines such term or a similar term, means that the
Participant is unable to perform substantially all his or her duties as an
employee of the Company or any of its Subsidiaries by reason of illness or
incapacity for a period of more than six months, or six months in the aggregate
during any 12-month period, established by medical evidence reasonably
satisfactory to the Compensation Committee.

         "Person" means an individual, a partnership, a joint venture, a
company, a corporation, an association, a trust, an estate or other entity or
organization, including a government or any department or agency thereof.

         "Public Offering" means an underwritten public offering of equity
securities of the Company pursuant to an effective registration statement under
the 1933 Act.

         "Qualifying Performance Criteria" has the meaning set forth in Section
14(a) of the Plan.

         "Restricted Shares" mean Common Shares awarded to a Participant in
exchange for services rendered to the Company and/or its Subsidiaries or
Affiliates subject to the terms and conditions of the Plan under Section 9, that
the Company has the right to repurchase pursuant to terms prescribed by the
Compensation Committee.

         "Retirement", with respect to any Participant who is an employee of the
Company or any of its Subsidiaries, means resignation or termination of
employment on or after the Participant's 65th birthday (other than termination
for Cause); provided, however, that the Compensation Committee may determine in
its sole discretion that a resignation or termination of employment under other
circumstances shall be considered "Retirement" for purposes of the Plan.

         "Share Appreciation Right" means a right that entitles the Participant
to receive, in cash or Common Shares (as determined by the Compensation
Committee in its sole discretion) value equal to or otherwise based on the
excess of (a) the Fair Market Value of a specified number of Common Shares at
the time of exercise over (b) the exercise price of the right, as established by
the Compensation Committee on the Date of Grant.

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         "Share Unit" means an Award granted under Section 11 denominated in
units of Common Shares.

         "Subsidiary" means any corporation in which more than 50% of the total
combined voting power of all classes of stock are owned, either directly or
indirectly, by the Company or another Subsidiary.

         "Vested Options" means, as of any date of determination, Options that
by their terms have vested and are exercisable on such date.

         "Vested Restricted Shares" means, as of any date of determination,
Restricted Shares that are no longer subject to the Company's right of
repurchase.

         A "Wrongful Solicitation" shall be deemed to occur when a Participant
or former Participant directly or indirectly (except in the course of his
employment with the Company), for the purpose of conducting or engaging in a
Competing Business, calls upon, solicits, advises or otherwise does, or attempts
to do, business with any Person who is, or was, during the then most recent
12-month period, a customer of the Company or any of its Affiliates, or takes
away or interferes or attempts to take away or interfere with any custom, trade,
business, patronage or affairs of the Company or any of its Affiliates, or hires
or attempts to hire any Person who is, or was during the most recent 12-month
period, an employee, officer, representative or agent of the Company or any of
its Affiliates, or solicits, induces, or attempts to solicit or induce any
person who is an employee, officer, representative or agent of the Company or
any of its Affiliates to leave the employ of the Company or any of its
Affiliates, or violate the terms of their contract, or any employment agreement,
with it.

         3. Administration of the Plan.

         (a) Members of the Compensation Committee. The Plan shall be
administered, and Awards shall be granted hereunder, by the Compensation
Committee.

         (b) Authority of the Compensation Committee. The Compensation Committee
shall have full discretionary power and authority, subject to such resolutions
not inconsistent with the provisions of the Plan or applicable law as may from
time to time be adopted by the Board, to (i) interpret and administer the Plan
and any instrument or agreement entered into under the Plan, (ii) establish such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan and (iii) make any determination and take
any other action that the Compensation Committee deems necessary or desirable
for administration of the Plan. All questions of interpretation, administration
and application of the Plan shall be determined in good faith by a majority of
the members of the Compensation Committee then in office, except that the
Compensation Committee may authorize any one or more of its members, or any
officer of the Company, to execute and deliver documents on behalf of the
Compensation Committee, and the determination of such majority shall be final
and binding in all matters relating to the Plan.

         4. Number of Shares Issuable in Connection with Awards.

                                       5

         (a) Original Limit. The maximum aggregate number of Common Shares that
may be issued in connection with Awards granted under the Plan is 2,000,000.

         (b) Replenishment Provisions. Shares subject to any Awards that are
canceled, that expire without being exercised or that are repurchased by the
Company shall again be available for future grants of Awards. In addition,
Shares subject to Awards that have been repurchased by the Company in payment or
satisfaction of the purchase price or tax withholding obligation of an Award
shall not count against the limit set forth in paragraph (a) above. The Company
shall not be under any obligation, however, to make any such future Awards.

         (c) Adjustments. The limits provided for in this Section 4 shall be
subject to adjustment as provided in Section 16(a).

         5. Eligible Persons.

         Awards may be granted or offered only to Eligible Persons. The
Compensation Committee shall have the authority to select the individual
Participants to whom Awards may be granted from among such class of Eligible
Persons and to determine the number and form of Awards to be granted to each
Participant.

         6. Agreement.

         The terms and conditions of each Award shall be embodied in an
Agreement in a form approved by the Compensation Committee, which shall contain
terms and conditions not inconsistent with the Plan and which shall incorporate
the Plan by reference. Each Agreement shall: (a) state the date (the Date of
Grant) as of which the Award was granted, and (i) in the case of Options and
Share Appreciation Rights, set forth the number of Options and Share
Appreciation Rights being granted to the Participant and the applicable Option
Price and/or exercise price (for Share Appreciation Rights) and expiration
date(s) and (ii) in the case of Restricted Shares and other Awards, set forth
the number of Restricted Shares or other Awards being granted or offered to the
Participant and, if applicable, the purchase price or other consideration for
such Restricted Shares or other Awards; (b) set forth the vesting schedule (if
any); (c) be signed by the recipient of the Award and a person designated by the
Compensation Committee; and (d) be delivered to the recipient of the Award.

         7. Restrictions on Transfer.

         Unless otherwise determined by the Compensation Committee, an Award
shall not be transferable or assignable by the Participant other than by will or
by the laws of descent and distribution. An Award exercisable after the death of
a Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.

         8. Options.

         (a) Terms of Options Generally. The Compensation Committee may grant
Options designated as Incentive Share Options or Nonqualified Share Options.
Options may be granted to any Eligible Person. Each Option shall entitle the
Participant to whom such Option was

                                       6

granted to purchase, upon payment of the relevant Option Price, one Common
Share. Options granted under the Plan shall comply with the following terms and
conditions:

               (i) Option Price.

                    A. The Option Price for shares purchased under an Option
               shall be as determined by the Compensation Committee, but shall
               not be less than the Fair Market Value of the Common Shares as of
               the Date of Grant, except in the case of substitute awards issued
               by the Company in connection with an acquisition or other
               corporate transaction.

                    B. The Option Price for shares purchased under an Option
               shall be paid in full to the Company by delivery of consideration
               equal to the product of the Option Price and the number of shares
               purchased, together with any amounts required to be withheld for
               tax purposes under Section 17(c). Such consideration must be paid
               before the Company will issue the shares being purchased and must
               be in a form or a combination of forms acceptable to the
               Compensation Committee for that purchase, which forms may (but
               are not required to) include:

                         (A) cash;

                         (B) check or wire transfer;

                         (C) to the extent permitted by applicable law,
                    tendering Common Shares already owned by the Participant,
                    provided that the shares have been held for the minimum
                    period required by applicable accounting rules to avoid a
                    charge to the Company's earnings for financial reporting
                    purposes or were not acquired from the Company as
                    compensation;

                         (D) to the extent permitted by applicable law, Cashless
                    Exercise; or

                         (E) such other consideration as the Compensation
                    Committee may permit in its sole discretion; provided,
                    however, that any Participant may, at any time, exercise any
                    Vested Option (or portion thereof) owned by him pursuant to
                    a Cashless Exercise without any prior approval or consent of
                    the Compensation Committee.

               (ii) Vesting of Options. Unless the Compensation Committee in its
          sole discretion determines otherwise and so sets forth in the
          applicable Agreement, and except as vesting may be accelerated
          pursuant to the terms of the Plan or the applicable Agreement, Options
          shall vest and become exercisable in 20% installments on each of the
          first five anniversaries of the Date of Grant.

               (iii) Duration of Options. Subject to earlier termination in
          accordance with the terms of the Plan and the instrument evidencing
          the Option, the maximum term of an

                                       7

          Option shall be as established for that Option by the Compensation
          Committee but in no event shall be greater than ten years from the
          Date of Grant.

               (iv) Exercise Following Termination of Employment. Upon
          termination of a Participant's employment with the Company and its
          Subsidiaries, unless otherwise determined by the Compensation
          Committee in its sole discretion, the following terms and conditions
          shall apply:

                    A. If the Participant's employment is terminated by the
               Company other than for Cause, or as a result of the Participant's
               resignation for Good Reason, or as a result of death, Permanent
               Disability or Retirement, the Participant (or, in the case of the
               Participant's death, his Beneficiary) may exercise any Options,
               to the extent vested as of the date of such termination, at any
               time until the earlier of (I) the 90th day following the date of
               such termination of employment, and (II) the expiration of the
               Option under the provisions of Section 8(a)(iii); and

                    B. If the Participant's employment is terminated by the
               Company for Cause, or as a result of the Participant's
               resignation other than for Good Reason, all of the Participant's
               Options (whether or not vested) shall expire and be canceled
               without any payment therefor as of the date of such termination.

          Any Options not exercised within the applicable time period specified
          above shall expire at the end of such period and be canceled without
          any payment therefor.

               (v) Certain Restrictions. Options granted hereunder shall be
          exercisable during the Participant's lifetime only by the Participant.

               (vi) Shareholder Rights; Option and Share Adjustments. A
          Participant shall have no rights as a shareholder with respect to any
          Common Shares issuable upon exercise of an Option until the issuance
          of the Common Shares is recorded in the Company's register of members
          and a share certificate evidencing the Common Shares have actually
          been issued to that person in accordance with the terms of the Plan
          and the applicable Agreement and the issue of such Common Shares has
          been approved by the Bermuda Monetary Authority. Except as otherwise
          provided by the Board of Directors, no adjustment (including an
          adjustment of an Option's exercise price) shall be made with respect
          to (A) outstanding Options for dividends or other distributions,
          whether made with respect to Common Shares or otherwise, or (B)
          dividends, distributions or other rights in respect of any Common
          Shares for which the record date is prior to the date upon which the
          Participant shall become the registered holder thereof.

               (vii) Dividends and Distributions. Any Common Shares or other
          securities of the Company received by the Participant as a result of a
          share dividend, bonus issue or other distribution in respect of Option
          Shares shall be subject to the same restrictions (if any) as such
          Option Shares.

               (viii) Incentive Share Options. Incentive Share Options granted
          under this Plan shall be subject to the following additional
          conditions, limitations and restrictions:

                                       8

                    A. Incentive Share Options may be granted only to employees
               of the Company or a Subsidiary or parent corporation of the
               Company, within the meaning of Section 424 of the Code.

                    B. No Incentive Share Option may be granted under this Plan
               after the 10-year anniversary of the date on which the Plan is
               adopted by the Board or, if earlier, the date on which the Plan
               is approved by the Company's shareholders.

                    C. The aggregate Fair Market Value (as of the Date of Grant)
               of the Common Shares with respect to which the Incentive Share
               Options awarded to any Participant first become exercisable
               during any calendar year may not exceed $100,000. For purposes of
               the $100,000 limit, the Participant's Incentive Share Options
               under this Plan and all other plans maintained by the Company and
               its Subsidiaries will be aggregated. To the extent any Incentive
               Share Option would exceed the $100,000 limit, the Incentive Share
               Option will thereafter be treated as a Nonqualified Share Option
               for all purposes. No Incentive Share Option may be granted to any
               individual who owns shares possessing more than 10% of the total
               combined voting power of all classes of shares of the Company or
               any Subsidiary.

                    D. If the Compensation Committee exercises its discretion to
               permit an Incentive Share Option to be exercised by a Participant
               more than three months after the termination of a Participant's
               employment for any reason (or more than 12 months if the
               Participant is permanently and totally disabled, within the
               meaning of Section 22(e) of the Code), the Incentive Share Option
               will thereafter be treated as a Nonqualified Share Option for all
               purposes. For purposes of this subclause D, a Participant's
               employment relationship will be treated as continuing
               uninterrupted during any period that the Participant is on
               military leave, sick leave or another Approved Leave of Absence
               if the period of leave does not exceed 90 consecutive days, or a
               longer period to the extent that the Participant's right to
               reemployment with the Company or a Subsidiary is guaranteed by
               statute or by contract. If the period of leave exceeds 90
               consecutive days and the Participant's right to reemployment is
               not guaranteed by statute or contract, the employment
               relationship will be deemed to have ceased on the 91st day of the
               leave.

          (ix) Additional Terms and Conditions. Each Option granted hereunder,
     and any Common Shares issued in connection with such Option, shall be
     subject to such additional terms and conditions not inconsistent with the
     Plan as are prescribed by the Compensation Committee and set forth in the
     applicable Agreement.

         (b) Unvested Options. Upon termination of a Participant's employment
with the Company and its Subsidiaries, all Options granted to such Participant
that have not theretofore vested and which do not vest by reason of such
termination of employment shall terminate and be canceled without any payment
therefor.

         9. Restricted Shares and Bonus Shares.

                                       9

         (a) Terms of Restricted Shares and Bonus Shares Generally. Restricted
Shares and Bonus Shares awarded by the Compensation Committee shall be issued
solely in consideration for services rendered to the Company, its Subsidiaries
and/or Affiliates by Participants, except as otherwise determined by the
Compensation Committee in its sole discretion.

         (b) Restricted Shares and Bonus Shares shall comply with the following
terms and conditions:

          (i) Right of Repurchase. The Company shall have the right to
     repurchase Restricted Shares on such terms as determined by the
     Compensation Committee. Bonus Shares shall not be subject to a right of
     repurchase.

          (ii) Shareholder Rights. A Participant shall have all rights of a
     shareholder as to the Restricted Shares and Bonus Shares awarded to such
     Participant, including the right to receive dividends and the right to vote
     in accordance with the Company's bye-laws, subject to the restrictions set
     forth in the Plan and the applicable Agreement.

          (iii) Dividends and Distributions. Unless otherwise determined by the
     Compensation Committee in its sole discretion, any Common Shares or other
     securities of the Company received by a Participant as a result of a share
     distribution to holders of Restricted Shares or as a share dividend or
     bonus issue on Restricted Shares shall be subject to the same restrictions
     as such Restricted Shares, and all references to Restricted Shares
     hereunder shall be deemed to include such Common Shares or other
     securities.

          (iv) Additional Terms and Conditions. The issue of each Restricted
     Share and Bonus Share granted or offered for sale hereunder shall be
     subject to such additional terms and conditions not inconsistent with the
     Plan as are prescribed by the Compensation Committee and set forth in the
     applicable Agreement.

         (c) Unvested Restricted Shares. Unless otherwise determined by the
Compensation Committee in its sole discretion, upon termination of a
Participant's employment with the Company and its Subsidiaries, all Restricted
Shares granted or sold to such Participant that have not theretofore vested (and
that do not vest by reason of such termination of employment) shall be subject
to repurchase by the Company for US$0.01 for each such share.

         10. Share Appreciation Rights.

         Share Appreciation Rights may be granted to Participants either alone
("freestanding") or in addition to or in tandem with other Awards granted under
the Plan and may, but need not, relate to a specific Option granted hereunder.
The provisions of Share Appreciation Rights need not be the same with respect to
each grant or each recipient. Any Share Appreciation Right granted in tandem
with an Option may be granted at the same time such Option is granted or at any
time thereafter before exercise or expiration of such Option. All Share
Appreciation Rights granted under the Plan shall be granted subject to the same
terms and conditions applicable to Nonqualified Share Options as set forth in
Section 8(a); provided, however, that Share Appreciation Rights granted in
tandem with a previously granted Option shall have the terms and conditions as
such Option. Subject to the provisions of Section 8, the Compensation Committee
may impose such other conditions or restrictions on any Share Appreciation Right
as it shall

                                       10

deem appropriate. Share Appreciation Rights may be settled in Common Shares or
cash as determined by the Compensation Committee in its sole discretion.

         11. Share Units.

         The Compensation Committee may grant Awards of Share Units under the
Plan. With respect to each grant of Share Units, the Compensation Committee
shall determine in its sole discretion the period or periods, including any
conditions for determining such period or periods, during which any restrictions
on vesting shall apply, provided that in no event, other than in connection with
a termination of employment, shall such period or periods be less than three
years (the "Unit Restriction Period"). The Compensation Committee also may make
any Award of Share Units subject to the satisfaction of other conditions,
including the attainment of performance goals, or contingencies ("Unit Vesting
Condition"), in order for a Participant to receive payment of such Share Unit
Award, which shall be established by the Compensation Committee at the Date of
Grant thereof. The Compensation Committee may specify that the grant, vesting or
retention of any or all Share Units shall be a measure based on one or more
Qualifying Performance Criteria selected by the Compensation Committee and
specified at the Date of Grant thereof. If required by Section 162(m) of the
Code, the Compensation Committee shall certify the extent to which any
Qualifying Performance Criteria have been satisfied, and the amount payable as a
result thereof, prior to payment of any Share Units that are intended to satisfy
the requirements for "performance-based compensation" under Section 162(m) of
the Code. Awards of Share Units shall be payable in Common Shares or cash as
determined by the Compensation Committee in its sole discretion. The
Compensation Committee may permit a Participant to elect to defer receipt of
payment of all or part of any Award of Share Units pursuant to rules and
regulations adopted by the Compensation Committee. Unless the Compensation
Committee provides otherwise at the Date of Grant of an Award of Share Units,
the provisions of Sections 9 of this Plan relating to the vesting of Restricted
Shares shall apply during the Unit Restriction Period or prior to the
satisfaction of any Unit Vesting Condition for such Award.

         12. Performance Shares.

         The Compensation Committee may grant Awards of Performance Shares and
designate the Participants to whom Performance Shares are to be awarded and
determine the number of Performance Shares, the length of the performance period
and the other terms and conditions of each such Award. Each Award of Performance
Shares shall entitle the Participant to a payment in the form of Common Shares
upon the attainment of performance goals (which may be Qualifying Performance
Criteria) and other terms and conditions specified by the Compensation
Committee. Notwithstanding satisfaction of any performance goals, the number of
shares issued under an Award of Performance Shares may be adjusted on the basis
of such further considerations as the Compensation Committee shall determine, in
its sole discretion. However, the Compensation Committee may not, in any event,
increase the number of shares earned upon satisfaction of any performance goal
by any Participant subject to Section 162(m) of the Code to the extent such
Section is applicable. The Compensation Committee, in its sole discretion, may
make a cash payment equal to the Fair Market Value of the Common Shares
otherwise required to be issued to a Participant pursuant to an Award of
Performance Shares.

                                       11

         13. Other Share-Based Awards.

         In addition to the Awards described in Sections 8 through 12, and
subject to the terms of the Plan, the Compensation Committee may grant other
incentives payable in cash or in Common Shares under the Plan as it determines
to be in the best interests of the Company and subject to such other terms and
conditions as it deems appropriate.

         14. Performance-Based Awards.

         (a) Performance Criteria. Awards of Options, Restricted Shares, Share
Units, Performance Shares and other Awards made pursuant to the Plan may be made
subject to the attainment of performance goals relating to one or more business
criteria. For purposes of the Plan, such business criteria shall mean any one or
more of the following performance criteria, either individually, alternatively
or in any combination: (a) cash flow; (b) earnings (including gross margin,
earnings before interest and taxes ("EBIT"), earnings before taxes ("EBT"), and
net earnings); (c) earnings per share; (d) growth in earnings or earnings per
share; (e) share price; (f) return on equity or average shareholders' equity;
(g) total shareholder return; (h) return on capital; (i) return on assets or net
assets; (j) return on investment; (k) sales, growth in sales or return on sales;
(l) income or net income; (m) operating income or net operating income; (n)
operating profit or net operating profit; (o) operating margin; (p) return on
operating revenue; (q) economic profit, (r) market share; (s) overhead or other
expense reduction; (t) growth in shareholder value relative to various indices,
including without limitation the S&P 500 Index or the Russell 2000 Index, (u)
strategic plan development and implementation, and (v) during the "reliance
period" (as defined in Treasury Regulation section 1.162-27(f)(2)), any other
performance measure selected by the Compensation Committee in its sole
discretion (collectively, the "Qualifying Performance Criteria"). To the extent
required by and consistent with Section 162(m) of the Code, the Compensation
Committee may appropriately adjust any evaluation of performance under a
Qualifying Performance Criteria to exclude any of the following events that
occur during a performance period: (aa) asset write-downs, (bb) litigation,
claims, judgments or settlements, (cc) the effect of changes in tax law,
accounting principles or other such laws or provisions affecting reported
results, (dd) accruals for reorganization and restructuring programs and (ee)
any extraordinary, unusual or non-recurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management's discussion and analysis
of financial condition and results of operations appearing in the Company's
annual report to shareholders for the applicable year.

         (b) Any Performance Criteria may be used to measure the performance of
the Company as a whole or with respect to any business unit, subsidiary or
business segment of the Company, either individually, alternatively or in any
combination, and may be measured either annually or cumulatively over a period
of years, on an absolute basis or relative to a pre-established target, to
previous period results or to a designated comparison group, in each case as
specified by the Compensation Committee in the Award. To the extent required by
Section 162(m) of the Code, prior to the payment of any compensation under an
Award intended to qualify as "performance-based compensation" under Code Section
162(m) the Compensation Committee shall certify the extent to which any such
Performance Criteria and any other material terms under such Award have been
satisfied (other than in cases where such relate solely to the increase in the
value of the Common Shares). To the extent Section 162(m) of the Code is

                                       12

applicable, the Compensation Committee may not in any event increase the amount
of compensation payable to a Participant subject to Section 162(m) of the Code
upon the satisfaction of any Performance Criteria.

         15. Certain Forfeitures.

         In the event a Participant or former Participant engages in a Competing
Business or in Wrongful Solicitation while in the employ of the Company or a
Subsidiary, or during the period of 12 months immediately following termination
of such employment, the following rules shall apply:

         (a) all Awards then held by the Participant (whether vested or not)
shall be forthwith forfeited without payment or other compensation of any kind;
provided, however, that the Company shall remit to the Participant the lesser of
(1) the amount (if any) he paid for forfeited Award and (2) in the case of
Restricted Shares or Performance Shares "forfeiture" means that the Company may,
subject to applicable law, repurchase such shares for the Fair Market Value of
such Restricted Shares or par value for such shares as of the date of
termination;

         (b) notwithstanding subclause (a), in the event Vested Restricted
Shares or vested Performance Shares were disposed of (for or without receipt of
value) during the period commencing one year prior to the initial engagement in
a Competing Business or in Wrongful Solicitation through the 12-month
anniversary of his termination of employment with the Company or a Subsidiary,
then, upon written demand by the Company, the Participant or former Participant,
as the case may be, shall forthwith remit to the Company the Fair Market Value
of such Vested Restricted Shares or vested Performance Shares, as determined on
the date of disposition, less the amount (if any) paid by the Participant for
such shares; and

         (c) in the event Option Shares, Shares obtained pursuant to the
exercise of a Share Appreciation Right or other Shares obtained pursuant to
Awards under the Plan (and not described in subparagraph (b)) were disposed of
(for or without receipt of value) during the period commencing one year prior to
the initial engagement in a Competing Business or in Wrongful Solicitation
through the 12-month anniversary of his termination of employment with the
Company or a Subsidiary, then, upon written demand by the Company, the
Participant or former Participant, as the case may be, shall forthwith remit to
the Company the Fair Market Value of such Shares, as determined on the date of
disposition, less the Option Price or other amount (if any) paid therefor.

         16. Effect of Certain Corporate Changes and Changes in Control.

         (a) Dilution and Other Adjustments. If the Outstanding Common Shares or
other securities of the Company, or both, for which the Award is then
exercisable or as to which the Award is to be settled shall at any time be
changed or exchanged by declaration of a share dividend, bonus issue, share
split, subdivision, consolidation, combination of shares, extraordinary dividend
of cash and/or assets, recapitalization, or reorganization, the Compensation
Committee may, and if such event occurs after a Change of Control, the
Compensation Committee shall, appropriately and equitably adjust the number and
kind of Common Shares or other securities that are subject to the Plan or
subject to any Awards

                                       13

theretofore granted, and the exercise or settlement prices of such Awards, so as
to maintain the proportionate number of Common Shares or other securities
without changing the aggregate exercise or settlement price.

         (b) Change in Control. The Compensation Committee may provide, either
at the time an Award is granted or thereafter, that a Change in Control that
occurs after the initial Public Offering of the Company shall have such effect
as is specified by the Compensation Committee, or no effect, as the Compensation
Committee in its sole discretion may provide. Without limiting the foregoing,
the Compensation Committee may provide, either at the Date of Grant of an Award
or thereafter, that if such a Change in Control occurs, then effective as of a
date selected by the Compensation Committee, the Compensation Committee, acting
in its sole discretion without the consent or approval of any Participant, will
effect one or more of the following actions or combination of actions with
respect to some or all outstanding Awards (which actions may be conditional on
the occurrence of such Change in Control and which may vary among individual
Participants): (1) accelerate the time at which Awards then outstanding vest and
(as applicable) may be exercised in full for a limited period of time on or
before a specified date (which will permit the Participant to participate with
the Common Shares received upon exercise of an Option, a Share Appreciation
Right or another Award in the event of such Change in Control) fixed by the
Compensation Committee, after which specified date all unexercised Awards and
all rights of Participants thereunder shall terminate, (2) accelerate the time
at which Awards then outstanding vest (and, in the case of Options and Share
Appreciation Rights, may be exercised so that such Options and Share
Appreciation Rights may be exercised in full for their then remaining term), (3)
require the mandatory surrender to the Company of outstanding Awards held by
such Participant (irrespective of whether such Awards are then vested or
exercisable under the provisions of the Plan) as of a date (or, with respect to
Restricted Shares, repurchase by the Company), before or not later than 60 days
after such Change in Control, specified by the Compensation Committee, and in
such event the Compensation Committee shall thereupon cancel such Awards and the
Company shall pay to each Participant an amount of cash equal to the excess of
the Fair Market Value of the aggregate Common Shares subject to such Award over
the aggregate price (if any) of such shares, or (4) take such other actions as
the Compensation Committee deems appropriate in its discretion (whether or not
related to any of the foregoing).

         17. Miscellaneous.

         (a) No Rights to Grants or Continued Employment or Engagement. No
Participant shall have any claim or right to receive grants of Awards under the
Plan. Neither the Plan nor any action taken or omitted to be taken hereunder
shall be deemed to create or confer on any Participant any right to be retained
in the employ or as a director of the Company or any Subsidiary or other
Affiliate thereof, or to interfere with or to limit in any way the right of the
Company or any Subsidiary or other Affiliate thereof to terminate the employment
or other retention of such Participant at any time.

         (b) Right of Company to Assign Rights and Delegate Duties. The Company
shall have the right to assign any of its rights and delegate any of its duties
hereunder to any of its Affiliates. The terms and conditions of any Award under
the Plan shall be binding upon and

                                       14

shall inure to the benefit of the personal representatives, heirs, legatees and
permitted successors and assigns of the relevant Participant and the Company.

         (c) Tax Withholding. The Company and its Subsidiaries may require the
Participant to pay to the Company the amount of any taxes that the Company is
required by applicable federal, state, local or other law to withhold with
respect to the grant, vesting or exercise of an Award. The Company shall not be
required to issue any Common Shares under the Plan until such obligations are
satisfied in full. The Compensation Committee may in its sole discretion permit
or require a Participant to satisfy all or part of his or her tax withholding
obligations by (1) paying cash to the Company, (2) tendering to the Company for
repurchase a number of Common Shares the Participant already owns, having a Fair
Market Value equal to the tax withholding obligations, or (3) entering into such
other arrangement as is acceptable to the Compensation Committee in its sole
discretion. The value of any shares tendered for repurchase may not exceed the
employer's minimum tax withholding obligation and, to the extent such shares
were acquired by the Participant from the Company as compensation, the shares
must have been held for the minimum period required by applicable accounting
rules to avoid a charge to the Company's earnings for financial reporting
purposes. The Company and its Subsidiaries shall also have the right to deduct
from any and all cash payments otherwise owed to a Participant any federal,
state, local or other taxes required to be withheld with respect to the
Participant's participation in the Plan.

         (d) No Restriction on Right of Company to Effect Corporate Changes. The
Plan shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger, amalgamation or consolidation of the Company, or any
issue of shares or of options, warrants or rights to purchase shares or of
bonds, debentures, preferred or prior preference shares whose rights are
superior to or affect the Common Shares or the rights thereof or that are
convertible into or exchangeable for Common Shares, or the dissolution,
winding-up or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

         (e) 1934 Act. Notwithstanding anything contained in the Plan or any
Agreement to the contrary, if the consummation of any transaction under the Plan
would result in the possible imposition of liability on a Participant pursuant
to Section 16(b) of the 1934 Act, the Compensation Committee shall have the
right, in its sole discretion, but shall not be obligated, to defer such
transaction to the extent necessary to avoid such liability.

         (f) Securities Laws. Notwithstanding any other provision of the Plan,
the Company shall have no obligation to issue any Common Shares under the Plan
or make any other distribution of benefits under the Plan unless, in the
judgment of the Compensation Committee, such issuance, delivery or distribution
would comply with all applicable laws (including, without limitation, the
requirements of the 1934 Act or the laws of any state or foreign jurisdiction)
and the applicable requirements of any securities exchange or similar entity.

         (g) Severability. If any provision of the Plan or any Award is
determined to be invalid, illegal or unenforceable in any jurisdiction, or as to
any Person, or would disqualify the

                                       15

Plan or any Award under any law deemed applicable by the Compensation Committee,
such provision shall be construed or deemed amended to conform to applicable
laws, or, if it cannot be so construed or deemed amended without, in the
Compensation Committee's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.

         18. Amendment.

         The Board of Directors or the Compensation Committee may at any time
and from time to time alter, amend, suspend or terminate the Plan in whole or in
part. No termination or amendment of the Plan may, without the consent of the
Participant to whom any Awards shall previously have been granted, adversely
affect the rights of such Participant in such Awards; provided, however, that
the Board of Directors or the Compensation Committee may amend the Plan in such
manner as it deems necessary to permit the granting of Awards meeting the
requirements of the Code or other applicable laws. In addition, no amendment of
the Plan shall, without the approval of the shareholders of the Company:

               A. increase the maximum number of Common Shares for which Awards
          may be granted under this Plan;

               B. reduce the price at which Options may be granted below the
          price provided for in Section 8(a) hereof;

               C. reduce the Option Price of outstanding Options; or

               D. extend the term of this Plan.

Notwithstanding any other provision of the Plan, during the "reliance period"
(as defined in Treasury Regulation section 1.162-27(f)(2)), any purported
"material modification" of the Plan (within the meaning of Treasury Regulation
section 1.162-27(h)(1)(iii)) shall be of no effect.

         19. Termination of the Plan.

         The Plan shall continue until terminated by the Board of Directors
pursuant to Section 18 or as otherwise set forth in this Plan, and no further
Awards shall be made hereunder after the date of such termination.

         20. Conditions to Issuance of Shares.

         (a) The Company shall be under no obligation to any Participant to
register for offering or resale or to qualify for exemption under the 1933 Act,
or to register or qualify under the laws of any state or foreign jurisdiction,
any Common Shares, security or interest in a security paid or issued under, or
created by, the Plan, or to continue in effect any such registrations or
qualifications if made. The Company may issue certificates for shares with such
legends and subject to such restrictions on transfer and stop-transfer
instructions as the Compensation Committee deems necessary or desirable for
compliance by the Company with

                                       16

federal, state and foreign securities laws. The Company may also require such
other action or agreement by the Participants as may from time to time be
necessary to comply with applicable securities laws.

         (b) To the extent the Plan or any instrument evidencing an Award
provides for issuance of share certificates to reflect the issuance of Common
Shares, the issuance may be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange.

         21. Headings; Number; Gender.

         The headings of sections and subsections herein are included solely for
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan.

         Words used herein in the singular form shall be construed as being used
in the plural form, as appropriate in the relevant context, and vice versa.
Pronouns used herein of one gender shall be construed as referring to either or
both genders, as appropriate in the relevant context.

         22. Limited Waiver.

         The waiver by the Company of any of its rights under the Plan with
respect to any Participant, whether express or implied, shall not operate or be
construed as a waiver of any other rights the Company has with respect to such
Participant or of any of its rights with respect to any other Participant.

         23. Governing Law.

         The Plan and all rights hereunder shall be governed by and construed in
accordance with the laws of Delaware without reference to rules relating to
conflicts of law.

         24. Effective Date.

         The Plan shall become effective immediately prior to the time at which
the Form S-1 registration statement for the Company's initial Public Offering is
declared effective by the Securities and Exchange Commission.

                                       17TBS INTERNATIONAL LIMITED
                                              EMPLOYEE SHARE PURCHASE PLAN
                                             (Effective ____________, 2005)

                                   ARTICLE I

                          PURPOSE AND SCOPE OF THE PLAN

Section 1.1       PURPOSE.

                  The TBS International Limited Employee Share Purchase Plan is
intended to encourage employee participation in the ownership and economic
progress of the Company. This Plan meets the requirements of an employee stock
purchase plan within the meaning of Section 423 of the Code.

Section 1.2       DEFINITIONS.

                  Unless the context clearly indicates otherwise, the following
capitalized terms have the meaning set forth below:

                  "Board of Directors" means the board of directors of the
Company.

                  "Code" means the United States Internal Revenue Code of 1986,
as amended, and as the same may be further amended from time to time, and the
Treasury Regulations promulgated thereunder.

                  "Committee" means the Compensation Committee of the Board of
Directors, which shall administer the Plan as provided in Section 1.3.

                  "Common Shares" means Class A Common Shares, par value US$0.01
per share, of the Company.

                  "Company" means TBS International Limited.

                  "Compensation" means an Employee's salary or hourly base rate
of pay, as the case may be, but except to the extent determined otherwise by the
Committee shall exclude overtime pay, bonuses, commissions, disability payments,
workers' compensation payments, and any other payment in excess of normal salary
or hourly base pay, received by an Employee for services performed for the
Company or a Subsidiary during an Option Period.

                                       2

                  "Continuous Service" means the period of time, uninterrupted
by a termination of employment, that an Employee has been employed by the
Company or a Subsidiary, or both, immediately preceding the first day of the
Subscription Period in which such Employee wishes to participate in the Plan.
Such period of time shall include any leave of absence permitted or required to
be taken into account by applicable Treasury Regulations.

                  "Employee" means any common law employee of the Company and
any common law employee of a Subsidiary that has been designated by the
Committee as participating in the Plan.

                  "Enrollment Period" means each period designated by the
Committee during which eligible Employees may enroll in the Plan.

                  "Exercise Date" means the last day of each Subscription
Period.

                  "Fair Market Value" means, with respect to a Common Share on
any relevant day: (a) if such Common Shares are traded on a national securities
exchange, the closing price on such day, or if the Common Shares did not trade
on such day, the closing price on the most recent preceding day on which there
was a trade, (b) if such Common Shares are quoted on an automated quotation
system, the closing price on such day, or if the Common Shares did not trade on
such day, the mean between the closing bid and asked prices on such day, or (c)
in all other cases, the "fair market value" as determined by the Compensation
Committee in good faith and using such financial sources as it deems relevant
and reliable, provided that such Fair Market Value of such Common Shares shall
not be less than their par value.

                  "Human Resources" means the department responsible for
personnel matters pertaining to an Employee.

                  "Leave of Absence" means, for purposes of participation in the
Plan, an Employee's sick leave or other leave of absence approved by the
Company, except that where the period of leave exceeds 90 days and the
Employee's right to reemployment is not guaranteed by statute or by contract,
the Employee shall not be deemed on a Leave of Absence as of the 91st day of
such sick leave or other leave of absence, such Employee's employment
relationship with

                                       3

the Company shall be deemed terminated, and such Employee's right to participate
in the Plan and to purchase Common Shares hereunder shall terminate.

                  "Offering Date" means the day beginning at 12:01 a.m. on the
first day of each Subscription Period.

                  "Option Period" means each period beginning on an Offering
Date and ending on the next succeeding Exercise Date. The initial Option Period
shall begin on the date of the initial public offering of the Common Shares.

                  "Option Price" means the purchase price of a Common Share
hereunder as provided in Section 3.1.

                  "Participant" means any Employee who (i) is eligible to
participate in the Plan under Section 2.1 and (ii) elects to participate.

                  "Plan" means this TBS International Limited Employee Share
Purchase Plan, as the same may be amended from time to time.

                  "Plan Year" means the 12-consecutive-month period beginning on
January 1st and ending on the following December 31st; provided, however, that
the first Plan Year shall be a short plan year commencing on the date of the
initial public offering of the Common Shares and ending on December 31, 2005.

                  "Securities Transactions Policy" means a policy implemented by
the Company governing trades of the Common Shares in order to prevent violations
of the United States securities laws.

                  "Share Purchase Account" or "Account" means a notional account
established and maintained in the name of each Participant to record the dollar
amounts accumulated on such Participant's behalf each Option Period.

                  "Share Purchase Agreement" means the form prescribed by the
Committee that must be executed by an Employee who elects to participate in the
Plan. The proper execution

                                       4

and filing of such form shall constitute the grant of an option from time to
time to the Employee in accordance with the terms of the Plan and the terms of
such form.

                  "Subscription Period" means each month; provided, however,
that a short Subscription Period shall start on the date of the initial public
offering of the Common Shares and shall end on the last day of the month in
which such initial public offering occurs.

                  "Subsidiary" means any company or corporation (other than the
Company) in an unbroken chain of companies or corporations beginning with the
Company if, at the beginning of an Option Period, each of the companies or
corporations other than the last company or corporation in the unbroken chain
owns shares possessing 50% or more of the total combined voting power of all
classes of shares in one of the other companies or corporations in such chain.

Section 1.3       ADMINISTRATION OF PLAN.

                  The Plan shall be administered by the Committee. Subject to
the express provisions of this Plan, the Committee shall be authorized to
prescribe, amend, and rescind rules and regulations relating to the Plan and the
Committee's administration thereof; to interpret the Plan; to fix the terms of
an offering under the Plan; to prescribe the maximum percentage of payroll
deductions permitted for a Subscription Period; to restrict participation in the
Plan consistent with any requirement of law or regulation; to determine the
Subsidiaries that participate in the Plan; and to make all other determinations
necessary to the administration of the Plan, including appointment of
individuals to facilitate the day-to-day operation thereof. The Committee's
determinations as to the interpretation and operation of the Plan shall be final
and conclusive. The Committee may delegate any or all of its duties hereunder to
one or more other persons, in which case any reference to the Committee herein
shall be deemed to refer to such person or persons where appropriate.

Section 1.4       EFFECTIVE DATE OF PLAN.

                  The effective date of the Plan is the date of the initial
public offering of the Common Shares, subject to the Plan being approved by
shareholders of the Company by a vote sufficient to meet the requirements of
Code Section 423(b)(2).

                                       5

Section 1.5       TERMINATION OF PLAN.

                  The Board of Directors shall have the right to terminate the
Plan at any time. Upon any such termination, the dollar amount, if any, in each
Participant's Account shall be distributed to such Participant.

                                   ARTICLE II

                                  PARTICIPATION

Section 2.1       ELIGIBILITY.

                  Each Employee, who on an Offering Date (i) will have at least
six months of Continuous Service, (ii) will be an Employee whose customary
employment is more than five months in a calendar year, and (iii) will be an
Employee whose customary employment is more than 20 hours per week, may become a
Participant by executing and filing with Human Resources a Share Purchase
Agreement during an Enrollment Period. Such participation shall begin on the
next Subscription Period following Human Resources's receipt of a properly
completed Share Purchase Agreement. Any election to participate shall be
effective subject to the Company's Securities Transactions Policy or similar
policy, if any, that may be in effect at the time of such election. An election
to participate shall continue in effect until termination of participation
occurs in accordance with Article V.

Section 2.2       PAYROLL DEDUCTIONS.

                  Payment for Common Shares purchased under the Plan shall be
made solely by authorized payroll deduction from each payment of Compensation in
accordance with the Participant's Share Purchase Agreement. Deductions from
payroll shall be expressed as a percentage of Compensation (determined on the
first day of each Subscription Period) no greater than the percentage set by the
Committee, but shall not be less than 1% of such Participant's Compensation, per
Option Period. The actual maximum percentage that may be fixed by the Committee
shall be 10%. A Participant may not increase or decrease the percentage
deduction during a Subscription Period (other than to withdraw or terminate
participation pursuant to Article V hereunder). Subject to the Company's
Securities Transactions Policy or similar policy

                                       6

that may be in effect at the time of such election, however, a Participant may
change the percentage deduction for any subsequent Subscription Period by filing
notice thereof with Human Resources during the time period described in Section
2.1 for filing a Share Purchase Agreement. Amounts deducted from a Participant's
Compensation pursuant to this section shall be credited to such Participant's
Account.

Section 2.3       TRANSFER OF PAYROLL DEDUCTIONS.

                  All payroll deductions withheld by a Subsidiary under the Plan
shall be immediately transferred to the Company.

Section 2.4       LEAVE OF ABSENCE.

                  If a Participant goes on a Leave of Absence, such
Participant's participation in the Plan shall continue provided that such
Participant continues to receive Compensation. If such Participant ceases to
receive Compensation while on a Leave of Absence, such Participant's
participation shall automatically terminate.

                                  ARTICLE III

                               PURCHASE OF SHARES

Section 3.1       OPTION PRICE.

                  (a) The Option Price for a Subscription Period shall be 95% of
the Fair Market Value of a Common Share on the Exercise Date; provided that the
Option Price shall in no case be less than the par value of a Common Share.

                  (b) The Company shall pay any brokerage fees, commissions and
other transaction expenses in connection with the purchase of shares pursuant to
the Plan.

Section 3.2       PURCHASE OF SHARES.

                  As of the date that all purchases under the Plan with respect
to a particular Subscription Period are made, the amount in a Participant's
Share Purchase Account shall be

                                       7

charged with the aggregate Option Price of the largest number of Common Shares
(including fractional shares) that can be purchased with such amount.

Section 3.3       LIMITATIONS ON PURCHASE.

                  No Participant shall purchase Common Shares hereunder in any
calendar year having a Fair Market Value of more than US$25,000, as determined
pursuant to Code Section 423(b)(8). Further, no Participant shall purchase
Common Shares hereunder if, by reason of such purchase, such Participant shall
be deemed to possess 5% or more of the total combined voting power or value of
all classes of shares of the Company or a Subsidiary. For purposes of the
preceding sentence, the rules of Code Section 424(d) shall apply and Common
Shares that a Participant may purchase under outstanding options shall be
treated as shares owned by the Participant.

Section 3.4       RESTRICTION ON TRANSFERABILITY.

                  Rights to purchase shares hereunder shall be exercisable only
by the Participant. Such rights shall not be transferable and shall expire upon
a Participant's death.

                                   ARTICLE IV

                      PROVISIONS RELATING TO COMMON SHARES

Section 4.1       COMMON SHARES RESERVED.

                  Except as provided in Section 4.2, no more than 1,300,000
Common Shares may be sold pursuant to options granted under the Plan. Such
number shall be subject to adjustments effected in accordance with Section 4.2.

Section 4.2       ADJUSTMENT FOR CHANGES IN COMMON SHARES.

                  (i) In the event that the Common Shares of the Company as
presently constituted, shall be changed into or exchanged for a different number
or kind of shares or other securities of the Company or of another company or
corporation (whether by reason of merger, amalgamation, consolidation,
recapitalization, reclassification, split-up, subdivision, combination

                                       8

of shares or otherwise) or if the number of such Common Shares shall be
increased or decreased through the payment of a share dividend, bonus issue,
share split, subdivision, or reverse share split or consolidation, then, subject
to the provisions of subsection (iii) below, there shall be substituted for or
added to each Common Share that was theretofore appropriated, or that thereafter
may become subject to an offering under the Plan, the number and kind of shares
or other securities into which each outstanding Common Share shall be so changed
or for which each such share shall be exchanged or to which such share shall be
entitled, as the case may be. Outstanding Share Purchase Agreements shall be
deemed to be amended as to price and other terms, as may be necessary to
appropriately reflect the foregoing events.

                  (ii) If there shall be any other change in the number or kind
of the outstanding Common Shares, or of any share or other securities in which
such shares shall have been changed or for which it shall have been exchanged,
and if a majority of the members of the Board of Directors shall, in its sole
discretion, determine that such change equitably requires an adjustment in any
offering that was theretofore made or that may thereafter be made under the
Plan, that such adjustment shall be made in accordance with such determination.

                  (iii) An offering pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments or reclassifications,
reorganizations or changes in its capital or business structure, to merge,
amalgamate, to consolidate, to dissolve, to liquidate, to wind up or to sell or
transfer all or any part of its business or assets.

Section 4.3       INSUFFICIENT SHARES.

                  If the aggregate funds available for the purchase of Common
Shares with respect to any Subscription Period would cause an issuance of shares
in excess of the number provided for in Section 4.1, (i) the Committee shall
proportionately reduce the number of shares that would otherwise be purchased by
each Participant in order to eliminate such excess, (ii) any cash remaining in
each Participant's Share Purchase Account shall be distributed to such
Participant as soon as reasonably practicable, and (iii) the Plan shall
automatically terminate immediately after such Subscription Period.

                                       9

Section 4.4       CONFIRMATION OF PURCHASES; REGISTRATION OF SHARES.

                  Each Participant shall be provided with a written statement at
such times as determined by the Committee indicating the number of Common Shares
purchased under the Plan by the Participant, the aggregate number of Common
Shares accumulated under the Plan by the Participant, and other relevant
information with respect to the Participant's participation in the Plan. Except
in the case of death, any certificate issued to a Participant must initially be
issued in the Participant's name alone or in such Participant's name and another
as joint tenants with right of survivorship. Registration of any shares
following the death of a Participant will be subject to the same rules as are
then applicable to decedent shareholders generally. At the Company's election,
the issue of Common Shares may occur through a transfer agent or brokerage
account established for this purpose, and the Company may require as a condition
to participation in the Plan that each Participant establish an account with a
brokerage firm selected by the Company. To the extent determined by the
Committee, Common Shares acquired pursuant to the Plan may not be disposed of by
the Participant for a period after the applicable Exercise Date established by
the Committee.

Section 4.5       RIGHTS AS SHAREHOLDERS.

                  The Common Shares purchased by a Participant with respect to a
Subscription Period shall, for all purposes, be deemed to have been purchased as
of the day such shares are first owned by the Participant. Participants for whom
shares have been purchased shall be entitled to all rights of a shareholder with
respect to such shares, including the right to receive dividends and the right
to vote. The Participant shall be responsible for payment of all transaction
fees related to Common Shares arising after the date such shares are purchased
hereunder.

Section 4.6       CORPORATE REORGANIZATIONS, LIQUIDATION, ETC.

                  In the event of any corporate merger, amalgamation,
consolidation, acquisition of property or shares, separation, reorganization, or
liquidation or winding up, provision may be made (but is not required to be
made) for the substitution of a new option for an old option, or an assumption
of an old option, by an employer company or corporation or a company or

                                       10

corporation related to such company or corporation. Any provision for such
substitution or assumption shall be subject to the limitations and provisions of
Code Section 424.

                                   ARTICLE V

                          TERMINATION OF PARTICIPATION

Section 5.1       WITHDRAWAL.

                  Subject to the Company's Securities Transactions Policy or
similar policy that may be in effect at the time, a Participant may withdraw
from the Plan at any time by filing notice of withdrawal with the Company's
nominee prior to an Offering Date. In such event, the dollar amount, if any, in
such Participant's Share Purchase Account shall be distributed to such
Participant (or in the case of death, to such Participant's designated
beneficiary(ies)) and no further shares will be purchased on such Participant's
behalf unless such Participant is eligible to enroll and again enrolls in the
Plan effective as of the beginning of a subsequent Subscription Period by filing
a Share Purchase Agreement as set forth in Section 2.1.

Section 5.2       TERMINATION OF ELIGIBILITY.

                  If a Participant ceases to be employed by the Company or a
Subsidiary or otherwise becomes ineligible to participate in the Plan as set
forth in Section 2.1, such Participant's participation in the Plan shall
thereupon automatically terminate. In such event, the dollar amount, if any, in
such Participant's Share Purchase Account shall be distributed to such
Participant (or in the case of death, to such Participant's designated
beneficiary(ies)) and no further shares will be purchased on such Participant's
behalf. For purposes of this section, a Participant's participation in the Plan
will not automatically terminate if such Participant becomes an individual on a
Leave of Absence permitted or required to be taken into account by applicable
Treasury Regulations or other law unless provided otherwise in Section 4.2. Any
Participant whose participation in the Plan is terminated pursuant to this
Section may again become a Participant as of the beginning of a new Subscription
Period by satisfying the eligibility requirements and executing and filing a
Share Purchase Agreement as set forth in Section 2.1.

                                       11

Section 5.3       NO INTEREST.

                  No interest will be credited or paid on cash balances in a
Participant's Share Purchase Account.

                                   ARTICLE VI

                               GENERAL PROVISIONS

Section 6.1       TAX WITHHOLDING; INFORMATION RETURNS.

                  Each Participant shall be deemed to have consented to any
income tax withholding that may hereafter be required by reason of such
Participant's participation in the Plan or the disposition of, or payment of any
dividends on, shares acquired by such Participant under the Plan. The proper
officers of the Company and each Subsidiary shall prepare and, where required,
timely file such tax information returns and other notices as may be required by
law from time to time.

Section 6.2       NOTICES.

                  Any notice that an Employee files pursuant to the Plan shall
be made on forms prescribed by the Committee and shall be effective as soon as
administratively possible after such notice is received by Human Resources or by
the Company's nominee, as the case may be.

Section 6.3       CONDITION OF EMPLOYMENT.

                  Neither the creation of the Plan, nor participation therein,
shall be deemed to create any right of continued employment or in any way affect
the right of the Company or a Subsidiary to terminate an Employee.

Section 6.4       AMENDMENT OF THE PLAN.

                  The Board of Directors may at any time, and from time to time,
amend the Plan in any respect, except, that without approval of the Company's
shareholders, no amendment may (i) increase the aggregate number of shares
permitted to be reserved by the Board of Directors

                                       12

under the Plan other than as provided in Section 4.2, (ii) materially change the
Plan benefits provided for herein, (iii) change the definition of a Subsidiary,
or (iv) materially change the eligibility requirements for Employees. Any
amendment of the Plan must be made in accordance with applicable provisions of
the Code.

Section 6.5       APPLICATION OF FUNDS.

                  All funds received by the Company by reason of a purchase of
shares hereunder may be used for any corporate purpose.

Section 6.6       LEGAL RESTRICTIONS.

                   The Plan, the grant and exercise of options to purchase
Common Shares under the Plan, and the Company's obligation to sell and deliver
shares upon the exercise of options to purchase shares shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approvals by any regulatory or governmental agency as may, in the opinion of the
Company, be required.

Section 6.7       NUMBER.

                  Whenever used herein, singular words shall include the plural,
and vice versa, as the context requires.

Section 6.8       GOVERNING LAW.

                  Except to the extent preempted by Federal law, the Plan and
all rights and obligations thereunder shall be construed and enforced in
accordance with the domestic internal law of the State of Delaware.

                                       13

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