Document:

JOINDER 

JOINDER dated as of
September 8, 2004, to the Stockholders Agreement dated April 6, 2004 (the “Stockholders
Agreement”) by and among Sealy Corporation, Bain Capital Fund V, L.P., BCIP
Associates, BCIP Trust Associates, L.P., Harvard Private Capital Holdings,
Inc., Sealy Investors 1 LLC (“SI1LLC”), Sealy Investors 2 LLC (“SI2LLC”),
Sealy Investors 3, LLC (“SI3LLC”; and together with SI1LLC and SI2LLC,
the “SILLCs”) and Sealy Holding LLC. 
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Stockholders Agreement.

RECITALS

WHEREAS,
SI1LLC desires to Transfer all of its shares of Common Stock to its members
such that as a result of such Transfer JPMorgan Partners (BHCA), L.P. will own
1,361,350.4698 shares of Common Stock and Bain Capital Partners V, L.P. will
own 357,526.3860 shares of Common Stock;

WHEREAS,
SI2LLC desires to Transfer all of its shares of Common Stock to its members
such that as a result of such Transfer CIBC WG Argosy Merchant Fund 2, L.L.C.
will own 612,606.7877 shares of Common Stock, Co-Investment Merchant Fund, LLC
will own 60,444.2135 shares of Common Stock, Co-Investment Merchant Fund 3, LLC
will own 7,623.2074 shares of Common Stock and Bain Capital Partners V, L.P. will
own 178,762.9234  shares of Common Stock;

WHEREAS,
SI3LLC desires to Transfer all of its shares of Common Stock to its members
such that as a result of such Transfer BancBoston Capital Inc. will own
226,891.4028 shares of Common Stock and Bain Capital Partners V, L.P. will own
59,587.6412 shares of Common Stock;

WHEREAS,
pursuant to Section 6(a) of the Stockholders Agreement, each Minority Investor
is permitted to Transfer any of its shares of Common Stock to members of such
Minority Investor, so long as each transferee agrees in writing to be bound by
the terms of the Stockholders Agreement;

WHEREAS,
each of the undersigned is executing this Joinder in order to comply with the
provisions of Section 6(a) of the Stockholders Agreement.

NOW,
THEREFORE, the parties hereto hereby agree as follows:

1.     Joinder. Each of the undersigned hereby agrees to be
bound by the terms, conditions and other provisions of the Stockholders
Agreement with all attendant rights, duties and obligations stated therein,
with the same force and effect as if originally named as a Minority Investor
therein (including, without limitation, for purposes of the first sentence of
Section 5(b) of the Stockholders Agreement).

 

 

2.     Notices. The address for notices and other communications
required or permitted to be given under the Stockholders Agreement to each of
the undersigned is set forth on Annex A attached hereto.

3.     Counterparts.
This Joinder may be executed by one or more of the parties hereto on any number
of separate counterparts (including by facsimile), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.

4.     GOVERNING LAW. THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

2

IN WITNESS WHEREOF, each of
the undersigned has caused this Joinder to be duly executed and delivered as of
the date first above written.

	
   

  	
  BAIN
  CAPITAL PARTNERS V, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Bain Capital Investors,
  LLC, its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Goss

  
	
   

  	
   

  	
  Name: Michael Goss

  
	
   

  	
   

  	
  Title:   Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  PARTNERS (BHCA), L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  JPMP MASTER FUND MANAGER,
  L.P., ITS

  
	
   

  	
   

  	
  GENERAL PARTNER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  JPMP CAPITAL CORP.

  
	
   

  	
   

  	
  ITS GENERAL PARTNER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Faith Rosenfeld

  
	
   

  	
   

  	
  Name: Faith Rosenfeld

  
	
   

  	
   

  	
  Title:   Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CIBC
  WG ARGOSY MERCHANT FUND 2, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven A. Flyer

  
	
   

  	
   

  	
  Name: Steven A. Flyer

  
	
   

  	
   

  	
  Title:   Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CO-INVESTMENT
  MERCHANT FUND, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven A. Flyer

  
	
   

  	
   

  	
  Name: Steven A. Flyer

  
	
   

  	
   

  	
  Title:   Attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CO-INVESTMENT
  MERCHANT FUND 3, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven A. Flyer

  
	
   

  	
   

  	
  Name: Steven A. Flyer

  
	
   

  	
   

  	
  Title:   Attorney-in-fact

  

 

3

 

	
   

  	
  BANCBOSTON CAPITAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Quintal

  
	
   

  	
   

  	
  Name: John J. Quintal

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SEALY CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Kenneth L. Walker

  	
   

  	
   

  	
   

  
	
  Name: Kenneth L.
  Walker

  	
   

  	
   

  
	
  Title:   Sr.
  V.P. General Counsel

  	
   

  	
   

  
					

 

4Exhibit
10.1

 

Williams
Scotsman International, Inc.

2005 Omnibus Award Plan

 

1.             Purpose

 

The purpose of the Plan is to provide a means
through which the Company and its Affiliates may attract able persons to enter
and remain in the employ of the Company and its Affiliates and to provide a
means whereby employees, directors and consultants of the Company and its
Affiliates can acquire and maintain Common Stock ownership, or be paid
incentive compensation measured by reference to the value of Common Stock, thereby
strengthening their commitment to the welfare of the Company and its Affiliates
and promoting an identity of interest between stockholders and these persons.

 

So that the appropriate incentive can be
provided, the Plan provides for granting Incentive Stock Options, Nonqualified
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Phantom Stock Awards, Stock Bonuses and Performance Compensation Awards,
or any combination of the foregoing.

 

2.             Definitions

 

The following definitions shall be applicable
throughout the Plan.

 

(a)           “Affiliate”
means any entity that directly or indirectly is controlled by, controls or is
under common control with the Company.

 

(b)           “Award”
means, individually or collectively, any Incentive Stock Option, Nonqualified
Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock
Unit, Phantom Stock Award, Stock Bonus or Performance Compensation Award
granted under the Plan.

 

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

 

(d)           “Cause”
means, unless in the case of a particular Award the applicable Award agreement
states otherwise, the Company or an Affiliate having “cause” to terminate a
Participant’s employment or service, as defined in any employment or consulting
agreement between the Participant and the Company or an Affiliate in effect at
the time of such termination or, in the absence of such an employment or
consulting agreement, upon (i) the determination by the Committee that the
Participant has ceased to perform his duties to the Company, or an Affiliate
(other than as a result of his incapacity due to physical or mental illness or
injury), which failure amounts to an intentional and extended neglect of his
duties to such party, (ii) the Committee’s determination that the Participant
has engaged or is about to engage in conduct materially injurious to the
Company or an Affiliate, (iii) the Participant having been convicted of,
or plead guilty or no contest to, a felony or any crime involving as a material
element fraud or dishonesty, (iv) the failure of the Participant to follow
the 

 

 

lawful instructions of the Board or his
direct superiors or (v) in the case of a Participant who is a non-employee
director, the Participant ceasing to be a member of the Board in connection
with the Participant engaging in any of the activities described in
clauses (i) through (iv) above.

 

(e)           “Change
in Control” shall, unless in the case of a particular Award the applicable
Award agreement states otherwise or contains a different definition of “Change
in Control,” be deemed to occur upon:

 

(i)            the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
50% or more (on a fully diluted basis) of either (A) the then outstanding
shares of Common Stock of the Company, taking into account as outstanding for
this purpose such Common Stock issuable upon the exercise of options or warrants,
the conversion of convertible stock or debt, and the exercise of any similar
right to acquire such Common Stock (the “Outstanding Company Common Stock”)
or (B) the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for
purposes of this Plan, the following acquisitions shall not constitute a Change
in Control:  (I) any acquisition by
the Company or any Affiliate, (II) any acquisition by any employee benefit
plan sponsored or maintained by the Company or any Affiliate, or (III) in
respect of an Award held by a particular Participant, any acquisition by the
Participant or any group of persons including the Participant (or any entity
controlled by the Participant or any group of persons including the
Participant);

 

(ii)           individuals
who, on the date hereof, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof, whose
election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a specific vote
or by approval of a registration statement of the Company describing such
person’s inclusion on the Board, or a proxy statement of the Company in which
such person is named as a nominee for director, without written objection to
such nomination) shall be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the Company
as a result of an actual or threatened election contest, as such terms are used
in Rule 14a-11 of Regulation A promulgated under the Exchange Act, with
respect to directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than
the Board shall be deemed to be an Incumbent Director;

 

(iii)          the
dissolution or liquidation of the Company;

 

2

 

(iv)          the
sale, transfer or other disposition of all or substantially all of the business
or assets of the Company, other than any such sale, transfer or other
disposition to one or more Designated Holders; or

 

(v)           the
consummation of a reorganization, recapitalization, merger, consolidation,
statutory share exchange or similar form of corporate transaction involving the
Company that requires the approval of the Company’s stockholders, whether for
such transaction or the issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business Combination:  (A) more than 50% of the total voting
power of (x) the entity resulting from such Business Combination (the “Surviving
Company”), or (y) if applicable, the ultimate parent entity that directly
or indirectly has beneficial ownership of sufficient voting securities eligible
to elect a majority of the members of the board of directors (or the analogous
governing body) of the Surviving Company (the “Parent Company”), is
represented by the Outstanding Company Voting Securities that were outstanding
immediately prior to such Business Combination (or, if applicable, is
represented by shares into which the Outstanding Company Voting Securities were
converted pursuant to such Business Combination), and such voting power among
the holders thereof is in substantially the same proportion as the voting power
of the Outstanding Company Voting Securities among the holders thereof
immediately prior to the Business Combination, and (B) at least a majority
of the members of the board of directors (or the analogous governing body) of
the Parent Company (or, if there is no Parent Company, the Surviving Company)
following the consummation of the Business Combination were Board members at
the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination.

 

(f)            “Code”
means the Internal Revenue Code of 1986, as amended.  Reference in the Plan to any section of
the Code shall be deemed to include any amendments or successor provisions to
such section and any regulations under such section.

 

(g)           “Committee”
means a committee of at least two people as the Board may appoint to administer
the Plan or, if no such committee has been appointed by the Board, the
Board.  Unless the Board is acting as the
Committee or the Board specifically determines otherwise, each member of the
Committee shall, at the time he takes any action with respect to an Award under
the Plan, be an Eligible Director. 
However, the fact that a Committee member shall fail to qualify as an
Eligible Director shall not invalidate any Award granted by the Committee which
Award is otherwise validly granted under the Plan.

 

(h)           “Common
Stock” means the common stock, par value $0.01 per share, of the Company
and any stock into which such common stock may be converted or into which it
may be exchanged.

 

3

 

(i)            “Company”
means Williams Scotsman International, Inc. and any successor thereto.

 

(j)            “Date
of Grant” means the date on which the granting of an Award is authorized,
or such other date as may be specified in such authorization or, if there is no
such date, the date indicated on the applicable Award agreement.

 

(k)           “Designated
Holder” means (1) The Cypress Group L.L.C., Cypress Merchant Banking
Partners L.P., Cypress Offshore Partners L.P., Keystone Group, L.P., Oak Hill
Strategic Partners, L.P., Scotsman Partners, L.P. and any affiliate of any of
the foregoing, (2) any individual who is both a member of the senior
management of Williams Scotsman Inc. or the Company and a stockholder of the
Company and (3) Odyssey Partners, L.P. and any affiliate of any of the
foregoing.

 

(l)            “Effective
Date” means the date upon which the pricing committee of the Board sets the
price at which the shares of Common Stock are to be sold to a group of
underwriters in the underwritten initial public offering of Common Stock.

 

(m)          “Eligible
Director” means a person who is (i) a “non-employee director” within
the meaning of Rule 16b-3 under the Exchange Act, or a person meeting any
similar requirement under any successor rule or regulation, (ii) an “outside
director” within the meaning of Section 162(m) of the Code, and the
Treasury Regulations promulgated thereunder, and (iii) an “independent
director” under the rules of the stock exchange on which the Stock is
listed or the Nasdaq, as applicable; provided, however, that
clause (ii) shall apply only with respect to grants of Awards with respect
to which the Company’s tax deduction could be limited by Section 162(m) of
the Code if such clause did not apply.

 

(n)           “Eligible
Person” means any (i) individual regularly employed by the Company or
Affiliate who satisfies all of the requirements of Section 6; provided,
however, that no such employee covered by a collective bargaining
agreement shall be an Eligible Person unless and to the extent that such
eligibility is set forth in such collective bargaining agreement or in an
agreement or instrument relating thereto; (ii) director of the Company or
an Affiliate; or (iii) consultant or advisor to the Company or an
Affiliate who may be offered securities pursuant to Form S-8.

 

(o)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(p)           “Fair
Market Value”, on a given date means (i) if the Stock is listed on a
national securities exchange, the average of the highest and lowest sale prices
reported as having occurred on the primary exchange with which the Stock is
listed and traded on the date prior to such date, or, if there is no such sale
on that date, then on the last preceding date on which such a sale was
reported; (ii) if the Stock is not listed on any national securities
exchange but is quoted in the Nasdaq National Market (the “Nasdaq”) on a
last sale basis, the average between the high bid price and low ask price 

 

4

 

reported on the date prior to such date, or,
if there is no such sale on that date, then on the last preceding date on which
a sale was reported; or (iii) if the Stock is not listed on a national
securities exchange nor quoted in the Nasdaq on a last sale basis, the amount
determined by the Committee to be the fair market value based upon a good faith
attempt to value the Stock accurately and computed in accordance with
applicable regulations of the Internal Revenue Service.

 

(q)           “Good
Reason” shall, unless in the case of a particular Award the applicable
Award agreement states otherwise, have the meaning, if any, set forth in a
Participant’s employment agreement or consulting agreement, if any, with the
Company or an Affiliate, and shall not apply in respect of any Participant who
does not have such an employment agreement or consulting agreement.

 

(r)            “Incentive
Stock Option” means an Option granted by the Committee to a Participant
under the Plan which is designated by the Committee as an incentive stock
option as described in Section 422 of the Code and otherwise meets the
requirements set forth herein.

 

(s)           “Mature
Shares” means shares of Stock owned by a Participant which are not subject
to any pledge or other security interest and have such other requirements as
the Committee may determine are necessary in order to avoid an accounting
earnings charge on account of the use of such shares to pay the Option Price or
satisfy a withholding obligation in respect of an Option.

 

(t)            “Negative
Discretion” shall mean the discretion authorized by the Plan to be applied
by the Committee to eliminate or reduce the size of a Performance Compensation
Award in accordance with Section 11(d)(iv) of the Plan; provided,
that the exercise of such discretion would not cause the Performance
Compensation Award to fail to qualify as “performance-based compensation” under
Section 162(m) of the Code.

 

(u)           “Nonqualified
Stock Option” means an Option granted by the Committee to a Participant
under the Plan which is not designated by the Committee as an Incentive Stock
Option.

 

(v)           “Option”
means an Award granted under Section 7 of the Plan.

 

(w)          “Option
Period” means the period described in Section 7(c) of the Plan.

 

(x)            “Option
Price” means the exercise price for an Option as described in Section 7(a) of
the Plan.

 

(y)           “Participant”
means an Eligible Person who has been selected by the Committee to participate
in the Plan and to receive an Award pursuant to Section 6 of the Plan.

 

5

 

(z)            “Parent”
means any parent of the Company as defined in Section 424(e) of the
Code.

 

(aa)         “Performance
Compensation Award” shall mean any Award designated by the Committee as a
Performance Compensation Award pursuant to Section 11 of the Plan.

 

(bb)         “Performance
Criteria” shall mean the criterion or criteria that the Committee shall
select for purposes of establishing the Performance Goal(s) for a Performance
Period with respect to any Performance Compensation Award under the Plan.  The Performance Criteria that will be used to
establish the Performance Goal(s) shall be based on the attainment of specific
levels of performance of the Company (or Affiliate, division or operational
unit of the Company) and shall be limited to the following:

 

(i)            net
earnings or net income (before or after taxes);

 

(ii)           basic
or diluted earnings per share (before or after taxes);

 

(iii)          net
revenue or net revenue growth;

 

(iv)          gross
profit or gross profit growth;

 

(v)           net
operating profit (before or after taxes);

 

(vi)          return
measures (including, but not limited to, return on assets, capital, invested capital,
equity, or sales);

 

(vii)         cash
flow (including, but not limited to, operating cash flow, free cash flow, and
cash flow return on capital);

 

(viii)        earnings
before or after taxes, interest, depreciation and/or amortization;

 

(ix)           gross
or operating margins;

 

(x)            productivity
ratios;

 

(xi)           share
price (including, but not limited to, growth measures and total stockholder
return);

 

(xii)          expense
targets;

 

(xiii)         margins;

 

(xiv)        operating
efficiency;

 

(xv)         objective
measures of customer satisfaction;

 

6

 

(xvi)        working
capital targets;

 

(xvii)       measures
of economic value added;

 

(xviii)      inventory
control; and

 

(xix)         enterprise
value.

 

Any one or more of the Performance Criteria
may be used on an absolute or relative basis to measure the performance of the
Company and/or an Affiliate as a whole or any business unit of the Company
and/or an Affiliate or any combination thereof, as the Committee may deem
appropriate, or any of the above Performance Criteria as compared to the
performance of a group of comparator companies, or published or special index
that the Committee, in its sole discretion, deems appropriate, or the Company
may select Performance Criterion (xi) above as compared to various stock
market indices.  The Committee also has
the authority to provide for accelerated vesting of any Award based on the
achievement of Performance Goals pursuant to the Performance Criteria specified
in this paragraph.  To the extent
required under Section 162(m) of the Code, the Committee shall, within the
first 90 days of a Performance Period (or, if longer or shorter, within the
maximum period allowed under Section 162(m) of the Code), define in an
objective fashion the manner of calculating the Performance Criteria it selects
to use for such Performance Period.  In
the event that applicable tax and/or securities laws change to permit Committee
discretion to alter the governing Performance Criteria without obtaining
stockholder approval of such changes, the Committee shall have sole discretion
to make such changes without obtaining stockholder approval.

 

(cc)         “Performance
Formula” shall mean, for a Performance Period, the one or more objective
formulas applied against the relevant Performance Goal to determine, with
regard to the Performance Compensation Award of a particular Participant,
whether all, some portion but less than all, or none of the Performance
Compensation Award has been earned for the Performance Period.

 

(dd)         “Performance
Goals” shall mean, for a Performance Period, the one or more goals
established by the Committee for the Performance Period based upon the
Performance Criteria.  The Committee is
authorized at any time during the first 90 days of a Performance Period (or, if
longer or shorter, within the maximum period allowed under Section 162(m)
of the Code), or at any time thereafter to the extent allowed under Section 162(m)
of the Code, in its sole and absolute discretion, to adjust or modify the
calculation of a Performance Goal for such Performance Period in order to
prevent the dilution or enlargement of the rights of Participants based on the
following events:

 

(i)            asset
write-downs;

 

(ii)           litigation
or claim judgments or settlements;

 

7

 

(iii)          the
effect of changes in tax laws, accounting principles, or other laws or
regulatory rules affecting reported results;

 

(iv)          any
reorganization and restructuring programs;

 

(v)           extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30
(or any successor pronouncement thereto) and/or in management’s discussion and
analysis of financial condition and results of operations appearing in the
Company’s annual report to stockholders for the applicable year;

 

(vi)          acquisitions
or divestitures;

 

(vii)         any
other specific unusual or nonrecurring events, or objectively determinable
category thereof;

 

(viii)        foreign
exchange gains and losses; and

 

(ix)           a
change in the Company’s fiscal year.

 

(ee)         “Performance
Period” shall mean the one or more periods of time not less than one (1) year
in duration, as the Committee may select, over which the attainment of one or
more Performance Goals will be measured for the purpose of determining a
Participant’s right to, and the payment of, a Performance Compensation Award.

 

(ff)           “Phantom
Stock Award” shall mean a cash award whose value is determined based on the
change in the value of the Company Common Stock from the Effective Date.

 

(gg)         “Plan”
means this Williams Scotsman International, Inc. 2005 Omnibus Award Plan.

 

(hh)         “Restricted
Period” means, with respect to any Award of Restricted Stock or any
Restricted Stock Unit, the period of time determined by the Committee during
which such Award is subject to the restrictions set forth in Section 9 or,
as applicable, the period of time within which performance is measured for
purposes of determining whether an Award has been earned.

 

(ii)           “Restricted
Stock Unit” means a hypothetical investment equivalent to one share of
Stock granted in connection with an Award made under Section 9.

 

(jj)           “Restricted
Stock” means shares of Stock issued or transferred to a Participant subject
to forfeiture and the other restrictions set forth in Section 9 of the
Plan.

 

8

 

(kk)         “Securities
Act” means the Securities Act of 1933, as amended.

 

(ll)           “Stock”
means the Common Stock or such other authorized shares of stock of the Company
as the Committee may from time to time authorize for use under the Plan.

 

(mm)       “Stock
Appreciation Right” or “SAR” means an Award granted under Section 8
of the Plan.

 

(nn)         “Stock
Bonus” means an Award granted under Section 10 of the Plan.

 

(oo)         “Stock
Option Agreement” means any agreement between the Company and a Participant
who has been granted an Option pursuant to Section 7 which defines the
rights and obligations of the parties thereto.

 

(pp)         “Strike
Price” means, (i) in the case of a SAR granted in tandem with an
Option, the Option Price of the related Option, or (ii) in the case of a
SAR granted independent of an Option, the Fair Market Value on the Date of
Grant.

 

(qq)         “Subsidiary”
means any subsidiary of the Company as defined in Section 424(f) of
the Code.

 

(rr)           “Substitution
Award” means an Award that is intended to replace any existing incentive
award held by an employee or director of, or consultant or advisor to, an
entity acquired by the Company or an Affiliate of the Company.  The terms and conditions of any Substitution
Award shall be set forth in an Award agreement and shall, except as may be inconsistent
with any provision of the Plan, to the extent practicable provide the recipient
with benefits (including economic value) substantially similar to those
provided to the recipient under the existing award which such Substitution
Award is intended to replace.

 

(ss)         “Vested
Unit” shall have the meaning ascribed thereto in Section 9(d) of
the Plan.

 

(tt)           “Voting
Stock” of a person means all classes of capital stock or other interests,
including partnership interests, of such person then outstanding and normally
entitled, without regard to the occurrence of any contingency, to vote in the
election of directors, managers, or trustee thereof.

 

3.             Effective
Date, Duration and Shareholder Approval

 

The Plan is effective as of the Effective
Date.  No Option shall be treated as an
Incentive Stock Option unless the Plan has been approved by the shareholders of
the Company in a manner intended to comply with the shareholder approval
requirements of Section 422(b)(i) of the Code; provided, that
any Option intended to be an Incentive Stock Option shall not fail to be
effective solely on account of a failure to obtain such 

 

9

 

approval, but rather such
Option shall be treated as a Nonqualified Stock Option unless and until such
approval is obtained.

 

The expiration date of the Plan, on and after
which no Awards may be granted hereunder, shall be the tenth anniversary of the
Effective Date; provided, however, that such expiration shall not
affect Awards then outstanding, and the terms and conditions of the Plan shall
continue to apply to such Awards.

 

4.             Administration

 

(a)           The
Committee shall administer the Plan.  The
majority of the members of the Committee shall constitute a quorum.  The acts of a majority of the members present
at any meeting at which a quorum is present or acts approved in writing by a
majority of the Committee shall be deemed the acts of the Committee.

 

(b)           Subject
to the provisions of the Plan and applicable law, the Committee shall have the
power, and in addition to other express powers and authorizations conferred on
the Committee by the Plan, to:  (i) designate
Participants; (ii) determine the type or types of Awards to be granted to
a Participant; (iii) determine the number of shares of Stock to be covered
by, or with respect to which payments, rights, or other matters are to be
calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under
what circumstances Awards may be settled or exercised in cash, shares of Stock,
other securities, other Awards or other property, or canceled, forfeited, or
suspended and the method or methods by which Awards may be settled, exercised,
canceled, forfeited, or suspended; (vi) determine whether, to what extent,
and under what circumstances the delivery of cash, Stock, other securities,
other Options, other property and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the holder thereof
or of the Committee; (vii) interpret, administer, reconcile any
inconsistency, correct any defect and/or supply any omission in the Plan and
any instrument or agreement relating to, or Award granted under, the Plan; (viii) establish,
amend, suspend, or waive such rules and regulations; (ix) appoint
such agents as it shall deem appropriate for the proper administration of the
Plan; and (x) make any other determination and take any other action that
the Committee deems necessary or desirable for the administration of the Plan.

 

(c)           Notwithstanding
the foregoing, the committee may delegate to any officer of the Company or any
Affiliate the authority to act on behalf of the Committee with respect to any
matter, right, obligation, or election which is the responsibility of or which
is allocated to the Committee herein, and which may be so delegated as a matter
of law, except for grants of Awards to (i) ”covered employees” under Code Section 162(m)
(other than Awards exempt from the application of Code Section 162(m)) and
(ii) persons subject to Section 16 of the 1934 Act.

 

(d)           Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any
Award or any documents evidencing Awards granted pursuant to the Plan

 

10

 

shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and binding
upon all parties, including, without limitation, the Company, any Affiliate,
any Participant, any holder or beneficiary of any Award, and any shareholder.

 

(e)           No
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Award hereunder.

 

5.             Grant
of Awards; Shares Subject to the Plan

 

The Committee may, from time to time, grant
Awards of Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units, Phantom Stock Awards, Stock Bonuses and/or Performance Compensation
Awards to one or more Eligible Persons; provided, however, that:

 

(a)           Subject
to Section 13, the aggregate number of shares of Stock in respect of which
Awards may be granted under the Plan is 1,800,000 shares;

 

(b)           Shares
of Stock shall be deemed to have been used in settlement of Awards whether or
not they are actually delivered or the Fair Market Value equivalent of such
shares is paid in cash; provided, however, that shares of Stock
delivered (either directly or by means of attestation) in full or partial
payment of the Option Price in accordance with Section 7(b) shall be
deducted from the number of shares of Stock delivered to the Participant
pursuant to such Option for purposes of determining the number of shares of
Stock acquired pursuant to the Plan.  In
accordance with (and without limitation upon) the preceding sentence, if and to
the extent an Award under the Plan expires, terminates or is canceled for any
reason whatsoever without the Participant having received any benefit
therefrom, the shares covered by such Award shall again become available for
future Awards under the Plan.  For
purposes of the foregoing sentence, a Participant shall not be deemed to have
received any “benefit” (i) in the case of forfeited Restricted Stock
Awards by reason of having enjoyed voting rights and dividend rights prior to
the date of forfeiture or (ii) in the case of an Award canceled by reason
of a new Award being granted in substitution therefor;

 

(c)           Stock
delivered by the Company in settlement of Awards may be authorized and unissued
Stock, Stock held in the treasury of the Company, Stock purchased on the open
market or by private purchase, or a combination of the foregoing; and

 

(d)           Subject
to Section 13, no person may be granted Options or SARs under the Plan
during any calendar year with respect to more than 900,000 shares of Stock.

 

11

 

6.             Eligibility

 

Participation shall be limited to Eligible
Persons who have entered into an Award agreement or who have received written
notification from the Committee, or from a person designated by the Committee,
that they have been selected to participate in the Plan.

 

7.             Options

 

The Committee is authorized to grant one or
more Incentive Stock Options or Nonqualified Stock Options to any Eligible
Person; provided, however, that no Incentive Stock Option shall
be granted to any Eligible Person who is not an employee of the Company or a
Parent or Subsidiary.  Each Option so
granted shall be subject to the conditions set forth in this Section 7, or
to such other conditions as may be reflected in the applicable Stock Option
Agreement.

 

(a)           Option Price.  The
exercise price (“Option Price”) per share of Stock for each Option shall
be set by the Committee at the time of grant and for each Option which is not a
Substitution Award shall not be less than the Fair Market Value of a share of
Stock on the Date of Grant.

 

(b)           Manner of Exercise and Form of Payment.  No shares of Stock shall be delivered pursuant
to any exercise of an Option until payment in full of the Option Price therefor
is received by the Company.  Options
which have become exercisable may be exercised by delivery of written notice of
exercise to the Committee accompanied by payment of the Option Price.  The Option Price shall be payable (i) in
cash, check, cash equivalent and/or shares of Stock valued at the Fair Market
Value at the time the Option is exercised (including by means of attestation of
ownership of a sufficient number of shares of Stock in lieu of actual delivery
of such shares to the Company); provided, that such shares of Stock are
Mature Shares; (ii) in the discretion of the Committee, either (A) in
other property having a fair market value on the date of exercise equal to the
Option Price or (B) by delivering to the Committee a copy of irrevocable
instructions to a stockbroker to deliver promptly to the Company an amount
sufficient to pay the Option Price; or (iii) by such other method as the
Committee may allow.  Notwithstanding the
foregoing, in no event shall a Participant be permitted to exercise an Option
in a manner which the Committee determines would violate the Sarbanes-Oxley Act
of 2002, or any other applicable law or the applicable rules and
regulations of the Securities and Exchange Commission or the applicable rules and
regulations of any securities exchange or inter dealer quotation system on
which the securities of the Company or any Affiliates are listed or traded.

 

(c)           Vesting, Option Period and Expiration.  Options shall vest and become exercisable
in such manner and on such date or dates determined by the Committee and shall
expire after such period, not to exceed ten years, as may be determined by the
Committee (the “Option Period”); provided, however, that
notwithstanding any vesting dates set by the Committee, the Committee may, in
its sole discretion, accelerate the exercisability of any Option, which
acceleration shall not affect

 

12

 

the terms and conditions of such Option other
than with respect to exercisability.  If
an Option is exercisable in installments, such installments or portions thereof
which become exercisable shall remain exercisable until the Option expires.

 

(d)           Stock Option Agreement – Other Terms and
Conditions.  Each Option
granted under the Plan shall be evidenced by a Stock Option Agreement.  Except as specifically provided otherwise in
such Stock Option Agreement, each Option granted under the Plan shall be
subject to the following terms and conditions:

 

(i)            Each
Option or portion thereof that is exercisable shall be exercisable for the full
amount or for any part thereof.

 

(ii)           Each
share of Stock purchased through the exercise of an Option shall be paid for in
full at the time of the exercise.  Each
Option shall cease to be exercisable, as to any share of Stock, when the
Participant purchases the share or exercises a related SAR or when the Option
expires.

 

(iii)          Subject
to Section 12(k), Options shall not be transferable by the Participant
except by will or the laws of descent and distribution and shall be exercisable
during the Participant’s lifetime only by him.

 

(iv)          Each
Option shall vest and become exercisable by the Participant in accordance with
the vesting schedule established by the Committee and set forth in the
Stock Option Agreement.

 

(v)           At
the time of any exercise of an Option, the Committee may, in its sole
discretion, require a Participant to deliver to the Committee a written
representation that the shares of Stock to be acquired upon such exercise are
to be acquired for investment and not for resale or with a view to the
distribution thereof and any other representation deemed necessary by the
Committee to ensure compliance with all applicable federal and state securities
laws.  Upon such a request by the
Committee, delivery of such representation prior to the delivery of any shares
issued upon exercise of an Option shall be a condition precedent to the right
of the Participant or such other person to purchase any shares.  In the event certificates for Stock are
delivered under the Plan with respect to which such investment representation
has been obtained, the Committee may cause a legend or legends to be placed on
such certificates to make appropriate reference to such representation and to
restrict transfer in the absence of compliance with applicable federal or state
securities laws.

 

(vi)          Each
Participant awarded an Incentive Stock Option under the Plan shall notify the
Company in writing immediately after the date he or she makes a disqualifying
disposition of any Stock acquired pursuant to the exercise of such Incentive
Stock Option.  A disqualifying
disposition is any disposition (including any sale) of such Stock before the
later of (A) two years after the Date of Grant of the Incentive Stock Option
or (B) one year after the date the Participant acquired

 

13

 

the Stock by exercising the Incentive Stock
Option.  The Company may, if determined
by the Committee and in accordance with procedures established by it, retain
possession of any Stock acquired pursuant to the exercise of an Incentive Stock
Option as agent for the applicable Participant until the end of the period
described in the preceding sentence, subject to complying with any instructions
from such Participant as to the sale of such Stock.

 

(e)           Incentive Stock Option Grants to 10% Stockholders.  Notwithstanding anything to the contrary in
this Section 7, if an Incentive Stock Option is granted to a Participant
who owns stock representing more than ten percent of the voting power of all
classes of stock of the Company or of a Subsidiary or Parent, the Option Period
shall not exceed five years from the Date of Grant of such Option and the
Option Price shall be at least 110 percent of the Fair Market Value (on the
Date of Grant) of the Stock subject to the Option.

 

(f)            $100,000 Per Year Limitation for Incentive Stock
Options.  To the extent the
aggregate Fair Market Value (determined as of the Date of Grant) of Stock for
which Incentive Stock Options are exercisable for the first time by any
Participant during any calendar year (under all plans of the Company) exceeds
$100,000, such excess Incentive Stock Options shall be treated as Nonqualified
Stock Options.

 

8.             Stock
Appreciation Rights

 

Any Option granted under the Plan may include
SARs.  The Committee also may award SARs
to Eligible Persons independent of any Option. 
A SAR shall be subject to such terms and conditions not
inconsistent with the Plan as the Committee shall impose, including, but not
limited to, the following:

 

(a)           Vesting, Transferability and Expiration.  A SAR
granted in connection with an Option shall become exercisable, be transferable
and shall expire according to the same vesting schedule, transferability rules and
expiration provisions as the corresponding Option.  A SAR granted independent of an Option shall
become exercisable, be transferable and shall expire in accordance with a
vesting schedule, transferability rules and expiration provisions as
established by the Committee and reflected in an Award agreement.

 

(b)           Automatic Exercise. 
If on the last day of the Option Period (or in the case of a
SAR independent of an option, the period established by the Committee after
which the SAR shall expire), the Fair Market Value exceeds the Strike Price,
the Participant has not exercised the SAR or the corresponding Option, and
neither the SAR nor the corresponding Option has expired, such SAR shall be
deemed to have been exercised by the Participant on such last day and the Company
shall make the appropriate payment therefor.

 

(c)           Payment.  Upon
the exercise of a SAR, the Company shall pay to the Participant an amount equal
to the number of shares subject to the SAR

 

14

 

multiplied by the excess, if any, of the Fair
Market Value of one share of Stock on the exercise date over the Strike
Price.  The Company shall pay such excess
in cash (taking into consideration any adverse tax consequences to the
Participant under Section 409A of the Code), in shares of Stock valued at
Fair Market Value, or any combination thereof, as determined by the Committee.

 

(d)           Method of Exercise. 
A Participant may exercise a SAR at such time or times as may
be determined by the Committee at the time of grant by filing an irrevocable
written notice with the Committee or its designee, specifying the number of
SARs to be exercised and the date on which such SARs were awarded.

 

(e)           Expiration.  Except
as otherwise provided in the case of SARs granted in connection with Options, a
SAR shall expire on a date designated by the Committee which is not later than
ten years after the Date of Grant of the SAR.

 

(f)            Tax Considerations. 
The Committee shall take into account Section 409A of
the Code and applicable regulatory guidance thereunder before granting a SAR.

 

9.             Restricted
Stock and Restricted Stock Units

 

(a)           Award
of Restricted Stock and Restricted Stock Units.

 

(i)            The
Committee shall have the authority (A) to grant Restricted Stock and
Restricted Stock Units to Eligible Persons, (B) to issue or transfer
Restricted Stock to Participants, and (C) to establish terms, conditions
and restrictions applicable to such Restricted Stock and Restricted Stock
Units, including the Restricted Period, as applicable, which may differ with
respect to each grantee, the time or times at which Restricted Stock or
Restricted Stock Units shall be granted or become vested and the number of
shares or units to be covered by each grant.

 

(ii)           Each
Participant granted Restricted Stock shall execute and deliver to the Company
an Award agreement with respect to the Restricted Stock setting forth the
restrictions and other terms and conditions applicable to such Restricted
Stock.  If the Committee determines that
the Restricted Stock shall be held by the Company or in escrow rather than
delivered to the Participant pending the release of the applicable
restrictions, the Committee may require the Participant to additionally execute
and deliver to the Company (A) an escrow agreement satisfactory to the
Committee, if applicable, and (B) the appropriate blank stock power with
respect to the Restricted Stock covered by such agreement.  If a Participant shall fail to execute an
agreement evidencing an Award of Restricted Stock and, if applicable, an escrow
agreement and stock power, the Award shall be null and void.  Subject to the restrictions set forth in Section 9(b),
the Participant generally shall have the rights and privileges of a stockholder
as to such Restricted Stock, including the right to vote such Restricted
Stock.  At the discretion of the
Committee, cash dividends and stock dividends with respect to

 

15

 

the Restricted Stock may be either currently
paid to the Participant or withheld by the Company for the Participant’s
account, and interest may be credited on the amount of dividends withheld at a
rate and subject to such terms as determined by the Committee.  The cash dividends or stock dividends so
withheld by the Committee and attributable to any particular share of
Restricted Stock (and earnings thereon, if applicable) shall be distributed to
the Participant in cash or, at the discretion of the Committee, in shares of
Stock having a Fair Market Value equal to the amount of such dividends and earnings,
if applicable, upon the release of restrictions on such share and, if such
share is forfeited, the Participant shall have no right to such cash dividends,
stock dividends or earnings.

 

(iii)          Upon
the grant of Restricted Stock, the Committee shall cause a stock certificate
registered in the name of the Participant to be issued and, if it so
determines, deposited together with the stock powers with an escrow agent
designated by the Committee.  If an
escrow arrangement is used, the Committee may cause the escrow agent to issue
to the Participant a receipt evidencing any stock certificate held by it,
registered in the name of the Participant.

 

(iv)          The
terms and conditions of a grant of Restricted Stock Units shall be reflected in
a written Award agreement.  No shares of
Stock shall be issued at the time a Restricted Stock Unit is granted, and the
Company will not be required to set aside a fund for the payment of any such
Award.  At the discretion of the
Committee, each Restricted Stock Unit (representing one share of Stock) may be
credited with cash and stock dividends paid by the Company in respect of one
share of Stock (“Dividend Equivalents”). 
At the discretion of the Committee, Dividend Equivalents may be either
currently paid to the Participant or withheld by the Company for the
Participant’s account, and interest may be credited on the amount of cash
Dividend Equivalents withheld at a rate and subject to such terms as determined
by the Committee.  Dividend Equivalents
credited to a Participant’s account and attributable to any particular
Restricted Stock Unit (and earnings thereon, if applicable) shall be
distributed in cash or, at the discretion of the Committee, in shares of Stock
having a Fair Market Value equal to the amount of such Dividend Equivalents and
earnings, if applicable, to the Participant upon settlement of such Restricted
Stock Unit and, if such Restricted Stock Unit is forfeited, the Participant
shall have no right to such Dividend Equivalents.

 

(b)           Restrictions.

 

(i)            Restricted
Stock awarded to a Participant shall be subject to the following restrictions
until the expiration of the Restricted Period, and to such other terms and
conditions as may be set forth in the applicable Award agreement: (A) if
an escrow arrangement is used, the Participant shall not be entitled to
delivery of the stock certificate; (B) the shares shall be subject to the
restrictions on transferability set forth in the Award agreement; (C) the
shares shall be subject to forfeiture to the extent provided in Section 9(d) and
the applicable Award agreement; and (D) to the extent such shares are
forfeited, the stock certificates shall be returned to the Company, and all
rights of the Participant to such shares

 

16

 

and as a shareholder shall terminate without
further obligation on the part of the Company.

 

(ii)           Restricted
Stock Units awarded to any Participant shall be subject to (A) forfeiture
until the expiration of the Restricted Period, and satisfaction of any applicable
Performance Goals during such period, to the extent provided in the applicable
Award agreement, and to the extent such Restricted Stock Units are forfeited,
all rights of the Participant to such Restricted Stock Units shall terminate
without further obligation on the part of the Company and (B) such other
terms and conditions as may be set forth in the applicable Award agreement.

 

(iii)          The
Committee shall have the authority to remove any or all of the restrictions on
the Restricted Stock and Restricted Stock Units whenever it may determine that,
by reason of changes in applicable laws or other changes in circumstances
arising after the date of the Restricted Stock or Restricted Stock Units are
granted, such action is appropriate.

 

(c)           Restricted Period. 
The Restricted Period of Restricted Stock and Restricted
Stock Units shall commence on the Date of Grant and shall expire from time to
time as to that part of the Restricted Stock and Restricted Stock Units
indicated in a schedule established by the Committee in the applicable
Award agreement.

 

(d)           Delivery of Restricted Stock and Settlement of
Restricted Stock Units.  Upon
the expiration of the Restricted Period with respect to any shares of
Restricted Stock, the restrictions set forth in Section 9(b) and the
applicable Award agreement shall be of no further force or effect with respect
to such shares, except as set forth in the applicable Award agreement.  If an escrow arrangement is used, upon such
expiration, the Company shall deliver to the Participant, or his beneficiary,
without charge, the stock certificate evidencing the shares of Restricted Stock
which have not then been forfeited and with respect to which the Restricted
Period has expired (to the nearest full share) and any cash dividends or stock
dividends credited to the Participant’s account with respect to such Restricted
Stock and the interest thereon, if any.

 

Upon the expiration of the Restricted Period
with respect to any outstanding Restricted Stock Units, the Company shall
deliver to the Participant, or his beneficiary, without charge, one share of
Stock for each such outstanding Restricted Stock Unit (“Vested Unit”) and cash
equal to any Dividend Equivalents credited with respect to each such Vested
Unit in accordance with Section 9(a)(iv) hereof and the interest
thereon or, at the discretion of the Committee, in shares of Stock having a
Fair Market Value equal to such Dividend Equivalents and interest thereon, if
any; provided, however, that, if explicitly provided in the
applicable Award agreement, the Committee may, in its sole discretion, elect to
(i) pay cash or part cash and part Stock in lieu of delivering only shares
of Stock for Vested Units or (ii) delay the delivery of Stock (or cash or
part Stock and part cash, as the case may be) beyond the expiration of the
Restricted Period.  If a cash payment is
made in lieu of delivering shares of Stock, the amount of such payment shall be
equal to the Fair Market Value of the Stock as of the date on which the
Restricted Period lapsed with respect to such Vested Unit.

 

17

 

(e)           Stock Restrictions. 
Each certificate representing Restricted Stock awarded under
the Plan shall bear a legend substantially in the form of the following until
the lapse of all restrictions with respect to such Stock as well as any other
information the Company deems appropriate:

 

Transfer of
this certificate and the shares represented hereby is restricted pursuant to
the terms of the Williams Scotsman International, Inc. 2005 Omnibus Award
Plan and a Restricted Stock Purchase and Award Agreement, dated as of              ,
between Williams Scotsman International, Inc. and                   .  A copy of such Plan and Agreement is on file
at the offices of Williams Scotsman International, Inc.

 

Stop transfer orders shall be entered with the Company’s transfer agent
and registrar against the transfer of legended securities.

 

10.          Stock
Bonus Awards

 

The Committee may issue unrestricted Stock,
or other Awards denominated in Stock, under the Plan to Eligible Persons, alone
or in tandem with other Awards, in such amounts and subject to such terms and
conditions as the Committee shall from time to time in its sole discretion
determine.  A Stock Bonus Award under the
Plan shall be granted as, or in payment of, a bonus, or to provide incentives
or recognize special achievements or contributions.

 

11.          Performance
Compensation Awards

 

(a)           General. 
The Committee shall have the authority, at the time of grant of any
Award described in Sections 7 through 10 (other than Options and Stock
Appreciation Rights granted with an exercise price or grant price, as the case
may be, equal to or greater than the Fair Market Value per share of Stock on
the date of grant), to designate such Award as a Performance Compensation Award
in order to qualify such Award as “performance-based compensation” under Section 162(m)
of the Code.  The Committee shall have
the authority to grant cash bonuses under the Plan with the intent that such
bonuses shall qualify for the exemption from Section 162(m) of the Code
provided pursuant to Treasury Regulation Section 1.162-27(f)(1), for the
reliance period described in Treasury Regulation Section 1.162-27(f)(2).  In addition, the Committee shall have the
authority to make an award of a cash bonus to any Participant and designate
such Award as a Performance Compensation Award in order to qualify such Award
as “performance-based compensation” under Section 162(m).

 

(b)           Eligibility.  The Committee will, in its sole discretion,
designate which Participants will be eligible to receive Performance
Compensation Awards in respect of such Performance Period.  However, designation of a Participant
eligible to receive an Award hereunder for a Performance Period shall not in
any manner entitle the Participant to receive payment in respect of any
Performance Compensation Award for such Performance Period.  The determination as to whether or not such

 

18

 

Participant becomes entitled to payment in respect of any Performance
Compensation Award shall be decided solely in accordance with the provisions of
this Section 11.  Moreover,
designation of a Participant eligible to receive an Award hereunder for a
particular Performance Period shall not require designation of such Participant
eligible to receive an Award hereunder in any subsequent Performance Period and
designation of one person as a Participant eligible to receive an Award
hereunder shall not require designation of any other person as a Participant
eligible to receive an Award hereunder in such period or in any other period.

 

(c)           Discretion of Committee with Respect to Performance
Compensation Awards.  With
regard to a particular Performance Period, the Committee shall have full
discretion to select the length of such Performance Period (provided any such
Performance Period shall be not less than one (1) year in duration), the
type(s) of Performance Compensation Awards to be issued, the Performance
Criteria that will be used to establish the Performance Goal(s), the kind(s)
and/or level(s) of the Performance Goals(s) that is(are) to apply to the
Company and the Performance Formula. 
Within the first 90 days of a Performance Period (or, if longer or shorter,
within the maximum period allowed under Section 162(m) of the Code), the
Committee shall, with regard to the Performance Compensation Awards to be
issued for such Performance Period, exercise its discretion with respect to
each of the matters enumerated in the immediately preceding sentence of this Section 11(c) and
record the same in writing.  

 

(d)           Payment of Performance Compensation Awards

 

(i)            Condition to Receipt of Payment.  Unless otherwise provided in the applicable
Award agreement, a Participant must be employed by the Company on the last day
of a Performance Period to be eligible for payment in respect of a Performance
Compensation Award for such Performance Period.

 

(ii)           Limitation. 
A Participant shall be eligible to receive payment in respect of a
Performance Compensation Award only to the extent that:  (A) the Performance Goals for such
period are achieved; and (B) the Performance Formula as applied against
such Performance Goals determines that all or some portion of such Participant’s
Performance Award has been earned for the Performance Period.

 

(iii)          Certification.  Following the completion of a Performance
Period, the Committee shall review and certify in writing whether, and to what
extent, the Performance Goals for the Performance Period have been achieved
and, if so, calculate and certify in writing that amount of the Performance
Compensation Awards earned for the period based upon the Performance
Formula.  The Committee shall then
determine the actual size of each Participant’s Performance Compensation Award
for the Performance Period and, in so doing, may apply Negative Discretion in
accordance with Section 11(d)(iv) hereof, if and when it deems
appropriate.

 

19

 

(iv)          Use of Discretion.  In determining the actual size of an
individual Performance Award for a Performance Period, the Committee may reduce
or eliminate the amount of the Performance Compensation Award earned under the
Performance Formula in the Performance Period through the use of Negative
Discretion if, in its sole judgment, such reduction or elimination is
appropriate.  The Committee shall not
have the discretion to (a) grant or provide payment in respect of
Performance Compensation Awards for a Performance Period if the Performance
Goals for such Performance Period have not been attained; or (b) increase
a Performance Compensation Award above the maximum amount payable under Section 5(a) or
Section 11(d)(vi) of the Plan.

 

(v)           Timing of Award Payments.  Performance Compensation Awards granted for a
Performance Period shall be paid to Participants as soon as administratively
practicable following completion of the certifications required by this Section 11.

 

(vi)          Maximum Award Payable.  Notwithstanding any provision contained in
this Plan to the contrary, the maximum Performance Compensation Award payable
to any one Participant under the Plan for a Performance Period is 900,000
shares of Stock or, in the event such Performance Compensation Award is paid in
cash, the equivalent cash value thereof on the first or last day of the
Performance Period to which such Award relates, as determined by the
Committee.  The maximum amount that can
be paid in any calendar year to any Participant pursuant to a cash bonus Award
described in the last sentence of Section 11(a) shall be
$1,000,000.  Furthermore, any Performance
Compensation Award that has been deferred shall not (between the date as of
which the Award is deferred and the payment date) increase (A) with
respect to Performance Compensation Award that is payable in cash, by a
measuring factor for each fiscal year greater than a reasonable rate of
interest set by the Committee or (B) with respect to a Performance
Compensation Award that is payable in shares of Stock, by an amount greater
than the appreciation of a share of Stock from the date such Award is deferred
to the payment date.

 

12.          General

 

(a)           Additional Provisions of an Award.  Awards to a Participant under the
Plan also may be subject to such other provisions (whether or not applicable to
Awards granted to any other Participant) as the Committee determines
appropriate, including, without limitation, provisions (in addition to those
provisions of Section 9 providing for the payment of dividends with
respect to Restricted Stock and Dividend Equivalents with respect to Restricted
Stock Units) adding dividend equivalent rights or other protections to
Participants in respect of dividends paid on Stock underlying any Award,
provisions for the forfeiture of or restrictions on resale or other disposition
of shares of Stock acquired under any Award, provisions giving the Company the
right to repurchase shares of Stock acquired under any Award in the event the
Participant elects to dispose of such shares, provisions allowing the
Participant to elect to defer the receipt of payment in respect of Awards for a
specified period or until a

 

20

 

specified event, and provisions to comply with Federal and state
securities laws and Federal and state tax withholding requirements; provided,
however, that any such deferral does not result in acceleration of taxability
of an Award prior to receipt, or tax penalties, under Section 409A of the
Code.  Any such provisions shall be
reflected in the applicable Award agreement.

 

(b)           Privileges of Stock Ownership.  Except as otherwise specifically
provided in the Plan, no person shall be entitled to the privileges of
ownership in respect of shares of Stock which are subject to Awards hereunder
until such shares have been issued to that person.

 

(c)           Government and Other Regulations.  The obligation of the Company to
settle Awards in Stock shall be subject to all applicable laws, rules, and
regulations, and to such approvals by governmental agencies as may be
required.  Notwithstanding any terms or
conditions of any Award to the contrary, the Company shall be under no
obligation to offer to sell or to sell, and shall be prohibited from offering
to sell or selling, any shares of Stock pursuant to an Award unless such shares
have been properly registered for sale pursuant to the Securities Act with the
Securities and Exchange Commission or unless the Company has received an
opinion of counsel, satisfactory to the Company, that such shares may be
offered or sold without such registration pursuant to an available exemption
therefrom and the terms and conditions of such exemption have been fully
complied with.  The Company shall be
under no obligation to register for sale under the Securities Act any of the
shares of Stock to be offered or sold under the Plan.  If the shares of Stock offered for sale or
sold under the Plan are offered or sold pursuant to an exemption from
registration under the Securities Act, the Company may restrict the transfer of
such shares and may legend the Stock certificates representing such shares in
such manner as it deems advisable to ensure the availability of any such
exemption.

 

(d)           Tax Withholding.

 

(i)            A
Participant may be required to pay to the Company or any Affiliate, and the
Company or any Affiliate shall have the right and is hereby authorized to
withhold from any shares of Stock or other property deliverable under any Award
or from any compensation or other amounts owing to a Participant, the amount
(in cash, Stock or other property) of any required income tax withholding and
payroll taxes in respect of an Award, its exercise, or any payment or transfer
under an Award or under the Plan and to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such withholding and taxes.

 

(ii)           Without
limiting the generality of clause (i) above, the Committee may, in
its sole discretion, permit a Participant to satisfy, in whole or in part, the
foregoing withholding liability by (A) the delivery of Mature Shares owned
by the Participant having a Fair Market Value equal to such withholding
liability or (B) having the Company withhold from the number of shares of
Stock otherwise issuable pursuant to the exercise or settlement of the Award a
number of shares 

 

21

 

with a Fair Market Value equal to such
withholding liability (but no more than the minimum required withholding
liability).

 

(e)           Claim to Awards and Employment Rights.  No employee of the Company or an
Affiliate, or other person, shall have any claim or right to be granted an
Award under the Plan or, having been selected for the grant of an Award, to be
selected for a grant of any other Award. 
Neither the Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the employ or service of the
Company or an Affiliate.

 

(f)            Designation and Change of Beneficiary.  Each Participant may file with the
Committee a written designation of one or more persons as the beneficiary who
shall be entitled to receive the amounts payable with respect to an Award, if
any, due under the Plan upon his death. 
A Participant may, from time to time, revoke or change his beneficiary
designation without the consent of any prior beneficiary by filing a new designation
with the Committee.  The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant’s death, and in no event
shall it be effective as of a date prior to such receipt.  If no beneficiary designation is filed by a
Participant, the beneficiary shall be deemed to be his or her spouse or, if the
Participant is unmarried at the time of death, his or her estate.

 

(g)           Payments to Persons Other Than Participants.  If the Committee shall find that
any person to whom any amount is payable under the Plan is unable to care for
his affairs because of illness or accident, or is a minor, or has died, then
any payment due to such person or his estate (unless a prior claim therefor has
been made by a duly appointed legal representative) may, if the Committee so
directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment.  Any such payment shall be a
complete discharge of the liability of the Committee and the Company therefor.

 

(h)           No Liability of Committee Members.  No member of the Committee shall
be personally liable by reason of any contract or other instrument executed by
such member or on his behalf in his capacity as a member of the Committee nor
for any mistake of judgment made in good faith, and the Company shall indemnify
and hold harmless each member of the Committee and each other employee, officer
or director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or expense (including counsel fees) or liability (including
any sum paid in settlement of a claim) arising out of any act or omission to
act in connection with the Plan unless arising out of such person’s own fraud
or willful bad faith; provided, however, that approval of the
Board shall be required for the payment of any amount in settlement of a claim
against any such person.  The foregoing
right of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the 

 

22

 

Company’s Articles of Incorporation or
By-Laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.

 

(i)            Governing Law.  The
Plan shall be governed by and construed in accordance with the internal laws of
the State of Maryland applicable to contracts made and performed wholly within
the State of Maryland.

 

(j)            Funding. 
No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes.  Participants shall have no rights under the
Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional compensation
by performance of services, they shall have the same rights as other employees
under general law.

 

(k)           Nontransferability.

 

(i)            Each
Award shall be exercisable only by a Participant during the Participant’s
lifetime, or, if permissible under applicable law, by the Participant’s legal
guardian or representative.  No Award may
be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant other than by will or by the laws of descent and
distribution and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
Company or an Affiliate; provided that the designation of a beneficiary shall
not constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.

 

(ii)           Notwithstanding
the foregoing, the Committee may, in its sole discretion, permit Awards to be
transferred by a Participant, without consideration, subject to such rules as
the Committee may adopt consistent with any applicable Award agreement to
preserve the purposes of the Plan, to:

 

(A)          any
person who is a “family member” of the Participant, as such term is used in the
instructions to Form S-8 (collectively, the “Immediate Family Members”);

 

(B)           a
trust solely for the benefit of the Participant and his or her Immediate Family
Members;

 

(C)           a
partnership or limited liability company whose only partners or shareholders
are the Participant and his or her Immediate Family Members; or

 

(D)          any
other transferee as may be approved either (a) by the Board or the
Committee in its sole discretion, or (b) as provided in the applicable
Award agreement;

 

23

 

(each transferee described in clauses (A), (B), (C)  and (D) above
is hereinafter referred to as a “Permitted Transferee”); provided that
the Participant gives the Committee advance written notice describing the terms
and conditions of the proposed transfer and the Committee notifies the
Participant in writing that such a transfer would comply with the requirements
of the Plan.

 

(iii)          The
terms of any Award transferred in accordance with the immediately preceding
sentence shall apply to the Permitted Transferee and any reference in the Plan,
or in any applicable Award agreement, to a Participant shall be deemed to refer
to the Permitted Transferee, except that (A) Permitted Transferees shall
not be entitled to transfer any Award, other than by will or the laws of
descent and distribution; (B) Permitted Transferees shall not be entitled
to exercise any transferred Option unless there shall be in effect a
registration statement on an appropriate form covering the shares of Stock to
be acquired pursuant to the exercise of such Option if the Committee
determines, consistent with any applicable Award agreement, that such a
registration statement is necessary or appropriate; (C) the Committee or
the Company shall not be required to provide any notice to a Permitted
Transferee, whether or not such notice is or would otherwise have been required
to be given to the Participant under the Plan or otherwise; and (D) the
consequences of the termination of the Participant’s employment by, or services
to, the Company or an Affiliate under the terms of the Plan and the applicable
Award agreement shall continue to be applied with respect to the Participant,
including, without limitation, that an Option shall be exercisable by the
Permitted Transferee only to the extent, and for the periods, specified in the
Plan and the applicable Award agreement.

 

(l)            Reliance on Reports. 
Each member of the Committee and each member of the Board
shall be fully justified in acting or failing to act, as the case may be, and
shall not be liable for having so acted or failed to act in good faith, in
reliance upon any report made by the independent public accountant of the
Company and its Affiliates and/or any other information furnished in connection
with the Plan by any person or persons other than himself.

 

(m)          Relationship to Other Benefits.  No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company except as
otherwise specifically provided in such other plan.

 

(n)           Expenses.  The
expenses of administering the Plan shall be borne by the Company and
Affiliates.

 

(o)           Pronouns.  Masculine
pronouns and other words of masculine gender shall refer to both men and women.

 

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

 

24

 

(q)           Termination of Employment.  Unless an applicable Award
agreement provides otherwise, for purposes of the Plan a person who transfers
from employment or service with the Company to employment or service with an
Affiliate or vice versa shall not be deemed to have terminated employment or
service with the Company or an Affiliate.

 

(r)            Severability.  If any provision of the Plan or any Award
agreement is or becomes or is deemed to be invalid, illegal, or unenforceable
in any jurisdiction or as to any person or Award, or would disqualify the Plan
or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if
it cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award and the
remainder of the Plan and any such Award shall remain in full force and effect.

 

(s)           Compliance with Applicable Law.  Notwithstanding any provision in
the Plan to the contrary, the Committee reserves the right to add any
additional terms or provisions to any Award granted under the Plan that it in
its sole discretion deems necessary or advisable in order that such Award
complies with the legal requirements of any governmental entity to whose
jurisdiction the Award is subject.

 

13.          Changes
in Capital Structure

 

Awards granted under the Plan and any
agreements evidencing such Awards, the maximum number of shares of Stock
subject to all Awards stated in Section 5(a) and the maximum number
of shares of Stock with respect to which any one person may be granted Awards
during any period stated in Sections 5(d) or 11(d)(vi) shall be
subject to adjustment or substitution, as determined by the Committee in its
sole discretion, as to the number, price or kind of a share of Stock or other
consideration subject to such Awards or as otherwise determined by the Committee
to be equitable (i) in the event of changes in the outstanding Stock or in
the capital structure of the Company by reason of stock or extraordinary cash
dividends, stock splits, reverse stock splits, recapitalization,
reorganizations, mergers, consolidations, combinations, exchanges, or other
relevant changes in capitalization occurring after the Date of Grant of any
such Award or (ii) in the event of any change in applicable laws or any
change in circumstances which results in or would result in any substantial
dilution or enlargement of the rights granted to, or available for,
Participants, or which otherwise warrants equitable adjustment because it
interferes with the intended operation of the Plan.  Any adjustment in Incentive Stock Options
under this Section 13 shall be made only to the extent not constituting a “modification”
within the meaning of Section 424(h)(3) of the Code, and any
adjustments under this Section 13 shall be made in a manner which does not
adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act.  The Company shall give
each Participant notice of an adjustment hereunder and, upon notice, such
adjustment shall be conclusive and binding for all purposes.

 

Notwithstanding the above, in the event of any
of the following:

 

25

 

A.            The
Company is merged or consolidated with another corporation or entity and, in
connection therewith, consideration is received by shareholders of the Company
in a form other than stock or other equity interests of the surviving entity;

 

B.            All
or substantially all of the assets of the Company are acquired by another
person;

 

C.            The
reorganization or liquidation of the Company; or

 

D.            The
Company shall enter into a written agreement to undergo an event described in
clauses A, B or C above,

 

then the Committee may, in its discretion and upon at least 10 days
advance notice to the affected persons, cancel any outstanding Awards and cause
the holders thereof to be paid, in cash or stock, or any combination thereof,
the value of such Awards based upon the price per share of Stock received or to
be received by other shareholders of the Company in the event.  The terms of this Section 13 may be
varied by the Committee in any particular Award agreement.

 

14.          Effect
of Change in Control

 

(a)           Except
to the extent provided in a particular Award agreement:

 

(i)            In
the event of a Change in Control, notwithstanding any provision of the Plan or
any applicable Award agreement to the contrary, the Committee may in its
discretion provide that all Options and SARs shall become immediately
exercisable with respect to 100 percent of the shares subject to such Option or
SAR, and/or that the Restricted Period shall expire immediately with respect to
100 percent of such shares of Restricted Stock or Restricted Stock Units
(including a waiver of any applicable Performance Goals).  To the extent practicable, such acceleration
of exercisability and expiration of the Restricted Period (as applicable) shall
occur in a manner and at a time which allows affected Participants the ability
to participate in the Change in Control transaction with respect to the Stock
subject to their Awards.

 

(ii)           In
the event of a Change in Control, all incomplete Performance Periods in effect
on the date the Change in Control occurs shall end on the date of such change,
and the Committee shall (A) determine the extent to which Performance
Goals with respect to each such Award Period have been met based upon such
audited or unaudited financial information then available as it deems relevant,
(B) cause to be paid to each Participant partial or full Awards with
respect to Performance Goals for each such Award Period based upon the
Committee’s determination of the degree of attainment of Performance Goals, and
(C) cause all previously deferred Awards to be settled in full as soon as
possible.

 

(b)           In
addition, in the event of a Change in Control, the Committee may in its
discretion and upon at least 10 days’ advance notice to the affected 

 

26

 

persons, cancel any outstanding Awards and
pay to the holders thereof, in cash or stock, or any combination thereof, the
value of such Awards, if any, based upon the price per share of Stock received
or to be received by other shareholders of the Company in the event.

 

(c)           The
obligations of the Company under the Plan shall be binding upon any successor
corporation or organization resulting from the merger, consolidation or other
reorganization of the Company, or upon any successor corporation or
organization succeeding to substantially all of the assets and business of the
Company.  The Company agrees that it will
make appropriate provisions for the preservation of Participants’ rights under
the Plan in any agreement or plan which it may enter into or adopt to effect
any such merger, consolidation, reorganization or transfer of assets.

 

15.          Nonexclusivity
of the Plan

 

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

 

16.          Amendments
and Termination

 

(a)           Amendment and Termination of the Plan.  The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided,
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without shareholder approval if such approval is necessary to
comply with any tax or regulatory requirement applicable to the Plan (including
as necessary to comply with any applicable stock exchange listing requirement
or to prevent the Company from being denied a tax deduction on account of Section 162(m)
of the Code); and provided, further, that any such amendment,
alteration, suspension, discontinuance or termination that would impair the
rights of any Participant or any holder or beneficiary of any Award theretofore
granted shall not to that extent be effective without the consent of the
affected Participant, holder or beneficiary. 
The expiration date of the Plan is the tenth anniversary of the
Effective Date, as described in Section 3 of the Plan.

 

(b)           Amendment of Award Agreements.  The Committee may, to the extent consistent
with the terms of any applicable Award agreement, waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted or the associated Award agreement,
prospectively or retroactively; provided that any such waiver, amendment, alteration,
suspension, discontinuance, cancellation or termination that would impair the
rights of any Participant or any holder or beneficiary of any Award theretofore
granted shall not to that extent be effective without the consent of the
affected Participant, holder or beneficiary; and provided, further,
that, without stockholder approval, (i) no amendment 

 

27

 

or modification may reduce the Option Price
of any Option or the Strike Price of any SAR, (ii) the Committee may not
cancel any outstanding Option or SAR and replace it with a new Option or SAR
(with a lower Option Price or Strike Price, as the case may be) in a manner
which would either (A) be reportable on the Company’s proxy statement as
Options which have been “repriced” (as such term is used in Item 402 of
Regulation S-K promulgated under the Exchange Act), or (B) result in any “repricing”
for financial statement reporting purposes and (iii) the Committee may not
take any other action which is considered a “repricing” for purposes of the
shareholder approval rules of the applicable stock exchange on which the
Stock is listed.

 

(c)           Section 162(m) Approval

 

The Plan shall be approved by the
stockholders of the Company no later than the first meeting of stockholders at
which directors are to be elected that occurs after the close of the third
calendar year following the calendar year in which the Company’s initial public
offering occurs and the provisions of the Plan regarding Performance
Compensation Awards shall be disclosed and reapproved by stockholders of the
Company no later than the first stockholder meeting that occurs in the fifth
year following the year that stockholders previously approved such provisions
following the Company’s initial public offering, in each case in order for
certain Awards granted after such time to be exempt from the deduction
limitations of Section 162(m) of the Code. 
Nothing in this Section 16(c), however, shall affect the validity
of Awards granted after such time if such stockholder approval has not been
obtained.

 

*       *      
*

 

As adopted by the Board of Directors of

Williams Scotsman International, Inc. at a meeting held on September 11,
2005.

 

28

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