Document:

EXHIBIT (vi)

Page 1 of 24

 

 

 

 

 

 

PITNEY BOWES INC.

 

DEFERRED INCENTIVE SAVINGS PLAN

 

As Amended and Restated

Effective January 1, 2003

 

(Previously amended and Restated Effective January 1, 2000)

 

 

 

 

 

 

This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.

 

 

EXHIBIT (vi)

Page 2 of 24

 

 

DCPP12

 

PITNEY BOWES INC.

DEFERRED INCENTIVE SAVINGS PLAN

(As amended and restated effective as of January 1, 2003)

 

ARTICLE I

 

INTRODUCTION

 

The purpose of the Pitney Bowes Inc. Deferred Incentive Savings Plan (hereinafter referred to as the “Plan”) is to aid Pitney Bowes Inc. and its subsidiaries in retaining and attracting executive employees by providing them with savings and tax deferral opportunities. The Plan first became effective for deferral elections made hereunder on or after September 9, 1996. The Plan has been amended and restated from time to time. The Plan was amended and restated to incorporate previous amendments and to make additional changes, effective for deferral elections made hereunder on or after January 1, 2000. The Plan was further amended - and restated to incorporate amendments and clarifications effective for deferral elections made hereunder on or after November 1, 2002. Participants who made a deferral election and incurred a Termination of Employment or Disability, entered Retirement or died prior to the
effective date of any amendments shall have their deferrals and distributions governed by the terms of the Plan in effect prior to the effective date of any amendments. Effective the effective date of any amendments, the term “PBC” will no longer be used to describe the annual incentive compensation deferred under the Plan. Instead, annual incentive compensation will be known as Pitney Bowes Incentive Program.

 

 

EXHIBIT (vi)

Page 3 of 24

 

 

ARTICLE LI

 

DEFINITIONS

 

For the purposes of this Plan, the following words and phrases shall have the meanings indicated, unless the context clearly indicates otherwise:

 

Section 2.01; Account. “Account” means-the bookkeeping account(s) established on the books of the Company by the Administrative Committee on behalf of the Participant comprised of the Deferral Account and the Gain Share Account. Accounts and Sub-Accounts will be established when the Deferred Amount would otherwise have been paid.

 

Section 2.02 Administrative Committee. “Administrative Committee” means the committee comprised of the Senior Vice President and Chief Human Resources Officer, Vice President and Treasurer, Vice President Employee Brand and Total Rewards, Director Strategic Leadership Total Rewards.

 

Section 2.03 Annual Incentive Award. “Annual Incentive Award” means the annual cash incentive payable to a Participant.

 

Section 2.04 Base Salary. “Base Salary” means the base salary of a Participant described in Section 4.01 (ii) of the Plan in effect at the time of the deferral rather that in effect at the time of the election to defer.

 

Section 2.05 Beneficiary “Beneficiary” means the person, persons or entity designated by the Participant to receive any benefits payable under the Plan pursuant to Article

VIII.

 

Section 2.06 Board. “Board” means the Board of Directors of Pitney Bowes Inc.

 

Section 2.07 CIU Award. “CIU Award” means any Cash Incentive Unit Award granted pursuant to the long-term incentive program under the Pitney Bowes Inc. Key Employees’ Incentive Plan (as amended and restated as of February 12, 2001).

 

Section 2.08 Change of Control. For purposes of this Plan, a “Change of Control” shall be deemed to have occurred if:

 

(i)               there is an acquisition, in any one transaction or a series of transactions, other than from Pitney Bowes Inc., by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), of beneficial ownership (within the meaning of Rule 13(d)(3) promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of Common Stock or the combined voting power of the then outstanding voting securities of Pitney Bowes Inc. entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by Pitney Bowes Inc. or any of its subsidiaries, or any employee benefit plan (or related trust) of Pitney Bowes
Inc. or its subsidiaries, or any corporation with respect to which, following such acquisition, more than 50% of the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, 

 

EXHIBIT (vi)

Page 4 of 24

 

respectively, of the common stock and voting securities of Pitney Bowes Inc. immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of Common Stock or the combined voting power of the then outstanding voting securities of Pitney Bowes Inc. entitled to vote generally in the election of directors, as the case may be; or

 

(ii)              individuals who, as of January 1, 2002, constitute the Board (as of such date, the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to January 1, 2002, whose election, or nomination for election by Pitney Bowes’ shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of Pitney Bowes Inc. (as such terms are used in Rule
14(a)(11) or Regulation 14A promulgated under the Exchange Act); or

 

(iii)             there occurs either (a) the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company, in each case, with respect to which the individuals and entities who were the respective beneficial owners of the common stock and voting securities of Pitney Bowes Inc. immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such reorganization, merger or consolidation, or (b) an approval by the shareholders of Pitney Bowes Inc. of a complete liquidation of dissolution of Pitney Bowes Inc. or of the sale or other disposition of all or substantially all of the assets of Pitney Bowes Inc.

 

Section 2.09 Common Stock. “Common Stock” means the common stock of Pitney Bowes Inc.

 

Section 2.10 Company. “Company” means Pitney Bowes Inc., its successors, any subsidiary or affiliated organizations authorized by the Board or the Executive Committee to participate in the Plan and any organization into which or with which Pitney Bowes Inc. may merge or consolidate or to which all or substantially all of its assets may be transferred.

 

Section 2.11 Consideration Shares. “Consideration Shares” means shares of Common Stock owned by the Participant for a period of at least six months prior to the Date of Exercise, and having a Fair Market Value equal to the exercise price for the number of Option Shares to be exercised.

 

Section 2.12 Date of Exercise. “Date  of Exercise” means the date on which an Option is considered to be exercised.

 

Section 2.13 Deferral Account. “Deferral Account” means the total of all Sub-Accounts maintained on the books of the Company by the Administrative Committee for each Participant to reflect deferral of Eligible Compensation, adjusted for hypothetical gains, earnings, dividends, losses, distributions, withdrawals and other similar activity other than gains with respect to stock options granted pursuant to deferrals made under the Plan.

 

Section 2.14 Deferral Period. “Deferral Period” means the period beginning on the date the Eligible Compensation would otherwise have been paid or, in the case of Gain Shares, on the Date of Exercise, and 

 

EXHIBIT (vi)

Page 5 of 24

 

ending on the earlier of (i) the Participant’s Retirement and (ii) the last day of the period during which the Participant elected to defer current enjoyment and distribution of the Eligible Compensation and Gain Shares

 

Section 2.15 Deferred Amount. “Deferred Amount” means the amount of Eligible Compensation for the Plan Year or performance period to which the Participation Agreement relates that is to be deferred under the Plan.

 

Section 2.16 Disability. “Disability” means eligibility for disability benefits under the terms of the Company’s Long-Term Disability Plan as in effect from time to time.

 

Section 2.17 Eligible Compensation. “Eligible Compensation” means any cash award otherwise payable as annual incentive compensation or a CIU Award by the Company to a Participant with respect to a Plan Year or a performance period pursuant to the Pitney Bowes Inc. Key Employees’ Incentive Plan or, effective January 1, 2000, Base Salary otherwise payable to the Participant.

 

Section 2.18 ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

Section 2.19 Executive Committee. “Executive Committee” means the Executive Compensation Committee of the Board.

 

Section 2.20 Fair Market Value. “Fair Market Value” of a share of Common Stock means the closing price of the Common Stock on the New York Stock Exchange on the most recent day on which the Common Stock was so traded that precedes the date as of which Fair Market Value is to be determined.

 

Section 2.21 Form of Payment. “Form of Payment” means, with respect to In-Service Distributions, payment in one lump sum or in 5 annual installments, and with respect to Retirement distributions, payments in a lump sum, a partial lump sum, and/or in annual installments of 5, 10 or 15 years.

 

Section 2.22 Gain Shares. “Gain Shares” means the shares of Common Stock resulting from the exercise of any option pursuant to Article V.

 

Section 2.23 Gain Share Account. “Gain Share Account” means the account maintained on the books of the Company by the Administrative Committee for the Participant to reflect the number of Phantom Share Units related to Gains Shares, adjusted for hypothetical gains, earnings, dividends, losses, distributions, withdrawals and other similar activity.

 

Section 2.24 In-Service Distribution. “In-Service Distribution” means a payment by the Company to the Participant following a date elected by the Participant (the In-Service Distribution Date) of the amount represented by the Account balance in the In-Service Fund Sub-Account or In-Service Option Sub-Account pertaining to that In-Service Distribution. In-Service Distributions shall be made in accordance with Participants’ In-Service Distribution Form of Payment election.

 

Section 2.25 In-Service Fund Sub-Account. “In-Service Fund Sub-Account” or “Fund Sub-Account” means an Account created to track Deferred Amounts allocated to hypothetical investments other than Options, and hypothetical - earnings thereon, which the Participant elects to receive as an In-Service Distribution.

 

Section 2.26 In-Service Option Sub-Account. “In-Service Option Sub-Account” or “Option Sub-Account” is 

 

EXHIBIT (vi)

Page 6 of 24

 

an Account created to track Deferred Amounts allocated to Options.

 

Section 2.27 Option. “Option” means an option to acquire shares of Common Stock granted pursuant to the Pitney Bowes Stock Option Plan as amended and restated January, 2002 or any predecessor or successor thereto.

 

Section 2.28 Option Expiration Date. “Option Expiration Date” means the last day of the option term.

 

Section 2.29 Option Share. “Option Share” means a share of Common Stock acquired (or deferred hereunder) pursuant to the exercise of an Option.

 

Section 2.30 PBIP. “PBIP” means the Pitney Bowes’ Performance Based Compensation Incentive Program, or any successor thereto, and the “PBIP-like” compensation incentive program, or any successor thereto.

 

Section 2.31 Participant. “Participant” means any individual who is eligible to participate in this Plan and who elects to participate by filing a Participation Agreement or Stock Option Gain Agreement as provided in Article IV.

 

Section 2.32 Participation Agreement. “Participation Agreement” means an agreement filed by a Participant in accordance with Article IV.

 

Section 2.33 Phantom Share Fund. “Phantom Share Fund” means the hypothetical investment fund under the Plan which is comprised of Phantom Share Units and which is intended to mirror investment in Common Stock, including deemed reinvestment of dividends thereon.

 

Section 2.34 Phantom Share Unit. “Phantom Share Unit” means the accounting units established hereunder to track a Participant’s hypothetical interest in the Phantom Share Fund.

 

Section 2.35 Plan Year. “Plan Year” means a twelve-month period beginning January 1 and ending the following December 31; provided that the first Plan Year shall be the partial year beginning on September 9, 1996 and ending on December 31, 1996.

 

Section 2.36 Retirement. “Retirement” means retirement of a Participant from the Company after attaining age 65 or 55 with at least ten years of service (in accordance with the method of determining retirement under the Pitney Bowes Pension Plan).

 

Section 2.37 Retirement Sub-Account. “Retirement Sub-Account” means an Account created to track all Deferred Amounts, and hypothetical earnings thereon, that Participants elect to receive upon Retirement or are otherwise not credited to an In-Service Sub-Account or to an Option Sub-Account.

 

Section 2.38 Stock Option Gain Agreement. “Stock Option Gain Agreement” means an agreement filed by a Participant in accordance with Article V intended to defer taxation of the gain from the exercise of an Option.

 

Section 2.39 Sub-Account. “Sub-Account” means an Account that is a portion of the Deferral Account created and maintained for purposes of enabling different allocation elections (among hypothetical investment funds), 

 

EXHIBIT (vi)

Page 7 of 24

 

different Form of Payment elections, and different distribution dates, or for other, reasons deemed necessary by the Administrative Committee to properly administer the Plan.

 

Section 2.40 Termination of Employment. “Termination of Employment” means the cessation of a Participant’s services as a full-time employee of the Company and its affiliates for any reason other than Retirement.

 

Section 2.41 Unforeseeable Emergency. “Unforeseeable Emergency” means severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or a dependent of the Participant, loss of the Participant’s property due

-7-

to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

 

Section 2.42 Valuation Date. “Valuation Date” means the last day of the calendar month immediately preceding a distribution triggering event (e.g. an In-Service Distribution Date, the end of an Option Sub-Account Deferral Period, Retirement, Termination of Employment, Death, or Disability) or such other date as the Administrative Committee in its sole discretion may determine.

 

EXHIBIT (vi)

Page 8 of 24

 

 

ARTICLE III

 

ADMINISTRATION

 

Section 3.01 Executive and Administrative Committees; Duties. The Executive Committee shall administer this Plan and shall be the named fiduciary of this Plan. A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business. All resolutions or other action taken by the Executive Committee shall be by a vote of a majority of its members present at any meeting or, without a meeting, by an instrument in writing signed by all its members. Members of the Executive Committee may participate in a meeting of such committee by means of a conference telephone or similar communications equipment that enables all persons participating in the meeting to hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

 

The Executive Committee shall be responsible for the administration of this Plan and shall have all powers necessary to administer this Plan, including discretionary authority to determine eligibility for benefits and to decide claims under the terms of this Plan, except to the extent that any such powers are vested in any other fiduciary of this Plan by the Executive Committee. The Executive Committee may from time to time establish rules for the administration of this Plan, and it shall have the exclusive right to interpret this Plan and to decide any matters arising in connection with the administration and operation of this Plan. All rules, interpretations and decisions of the Executive Committee shall be conclusive and binding on the Company, Participants and Beneficiaries.

 

The Executive Committee has delegated to the Administrative Committee responsibility for performing certain administrative and ministerial functions under this Plan. The Administrative Committee shall be responsible for determining in the first instance issues related to eligibility, deemed investment choices, determination and distribution of Account balances, crediting of hypothetical earnings and debiting of hypothetical losses, in-service withdrawals, deferral elections and any other duties concerning the day-to-day operation of the Plan. The Executive Committee shall have discretion to delegate to the Administrative Committee such additional duties as it may determine. The Administrative Committee may designate one of its members as a chairperson and may retain and supervise outside providers and professionals (including in-house professionals) to perform any or all of the duties delegated to it hereunder.

 

Neither the Executive Committee nor a member of the Board nor any member of the Administrative Committee shall be liable for any act or action hereunder, whether of omission or commission, by any other member or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated or for anything done or omitted to be done in connection with this Plan. The Executive Committee and the Administrative Committee shall keep records of all of their respective proceedings and the Administrative Committee shall keep records of all payments made to Participants or Beneficiaries and payments made for expenses or otherwise.

 

The Company shall, to the fullest extent permitted by law, indemnify each director, officer or employee of the Company (including the heirs, executors, administrators and other personal representatives of such person) and each member of the Executive Committee and the Administrative Committee against expenses (including attorneys’ fees), judgments, fines, amounts paid in settlement, actually and reasonably incurred by such person in connection with any threatened, pending or actual suit, action or proceeding (whether civil, criminal, administrative or investigative in nature or otherwise) in which such person may be involved by reason of the fact that he or she is or was serving this Plan in any capacity at the request of the Company.

 

 

EXHIBIT (vi)

Page 9 of 24

 

 

Any expense incurred by the Company, the Executive Committee or the Administrative Committee relative to the administration of this Plan shall be paid by the Company.

 

Section 3.02 Claim Procedure. If a Participant or Beneficiary makes a written request alleging a right to receive payments under this Plan or alleging a right to receive an adjustment in benefits being paid under this Plan, such actions shall be treated as a claim for benefits. All claims for benefits under this Plan shall be sent to the Administrative Committee. If the Administrative Committee determines that any individual who has claimed a right to receive benefits, or different benefits, under this Plan is not entitled to receive all or any part of the benefits claimed, the Administrative Committee shall inform the claimant in writing of such determination and the reasons therefore in terms calculated to be understood by the claimant. The notice shall be sent within 90 days of the claim unless the Administrative Committee
determines that additional time, not exceeding 90 days, is needed. The notice shall make specific reference to the pertinent Plan provisions on which the denial is based, and shall describe any additional material or information that is necessary. Such notice shall, in addition, inform the claimant of the procedure that the claimant should follow to take advantage of the review procedure set forth below in the event the claimant desires to contest the denial of the claim. Such notice shall further inform the claimant of his or her right to bring a civil action under -ERISA Section 502(a) following an adverse benefit determination on appeal. The claimant may within 90 days thereafter submit in writing to the Administrative Committee a notice that the claimant contests the denial of his or her claims and desires a further review by the Executive Committee. The Executive Committee shall within 60 days thereafter review the claim and authorize the claimant to review relevant documents and
submit issues, comments, documents - and other information relating to the claim to the Executive Committee. The Executive Committee will render a final decision on behalf of the Company with specific reasons therefore in writing and will transmit it to the claimant within 60 days of the written request for review, unless the Chairperson of the Executive Committee determines that additional time, not exceeding 60 days, is needed, and so notifies the claimant. If the claim is denied, wholly or in part, the notice shall further include specific references to the pertinent Plan provisions on which the denial is based, shall include a statement that the claimant is entitled to receive or review, upon request, documents relevant to the claim, and a statement of the claimant’s right to bring a civil action under ERISA Section 502(a). If the Committee fails to respond to a claim filed in accordance with the foregoing within 60 days or any such extended period, the Company shall be
deemed to have denied the claim.

 

 

EXHIBIT (vi)

Page 10 of 24

 

 

ARTICLE IV

 

PARTICIPATION AND DEFERRAL OF ELIGIBLE COMPENSATION

 

	
            Section 4.01
 	
            Participation. Participation in the Plan shall be limited to executives who
 

 

	
            (a)
 	
            meet such eligibility criteria as the Executive Committee shall establish from time to time,
 

 

	
            (b)
 	
            in the case of deferral of Base Salary, are individuals whose compensation may be subject to the deductibility limitations of Section 162(m) of the Internal Revenue Code, as amended, and
 

 

	
            (c)
 	
            elect to Participate in the Plan by filing a Participation Agreement or a Stock Option Gain Agreement with the Administrative Committee. A Participation Agreement must be filed
 

 

	
            (i)
 	
            with respect to an Annual Incentive Award, prior to the December 1st immediately preceding the Plan Year with respect to which the award relates and
 

 

	
            (ii)
 	
            with respect to a CIU Award, prior to the December 1st that occurs during the year prior to the last year of the performance period to which the award relates.
 

 

Prior to January 1, 2001, the term “PBC award” was used to describe the annual incentive award that could be offered under the Plan. The Participation Agreement for deferral of awards and CIU Awards that would otherwise be payable in 1997 was required to be filed no later than December 1, 1996. The Administrative Committee shall have the discretion to establish special deadlines regarding the filing of Participation Agreements for specified groups of Participants.

 

Section 4.02 Contents of Participation Agreement. Each Participation Agreement shall set forth:

(i)     the Deferred Amount, expressed as either a dollar amount or a percentage of the total Eligible Compensation for such Plan Year or performance period; provided, that the minimum Deferred Amount for any Plan Year or performance period shall not be less than $2,000;

 

(ii)    the In-Service Distribution Date(s) and/or Deferral Period for portions, or all, of the Deferred Amount, which is not to be less than three years,

 

	
            (iii)
 	
            the Form of Payment for In-Service Distributions and Retirement distribution;
 

 

(iv) investment selections made by the Participant in hypothetical investment funds under the Plan; and

 

	
            (v)
 	
            and any other item determined to be appropriate by the Administrative Committee.
 

 

Section 4.03 In-Service Distributions. An In-Service Distribution election shall pertain to such portion of the Deferred Amount as elected by the Participant and shall cause a Fund Sub-Account or an Option Sub-Account, as the case may be, to be established (unless such Sub-Account already exists), to which such portion of Deferred Amount shall be credited. In the event an In-Service Sub-Account has already been established for the In-Service Distribution Date referred to in the deferral election, such portion of the Deferred Amount shall be credited to the existing In-Service Sub-Account.

 

 

EXHIBIT (vi)

Page 11 of 24

 

 

(a)    A Participant may maintain up to four (4) Fund Sub-Accounts and an unlimited number of Option Sub-Accounts.

 

	
            (b)
 	
            The minimum Deferral Period for an In-Service Distribution is three years.
 

 

	
            (c)
 	
            A Participant may change an In-Service Distribution Date or Form of Payment once only, as follows:
 

 

	
            (i)
 	
            An In-Service Distribution Date extension may be requested by submitting a new Participation Agreement or such other form as may be provided for In-Service Distribution Date extensions by the Administrative Committee (or completing and electronically submitting the appropriate screen on the Participant website, when available) at any time, so long as the date that such form is submitted is at least twelve (12) months prior to the In-Service Distribution Date being extended; and
 

 

	
            (ii)
 	
            The In-Service Distribution Date may be extended to a subsequent year (and must be extended by at least one year), but it may not be accelerated (made to occur sooner than the original date). An extension of an In-Service Distribution Date corresponding to an Option Sub-Account will not extend the Option term.
 

 

	
            (iii)
 	
            In-Service Distribution Dates corresponding to Fund Sub-Accounts may be cancelled, even after an extension. A cancellation of such an In-Service Distribution Date shall cause the Fund Sub-Account associated with it to be combined with the Retirement Sub-Account.
 

 

	
            (iv)
 	
            In-Service Distribution Dates corresponding to Option Sub-Accounts may not be cancelled.
 

 

	
            (v)
 	
            Extending or canceling an In-Service Distribution Date in accordance with the Plan is specific to the In-Service Distribution to which it refers, and shall not affect other In-Service Distribution Dates or the ability of the Participant to make new In-Service Distribution elections with respect to new Deferred Amounts (except to the extent the maximum number of In-Service-Fund Sub-Accounts are already established).
 

 

	
            (vi)
 	
            With the exception that Fund Sub-Account cancellations do not count as a change, only one change may be made for each In Service Sub-Account. More than one change (that is otherwise permitted under the Plan) may be made if made concurrently with other permissible changes (e.g. a Form of Payment change may be made in the same request as a request for a date extension). If made separately, any change (other than a cancellation of a Fund Sub-Account) constitutes a change to the In-Service Distribution and thereby extinguishes a Participant’s right to request any additional change at another time.
 

 

(d)    Any portion of a Deferred Amount not credited to a Fund Sub-Account or an Option Sub-Account will be credited to the Retirement Sub-Account.

 

(e)    The Participation Agreement shall also indicate the Participant’s Form of Payment election for each In-Service Distribution Date. Permitted payment schedules for In-Service Distributions are a single lump sum or five (5) annual-installment-payments.

 

(f)     In-Service-Distributions corresponding to Fund Sub-Accounts shall be accelerated in the event of Retirement or Termination of Employment. In the event Retirement occurs prior to an In-Service Distribution Date, or prior to the completion of payment of an In-Service Distribution (in the case of installment payments) with respect to a Fund Sub-Account, the remaining balances in the Fund Sub-Accounts shall be added to the Retirement Sub-Account. 

 

EXHIBIT (vi)

Page 12 of 24

 

Payments shall thereafter be made by the Company in accordance with Plan provisions regarding Retirement or Termination of Employment, as the case may be.

 

(g)    In-Service Distributions corresponding to In-Service Option Sub-Accounts shall not be accelerated in the event of Retirement, but shall be accelerated in the event of Termination of Employment, death, or Disability prior to Retirement.

 

Section 4.04 Options and Deferral Periods.

 

(a)    A Participant may allocate a portion, or all, of a Deferred Amount to Options, if such hypothetical investment is made available by the Executive Committee (see Section 7.02(c)). When a Participant allocates Deferred Amounts to Options, the Participant must elect a Deferral Period, which must be at least three years but no more than ten years beginning on the date the Deferred Amount (or last installment of the Deferred Amount in the case of salary), is credited to the Deferral Account. The Deferral Period will also determine the term of the Option; however, if the minimum Deferral Period of three years is chosen, then the Option term will be four years. 

 

(b)    The allocation to Options and establishment of a corresponding Deferral Period creates an Option Sub-Account. There is no limit on the number of Option Sub-Accounts which a Participant may maintain.

 

(c)    Option Sub-Accounts established prior to January 1, 2004 will be accelerated and combined with Retirement payments in progress (or, if none, then paid in accordance with the Participant’s Form of Payment election for the Option Sub-Account) in the event of exercise of the Option following Retirement. For Option Sub-Accounts established on or after January 1, 2004, Option Sub-Account distributions shall not be accelerated due to Retirement or exercise of the Option following Retirement.

 

Section 4.05 Changes to Participation Agreement. Provisions of a Participation Agreement pertaining to the amount and source (e.g. salary, specific award, etc.) of Deferred Amounts may not be amended or revoked after the beginning of the Plan Year to which they pertain. Changes to the In-Service Distribution Dates, and Form of Payment elections for In-Service Distributions and Retirement distributions may be made in accordance with provisions in applicable Sections of the Plan.

 

Section 4.06 Reduction in Deferred Amount for Tax Withholding. The foregoing provisions of this Article IV notwithstanding, in the event a Participant’s deferral election results in insufficient non-deferred compensation from which to withhold taxes in accordance with applicable law, the Deferred Amount shall be reduced as necessary to allow the Company to satisfy tax withholding requirements.

 

EXHIBIT (vi)

Page 13 of 24

 

 

ARTICLE V

 

STOCK OPTION GAIN DEFERRALS

 

Section 5.01 In General. Subject to provisions of this Article V, Participants may elect to defer receipt and distribution of the gain related to Gain Shares until the end of an elected Deferral Period by filing with the Administrative Committee a Stock Option Gain Agreement. The stock option gain deferral features of the Plan are effective for deferral elections made on or after September 14, 1998. The deferral of gain related to Gain Shares, as described in Article V and other related provisions of the Plan, shall be available only to Participants who are employees of the Company at the time the Participant files a Stock Option Gain Agreement.

 

Section 5.02 Timing of Filing Stock Option Gain Agreement. A Stock Option Gain Agreement must be filed at least six months prior to the Date of Exercise, prior to the calendar year in which occurs the Date of Exercise and no later than the day before the first day of the six month period ending on the Option Expiration Date.

 

Section 5.03 Contents of Stock Option Gain Agreement. Each Stock Option Gain Agreement shall set forth: (i) the number of Option Shares to be exercised in connection with the deferrals hereunder; (ii) the date of grant of the Option Shares; (iii) the Deferral Period, which is not to be less than three years; (iv) the Form of Payment; and (v) any other item determined to be appropriate by the Administrative Committee. A Participant may elect to defer gain on Option Shares in increments of 25%, 50%, 75% or 100% of the number of Option Shares awarded on a particular date of grant.

 

Section 5.04 Manner of Exercising Option Shares. A Participant who desires to exercise an Option and to defer current receipt and distribution of the gain related to Gain Shares must follow the procedures and requirements that are applicable to the Option under the Pitney Bowes Stock Plan as amended and restated, January 1, 2002, including the procedures and requirements relating to the exercise of an Option; provided, however, that in the case of a deferral of Gain Shares under this Plan, the Participant shall only be permitted to tender Consideration Shares to pay the entire exercise price for any exercised Option. Notwithstanding the foregoing, the Administrative Committee may in its discretion accept the Participant’s attestation that he or she owns the number of Consideration Shares necessary to
effectuate the stock swap contemplated hereunder. The attestation method or any other procedure accepted by the Administrative Committee shall be consistent with applicable legal authority regarding the tax-free treatment of such a transaction.

 

Section 5.05 Determination of Gain Shares. Upon exercise of an Option, the gain of which the Participant has elected to defer hereunder, Gain Shares resulting from such exercise shall be determined as follows: (i) the aggregate exercise price for all exercised Option Shares shall be determined; (ii) the number of Consideration Shares needed to pay the exercise price for such Option Shares shall be determined; (iii) the difference between the number of exercised Option Shares and the number of Consideration Shares shall be the number of Gain Shares resulting from such exercise. Any fractional Gain Share that results from the computations hereunder shall be rounded up to the nearest whole number.

 

Section 5.06 Conversion of Gain Shares to Phantom Stock Units. As of the Date of Exercise, Gain Shares shall be converted to Phantom Share Units by dividing the amount of the aggregate Fair Market Value of the Gain Shares as of the Date of Exercise by the Fair Market Value of one share of Common Stock as of the Date of Exercise. The resulting number of Phantom Share Units shall be credited to the Participant’s Gain Share Account. Any fractional 

 

EXHIBIT (vi)

Page 14 of 24

 

Phantom Share Unit that results from the- computations hereunder shall be rounded up to the nearest whole number.

 

Section 5.07 Changes to the Stock Option Gain Agreement. A Stock Option Gain Agreement may not be amended or revoked after the day on which it is filed with the Administrative Committee, except that the Deferral Period may be extended if an amended Stock Option Gain Agreement is filed with the Administrative Committee at least one full calendar year before the Deferral Period (as in effect before such amendment) ends; provided, that only one such amended Stock Option Deferral Agreement may be filed with respect to each Agreement.

 

Section 5.08 Failure to Properly Exercise. If a Participant who has. made a valid election under this Article V to defer the gain related to Gain Shares and if the Option expires without a proper exercise of the Option by the Participant or if the Participant fails to properly tender the Consideration Shares by the last day of the Option term, the Participant shall forfeit any opportunity to exercise the Option and the Option shall be cancelled as of the end of the last business day of the Option term.

 

 

EXHIBIT (vi)

Page 15 of 24

 

 

ARTICLE VI

 

DEFERRAL OF ELIGIBLE COMPENSATION AND GAIN SHARES

 

Section 6.01 Elective Deferred Incentive Compensation. The Deferred Amount of a Participant with respect to each Plan Year of participation in the Plan shall be credited by the Administrative Committee to the Participant’s Deferral Account or Sub-Account as and when such Deferred Amount would otherwise have been paid to the Participant. To the extent that the Company is required to withhold any taxes or other amounts from the Deferred Amount pursuant to any state, Federal or local law, such amounts shall be taken out of compensation to the Participant that is not deferred under this Plan. In the event a Participant’s deferral election results in insufficient non-deferred compensation from which to withhold taxes in accordance with applicable law, the Deferred Amount shall be reduced as necessary to
allow the Company to satisfy tax withholding requirements.

 

Section 6.02 Vesting of Accounts. Except as provided in Section 8.06, a Participant shall be 100% vested in his/her Account at all times.

 

Section 6.03 Gain Shares. The gain from the exercise of the Option which the Participant elects to defer under the Plan as Phantom Share Units shall be credited by the Administrative Committee to the Participant’s Gain Share Account as of the Date of Exercise.

 

EXHIBIT (vi)

Page 16 of 24

 

 

ARTICLE VII

 

MAINTENANCE AND INVESTMENT OF ACCOUNTS

 

Section 7.01 Maintenance of Accounts. A Deferral Account and a Gain Share Account, shall be separately maintained for each Participant in accordance with their Participation Agreements and Stock Option Gain Agreements. A Participant’s interest in his/her Account, and all Sub-Accounts, shall be comprised of the deemed investments in the deemed investment funds offered under the Plan (including the Phantom Share Fund); provided, however, the Gain Share Account shall only reflect the Participant’s interest in the Phantom Share Fund. A Participant’s Account or Sub-Account shall be utilized solely as a device for the measurement and determination of the amounts to be paid to the Participant pursuant to this Plan, and shall not constitute or be treated as a trust fund of any kind. Accounts and Sub-Accounts shall be valued
daily and balances shall be available on the Participant web site and in quarterly statements sent to Participants. For purposes of distributions, the Administrative Committee shall determine the balance of each Account, and Sub-Account, as of each Valuation Date.

 

Section 7.02 Investment Choices.

	
            (a)
 	
            Subject to Section 7.02(d), the Executive Committee shall permit the Participant to elect to have his/her Deferred Amounts and Deferral Account deemed to be invested in one or more of the deemed investment funds offered under the Plan, selecting among the investment choices, as determined by the Executive Committee from time to time, and in accordance with such rules, regulations and procedures as the Executive Committee may establish from time to time. A Participant may elect different hypothetical investment funds for each Sub-Account. Notwithstanding anything to the contrary herein, earnings and losses based on a Participant’s investment elections shall begin to accrue as of the date such Participant’s Deferred Amounts are credited to his/her Deferral Account or Sub-Account(s); provided, however, that with respect to a Participant who is participating
in the Plan as a “PBIP-like” employee whose incentive award is determined on other than an annual basis, Deferred Amounts shall not be considered to be invested until January 1 following the Plan Year to which the Deferred Amount relates. Upon the Termination of Employment of a Participant who is participating in the Plan as a “PBC-like” employee, amounts credited to his/her Deferral Account for which earnings or losses have not begun to accrue as provided herein at the time of such Termination of Employment shall be paid Deferred Amount in cash in one lump sum without regard to any earnings or losses. Notwithstanding anything to the contrary in this Plan, if a Change of Control occurs within three years of the initial crediting of such Deferred Amounts to the Deferral Account, the net cumulative earnings with respect to such Deferred Amounts shall be based on the greater of (i) rate of return based on the actual investment elections of the Participant and (ii) the
rate of return corresponding to the MONY Money Market Fund Rate of Return or such other competitive money market fund rate designated by the Executive Committee, in its sole discretion.
 

 

(b)

	
            (i)
 	
            Phantom Share Units shall be deemed to be invested in shares of Common Stock and shall comprise the Phantom Share Fund. Deferred Amounts that are deemed to be invested in the Phantom Share Fund and Gain Shares shall be converted into Phantom Share Units based upon the Fair Market Value of the Common Stock on the date(s) the Deferred Amounts or Gain Shares are to be credited to the Deferral Account or Gain Share Account, as the case may be. Gain Shares shall be converted into Phantom Stock Units in accordance with Section 5.06. Amounts allocated to the Gain Share Account shall remain hypothetically invested in the Phantom Share Fund at all times.
 

 

	
            (ii)
 	
            The portion of any Deferral Account that is invested in the Phantom Share Fund and the entire portion of
 

 

 

EXHIBIT (vi)

Page 17 of 24

 

the Gain Share Account shall be credited, as of each Valuation Date, with additional Phantom Share Units related to cash dividends paid on the Common Stock with record dates during the period beginning on the day after the most recent preceding Valuation Date and ending on such Valuation Date, as follows. The credit shall be for a number of Phantom Share Units equal to the amount of the aggregate deemed dividend payments on the Phantom Share Units as of the record date, divided by the Fair Market Value of one share of Common Stock determined as of the record date, rounded up to the next whole share.

 

	
            (iii)
 	
                    In the event of a stock dividend, split-up or combination of the Common Stock, merger, consolidation, reorganization, recapitalization, or other change in the corporate structure or capitalization affecting the Common Stock, such that an adjustment is determined by the Executive Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, then the Executive Committee may make appropriate adjustments to the number of Phantom Share Units credited to the Deferral Account and Gain Share Account. The determination of the Executive Committee as to such adjustments, if any, to be made shall be conclusive.
 

 

	
            (iv)
 	
                    Notwithstanding any other provision of this Plan, the Executive Committee shall adopt such procedures as it may determine are necessary to ensure that with respect to any Participant who is actually or potentially subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, the crediting of deemed shares to his or her Deferral Account and Gain Share Account is not deemed to be a non-exempt purchase for purposes of such Section 16(b), including without limitation requiring that no shares of Common Stock or cash relating to such deemed shares may be distributed for six months after being credited to such Deferral Account or Gain Share Account, as the case may be. This Plan will conform in all relevant respects to the provisions of Sarbanes-Oxley Act of 2002.
 

 

	
            (c)
 	
            The Executive Committee may authorize Options as an investment choice under the Plan. The terms and conditions under which Options may be made available as an investment choice shall be determined and communicated by the Executive Committee to Participants from time to time. Any Options issueable under the Plan will be made pursuant to the Pitney Bowes Stock Plan, as amended and restated, January 2002. For purposes of determining the value of Options at the time of grant, the Executive Committee shall use the method of fair market value used for other grants under the Pitney Bowes Stock Option Plan as amended and restated, January 2002. Options shall not be a permitted investment choice with respect to the deferral of Base Salary under the Plan.
 

 

	
            (d)
 	
            Except with respect to retirees who exercise Options after retirement based on deferrals made before January 1, 2003, no deemed investment return under the Plan shall be allocated to Option Sub-Accounts, prior to the last day of the Deferral Period pertaining to the Option Sub-Account. Upon the expiration of the Deferral Period, the Participant shall receive a distribution equal to the original Deferred Amount allocated to the Option, unless he or she has exercised the right to extend the Distribution Date pursuant to Section 4.03(c) of the Plan, in which case he/she shall be entitled to elect to have his/her Deferred Amounts related to the granting of such Options deemed to be invested in one or more of the hypothetical investment funds offered under the Plan effective as soon as practicable following the end of the original Deferral Period.
 

 

Section 7.03 Statement of Accounts. The Administrative Committee shall submit to each Participant quarterly statements of his/her Account, in such form as the Administrative Committee deems desirable, setting forth the balance to the credit of such Participant in his/her Deferral Account, including Sub-Accounts, and Gain Share Account as of the end of the most recently completed quarter.

 

EXHIBIT (vi)

Page 18 of 24

 

 

ARTICLE VIII

 

BENEFITS

 

Section 8.01 Time and Form of Payment for In-Service Distributions and Gain Share Account Distributions.

 

	
            (a)
 	
            At the end of the Deferral Period, the Company shall pay to the Participant the balance of the Fund Sub-Account, Option Sub-Account, or Gain Share Account, as the case may be, in accordance with the most current valid Form of Payment election pertaining to that Sub-Account or Gain Share Account on file with the Administration Committee or, if none, then as a single lump sum. If the Deferral Period was extended, then the Company shall pay to the Participant the balance of the Sub-Account as soon as administratively practicable following the end of the extended Deferral Period in accordance with the Form of Payment election made by the Participant or, if none, then in a single lump sum. Amounts allocated to the Gain Share Account shall only be paid in the form of actual shares of Common Stock in one lump sum or installments in accordance with the Participant’s
Stock Option Gain Agreement and applicable provisions of the Plan
 

 

	
            (b)
 	
            The most recent Participation Agreement or Stock Option Gain Agreement, as the case may be, making Form of Payment elections which is filed with the Administrative Committee at least twelve (12) months prior to an In-Service Distribution or Stock Option Gain distribution shall supersede all previous and subsequent Participation Agreements or Stock Option Gain Agreements, as the case may be, on file and the entire amount in the Participant’s Sub-Account shall be distributed in accordance with such Form of Payment elections; provided, however, that only a subsequent Stock Option Gain Agreement can supersede a prior Stock Option Gain Agreement and cannot supersede a prior Participation Agreement, and vice versa.
 

 

Section 8.02 Time and Form of Payment for Retirement Distributions.

 

	
            (a)
 	
            In the event of Retirement, the Company shall distribute an amount equal to the balance in the Retirement Sub-Account together with remaining unpaid balances in all In-Service Sub-Accounts which do not correspond to Option Sub-Accounts (determined as of the applicable Valuation Date) to the Participant as soon as administratively practicable following the first day of the month following the date of Retirement in accordance with the most recent Form of Payment election made by the Participant which was filed at least twelve (12) months prior to the date of Retirement, or if none, then in five (5) annual installments.
 

 

	
            (b)
 	
            Notwithstanding Section 8.02 (a) hereof, and in accordance with Section 4.04 (c) hereof, a Participant who meets the definition of Retirement who has been granted Options pursuant to Section 7.02 (c) hereof in connection with Deferred Amounts prior to January 1, 2004 shall have that portion of his/her Deferral Account that relates to the granting of such Options distributed at the earlier of (i) the Date of Exercise of such Options and (ii) the last day of the Option term. A Participant who meets the definition of Retirement who has been granted Options pursuant to Section 7.02 (c) hereof in connection with Deferred Amounts and who has established Option Sub-Accounts on or after January 1, 2004 shall have the balance of such Option Sub-Accounts distributed at the end of the Option term in accordance with distribution provisions in the Plan notwithstanding an
earlier exercise of the Option. Such Deferred Amounts shall be distributed in accordance with the Form of Payment elected by the Participant in his/her Participation Agreement or with 
 

 

 

EXHIBIT (vi)

Page 19 of 24

 

applicable provisions of the Plan; provided, however, that if the Deferred Amounts are to be distributed in installments, the Deferred Amounts related to the granting of Options shall be entirely distributed over the remaining installment schedule for Retirement distributions commencing with the next following installment payment due under the installment schedule. Any lump sum payment shall be paid as soon as practicable following the Date of Exercise of the Options or the last day of the Option term, as the case may be.

 

Section 8.03 Time and Form of Payment for Distributions Upon Termination of Employment. In the event of a Termination of Employment, the Company shall pay the balance in the Retirement Sub-Account and the remaining balance in any In-Service Sub-Accounts, valued as of the applicable Valuation Date, to the Participant in a single lump sum as soon as administratively practicable following the date of Termination of Employment.

 

Section 8.04 Time and Form of Payment for distributions upon death or Disability. In the event of death or Disability prior to Retirement or Termination of Employment, the Company shall pay the entire Deferral Account balance, including all remaining Sub-Account balances in a single lump sum to the Participant (in the event of Disability) or to the Beneficiary (in the event of death). In the event of death or Disability after Retirement, the Company shall continue to pay benefits in the same amounts and at the same time(s) as if the Participant had not died or become disabled; except that, in the case of death, such payments shall be paid to the Beneficiary.

 

Section 8.05 Miscellaneous Distribution Provisions. The foregoing provisions of this Article VII not withstanding:

 

	
            (a)
 	
            if a Participant has elected to receive a distribution in the form of a full or partial lump sum, the Administrative Committee may in its discretion distribute all or a portion of the Deferred Amounts deemed to be invested in the Phantom Share Fund in the form of actual shares of Common Stock. Installment payments from the Deferral Account shall only be paid in cash. All full or partial lump sum distributions hereunder will be made as soon as practicable following the In-Service Distribution Date, end of the Deferral Period, date of Retirement, date of Termination of Employment, or Death as the case may be, based on the most recent Valuation Date as of the distribution triggering event. 
 

 

	
            (b)
 	
            If the Participant has elected to receive payments in installments, each payment shall consist of an amount equal to (i) the balance of the Deferral Account, as of the most recent Valuation Date preceding the payment date times (ii) a fraction, the numerator of which is one and the denominator of which is the number of remaining installments (including the installment being paid). The first such installment shall be paid as soon as practicable after the distribution triggering event (e.g. In-Service Distribution Date, end of the Deferral Period, Retirement, etc.) as the case may be, and each subsequent installment shall be paid on or about the anniversary of such first payment. In the case of the In-Service and Retirement Sub-Accounts, each such installment shall be deemed made on a pro rata basis from each of the different deemed investments of such Sub-Accounts
(if there is more than one such deemed investment).
 

 

	
            (c)
 	
            In the event the balance in the Deferral Account (including all Sub-Accounts) is less than $50,000 at the time of the initial valuation immediately prior to the beginning of a Retirement distribution, then the Administrative Committee, in its sole discretion, may ignore the Form of Payment election made by the Participant and pay the benefit in a single lump sum. 
 

 

Section 8.06 Hardship Withdrawals. Notwithstanding the provisions of Section 8.01 and any Participation 

 

EXHIBIT (vi)

Page 20 of 24

 

Agreement or Stock Option Gain Agreement, as the case may be, a Participant shall be entitled to request early payment of all or part of the balance in his/her Deferral Account and Gain Share Account in the event of an Unforeseeable Emergency, in accordance with this Section 8.06. A distribution pursuant to this Section 8.06 may only be made to the extent reasonably needed to satisfy the Unforeseeable Emergency need, and may not be made if such need is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant’s assets to the extent such liquidation would not itself cause severe financial hardship, or (iii) by cessation of participation in the Plan. An application for an early payment under this Section 8.06 shall be made to the Administrative Committee in such form and in accordance with such procedures as the Administrative Committee
shall determine from time to time. The determination of whether and in what amount and form a distribution will be permitted pursuant to this Section 8.06 shall be made by the Administrative Committee. Distributions shall be made from In-Service and Option Sub-Accounts and Gain Share Accounts (beginning with the most distant) and then from the Retirement Sub-Account.

 

Section 8.07 Voluntary Early Withdrawal. Notwithstanding the provisions of Section 8.01 and any Participation Agreement or Stock Option Gain Agreement, a Participant shall be entitled to elect to withdraw all of the balances in his/her Deferral Account and Gain Share Account in accordance with this Section 8.07 by filing with the Administrative Committee such forms, in accordance with such procedures, as the Administrative Committee shall determine from time to time. As soon as practicable after receipt of such form by the Administrative Committee, the Company shall pay an amount equal to ninety percent of the balance in such Participant’s Deferral Account(s) and ninety percent of any Gain Shares allocated to the Gain Share Account (determined as of the most recent Valuation Date preceding the date such election is filed) to the
electing Participant in a lump sum in cash, or actual shares ofCommon Stock in the case of the Gain Share Account, and the Participant shall forfeit the remainder of such Deferral Account or Gain Share Account, as the case may be. The most recent Participation Agreement or the Stock Option Gain Agreement previously filed by a Participant who elects to make a withdrawal under this Section 8.07 shall be null and void as a result of a voluntary early withdrawal hereunder (including without limitation a Participation Agreement or the Stock Option Gain Agreement, as the case may be, with respect to Plan Years or performance periods that have not yet been completed). A Participant who does not have a Participation Agreement or Stock Option Gain Agreement on file at the time of the voluntary early withdrawal request shall not be permitted to file an additional Participation Agreement or Stock Option Gain Agreement for one year following the last day of the deferral election period
immediately following the voluntary early withdrawal request. Distributions shall be made from In-Service or Option Sub-Accounts and Gain Share Accounts (beginning with the most distant) and then from the Retirement Sub-Account.

 

Section 8.08 Payments in Connection with Change of Control. Notwithstanding anything contained in this Plan to the contrary, upon a Change of Control, the Company shall immediately pay to each Participant in a lump sum in cash the balance in his/her Deferral Account or in actual shares of Common Stock in the case of the Gain Share Account (determined as of the most recent Valuation Date preceding the Change of Control).

 

Section 8.09 Withholding of Taxes. Notwithstanding any other provision of this Plan, the Company shall withhold from payments made hereunder any amounts required to be so withheld by any applicable law or regulation.

 

Section 8.10 Modification of Payment Schedule. Notwithstanding anything herein to the contrary, the Committee may in its sole and exclusive discretion modify the method and timing of payment of Deferred Amounts as previously elected by the Participant based on circumstances it has identified as being in the best interests of the Company.

 

 

EXHIBIT (vi)

Page 21 of 24

 

 

ARTICLE IX

 

BENEFICIARY DESIGNATION

 

Section 9.01 Beneficiary Designation. Each Participant shall have the right, at any time, to designate any person, persons or entity as his Beneficiary or Beneficiaries to receive the balance of his or her Account upon the Participant’s death. A Beneficiary designation shall be made, and may be amended, by the Participant by filing a written designation with the Administrative Committee, on such form and in accordance with such procedures as the Administrative Committee shall establish from time to time.

 

Section 9.02 No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided above, or if all designated Beneficiaries predecease the Participant, then the Participant’s Beneficiary shall be deemed to be the Participant’s estate.

 

 

EXHIBIT (vi)

Page 22 of 24

 

 

ARTICLE X

 

AMENDMENT AND TERMINATION OF PLAN

 

Section 10.01 Amendment. The Board or the Executive Committee may at any time amend this Plan in whole or in part, provided, however, that no amendment shall be effective to decrease the balance in any Account as accrued at the time of such amendment, nor shall any amendment otherwise have a retroactive effect except if such retroactivity does not cause a materially adverse financial effect.

 

Section 10.02 Company’s Right to Terminate. The Board or the Executive Committee may at any time terminate the Plan with respect to future Participation Agreements and Stock Option Gain Agreements. The Board or the Executive Committee may also terminate the Plan in its entirety or in part at any time for any reason, including without limitation if, in its judgment, the continuance of the Plan, the tax, accounting, or other effects thereof, or potential payments thereunder would not be in the best interests of the Company, and upon any such termination, the Company shall immediately pay to each Participant in a lump sum the accrued balance in his Account (determined as of the most recent Valuation Date preceding the termination date).

 

EXHIBIT (vi)

Page 23 of 24

 

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01 Unfunded Plan. This Plan is intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, within the meaning of Section 401 of ERISA. All payments pursuant to the Plan shall be made from the general funds of the Company and no special or separate fund shall be established or other segregation of assets made to assure payment. No Participant or other person shall have under any circumstances any interest in any particular property or assets of the Company as a result of participating in the Plan. Notwithstanding the foregoing, the Company may (but shall not be obligated to) create one or more grantor trusts, the assets of which are subject to the claims of the Company’s creditors, to assist it in accumulating
funds to pay its obligations under the Plan.

 

Section 11.02 Nonassignability. Except as specifically set forth in the Plan with respect to the designation of Beneficiaries, neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any; payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any  other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

 

Section 11.03 Validity and Severability. The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 11.04 Governing Law. The validity, interpretation, construction and performance of this Plan shall in all respects be governed by the laws of the State of Connecticut, without reference to principles of conflict of law, except to the extent pre-empted by federal law.

 

Section 11.05 Employment Status. This Plan does not constitute a contract of employment or impose on the Participant or the Company any obligation for the Participant to remain an employee of the Company or change the status of the Participant’s employment or the policies of the Company and its affiliates regarding termination of employment.

 

Section 11.06 Underlying Incentive Plans and Programs. Nothing in this Plan shall prevent the Company from modifying, amending or terminating the compensation or the incentive plans and programs, including the Pitney Bowes Inc. Key Employees’ Incentive Plan pursuant to which cash awards are earned and which are deferred under this Plan and the Pitney Bowes Stock Option Plan as amended and restated, January, 2002

 

Section 11.07 Severance. Notwithstanding anything to the contrary herein the Executive Committee may in its sole and exclusive discretion, determine that the Accounts of a Participant who has incurred, a Termination of Employment and who receives or will receive severance payments from the Company shall be paid in installments, at such intervals as the Executive Committee may decide.

 

 

EXHIBIT (vi)

Page 24 of 24

 

 

Section 11.08 Termination of Employment. Upon Termination of Employment, Disability or death, a Participant shall forfeit all rights and entitlements to actively participate in the Plan, including the . opportunity to make further . deferral elections of Eligible Compensation, gain on related Gain Shares, direction of deemed investment funds and any other activities offered to active Participants, unless the Administrative Committee in its sole discretion decides otherwise.EXHIBIT 4.1

EMBRAER-EMPRESA BRASILEIRA DE AERONÁUTICA S.A..
(as successor in interest)

AND

JPMORGAN CHASE BANK, N.A.,
 As Depositary

AND

HOLDERS OF AMERICAN DEPOSITARY RECEIPTS

Amended and Restated Deposit Agreement

Dated as of [DATE]   , 2006

TABLE OF CONTENTS

	
   
 	
   
 	
   
 	
  
Page
  
	
   
 	
   
 	
   
 	
  

  
	
  
 
  	
  
 
  	
   
 
	
  PARTIES
  	
  
 
  	
  
1
  
	
  
RECITALS
  	
  
 
  	
  
1
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
Section 1.
  	
  
 
  	
  
Certain Definitions
  	
   
 
	
  
 
  	
  
(a)
  	
  
                    ADR   Register
  	
  
1
  
	
  
 
  	
  
(b)
  	
  
                    ADRs;   Direct Registration ADRs
  	
  
1
  
	
   
  	
  
(c)
  	
  
                    ADS
  	
  
1
  
	
   
  	
  
(d)
  	
  
                    Articles of Incorporation
  	
  
1
  
	
  
 
  	
  
(e)
  	
  
                    Custodian
  	
  
1
  
	
  
 
  	
  
(f)
  	
  
                    Deliver,   execute, issue et al
  	
  
1
  
	
  
 
  	
  
(g)
  	
  
                    Delivery   Order
  	
  
1
  
	
  
 
  	
  
(h)
  	
  
                    Deposited   Securities
  	
  
1
  
	
   
  	
  
(i)
  	
  
                    Direct   Registration System
  	
  
2
  
	
  
 
  	
  
(j)
  	
  
                    Holder
  	
  
2
  
	
  
 
  	
  
(k)
  	
  
                    Securities   Act of 1933
  	
  
2
  
	
  
 
  	
  
(l)
  	
  
                    Securities   Exchange Act of 1934
  	
  
2
  
	
  
 
  	
  
(m)
  	
  
                    Shares
  	
  
2
  
	
   
  	
  
(n)
  	
  
                    Transfer   Office
  	
  
2
  
	
  
 
  	
  
(o)
  	
  
                    Withdrawal   Order
  	
  
2
  
	
  
Section 2.
  	
  
 
  	
  
ADRs
  	
  
2
  
	
  
Section 3.
  	
  
 
  	
  
Deposit of Shares
  	
  
3
  
	
  
Section 4.
  	
  
 
  	
  
Issue of ADRs
  	
  3
  
	
  Section 5.
  	
  
 
  	
  
Distributions on Deposited Securities
  	
  
3
  
	
  
Section 6.
  	
  
 
  	
  
Withdrawal of Deposited Securities
  	
  
4
  
	
  
Section 7.
  	
  
 
  	
  
Substitution of ADRs
  	
  
4
  
	
  
Section 8.
  	
  
 
  	
  
Cancellation and Destruction of ADRs
  	
  
4
  
	
  
Section 9.
  	
  
 
  	
  
The Custodian
  	
  
4
  
	
  
Section 10.
  	
  
Co-Registrars and Co-Transfer Agents
  	
  
5
  
	
  Section 11.
  	
  
Lists of Holders
  	
  
5
  
	
  
Section 12.
  	
  
Depositary’s Agents
  	
  
5
  
	
  
Section 13.
  	
  
Successor Depositary
  	
  
5
  
	
  
Section 14.
  	
  
Reports
  	
  
5
  
	
  
Section 15.
  	
  
Additional Shares
  	
  
5
  
	
  
Section 16.
  	
  
Indemnification
  	
  
6
  
	
  
Section 17.
  	
  
Notices
  	
  
6
  
	
  Section 18.
  	
  
Miscellaneous
  	
  
7
  
	
  
Section 19.
  	
  
Consent to Jurisdiction
  	
  
7
  
	
  
TESTIMONIUM
  	
  
 
  	
  
8
  
	
  
 
  	
  
 
  	
   
 
	
  
SIGNATURES
  	
  
 
  	
  
9
  

  
-i-

	
  
 
  	
  
 
  	
  
 
  	
  
Page
  
	
   
  	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
   
 	
   
 
	
  
EXHIBIT A
  
	
  
 
  	
  
 
  	
   
 	
   
 
	
  
FORM OF FACE OF ADR
  	
  
A-l
  
	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
Introductory Paragraph
  	
  
A-l
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
   
  	
  
(1)
  	
  
Issuance of ADRs
  	
  
A-2
  
	
  
 
  	
  
(2)
  	
  
Withdrawal of Deposited Securities
  	
  
A-2
  
	
  
 
  	
  
(3)
  	
  
Transfers of ADRs
  	
  
A-3
  
	
  
 
  	
  
(4)
  	
  
Certain Limitations
  	
  
A-3
  
	
  
 
  	
  
(5)
  	
  
Taxes
  	
  
A-4
  
	
  
 
  	
  
(6)
  	
  
Disclosure of Interests
  	
  
A-4
  
	
   
  	
  
(7)
  	
  
Charges of Depositary
  	
  
A-5
  
	
  
 
  	
  
(8)
  	
  
Available Information
  	
  
A-6
  
	
  
 
  	
  
(9)
  	
  
Execution
  	
  
A-6
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
Signature of Depositary
  	
  
A-6
  
	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
Address of Depositary’s Office
  	
  
A-6
  
	
   
  	
   
 
	
  
FORM OF REVERSE OF ADR
  	
  
A-7
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
(10)
  	
  
Distributions on Deposited Securities
  	
  
A-7
  
	
  
 
  	
  
(11)
  	
  
Conversion of Foreign Currency
  	
  
A-7
  
	
  
 
  	
  
(12)
  	
  
Record Dates
  	
  
A-8
  
	
  
 
  	
  
(13)
  	
  
Voting of Deposited Securities
  	
  
A-8
  
	
  
 
  	
  
(14)
  	
  
Changes Affecting Deposited Securities
  	
  
A-8
  
	
   
  	
  
(15)
  	
  
Exoneration
  	
  
A-9
  
	
  
 
  	
  
(16)
  	
  
Resignation and Removal of Depositary; the Custodian
  	
  
A-9
  
	
  
 
  	
  
(17)
  	
  
Amendment
  	
  
A-10
  
	
  
 
  	
  
(18)
  	
  
Termination
  	
  
A-10
  
	
  
 
  	
  
(19)
  	
  
Appointment
  	
  
A-11
  

-ii-

          DEPOSIT
AGREEMENT dated as of [DATE] , 2006 (the “Deposit Agreement”) among
EMBRAER-EMPRESA BRASILEIRA DE AERONÁUTICA S.A. and its successors (the
“Company”), as successor in interest pursuant to the terms of the
Protocol of Merger and Justification related to the restructuring of the
Company, JPMORGAN CHASE BANK, N.A., as depositary hereunder (the
“Depositary”), and all holders from time to time of American Depositary Receipts
issued hereunder (“ADRs”) evidencing American Depositary Shares
(“ADSs”) representing deposited Shares (defined below). The Company
hereby appoints the Depositary as depositary for the Deposited Securities and
hereby authorizes and directs the Depositary to act in accordance with the terms
set forth in this Deposit Agreement. All capitalized terms used herein have the
meanings ascribed to them in Section 1 or elsewhere in this Deposit Agreement.
The parties hereto agree as follows:

W I T N E S S E T H

           WHEREAS, the
Company and the Depositary entered into a Deposit Agreement dated as of July
20, 2000 (the “Old Deposit Agreement”) to provide for the deposit of
non-voting preferred shares of the Company with the Depositary or with the
Custodian as agent of Depositary for the purposes set forth in such Old Deposit
Agreement, for the creation of American depositary shares representing such
non-voting preferred shares so deposited and for the execution and delivery
of  American depositary receipts (“Old Receipts”) evidencing the
American depositary shares;

          WHEREAS, as a
result of a restructuring of the Company, each non-voting preferred share of the
Company was exchanged for a common share of Rio Han Empreendimentos e
Participações S.A., as successor to the Company;

          WHEREAS,
pursuant to the terms of paragraph (17) of the form of  ADR of the Old
Deposit Agreement, the Company and the Depositary now wish to amend and restate
the Old Deposit Agreement and the Old Receipts;

          NOW THEREFORE, in consideration of the premises, the parties hereto hereby amend and restate the Old Deposit Agreement and the Old Receipts in their entireties as follows:

          1.          
Certain Definitions.

          (a)          “ADR
Register” is defined in paragraph (3) of the form of ADR.

          (b)          “ADRs”
mean the American Depositary Receipts executed and delivered hereunder. ADRs may
be either in physical certificated form or Direct Registration ADRs. ADRs in
physical certificated form, and the terms and conditions governing the Direct
Registration ADRs (as hereinafter defined), shall be substantially in the form
of Exhibit A annexed hereto (the “form of ADR”).   The term
“Direct Registration ADR” means an ADR, the ownership of which
is recorded on the Direct Registration System. References to “ADRs”
shall include certificated ADRs and Direct Registration ADRs, unless the context
otherwise requires. The form of ADR is hereby incorporated herein and made a
part hereof; the provisions of the form of ADR shall be binding upon the parties
hereto.

          (c)          Subject
to paragraph (13) of the form of ADR, each “ADS” evidenced by an ADR
represents the right to receive [EXCHANGE] Share and a pro rata share in any
other Deposited Securities.

          (d)          
“Articles of Incorporation” means the “estatuto social” of the Company, as the same may be amended from time to time.

          (e)          “Custodian”means
the agent or agents of the Depositary (singly or collectively, as the context
requires) and any additional or substitute Custodian appointed pursuant to
Section 9. The initial custodian on the date of this Deposit Agreement is Banco Itau S.A. 

          (f)          The
terms “deliver”, “execute”, “issue”,
“register”, “surrender”, “transfer” or
“cancel”, when used with respect to Direct Registration ADRs, shall
refer to an entry or entries or an electronic transfer or transfers in the
Direct Registration System, and, when used with respect to ADRs in physical
certificated form, shall refer to the physical delivery, execution, issuance,
registration, surrender, transfer or cancellation of certificates representing
the ADRs.

          (g)          “Delivery Order” is defined in Section 3.

          (h)          “Deposited Securities” as of any time means all Shares at such time deposited under this Deposit Agreement and any and all other Shares, securities, property and cash at such time held by the Depositary or the Custodian in respect or in lieu of such deposited Shares and other Shares, securities, property and cash.

1

          (i)          “Direct Registration System” means the system for the uncertificated registration of ownership of securities established by The Depository Trust Company (“DTC”) and utilized by the Depositary pursuant to which the Depositary may record the ownership of ADRs without the issuance of a certificate, which ownership shall be evidenced by periodic statements issued by the Depositary to the Holders entitled thereto. For purposes hereof, the Direct Registration System shall include access to the Profile Modification System maintained by DTC which provides for automated transfer of ownership between DTC and the Depositary.

          (j)          “Holder”
means the person or persons in whose name an ADR is registered on the ADR
Register.

          (k)          “Securities Act of 1933” means the United States Securities Act of 1933, as from time to time amended.

          (l)          “Securities Exchange Act of 1934” means the United States Securities Exchange Act of 1934, as from time to time amended.

          (m)          “Shares” mean
the common shares of the Company, and shall include the rights to receive Shares
specified in paragraph (1) of the form of ADR.

          (n)          “Transfer Office” is defined in paragraph (3) of the form of ADR.

          (o)          “Withdrawal Order” is defined in Section 6.

          2.           ADRs. (a) ADRs in certificated form shall be engraved, printed or otherwise reproduced at the discretion of the Depositary in accordance with its customary practices in its American depositary receipt business, or at the request of the Company typewritten and photocopied on plain or safety paper, and shall be substantially in the form set forth in the form of ADR, with such changes as may be required by the Depositary or the Company to comply with their obligations hereunder, any applicable law, regulation or usage or to indicate any special limitations or restrictions to which any particular ADRs are subject. ADRs may be issued in denominations of any number of ADSs. ADRs in certificated form shall be executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary. ADRs in certificated
form bearing the facsimile signature of anyone who was at the time of execution a duly authorized officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased to hold such office prior to the delivery of such ADRs.

          (b)          Direct Registration ADRs. Notwithstanding anything in this Deposit Agreement or in the form of ADR to the contrary, ADSs shall be evidenced by Direct Registration ADRs, unless certificated ADRs are specifically requested by the Holder.

          (c)          Holders shall be bound by the terms and conditions of this Deposit Agreement and of the form of ADR, regardless of whether their ADRs are Direct Registration ADRs or certificated ADRs.

2

          3.          Deposit of Shares. In connection with the deposit of Shares hereunder, the Depositary or the Custodian may require the following in form satisfactory to it: (a) a written order directing the Depositary to issue to, or upon the written order of, the person or persons designated in such order a Direct Registration ADR or ADRs evidencing the number of ADSs representing such deposited Shares (a “Delivery Order”); (b) proper endorsements or duly executed instruments of transfer or a certified extract of the Company’s register in respect of such deposited Shares; (c) instruments assigning to the Custodian or its nominee any distribution on or in respect of such deposited Shares or indemnity therefor; and (d) proxies entitling the Custodian to vote such deposited Shares. As soon as practicable after the Custodian receives Deposited Secu

rities pursuant to any such deposit or pursuant
to paragraph (10) or (13) of the form of ADR, the Custodian shall present such Deposited Securities for registration of transfer into the name of the Custodian or its nominee, to the extent such registration is practicable, at the cost and expense of the person making such deposit (or for whose benefit such deposit is made) and shall obtain evidence satisfactory to it of such registration. Deposited Securities shall be held by the Custodian for the account and to the order of the Depositary at such place or places and in such manner as the Depositary shall determine. Deposited Securities may be delivered by the Custodian to any person only under the circumstances expressly contemplated in this Deposit Agreement. To the extent that the provisions of or governing the Shares make delivery of certificates therefor impracticable, Shares may be deposited hereunder by such delivery thereof as the Depositary or the Custodian may reasonably accept, including, without limitation, by causing them to be credited
to an account maintained by the Custodian for such purpose with the Company or an accredited intermediary, such as a bank, acting as a registrar for the Shares, together with delivery of the documents, payments and Delivery Order referred to herein to the Custodian or the Depositary.

          The
Depositary and the Custodian shall comply with reasonable written instructions
from the Company or its Brazilian counsel to maintain registration of the amount
of Deposited Securities with Banco Central do Brasil (the “Central
Bank”) and to furnish to the Central Bank and to the Comissão de Valores
Mobiliãrios (the “Securities Commission”), whenever reasonably
required, information or documents related to this Deposit Agreement, the ADRs
and the Deposited Securities and distributions thereon, and may rely, and shall
be fully protected in relying, on such written instructions from the Company or
its Brazilian counsel in respect of such registration, information and
documents.

          4.          Issue of ADRs. After any such deposit of Shares, the Custodian shall notify the Depositary of such deposit and of the information contained in any related Delivery Order by letter, first class airmail postage prepaid, or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission. After receiving such notice from the Custodian, the Depositary, subject to this Deposit Agreement, shall properly issue at the Transfer Office, to or upon the order of any person named in such notice, an ADR or ADRs registered as requested and evidencing the aggregate ADSs to which such person is entitled.

          5.          Distributions
on Deposited Securities. To the extent that the Depositary determines in its
discretion that any distribution pursuant to paragraph (10) of the form of ADR
is not practicable with respect to any Holder, subject to paragraph (12) of the
form of ADR the Depositary may, after consultation with the Company if
practicable, make such distribution as it so deems practicable, including the
distribution of foreign currency, securities or property (or appropriate
documents evidencing the right to receive foreign currency, securities or
property) or the retention thereof as Deposited Securities with respect to such
Holder’s ADRs (without liability for interest thereon or the investment
thereof).

3

          6.          Withdrawal
of Deposited Securities. In connection with any surrender of an ADR for
withdrawal of the Deposited Securities represented by the ADSs evidenced
thereby, the Depositary may require proper endorsement in blank of such ADR (or
duly executed instruments of transfer thereof in blank) and the Holder’s
written order directing the Depositary to cause the Deposited Securities
represented by the ADSs evidenced by such ADR to be withdrawn and delivered to,
or upon the written order of, any person designated in such order (a
“Withdrawal Order”). Directions from the Depositary to the Custodian
to deliver Deposited Securities shall be given by letter, first class airmail
postage prepaid, or, at the request, risk and expense of the Holder, by cable,
telex or facsimile transmission. Delivery of Deposited Securities may be made by
the delivery of certificates (which, if required by law shall be properly
endorsed or accompanied by properly executed instruments of transfer or, if such
certificates may be registered, registered in the name of such Holder or as
ordered by such Holder in any Withdrawal Order) or by such other means as the
Depositary may deem practicable, including, without limitation, by transfer of
record ownership thereof to an account designated in the Withdrawal Order
maintained either by the Company or an accredited intermediary, such as a bank,
acting as a registrar for the Deposited Securities.

          7.          Substitution of ADRs. The Depositary shall execute and deliver a new Direct Registration ADR in exchange and substitution for any mutilated certificated ADR upon cancellation thereof or in lieu of and in substitution for such destroyed, lost or stolen certificated ADR, unless the Depositary has notice that such ADR has been acquired by a bona fide purchaser, upon the Holder thereof filing with the Depositary a request for such execution and delivery and a sufficient indemnity bond and satisfying any other reasonable requirements imposed by the Depositary.

          8.          Cancellation and Destruction of ADRs. All ADRs surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy ADRs in certificated form so cancelled in accordance with its customary practices.

          9.          The
Custodian. Any Custodian in acting hereunder shall be subject to the
directions of the Depositary and shall be responsible solely to it. The
Depositary may, after consultation with the Company if practicable, from time to
time appoint one or more agents to act for it as Custodian hereunder. The
Depositary shall use reasonable commercial efforts to ensure that at all times
there is a Custodian hereunder. The Depositary shall be responsible for the
compliance by the Custodian with the provisions of this Deposit Agreement
applicable specifically to the Custodian. Each Custodian so appointed (other
than JPMorgan Chase Bank, N.A.) shall give written notice to the Company and the
Depositary accepting such appointment and agreeing to be bound by the applicable
terms hereof. Any Custodian may resign from its duties hereunder by at least 30
days written notice to the Depositary. The Depositary may discharge any
Custodian at any time upon notice to the Custodian being discharged. To the
extent required by law, the Depositary shall provide the Securities Commission
with notice of any Custodian removed hereunder. Any Custodian ceasing to act
hereunder as Custodian shall deliver, upon the instruction of the Depositary,
all Deposited Securities held by it to a Custodian continuing to act.

4

          10.          Co-Registrars
and Co-Transfer Agents. The Depositary may appoint and remove (i)
co-registrars to register ADRs and transfers, combinations and split-ups of ADRs
and to countersign ADRs in accordance with the terms of any such appointment and
(ii) co-transfer agents for the purpose of effecting transfers, combinations and
split-ups of ADRs at designated transfer offices in addition to the Transfer
Office on behalf of the Depositary. Each co-registrar or co-transfer agent
(other than JPMorgan Chase Bank, N.A.) shall give notice in writing to the
Company and the Depositary accepting such appointment and agreeing to be bound
by the applicable terms of this Deposit Agreement.

          11.          Lists of Holders. The Company shall have the right to inspect transfer records of the Depositary and its agents and the ADR Register, take copies thereof and require the Depositary and its agents to supply copies of such portions of such records as the Company may request. The Depositary or its agent shall furnish to the Company promptly upon the written request of the Company, a list of the names, addresses and holdings of ADSs by all Holders as of a date within seven days of the Depositary’s receipt of such request.

          12.          Depositary’s Agents. The Depositary may perform its obligations under this Deposit Agreement through any agent appointed by it, provided that the Depositary shall notify the Company of such appointment and shall remain responsible for the performance of such obligations as if no agent were appointed.

          13.          Successor Depositary. The Depositary may at any time resign as Depositary hereunder by 60 days prior written notice of its election so to do delivered to the Company. The Depositary may at any time be removed by the Company by 60 days prior written notice of such removal. Notwithstanding anything to the contrary contained herein, in case at any time the Depositary acting hereunder shall resign or be removed, it shall continue to act as Depositary for the purpose of terminating this Deposit Agreement pursuant to paragraph (17) of the form of ADR. Any bank or trust company into or with which the Depositary may be merged or consolidated, or to which the Depositary shall transfer substantially all its American depositary receipt business, shall be the successor of the Depositary without the execution or filing of any document or any further
act.

          14.          Reports. On or before the first date on which the Company makes any communication available to holders of Deposited Securities or any securities regulatory authority or stock exchange, by publication or otherwise, the Company shall transmit to the Depositary a copy thereof in English or with an English translation or summary. The Company has delivered to the Depositary, the Custodian and any Transfer Office, a copy of all provisions of or governing the Shares and any other Deposited Securities issued by the Company or any affiliate of the Company and, promptly upon any change thereto, the Company shall deliver to the Depositary, the Custodian and any Transfer Office, a copy (in English or with an English translation) of such provisions as so changed. The Depositary and its agents may rely upon the Company’s delivery thereof for all
purposes of this Deposit Agreement.

          15.          Additional Shares. Neither the Company nor any company controlling, controlled by or under common control with the Company shall issue additional Shares, rights to subscribe for Shares, securities convertible into or exchangeable for Shares or rights to subscribe for any such securities or shall deposit any Shares under this Deposit Agreement, except under circumstances complying in all respects with the Securities Act of 1933. The Depositary will use reasonable efforts to comply with written instructions of the Company not to accept for deposit hereunder any Shares identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company’s compliance with securities laws in the United States.

5

          16.          Indemnification. The Company shall indemnify, defend and save harmless each of the Depositary and its agents against any loss, liability or expense (including reasonable fees and expenses of counsel) which may arise out of acts performed or omitted, in connection with the provisions of this Deposit Agreement and of the ADRs, as the same may be amended, modified or supplemented from time to time in accordance herewith (i) by either the Depositary or its agents or their respective directors, employees, agents and affiliates, except, subject to the penultimate paragraph of this Section 16, for any liability or expense directly arising out of the negligence or bad faith of the Depositary, or (ii) by the Company or any of its directors, employees, agents or affiliates.

          The indemnities set forth in the preceding paragraph shall also apply to any liability or expense which may arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration statement, proxy statement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary placement memorandum) relating to the offer or sale of ADSs, except to the extent any such liability or expense arises out of (i) information relating to the Depositary or its agents (other than the Company), as applicable, furnished in writing by the Depositary and not changed or altered by the Company expressly for use in any of the foregoing documents or (ii) if such information is provided, the failure to state a material fact necessary to make the information provided not misleading.

          Except as provided in the next succeeding paragraph, the Depositary shall indemnify, defend and save harmless the Company against any loss, liability or expense (including reasonable fees and expenses of counsel) incurred by the Company in respect of this Deposit Agreement to the extent such loss, liability or expense is due to the negligence or bad faith of the Depositary or its agents (including, without limitation, the Custodian) acting hereunder.

          Notwithstanding any other provision of this Deposit Agreement or the form of ADR to the contrary, neither the Company nor the Depositary, nor any of their agents, shall be liable to the other for any indirect, special, punitive or consequential damages (collectively “Special Damages”) except (i) to the extent such Special Damages arise from the gross negligence or willful misconduct of the party from whom indemnification is sought or (ii) to the extent Special Damages arise from or out of a claim brought by a third party (including, without limitation, Holders) against the Depositary or its agents, except to the extent such Special Damages arise out of the gross negligence or willful misconduct of the party seeking indemnification hereunder

          The obligations set forth in this Section 16 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

          Any person seeking indemnification
hereunder shall notify in writing the person from whom indemnification is sought of the
commencement of any indemnifiable action as promptly as practicable after the person
seeking indemnification becomes aware of such commencement, provided that failure to make
such notification shall not affect such person’s rights hereunder except to the
extent that such failure was prejudicial. Any person seeking indemnification hereunder
shall consult with the person from whom indemnification is sought as to the conduct of any
defense. No person seeking indemnification hereunder shall compromise or settle any
indemnifiable action without the prior written consent of the person from whom
indemnification is sought (which consent shall not unreasonably (from the point of view of
the person seeking indemnification) be withheld) unless the person from whom
indemnification is sought is not liable for any damages under such settlement.

          17.          Notices. Notice to any Holder shall be deemed given when first mailed, first class postage prepaid, to the address of such Holder on the ADR Register or received by such Holder.

6

Notice to the Depositary or the Company shall be deemed given when first received by it at the address or facsimile transmission number set forth in (a) or (b), respectively, or at such other address or facsimile transmission number as either may specify to the other by written notice:

	
  
 
  	
  
(a)
  	
  
JPMorgan Chase Bank, N.A. 
  
	
  
 
  	
  
 
  	
  
Four New York Plaza 
   New York, New York 10004
   Attention: ADR Administration
   Fax: (212) 623-0079
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
Embraer-Empresa Brasileira de Aeronáutica S.A.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
Attention: [CONTACT PERSON]
  
	
   
  	
  
 
  	
  
Fax: [FACSIMILE]
  

          18.          Miscellaneous. This Deposit Agreement is for the exclusive benefit of the Company, the Depositary, the Holders, and their respective successors hereunder, and shall not give any legal or equitable right, remedy or claim whatsoever to any other person. The Holders and owners of ADRs from time to time shall be parties to this Deposit Agreement and shall be bound by all of the provisions hereof. If any such provision is invalid, illegal or unenforceable in any respect, the remaining provisions shall in no way be affected thereby. This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one instrument. The Deposit Agreement shall be governed by and construed in accordance with the laws of the state of New York.

          19.          Consent
to Jurisdiction. The Company irrevocably agrees that any legal suit, action
or proceeding against the Company brought by the Depositary or any Holder,
arising out of or based upon this Deposit Agreement or the transactions
contemplated hereby, may be instituted in any state or federal court in New
York, New York, and irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any such proceeding, and irrevocably
submits to the non-exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Company has appointed_________________________, New York, New York, as its
authorized agent (the “Authorized Agent”) upon which process may be
served in any such action arising out of or based on this Deposit Agreement or
the transactions contemplated hereby which may be instituted in any state or
federal court in New York, New York by the Depositary or any Holder, and waives
any other requirements of or objections to personal jurisdiction with respect
thereto. The Company represents and warrants that the Authorized Agent has
agreed to act as said agent for service of process, and the Company agrees to
take any and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment in full force
and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every respect,
effective service of process upon the Company. If, for any reason, the
Authorized Agent named above or its successor shall no longer serve as agent of
the Company to receive service of process in New York, the Company shall
promptly appoint a successor acceptable to the Depositary, so as to serve and
will promptly advise the Depositary thereof. In the event the Company fails to
continue such designation and appointment in full force and effect, the Company
hereby waives personal service of process upon it and consents that any such
service of process may be made by certified or registered mail, return receipt
requested, directed to the Company at its address last specified for notices
hereunder, and service so made shall be deemed completed five (5) days after the
same shall have been so mailed. Notwithstanding the foregoing, any action based
on this Agreement may be instituted by the Depositary or any Holder in any
competent court in The Federative Republic of Brazil.

7

          
To the extent that the Company or any of its properties, assets or revenues may
have or may hereafter be entitled to, or have attributed to it, any right of
immunity, on the grounds of sovereignty or otherwise, from any legal action,
suit or proceeding, from the giving of any relief in any respect thereof, from
setoff or counterclaim, from the jurisdiction of any court, from service of
process, from attachment upon or prior to judgment, from attachment in aid of
execution or judgment, or from execution of judgment, or other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment,
in any jurisdiction in which proceedings may at any time be commenced, with
respect to its obligations, liabilities or other matter under or arising out of
or in connection with the Shares or Deposited Securities, the ADSs, the ADRs or
this Agreement, the Company, to the fullest extent permitted by law, hereby
irrevocably and unconditionally waives, and agrees not to plead or claim, any
such immunity and consents to such relief and enforcement.

8

                    IN WITNESS WHEREOF, EMBRAER-EMPRESA BRASILEIRA DE AERONÁUTICA S.A. and JPMORGAN CHASE BANK, N.A. have duly executed this Deposit Agreement as of the day and year first above set forth and all holders of ADRs shall become parties hereto upon acceptance by them of ADRs issued in accordance with the terms hereof.

	
  
 
  	
  
EMBRAER-EMPRESA BRASILEIRA DE AERONÁUTICA S.A..
  
	 	  (as successor in interest)

	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
Title:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
JPMORGAN CHASE BANK, N.A.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  
	
  
 
  	
  
Title:
  	
  
Vice President
  

9

EXHIBIT A
 ANNEXED TO AND INCORPORATED IN
 DEPOSIT AGREEMENT

[FORM OF FACE OF ADR]

	
  
_____
  	
  
No. of ADSs:
  
	
  
Number
  	
  
 
  

	
  
 
  	
  
______
  
	
  
 
  	
  
Each ADS represents
  
	
  
 
  	
  
[EXCHANGE] Share
  
	
  
 
  	
  
 
  
	
  
 
  	
  
CUSIP:
  

AMERICAN DEPOSITARY RECEIPT

evidencing

AMERICAN DEPOSITARY SHARES

representing

COMMON SHARES

of

EMBRAER-EMPRESA BRASILEIRA DE AERONÁUTICA S.A.

(Incorporated under the laws of The Federative Republic of Brazil)

          JPMORGAN
CHASE BANK, N.A., a national banking association organized under the laws of the
United States of America , as depositary hereunder (the “Depositary”),
hereby certifies
that          is the
registered owner (a “Holder”)
of          American
Depositary Shares (“ADSs”), each (subject to paragraph (13))
representing [EXCHANGE] common shares (including the rights to receive Shares
described in paragraph (1), “Shares” and, together with any other
securities, cash or property from time to time held by the Depositary in respect
or in lieu of deposited Shares, the “Deposited Securities”), of
Embraer-Empresa Brasileira de Aeronáutica S.A., a corporation organized
under the laws of the Federative Republic of Brazil (the “Company”),
deposited under the Amended and Restated Deposit Agreement dated as of [DATE] , 2006 (as amended from
time to time, the “Deposit Agreement”) among the Company, the
Depositary and all Holders from time to time of American Depositary Receipts
issued thereunder (“ADRs”), each of whom by accepting an ADR becomes a
party thereto. The Deposit Agreement and this ADR (which includes the provisions
set forth on the reverse hereof) shall be governed by and construed in
accordance with the laws of the State of New York.

A-l

          (1)          Issuance of ADRs. This ADR is one of the ADRs issued under the Deposit Agreement. Subject to paragraph (4), the Depositary may so issue ADRs for delivery at the Transfer Office (defined in paragraph (3)) only against deposit with the Custodian of: (a) Shares in form satisfactory to the Custodian; (b) rights to receive Shares from the Company or any registrar, transfer agent, clearing agent or other entity recording Share ownership or transactions; or, (c) other rights to receive Shares (until such Shares are actually deposited pursuant to (a) or (b) above, “Pre-released ADRs”) only if (i) Pre-released ADRs are fully collateralized (marked to market daily) with cash or such other collateral as the Depositary deems appropriate held by the Depositary for the benefit of Holders (but such collateral shall not constitute
“Deposited Securities”), (ii) each recipient of Pre-released ADRs represents and agrees in writing with the Depositary that such recipient or its customer (a) beneficially owns such Shares, (b) assigns all beneficial right, title and interest therein to the Depositary, (c) holds such Shares for the account of the Depositary and (d) will deliver such Shares to the Custodian as soon as practicable and promptly upon demand therefor and (iii) all Pre-released ADRs evidence not more than 30% of all ADSs (excluding those evidenced by Pre-released ADRs), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate. The Depositary may retain for its own account any earnings on collateral for Pre-released ADRs and its charges for issuance thereof. At the request, risk and expense of the person depositing Shares, the Depositary may accept deposits for forwarding to the Custodian and may deliver ADRs at a place other than
its office. Every person depositing Shares under the Deposit Agreement represents and warrants that such Shares are validly issued and outstanding, fully paid, nonassessable and free of pre-emptive rights, that the person making such deposit is duly authorized so to do and that such Shares (A) are not “restricted securities” as such term is defined in Rule 144 under the Securities Act of 1933 unless at the time of deposit they may be freely transferred in accordance with Rule 144(k) and may otherwise be offered and sold freely in the United States or (B) have been registered under the Securities Act of 1933. Such representations and warranties shall survive the deposit of Shares and issuance of ADRs. The Depositary will not knowingly accept for deposit under the Deposit Agreement any Shares required to be registered under the Securities Act of 1933 and not so registered; the Depositary may refuse to accept for such deposit any Shares identified by the Company in order to facilitate the
Company’s compliance with such Act.

          (2)          Withdrawal of Deposited Securities. Subject to paragraphs (4) and (5), upon surrender of (i) a certificated ADR in form satisfactory to the Depositary at the Transfer Office or (ii) proper instructions and documentation in the case of a Direct Registration ADR, the Holder hereof is entitled to delivery at, or to the extent in dematerialized form from, the Custodian’s office of the Deposited Securities at the time represented by the ADSs evidenced by this ADR. At the request, risk and expense of the Holder hereof, the Depositary may deliver such Deposited Securities at such other place as may have been requested by the Holder. Notwithstanding any other provision of the Deposit Agreement or this ADR, the withdrawal of Deposited Securities maybe restricted only for the reasons set forth in General Instruction I.A.(l) of Form F-6
(as such instructions may be amended from time to time) under the Securities Act of 1933.

A-2

          (3)          Transfers of ADRs. The Depositary or its agent will keep, at a designated transfer office in the Borough of Manhattan, The City of New York (the “Transfer Office”), (a) a register (the “ADR Register”) for the registration, registration of transfer, combination and split-up of ADRs, and, in the case of Direct Registration ADRs, shall include the Direct Registration System, which at all reasonable times will be open for inspection by Holders and the Company for the purpose of communicating with Holders in the interest of the business of the Company or a matter relating to the Deposit Agreement and (b) facilities for the delivery and receipt of ADRs. The term ADR Register includes the Direct Registration System.   Title to this ADR (and to the Deposited Securities represented by the ADSs evidenced hereby),
when properly endorsed (in the case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer, is transferable by delivery with the same effect as in the case of negotiable instruments under the laws of the State of New York; provided that the Depositary, notwithstanding any notice to the contrary, may treat the person in whose name this ADR is registered on the ADR Register as the absolute owner hereof for all purposes and neither the Depositary nor the Company will have any obligation or be subject to any liability under the Deposit Agreement to any holder of an ADR, unless such holder is the Holder thereof. Subject to paragraphs (4) and (5), this ADR is transferable on the ADR Register and may be split into other ADRs or combined with other ADRs into one ADR, evidencing the aggregate number of ADSs surrendered for split-up or combination, by the Holder hereof or by duly authorized attorney upon surrender of this ADR at the Transfer Office properly
endorsed (in the case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer and duly stamped as may be required by applicable law; provided that the Depositary may close the ADR Register at any time or from time to time when deemed expedient by it or requested by the Company. At the request of a Holder, the Depositary shall, for the purpose of substituting a certificated ADR with a Direct Registration ADR, or vice versa, execute and deliver a certificated ADR or a Direct Registration ADR, as the case may be, for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the certificated ADR or Direct Registration ADR, as the case may be, substituted.

          (4)          Certain
Limitations. Prior to the issue, registration, registration of transfer,
split-up or combination of any ADR, the delivery of any distribution in respect
thereof, or, subject to the last sentence of paragraph (2), the withdrawal of
any Deposited Securities, and from time to time in the case of clause (b)(ii) of
this paragraph (4), the Company, the Depositary or the Custodian may require:
(a) payment with respect thereto of (i) any stock transfer or other tax or other
governmental charge, (ii) any stock transfer or registration fees in effect for
the registration of transfers of Shares or other Deposited Securities upon any
applicable register and (iii) any applicable charges as provided in paragraph
(7) of this ADR; (b) the production of proof satisfactory to it of (i) the
identity of any signatory and genuineness of any signature and (ii) such other
information, including without limitation, information as to citizenship,
residence, exchange control approval, beneficial ownership of any securities,
compliance with applicable law, regulations, provisions of or governing
Deposited Securities and terms of the Deposit Agreement and this ADR, as it may
deem necessary or proper; and (c) compliance with such regulations as the
Depositary may establish consistent with the Deposit Agreement and any
regulations which the Depositary is informed of in writing by the Company which
are deemed desirable by the Depositary, the Company or the Custodian to
facilitate compliance with any applicable rules or regulations of the Banco
Central do Brasil or Comissão de Valores Mobiliários. The issuance of ADRs, the
acceptance of deposits of Shares, the registration, registration of transfer,
split-up or combination of ADRs or, subject to the last sentence of paragraph
(2), the withdrawal of Deposited Securities may be suspended, generally or in
particular instances, when the ADR Register or any register for Deposited
Securities is closed or when any such action is deemed advisable by the
Depositary or the Company.

A-3

          (5)          Taxes. If any
tax or other governmental charge shall become payable by or on behalf of the
Custodian or the Depositary with respect to this ADR, any Deposited Securities
represented by the ADSs evidenced hereby or any distribution thereon, such tax
or other governmental charge shall be paid by the Holder hereof to the
Depositary. The Depositary may refuse to effect any registration, registration
of transfer, split-up or combination hereof or, subject to the last sentence of
paragraph (2), any withdrawal of such Deposited Securities until such payment is
made. The Depositary may also deduct from any distributions on or in respect of
Deposited Securities, or may sell by public or private sale for the account of
the Holder hereof any part or all of such Deposited Securities (after attempting
by reasonable means to notify the Holder hereof prior to such sale), and may
apply such deduction or the proceeds of any such sale in payment of such tax or
other governmental charge, the Holder hereof remaining liable for any
deficiency, and shall reduce the number of ADSs evidenced hereby to reflect any
such sales of Shares. In connection with any distribution to Holders, the
Company will remit to the appropriate governmental authority or agency all
amounts (if any) required to be withheld and owing to such authority or agency
by the Company; and the Depositary and the Custodian will remit to the
appropriate governmental authority or agency all amounts (if any) required to be
withheld and owing to such authority or agency by the Depositary or the
Custodian. The Depositary will forward to the Company such information from its
records as the Company may reasonably request to enable the Company to file any
necessary reports with governmental authorities or agencies, and either the
Company or the Depositary may file any such reports necessary to obtain benefits
under any applicable tax treaties for Holders. The Depositary shall cooperate
with the Company in the Company’s efforts to make and maintain arrangements
enabling Holders to receive any tax credits or other benefits (pursuant to
treaty or otherwise) relating to dividend payments on the ADSs, and the
Depositary shall, to the extent reasonably practicable, provide the Company with
such documents as the Company may reasonable request to maintain such
arrangements. If the Depositary determines that any distribution in property
other than cash (including Shares or rights) on Deposited Securities is subject
to any tax that the Depositary or the Custodian is obligated to withhold, the
Depositary may dispose of all or a portion of such property in such amounts and
in such manner as the Depositary deems necessary and practicable to pay such
taxes, by public or private sale, and the Depositary shall distribute the net
proceeds of any such sale or the balance of any such property after deduction of
such taxes to the Holders entitled thereto. Each Holder of an ADR or an interest
therein agrees to indemnify the Depositary, the Company, the Custodian and any
of their respective directors, employees, agents and affiliates against, and
hold each of them harmless from, any claims by any governmental authority with
respect to taxes, additions to tax, penalties or interest arising out of any
refund of taxes, reduced rate of withholding at source or other tax benefit
obtained.

          (6)          Disclosure of Interests.
Holders and holders of interests in
ADSs will be subject to the provisions of the Company’s Articles of Incorporation, to
Instruction No. 358/02 of the Comissão de Valores Mobiliários ( the
Brazilian securities commission, or the “CVM”) (“Instruction No.
358/02”), and any other regulations of Brazil or the U.S. securities laws relating to
disclosure of interests in Shares. Under Instruction No. 358/02, a Holder, a holder of an
interest in ADSs, or groups of holders or of holders of an interest in ADSs, will have a
duty to notify the Company and the stock exchanges on which the Company’s securities
are traded if such Holder, holder of an interest in ADSs, or groups of holders or of
holders of an interest in ADSs, acquires Shares that, together with the Shares already
held by them, equals or exceeds 5% of the capital stock of the Company. Such Holder,
holder of an interest in ADSs, or groups of holders or of holders of an interest in ADSs
may be required to further notify the Company and stock exchanges on which the
Company’s securities are traded of certain changes in ownership of the Shares after
the first notification. Under Instruction No. 358/02, the Company may make inquiries if
the Company knows or has reasonable cause to believe that a Holder, a holder of an
interest in ADSs, or groups of holders or of holders of an interest in ADSs has any
interest in Shares (including its interest in Shares represented by ADSs). Holders and
beneficial owners of interests in
ADRs agree to comply with all such disclosure requirements, inquiries and
ownership limitations and to comply with any reasonable Company instructions in
respect thereof. The Company reserves the right to instruct Holders to deliver
their ADSs for cancellation and withdrawal of the Deposited Securities so as to
permit the Company to deal directly with the Holder thereof as a holder of
Shares and Holders agree to comply with such instructions.   The
Depositary agrees to cooperate with the Company in its efforts to inform Holders
of the Company’s exercise of its rights under this paragraph and agrees to
consult with, and provide reasonable assistance without risk, liability or
expense on the part of the Depositary, to the Company on the manner or manners
in which it may enforce such rights with respect to any Holder.

A-4

          (7)          Charges of Depositary. The Depositary may charge (i) each person to whom ADSs are issued, including, without limitation, issuances against deposits of Shares, issuances in respect of Share Distributions, Rights and Other Distributions (as such terms are defined in paragraph (10)), issuances pursuant to a stock dividend or stock split declared by the Company, or issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or the Deposited Securities, and (ii) each person surrendering ADSs for withdrawal of Deposited Securities or whose ADSs are cancelled or reduced for any other reason, U.S. $5.00 for each 100 ADSs (or portion thereof) issued, delivered, reduced, cancelled or surrendered (as the case may be). The Depositary may sell (by public or private sale) sufficient securities and
property received in respect of Share Distributions, Rights and Other Distributions prior to such deposit to pay such charge. The following additional charges shall be incurred by the Holders, by any party depositing or withdrawing Shares or by any party surrendering ADRs, to whom ADRs are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the ADRs or the Deposited Securities or a distribution of ADRs pursuant to paragraph (10)), whichever is applicable (i) to the extent not prohibited by the rules of the primary stock exchange upon which the ADSs are listed, a fee of $.02 or less per ADS (or portion thereof) for any Cash distribution made pursuant to the Deposit Agreement, (ii) to the extent not prohibited by the rules of the primary stock exchange upon which the ADSs are listed, a fee of $1.50 per ADR or ADRs for transfers made pursuant to paragraph (3) hereof, (iii) a fee for the distribution or sale
of securities pursuant to paragraph (10) hereof, such fee being in an amount equal to the fee for the execution and delivery of ADSs referred to above which would have been charged as a result of the deposit of such securities (for purposes of this paragraph (7) treating all such securities as if they were Shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the Depositary to Holders entitled thereto, (iv) to the extent not prohibited by the rules of the primary stock exchange upon which the ADSs are listed, a fee of US$0.02 per ADS (or portion thereof) per year for the services performed by the Depositary in administering the ADRs (which fee shall be assessed against Holders as of the record date or dates set by the Depositary not more than once each calendar year and shall be payable at the sole discretion of the Depositary by billing such Holders or by deducting such charge from one or more cash dividends or other cash distributions), and (v) such
fees and expenses as are incurred by the Depositary (including without limitation expenses incurred on behalf of Holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of Deposited Securities or otherwise in connection with the Depositary’s or its Custodian’s compliance with applicable law, rule or regulation. The Company will pay all other charges and expenses of the Depositary and any agent of the Depositary (except the Custodian) pursuant to agreements from time to time between the Company and the Depositary, except (i) stock transfer or other taxes and other governmental charges (which are payable by Holders or persons depositing Shares), (ii) cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or Holders delivering Shares, ADRs or Deposited Securities (which are payable by such persons or Holders), (iii) transfer or registration fees for
the registration or transfer of Deposited Securities on any applicable register in connection with the deposit or withdrawal of Deposited Securities (which are payable by persons depositing Shares or Holders withdrawing Deposited Securities; there are no such fees in respect of the Shares as of the date of the Deposit Agreement), (iv) expenses of the Depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency), and (v) any other charge payable by any of the Depositary, any of the Depositary’s agents, including, without limitation, the custodian, or the agents of the Depositary’s agents in connection with the servicing of the Shares or other Deposited Securities (which charge shall be assessed against Holders as of the record date or dates set by the depositary and shall be payable at the sole discretion of the Depositary by billing such Holders or by deducting such charge from one or more cash dividends or other cash
distributions). Such charges may at any time and from time to time be changed by agreement between the Company and the Depositary.

A-5

          (8)          Available Information. The Deposit Agreement, the provisions of or governing Deposited Securities and any written communications from the Company, which are both received by the Custodian or its nominee as a holder of Deposited Securities and made generally available to the holders of Deposited Securities, are available for inspection by Holders at the offices of the Depositary and the Custodian and at the Transfer Office. The Depositary will distribute copies of such communications (or English translations or summaries thereof) to Holders when furnished by the Company. The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and accordingly files certain reports with the United States Securities and Exchange Commission (the “Commission”). Such reports and other information may be
inspected and copied at public reference facilities maintained by the Commission located at the date hereof at 100 F Street, NE, Washington, DC 20549.

          (9)          Execution. This ADR shall not be valid for any purpose unless executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary.

Dated:

	
  
 
  	
  
JPMORGAN CHASE BANK, N.A., as Depositary
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Authorized Officer
  

The Depositary’s office is located at 4 New York Plaza, New York, New York 10004.

A-6

[FORM OF REVERSE OF ADR]

          (10)          Distributions on Deposited Securities. Subject to paragraphs (4) and (5), to the extent practicable, the Depositary will distribute to each Holder entitled thereto on the record date set by the Depositary therefor at such Holder’s address shown on the ADR Register, in proportion to the number of Deposited Securities (on which the following distributions on Deposited Securities are received by the Custodian) represented by ADSs evidenced by such Holder’s ADRs: (a) Cash. Any U.S. dollars available to the Depositary resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof authorized in this paragraph (10) (“Cash”), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution
being impermissible or impracticable with respect to certain Holders, and (iii) deduction of the Depositary’s expenses in (1) converting any foreign currency to U.S. dollars by sale or in such other manner as the Depositary may determine to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the Depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner. If the Company shall have advised the Depositary pursuant to the provisions of the Deposit Agreement that any such conversion, transfer or distribution can be effected only with the approval or license of the
Brazilian government or any agency thereof or the Depositary shall become aware of any other governmental approval or license required therefor, the Depositary may, in its discretion, apply for such approval or license, if any, as the Company or its Brazilian counsel may reasonably instruct in writing or as the Depositary may deem desirable including, without limitation, Central Bank registration, (b) Shares, (i) Additional ADRs evidencing whole ADSs representing any Shares available to the Depositary resulting from a dividend or free distribution on Deposited Securities consisting of Shares (a “Share Distribution”) and (ii) U.S. dollars available to it resulting from the net proceeds of sales of Shares received in a Share Distribution, which Shares would give rise to fractional ADSs if additional ADRs were issued therefor, as in the case of Cash, (c) Rights, (i) Warrants or other instruments in the discretion of the Depositary representing rights to acquire additional ADRs in
respect of any rights to subscribe for additional Shares or rights of any nature available to the Depositary as a result of a distribution on Deposited Securities (“Rights”), to the extent that the Company timely furnishes to the Depositary evidence satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Company has no obligation to so furnish such evidence), or (ii) to the extent the Company does not so furnish such evidence and sales of Rights are practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent the Company does not so furnish such evidence and such sales cannot practicably be accomplished by reason of the nontransferability of the Rights, limited markets therefor, their short duration or otherwise, nothing (and any Rights may lapse), (d) Other Distributions, (i) Securities or property available to the Depositary resulting from any distribution on
Deposited Securities other than Cash, Share Distributions and Rights (“Other Distributions”), by any means that the Depositary, after consultation with the Company if practicable, may deem equitable and practicable, or (ii) to the extent the Depositary deems distribution of such securities or property not to be equitable and practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Other Distributions as in the case of Cash. Such U.S. dollars available will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices.

          (11)          
          Conversion of Foreign Currency. Whenever the Depositary or the Custodian
          shall receive foreign currency, as a Cash dividend or Other Distribution or as
          the net proceeds from the sale of securities, property or rights, which, in the
          judgment of the Depositary can then be converted on a reasonable basis into U.S.
          dollars which can, at the time of receipt thereof, be transferred to the United
          States, the Depositary shall, as promptly as practicable, convert or cause to be
          converted, by sale or in any other manner that it may determine, such foreign
          currency into U.S. dollars and shall transfer the resulting U.S. dollars (net of
          its charges and expenses in effecting such conversion) to the United States.
          Such U.S. dollars shall be distributed as promptly as practicable to the Holders
          entitled thereto or, if the Depositary shall have distributed any warrants or
          other instruments that entitle the holders thereof to such U.S. dollars, then to
          the holders of such warrants or instruments, as applicable, upon surrender
          thereof for cancellation. Such distribution may be made upon an averaged or
          other practicable basis without regard to any distinctions among Holders on
          account of exchange restrictions or otherwise. If such conversion or
          distribution can be effected only with the approval or license of any government
          or agency thereof, including without limitation, Central Bank registration, the
          Depositary may file such application for approval or license, if any, as it
          shall deem practicable; provided, however that the Depositary shall be entitled
          to rely upon Brazilian local counsel in such matters, which counsel shall be
          instructed to act as promptly as possible. The Company shall not be obliged to
          make any such filing on behalf of the Depositary. If at any time the Depositary
          shall determine that in its reasonable judgment any foreign currency received by
          the Depositary is not convertible on a reasonable basis into U.S. dollars
          transferable to the United States, or if any approval or license of any
          governmental authority or agency thereof that is required for such conversion is
          denied or in the opinion of the Depositary is not obtainable at a reasonable
          cost or within a reasonable period, the Depositary may, subject to applicable
          laws and regulations, and after consultation with the Company, either distribute
          the foreign currency (or an appropriate document evidencing the right to receive
          such foreign currency) to, or hold such foreign currency (without liability for
          interest thereon) for the respective accounts of, the Holders entitled to
          receive the same; provided, however, that if requested in writing by a Holder
          entitled thereto, the Depositary may, in its discretion, distribute the foreign
          currency, as promptly as practicable. If any such conversion of foreign
          currency, in whole or in part, can be effected for distribution to some but not
          all of the Holders entitled thereto, the Depositary shall make such conversion
          and distribution in U.S. dollars to the extent permissible to the Holders
          entitled thereto and may either so distribute or hold such balance (without
          liability for interest thereon) for the respective accounts of, the Holders
          entitled thereto for whom such conversion and distribution is not practicable;
          provided, however, that if requested in writing by a Holder entitled thereto and
          permitted by applicable law, the Depositary may, in its discretion, distribute
          the foreign currency, as promptly as practicable.

A-7

          (12)          Record Dates. The Depositary may, after consultation with the Company if practicable, fix a record date (which, to the extent applicable, shall be as near as practicable to any corresponding record date set by the Company) for the determination of the Holders who shall be responsible for the fee assessed by the Depositary for administration of the ADR program and for any expenses provided for in paragraph (7) hereof as well as for the determination of the Holders who shall be entitled to receive any distribution on or in respect of Deposited Securities, to give instructions for the exercise of any voting rights, to receive any notice or to act in respect of other matters and only such Holders shall be so entitled or obligated.

          (13)          Voting
of Deposited Securities. As soon as practicable after receipt from the
Company of notice of any meeting or solicitation of consents or proxies of
holders of Shares or other Deposited Securities, as soon as practicable after
receipt from the Company of notice of any meeting or solicitation of consents or
proxies of holders of Shares or other Deposited Securities, the Depositary shall
distribute to Holders a notice stating (a) such information as is contained in
such notice and any solicitation materials, (b) that each Holder on the record
date set by the Depositary therefor will, subject to any applicable provisions
of Brazilan law, and the Company’s Articles of Incorporation, be entitled
to instruct the Depositary as to the exercise of the voting rights, if any,
pertaining to the Deposited Securities represented by the ADSs evidenced by such Holder’s ADRs and (c) the manner in which such instructions
may be given, including instructions to give a discretionary proxy to a person
designated by the Company. Upon receipt of instructions of a Holder on such
record date in the manner and on or before the date established by the
Depositary for such purpose, the Depositary shall endeavor insofar as
practicable and permitted under the provisions of or governing Deposited
Securities to vote or cause to be voted the Deposited Securities represented by
the ADSs evidenced by such Holder’s ADRs in accordance with such
instructions and subject to the rules on limitation on voting rights of certain
shareholders provided for in the Company’s Articles of Incorporation. The Depositary
will not itself exercise any voting discretion in respect of any Deposited
Securities. Each Holder will be deemed to be a non-Brazilian shareholder for
the purposes of the limitation on the voting rights of non-Brazilian
shareholders set forth in the Company’s Articles of Incorporation, unless
such holder provides the Depositary and the Company with sufficient evidence to
establish that such shareholder is a “Brazilian shareholder” as
defined in the Company’s Articles of Incorporation. The Depositary shall
have no obligation to request or assist in obtaining or providing any such
evidence and shall have no obligations to Holders or any other person or entity
with respect to the application by the Company of the limitations on voting
provided for in the Company’s Articles of Incorporation. Holders and
persons holding interest in ADSs are encouraged to read the Company’s
Articles of Incorporation, and to seek their own legal and financial guidance,
to understand such voting limitations. There is no guarantee that Holders
generally or any Holder in particular will receive the notice described above
with sufficient time to enable such Holder to return any voting instructions to
the Depositary in a timely manner.

          (14)          Changes Affecting Deposited Securities. Subject to paragraphs (4) and (5), the Depositary may, in its discretion, amend this ADR or distribute additional or amended ADRs (with or without calling this ADR for exchange) or cash, securities or property on the record date set by the Depositary therefor to reflect any change in par value, split-up, consolidation, cancellation or other reclassification of Deposited Securities, any Share Distribution or Other Distribution not distributed to Holders or any cash, securities or property available to the Depositary in respect of Deposited Securities from (and the Depositary is hereby authorized to surrender any Deposited Securities to any person and, irrespective of whether such Deposited Securities are surrendered or otherwise cancelled by operation of law, rule, regulation or otherwise, to
sell by public or private sale any property received in connection with) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all the assets of the Company, and to the extent the Depositary does not so amend this ADR or make a distribution to Holders to reflect any of the foregoing, or the net proceeds thereof, whatever cash, securities or property results from any of the foregoing shall constitute Deposited Securities and each ADS evidenced by this ADR shall automatically represent its pro rata interest in the Deposited Securities as then constituted.

A-8

          (15)          Exoneration. The Depositary, the Company, their agents and each of them shall: (a) incur no liability (i) if any present or future law, rule or regulation of the United States, the Federative Republic of Brazil or any other country, or of any governmental or regulatory authority or any securities exchange or market or automated quotation system, the provisions of or governing any Deposited Securities, any present or future provision of the Company’s charter, any act of God, war, terrorism or other circumstance beyond its control shall prevent, delay or subject to any civil or criminal penalty any act which the Deposit Agreement or this ADR provides shall be done or performed by it or them (including, without limitation, voting pursuant to paragraph (12) hereof), or (ii) by reason of any exercise or failure to exercise any
discretion given it in the Deposit Agreement or this ADR; (b) assume no obligation and shall not be subject to any liability except to perform its obligations to the extent they are specifically set forth in this ADR and the Deposit Agreement without gross negligence or bad faith; (c) in the case of the Depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR; (d) in the case of the Company and its agents hereunder be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required; or (e) not be liable for any action or inaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Holder, or any other person believed by it to be competent to give such advice or information. The Depositary, its agents and the Company may rely and shall be protected in acting upon any written notice, request, direction or other document believed by them to be genuine and to have been signed or presented by the proper party or parties. The Depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, for the manner in which any such vote is cast or for the effect of any such vote. The Depositary may rely upon instructions from the Company or its Brazilian counsel in respect of any approval or license of the Brazilian government or any agency thereof required for any currency conversion, transfer or distribution. The Depositary and its agents may own and deal in any class of securities of the Company and its affiliates and in ADRs. Notwithstanding anything
to the contrary set forth in the Deposit Agreement or an ADR, the Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder or Holders, any ADR or ADRs or otherwise related hereto to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators.   The Company has agreed to indemnify the Depositary and its agents under certain circumstances and the Depositary has agreed to indemnify the Company under certain circumstances. Neither the Company nor the Depositary nor any of their respective agents shall be liable to Holders or beneficial owners of interests in ADSs for any indirect, special, punitive or consequential damages. No disclaimer of liability under the Securities Act of 1933 is intended by any provision
hereof.

          (16)          Resignation and Removal of Depositary; the Custodian. The Depositary may resign as Depositary by 60 days prior written notice of its election to do so delivered to the Company, or be removed as Depositary by the Company by 60 days prior written notice of such removal delivered to the Depositary. The Depositary may appoint substitute or additional Custodians and the term “Custodian” refers to each Custodian or all Custodians as the context requires.

A-9

          (17)          Amendment. Subject to the last sentence of paragraph (2), the ADRs and the Deposit Agreement may be amended by the Company and the Depositary, provided that any amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that shall otherwise prejudice any substantial existing right of Holders, shall become effective 30 days after notice of such amendment shall have been given to the Holders. Every Holder of an ADR at the time any amendment to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such ADR, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event
shall any amendment impair the right of the Holder of any ADR to surrender such ADR and receive the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act of 1933 or (b) the ADSs or Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to prejudice any substantial rights of Holders.   Notwithstanding the foregoing, if any governmental body or regulatory body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement or the form of ADR to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the ADR at any time in
accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance.

          (18)          Termination. Upon the resignation or removal of the Depositary pursuant to the Deposit Agreement, the Depositary may, and shall at the written direction of the Company, terminate the Deposit Agreement and this ADR by mailing notice of such termination to the Holders at least 30 days prior to the date fixed in such notice for such termination, which 30 days shall not act to reduce the 60 days referred to in paragraph (15) above. After the date so fixed for termination, the Depositary and its agents will perform no further acts under the Deposit Agreement and this ADR, except to receive and hold (or sell) distributions on Deposited Securities and deliver Deposited Securities being withdrawn. As soon as practicable after the expiration of six months from the date so fixed for termination, the Depositary shall sell the Deposited
Securities and shall thereafter (as long as it may lawfully do so) hold in a segregated account the net proceeds of such sales, together with any other cash then held by it under the Deposit Agreement, without liability for interest, in trust for the pro rata benefit of the Holders of ADRs not theretofore surrendered. After making such sale, the Depositary shall be discharged from all obligations in respect of the Deposit Agreement and this ADR, except to account for such net proceeds and other cash. After the date so fixed for termination, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary and its agents.

A-10

          (19)          Appointment.   Each Holder and each person holding an interest in ADSs, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive
determinant of the necessity and appropriateness thereof.

A-11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]