Document:

exv4w3

 

Exhibit 4.3

 

    PROGRESS
    SOFTWARE CORPORATION

    2008 STOCK OPTION AND INCENTIVE PLAN

 

    SECTION 1.  GENERAL
    PURPOSE OF THE PLAN; DEFINITIONS
    

 

    The name of the plan is the Progress Software Corporation 2008
    Stock Option and Incentive Plan (the “Plan”). The
    purpose of the Plan is to encourage and enable the officers,
    employees, Non-Employee Directors and other key persons
    (including consultants and prospective employees) of Progress
    Software Corporation (the “Company”) and its
    Subsidiaries upon whose judgment, initiative and efforts the
    Company largely depends for the successful conduct of its
    business to acquire a proprietary interest in the Company. It is
    anticipated that providing such persons with a direct stake in
    the Company’s welfare will assure a closer identification
    of their interests with those of the Company and its
    shareholders, thereby stimulating their efforts on the
    Company’s behalf and strengthening their desire to remain
    with the Company.

 

    The following terms shall be defined as set forth below:

 

    “Act” means the Securities Act of 1933, as
    amended, and the rules and regulations thereunder.

 

    “Administrator” means either the Board or the
    Committee.

 

    “Award” or “Awards,” except
    where referring to a particular category of grant under the
    Plan, shall include Incentive Stock Options, Non-Qualified Stock
    Options, Stock Appreciation Rights, Deferred Stock Awards,
    Restricted Stock Awards, Unrestricted Stock Awards, Cash-Based
    Awards, Performance Share Awards and Dividend Equivalent Rights.

 

    “Award Document” means a written or electronic
    document setting forth the terms and provisions applicable to an
    Award granted under the Plan. Each Award Document is subject to
    the terms and conditions of the Plan.

 

    “Board” means the Board of Directors of the
    Company.

 

    “Cash-Based Award” means an Award entitling the
    recipient to receive a cash-denominated payment.

 

    “Cause” means (i) any material breach by
    the grantee of any agreement to which the grantee and the
    Company are both parties, (ii) any act or omission to act
    by the grantee which may have a material and adverse effect on
    the Company’s business or on the grantee’s ability to
    perform services for the Company, including, without limitation,
    the commission of any crime (other than ordinary traffic
    violations), or (iii) any material misconduct or material
    neglect of duties by the grantee in connection with the business
    or affairs of the Company or any affiliate of the Company.

 

    “Code” means the Internal Revenue Code of 1986,
    as amended, and any successor Code, and related rules,
    regulations and interpretations.

 

    “Committee” means a committee which is
    comprised of not less than two Non-Employee Directors who are
    independent.

 

    “Covered Employee” means an employee who is a
    “Covered Employee” within the meaning of
    Section 162(m) of the Code.

 

    “Deferred Stock Award” means an Award of
    phantom stock units to a grantee.

 

    “Disability” means disability as set forth in
    Section 22(e)(3) of the Code.

1

 

    “Dividend Equivalent Right” means an Award
    entitling the grantee to receive credits based on cash dividends
    that would have been paid on the shares of Stock specified in
    the Dividend Equivalent Right (or other award to which it
    relates) if such shares had been issued to and held by the
    grantee.

 

    “Effective Date” means the date on which the
    Plan is approved by shareholders as set forth in Section 21.

 

    “Exchange Act” means the Securities Exchange
    Act of 1934, as amended, and the rules and regulations
    thereunder.

 

    “Fair Market Value” of the Stock on any given
    date means the closing price per share of Stock as reported by
    the NASDAQ Global Select Market or another national securities
    exchange. If there are no market quotations for such date, the
    determination shall be made by reference to the last date
    preceding such date for which there are market quotations. If
    the Stock is not quoted on the NASDAQ Global Select Market or
    another national securities exchange, the fair market value of
    the Stock shall be as determined in good faith by the
    Administrator

 

    “Incentive Stock Option” means any Stock Option
    designated and qualified as an “incentive stock
    option” as defined in Section 422 of the Code.

 

    “Non-Employee Director” means a member of the
    Board who is not also an employee of the Company or any
    Subsidiary.

 

    “Non-Qualified Stock Option” means any Stock
    Option that is not an Incentive Stock Option.

 

    “Option” or “Stock Option”
    means any option to purchase shares of Stock granted
    pursuant to Section 5.

 

    “Performance-Based Award” means any Restricted
    Stock Award, Deferred Stock Award, Performance Share Award or
    Cash-Based Award granted to a Covered Employee that is intended
    to qualify as “performance-based compensation” under
    Section 162(m) of the Code and the regulations promulgated
    thereunder.

 

    “Performance Criteria” means the criteria that
    the Administrator selects for purposes of establishing the
    Performance Goal or Performance Goals for an individual for a
    Performance Cycle. The Performance Criteria (which shall be
    applicable to the organizational level specified by the
    Administrator, including, but not limited to, the Company or a
    unit, division, group, or Subsidiary of the Company) that will
    be used to establish Performance Goals are limited to the
    following: revenue, non-GAAP operating income, earnings before
    interest, taxes, depreciation and amortization, net income
    (loss) (either before or after interest, taxes, depreciation
    and/or
    amortization), changes in the market price of the Stock,
    economic value-added, sales or revenue, acquisitions or
    strategic transactions, cash flow (including, but not limited
    to, operating cash flow and free cash flow), return on capital,
    assets, equity, or investment, total shareholder returns, return
    on sales, gross or net profit levels, productivity, expense,
    margins, operating efficiency, working capital, earnings (loss)
    per share of Stock, sales or market shares and number of
    customers, any of which may be measured either in absolute terms
    or as compared to any incremental increase or as compared to
    results of a peer group.

 

    “Performance Cycle” means one or more periods
    of time, which may be of varying and overlapping durations, as
    the Administrator may select, over which the attainment of one
    or more Performance Criteria will be measured for the purpose of
    determining a grantee’s right to and the payment of a
    Restricted Stock Award, Deferred Stock Award, Performance Share
    Award or Cash-Based Award.

 

    “Performance Goals” means, for a Performance
    Cycle, the specific goals established in writing by the
    Administrator for a Performance Cycle based upon the Performance
    Criteria.

 

    “Performance Share Award” means an Award
    entitling the recipient to acquire shares of Stock upon the
    attainment of specified Performance Goals.

    

    2

 

    “Restricted Stock Award” means an Award
    entitling the recipient to acquire, at such purchase price
    (which may be zero) as determined by the Administrator, shares
    of Stock subject to such restrictions and conditions as the
    Administrator may determine at the time of grant.

 

    “Sale Event” shall mean (i) the sale of
    all or substantially all of the assets of the Company on a
    consolidated basis to an unrelated person or entity, (ii) a
    merger, reorganization or consolidation in which the outstanding
    shares of Stock are converted into or exchanged for securities
    of the successor entity and the holders of the Company’s
    outstanding voting power immediately prior to such transaction
    do not own a majority of the outstanding voting power of the
    successor entity immediately upon completion of such
    transaction, or (iii) the sale of all of the Stock of the
    Company to an unrelated person or entity.

 

    “Sale Price” means the value as determined by
    the Administrator of the consideration payable, or otherwise to
    be received by shareholders, per share of Stock pursuant to a
    Sale Event.

 

    “Section 409A” means Section 409A of
    the Code and the regulations and other guidance promulgated
    thereunder.

 

    “Stock” means the Common Stock, par value $0.01
    per share, of the Company, subject to adjustments pursuant to
    Section 3.

 

    “Stock Appreciation Right” means an Award
    entitling the recipient to receive shares of Stock having a
    value equal to the excess of the Fair Market Value of the Stock
    on the date of exercise over the exercise price of the Stock
    Appreciation Right multiplied by the number of shares of Stock
    with respect to which the Stock Appreciation Right shall have
    been exercised.

 

    “Subsidiary” means any corporation or other
    entity (other than the Company) in which the Company has at
    least a 50 percent interest, either directly or indirectly.

 

    “Ten Percent Owner” means an employee who
    owns or is deemed to own (by reason of the attribution rules of
    Section 424(d) of the Code) more than 10 percent of
    the combined voting power of all classes of stock of the Company
    or any parent or subsidiary corporation.

 

    “Unrestricted Stock Award” means an Award of
    shares of Stock free of any restrictions.

 

		
	
    SECTION 2.  
    
	
    ADMINISTRATION
    OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND
    DETERMINE AWARDS

 

    (a) Administration of Plan.  The
    Plan shall be administered by the Administrator. In the event
    the Administrator is the Committee rather than the Board, it is
    the intention of the Company that the Committee shall consist of
    “outside directors” within the meaning of
    Section 162(m) of the Code and “non-employee
    directors” within the meaning of
    Rule 16b-3
    of the Exchange Act, but the authority and validity of any act
    taken or not taken by the Committee shall not be affected if any
    person serving on the Committee does not meet the qualification
    imposed by this sentence. Except as specifically reserved to the
    Board under the terms of the Plan or when the Board is serving
    as Administrator, the Committee shall have full and final
    authority to operate, manage and administer the Plan on behalf
    of the Company. Action by the Committee shall require the
    affirmative vote of a majority of all members thereof.

 

    (b) Powers of Administrator.  The
    Administrator shall have the power and authority to grant Awards
    consistent with the terms of the Plan, including the power and
    authority:

 

    (i) to select the individuals to whom Awards may from time
    to time be granted;

 

    (ii) to determine the time or times of grant, and the
    extent, if any, of Incentive Stock Options, Non-Qualified Stock
    Options, Stock Appreciation Rights, Restricted Stock Awards,
    Deferred Stock Awards,

    

    3

 

    Unrestricted Stock Awards, Cash-Based Awards and Performance
    Share Awards, Dividend Equivalent Rights or any combination of
    the foregoing, granted to any one or more grantees;

 

    (iii) to determine the number of shares of Stock to be
    covered by any Award;

 

    (iv) to determine and modify from time to time the terms
    and conditions, including restrictions, not inconsistent with
    the terms of the Plan, of any Award, which terms and conditions
    may differ among individual Awards and grantees, and to approve
    the form of written instruments evidencing the Awards;

 

    (v) to accelerate at any time the exercisability and
    vesting of all or any portion of any Award with the exception of
    a Restricted Stock Award or Deferred Stock Award other than in
    the context of a Sale Event;

 

    (vi) subject to the provisions of Section 5(c), to
    extend at any time the period in which Stock Options or Stock
    Appreciation Rights may be exercised;

 

    (vii) to reduce the per-share exercise price of any
    outstanding Stock Option or Stock Appreciation Right awarded to
    any employee of the Company, including any officer or director
    of the Company (but not to less than 100% of Fair Market Value
    on the date the reduction is made) provided, however, that such
    reduction shall be effective only if approved by the
    shareholders of the Company; and

 

    (viii) at any time to adopt, alter and repeal such rules,
    guidelines and practices for administration of the Plan and for
    its own acts and proceedings as it shall deem advisable; to
    interpret the terms and provisions of the Plan and any Award
    (including related written instruments); to make all
    determinations it deems advisable for the administration of the
    Plan; to decide all disputes arising in connection with the
    Plan; and to otherwise supervise the administration of the Plan.

 

    All decisions and interpretations of the Administrator shall be
    binding on all persons, including the Company and Plan grantees.

 

    (c) Award Document.  Awards under
    the Plan shall be evidenced by Award Documents that set forth
    the terms, conditions and limitations for each Award which may
    include, without limitation, the term of an Award and the
    provisions applicable in the event employment or service
    terminates.

 

    (d) Indemnification.  Neither the
    Board nor the Administrator, nor any member of either or any
    delegate thereof, shall be liable for any act, omission,
    interpretation, construction or determination made in good faith
    in connection with the Plan, and the members of the Board and
    the Administrator (and any delegate thereof) shall be entitled
    in all cases to indemnification and reimbursement by the Company
    in respect of any claim, loss, damage or expense (including,
    without limitation, reasonable attorneys’ fees) arising or
    resulting therefrom to the fullest extent permitted by law
    and/or under
    the Company’s articles or bylaws or any directors’ and
    officers’ liability insurance coverage which may be in
    effect from time to time
    and/or any
    indemnification agreement between such individual and the
    Company.

 

    (e) Foreign Award
    Recipients.  Notwithstanding any provision of
    the Plan to the contrary, in order to comply with the laws in
    other countries in which the Company and its Subsidiaries
    operate or have employees or other individuals eligible for
    Awards, the Administrator, in its sole discretion, shall have
    the power and authority to: (i) determine which
    Subsidiaries shall be covered by the Plan; (ii) determine
    which individuals outside the United States are eligible to
    participate in the Plan; (iii) modify the terms and
    conditions of any Award granted to individuals outside the
    United States to comply with applicable foreign laws;
    (iv) establish subplans and modify exercise procedures and
    other terms and procedures, to the extent the Administrator
    determines such actions to be necessary or advisable (and such
    subplans
    and/or
    modifications shall be attached to this Plan as appendices);
    provided, however, that no such subplans
    and/or
    modifications shall increase the share limitations contained in
    Section 3(a) hereof; and (v) take any action, before
    or after an Award is made, that the Administrator determines to
    be necessary or advisable to obtain approval or comply with any
    local governmental regulatory exemptions or

    

    4

 

    approvals. Notwithstanding the foregoing, the Administrator may
    not take any actions hereunder, and no Awards shall be granted,
    that would violate the Exchange Act or any other applicable
    United States securities law, the Code, or any other applicable
    United States governing statute or law.

 

		
	
    SECTION 3.  
    
	
    STOCK
    ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

 

    (a) Stock Issuable.  The maximum
    number of shares of Stock reserved and available for issuance
    under the Plan shall be equal to the sum of (i) 3,800,000,
    plus (ii) the number of shares of Stock available for grant
    on the Effective Date under the Progress Software Corporation
    1992 Incentive and Nonqualified Stock Option Plan, the Progress
    Software Corporation 1994 Stock Incentive Plan and the Progress
    Software Corporation 1997 Stock Incentive Plan, as amended and
    restated March 22, 2007 (together, the “Old Stock
    Plans”), plus (iii) the number of shares of Stock
    underlying any grants pursuant to the Old Stock Plans that are
    forfeited, canceled, repurchased or are terminated (other than
    by exercise) from and after the Effective Date, plus
    (iv) the number of shares of Stock underlying any grants
    pursuant to this Plan that are forfeited, canceled, repurchased
    or are terminated (other than by exercise). Shares tendered or
    held back upon exercise of an Option or settlement of an Award
    to cover the exercise price or tax withholding shall not be
    available for future issuance under the Plan. In addition, upon
    exercise of Stock Appreciation Rights, the gross number of
    shares exercised shall be deducted from the total number of
    shares remaining available for issuance under the Plan. Subject
    to such overall limitations, shares of Stock may be issued up to
    such maximum number pursuant to any type or types of Award;
    provided, however, that Stock Options or Stock Appreciation
    Rights with respect to no more than 500,000 shares of Stock
    may be granted to any one individual grantee during any one
    calendar year period. The maximum number of shares of Stock that
    may be issued in the form of Incentive Stock Options may not
    exceed 3,800,000. The shares available for issuance under the
    Plan may be authorized but unissued shares of Stock or shares of
    Stock reacquired by the Company.

 

    (b) Effect of Awards.  The grant of
    any full value Award (i.e., an Award other than an Option or a
    Stock Appreciation Right) shall be deemed, for purposes of
    determining the number of shares of Stock available for issuance
    under Section 3(a), as an Award of 2.25 shares of
    Stock for each such share of Stock actually subject to the
    Award. The grant of an Option or a Stock Appreciation Right
    shall be deemed, for purposes of determining the number of
    shares of Stock available for issuance under Section 3(a),
    as an Award for one share of Stock for each such share of Stock
    actually subject to the Award.

 

    (c) Changes in Stock.  Subject to
    Section 3(d) hereof, if, as a result of any reorganization,
    recapitalization, reclassification, stock dividend, stock split,
    reverse stock split or other similar change in the
    Company’s capital stock, the outstanding shares of Stock
    are increased or decreased or are exchanged for a different
    number or kind of shares or other securities of the Company, or
    additional shares or new or different shares or other securities
    of the Company or other non-cash assets are distributed with
    respect to such shares of Stock or other securities, or, if, as
    a result of any merger or consolidation, sale of all or
    substantially all of the assets of the Company, the outstanding
    shares of Stock are converted into or exchanged for securities
    of the Company or any successor entity (or a parent or
    subsidiary thereof), the Administrator shall make an appropriate
    or proportionate adjustment in (i) the maximum number of
    shares reserved for issuance under the Plan, including the
    maximum number of shares that may be issued in the form of
    Incentive Stock Options, (ii) the number of Stock Options
    or Stock Appreciation Rights that can be granted to any one
    individual grantee and the maximum number of shares that may be
    granted under a Performance-Based Award, (iii) the number
    and kind of shares or other securities subject to any then
    outstanding Awards under the Plan, (iv) the repurchase
    price, if any, per share subject to each outstanding Restricted
    Stock Award, and (v) the price for each share subject to
    any then outstanding Stock Options and Stock Appreciation Rights
    under the Plan, without changing the aggregate exercise price
    (i.e., the exercise price multiplied by the number of Stock
    Options and Stock Appreciation Rights) as to which such Stock
    Options and Stock Appreciation Rights remain exercisable. The
    Administrator shall also make equitable or proportionate
    adjustments in the number of shares subject to outstanding
    Awards and the exercise price and the terms of outstanding
    Awards to take into consideration cash

    

    5

 

    dividends paid other than in the ordinary course or any other
    extraordinary corporate event. The adjustment by the
    Administrator shall be final, binding and conclusive. No
    fractional shares of Stock shall be issued under the Plan
    resulting from any such adjustment, but the Administrator in its
    discretion may make a cash payment in lieu of fractional shares.

 

    (d) Sale Event.  The Administrator
    may in its discretion accelerate the exercisability and vesting
    of all outstanding Awards. Upon the effective time of the Sale
    Event, the Plan and all outstanding Awards granted hereunder
    shall terminate, unless provision is made in connection with the
    Sale Event in the sole discretion of the parties thereto for the
    assumption or continuation of Awards theretofore granted by the
    successor entity, or the substitution of such Awards with new
    Awards of the successor entity or parent thereof, with
    appropriate adjustment as to the number and kind of shares and,
    if appropriate, the per share exercise prices, as such parties
    shall agree (after taking into account any acceleration
    hereunder). In the event the Awards are not assumed, continued
    or otherwise substituted in connection with a Sale Event, the
    Administrator shall accelerate the exercisability and vesting of
    all outstanding Awards. The Administrator shall have the option
    (in its sole discretion) to (i) make or provide for a cash
    payment to the grantees holding Options and Stock Appreciation
    Rights, in exchange for the cancellation thereof, in an amount
    equal to the difference between (A) the sale price
    multiplied by the number of shares of Stock subject to all
    outstanding Options and Stock Appreciation Rights at exercise
    prices not in excess of the sale price and (B) the
    aggregate exercise price of all such outstanding Options and
    Stock Appreciation Rights; or (ii) permit each grantee,
    within a specified period of time prior to the consummation of
    the Sale Event as determined by the Administrator, to exercise
    all outstanding Options and Stock Appreciation Rights held by
    such grantee.

 

    (e) Substitute Awards.  The
    Administrator may grant Awards under the Plan in substitution
    for stock and stock based awards held by employees, directors or
    other key persons of another corporation in connection with the
    merger or consolidation of the employing corporation with the
    Company or a Subsidiary or the acquisition by the Company or a
    Subsidiary of property or stock of the employing corporation.
    The Administrator may direct that the substitute awards be
    granted on such terms and conditions as the Administrator
    considers appropriate in the circumstances. Any substitute
    Awards granted under the Plan shall not count against the share
    limitation set forth in Section 3(a).

 

		
	
    SECTION 4.  
    
	
    ELIGIBILITY

 

    Grantees under the Plan will be such officers and other
    employees, Non-Employee Directors and key persons (including
    consultants and prospective employees) of the Company and its
    Subsidiaries as are selected from time to time by the
    Administrator in its sole discretion.

 

		
	
    SECTION 5.  
    
	
    STOCK
    OPTIONS

 

    (a) Grant of Stock Options.  Any
    Stock Option granted under the Plan shall be in such form as the
    Administrator may from time to time approve.

 

    Stock Options granted under the Plan may be either Incentive
    Stock Options or Non-Qualified Stock Options. Incentive Stock
    Options may be granted only to employees of the Company or any
    Subsidiary that is a “subsidiary corporation” within
    the meaning of Section 424(f) of the Code. To the extent
    that any Option does not qualify as an Incentive Stock Option,
    it shall be deemed a Non-Qualified Stock Option.

 

    Stock Options granted pursuant to this Section 5 shall be
    subject to the following terms and conditions and shall contain
    such additional terms and conditions, not inconsistent with the
    terms of the Plan, as the Administrator shall deem desirable.

 

    (b) Exercise Price.  The exercise
    price per share for the Stock covered by a Stock Option granted
    pursuant to this Section 5 shall be determined by the
    Administrator at the time of grant but shall not be less than
    100 percent of

    

    6

 

    the Fair Market Value on the date of grant. In the case of an
    Incentive Stock Option that is granted to a Ten
    Percent Owner, the option price of such Incentive Stock
    Option shall be not less than 110 percent of the Fair
    Market Value on the grant date.

 

    (c) Option Term.  The term of each
    Stock Option shall be fixed by the Administrator, but no Stock
    Option shall be exercisable more than seven years after the date
    the Stock Option is granted. In the case of an Incentive Stock
    Option that is granted to a Ten Percent Owner, the term of
    such Stock Option shall be no more than five years from the date
    of grant.

 

    (d) Exercisability; Rights of a
    Shareholder.  Stock Options shall become
    exercisable at such time or times, whether or not in
    installments, as shall be determined by the Administrator at or
    after the grant date. The Administrator may at any time
    accelerate the exercisability of all or any portion of any Stock
    Option. An optionee shall have the rights of a shareholder only
    as to shares acquired upon the exercise of a Stock Option and
    not as to unexercised Stock Options.

 

    (e) Method of Exercise.  Stock
    Options may be exercised in whole or in part, by giving written
    or electronic notice of exercise to the Company, specifying the
    number of shares to be purchased. Payment of the purchase price
    may be made by one or more of the following methods to the
    extent provided in the Option Award Document:

 

    (i) In cash, by certified or bank check or other instrument
    acceptable to the Administrator;

 

    (ii) Through the delivery (or attestation to the ownership)
    of shares of Stock that have been purchased by the optionee on
    the open market or that have been beneficially owned by the
    optionee for at least six months and are not then subject to
    restrictions under any Company plan. Such surrendered shares
    shall be valued at Fair Market Value on the exercise
    date; or

 

    (iii) By the optionee delivering to the Company a properly
    executed exercise notice together with irrevocable instructions
    to a broker to promptly deliver to the Company cash or a check
    payable and acceptable to the Company for the purchase price;
    provided that in the event the optionee chooses to pay the
    purchase price as so provided, the optionee and the broker shall
    comply with such procedures and enter into such agreements of
    indemnity and other agreements as the Administrator shall
    prescribe as a condition of such payment procedure.

 

    Payment instruments will be received subject to collection. The
    transfer to the optionee on the records of the Company or of the
    transfer agent of the shares of Stock to be purchased pursuant
    to the exercise of a Stock Option will be contingent upon
    receipt from the optionee (or a purchaser acting in his stead in
    accordance with the provisions of the Stock Option) by the
    Company of the full purchase price for such shares and the
    fulfillment of any other requirements contained in the Option
    Award Document or applicable provisions of laws (including the
    satisfaction of any withholding taxes that the Company is
    obligated to withhold with respect to the optionee). In the
    event an optionee chooses to pay the purchase price by
    previously-owned shares of Stock through the attestation method,
    the number of shares of Stock transferred to the optionee upon
    the exercise of the Stock Option shall be net of the number of
    attested shares. In the event that the Company establishes, for
    itself or using the services of a third party, an automated
    system for the exercise of Stock Options, such as a system using
    an internet website or interactive voice response, then the
    paperless exercise of Stock Options may be permitted through the
    use of such an automated system.

 

    (f) Annual Limit on Incentive Stock
    Options.  To the extent required for
    “incentive stock option” treatment under
    Section 422 of the Code, the aggregate Fair Market Value
    (determined as of the time of grant) of the shares of Stock with
    respect to which Incentive Stock Options granted under this Plan
    and any other plan of the Company or its parent and subsidiary
    corporations become exercisable for the first time by an
    optionee during any calendar year shall not exceed $100,000. To
    the extent that any Stock Option exceeds this limit, it shall
    constitute a Non-Qualified Stock Option.

    

    7

 

		
	
    SECTION 6.  
    
	
    STOCK
    APPRECIATION RIGHTS

 

    (a) Grant of Stock Appreciation
    Rights.  The Administrator in its discretion
    may grant Stock Appreciation Rights to any grantee
    (i) alone, (ii) simultaneously with the grant of a
    Stock Option and in conjunction therewith or in the alternative
    thereto or (iii) subsequent to the grant of a Non-Qualified
    option and in conjunction therewith or in the alternative
    thereto.

 

    (b) Exercise Price of Stock Appreciation
    Rights.  The exercise price per share of a
    Stock Appreciation Right granted alone shall be determined by
    the Administrator, but shall not be less than 100% of Fair
    Market Value on the date of grant of such Stock Appreciation
    Right. A Stock Appreciation Right granted simultaneously with or
    subsequent to the grant of a Stock Option and in conjunction
    therewith or in the alternative thereto shall have the same
    exercise price as the related Stock Option, shall be
    transferable only upon the same terms and conditions as the
    related Stock Option, and shall be exercisable only to the same
    extent as the related Stock Option; provided, however, that a
    Stock Appreciation Right, by its terms, shall be exercisable
    only when the Fair Market Value per share of Stock exceeds the
    exercise price per share thereof.

 

    (c) Terms and Conditions.  Upon any
    exercise of a Stock Appreciation Right, the number of shares of
    Stock for which any related Stock Option shall be exercisable
    shall be reduced by the number of shares for which the Stock
    Appreciation Right shall have been exercised. The number of
    shares of Stock with respect to which a Stock Appreciation Right
    shall be exercisable shall be reduced upon any exercise of any
    related Stock Option by the number of shares for which such
    Option shall have been exercised.

 

    Any Stock Appreciation Right shall be exercisable upon such
    additional terms and conditions as may from time to time be
    prescribed by the Administrator.

 

    (d) Settlement in Shares.  A Stock
    Appreciation Right shall entitle the grantee upon exercise
    thereof to receive from the Company, upon written request to the
    Company at its principal offices (the “Request”), a
    number of shares of Stock (with or without restrictions as to
    substantial risk of forfeiture and transferability, as
    determined by the Administrator in its sole discretion), having
    an aggregate Fair Market Value equal to the product of
    (i) the excess of Fair Market Value, on the date of such
    Request, over the exercise price per share of Stock specified in
    such Stock Appreciation Right or its related Option, multiplied
    by (ii) the number of shares of Stock for which such Stock
    Appreciation Right shall be exercised.

 

    (e) Deemed Exercise.  A Stock
    Appreciation Right shall be deemed exercised on the last day of
    its term, if not otherwise exercised by the holder thereof,
    provided that the Fair Market Value of the Stock subject to the
    Stock Appreciation Right exceeds the exercise price thereof on
    such date.

 

    (f) Term.  The term of a Stock
    Appreciation Right shall not exceed seven years.

 

		
	
    SECTION 7.  
    
	
    RESTRICTED
    STOCK AWARDS

 

    (a) Nature of Restricted Stock
    Awards.  The Administrator shall determine the
    restrictions and conditions applicable to each Restricted Stock
    Award at the time of grant. Conditions may be based on
    continuing employment (or other service relationship)
    and/or
    achievement of pre-established performance goals and objectives.
    The grant of a Restricted Stock Award is contingent on the
    grantee executing the Restricted Stock Award Document. The terms
    and conditions of each such Award Document shall be determined
    by the Administrator, and such terms and conditions may differ
    among individual Awards and grantees.

 

    (b) Rights as a Shareholder.  Upon
    execution of the Restricted Stock Award Document and payment of
    any applicable purchase price, a grantee shall have the rights
    of a shareholder with respect to the voting of the Restricted
    Stock, subject to such conditions contained in the Restricted
    Stock Award Document. Unless the Administrator shall otherwise
    determine, (i) uncertificated Restricted Stock shall be
    accompanied by a notation on the records of

    

    8

 

    the Company or the transfer agent to the effect that they are
    subject to forfeiture until such Restricted Stock are vested as
    provided in Section 7(d) below, and (ii) certificated
    Restricted Stock shall remain in the possession of the Company
    until such Restricted Stock is vested as provided in
    Section 7(d) below, and the grantee shall be required, as a
    condition of the grant, to deliver to the Company such
    instruments of transfer as the Administrator may prescribe.

 

    (c) Restrictions.  Restricted Stock
    may not be sold, assigned, transferred, pledged or otherwise
    encumbered or disposed of except as specifically provided herein
    or in the Restricted Stock Award Document. Except as may
    otherwise be provided by the Administrator either in the Award
    Document or, subject to Section 18 below, in writing after
    the Award Document is issued if a grantee’s employment (or
    other service relationship) with the Company and its
    Subsidiaries terminates for any reason, any Restricted Stock
    that has not vested at the time of termination shall
    automatically and without any requirement of notice to such
    grantee from or other action by or on behalf of, the Company be
    deemed to have been reacquired by the Company at its original
    purchase price (if any) from such grantee or such grantee’s
    legal representative simultaneously with such termination of
    employment (or other service relationship), and thereafter shall
    cease to represent any ownership of the Company by the grantee
    or rights of the grantee as a shareholder. Following such deemed
    reacquisition of unvested Restricted Stock that are represented
    by physical certificates, a grantee shall surrender such
    certificates to the Company upon request without consideration.

 

    (d) Vesting of Restricted
    Stock.  The Administrator at the time of grant
    shall specify the date or dates
    and/or the
    attainment of pre-established performance goals, objectives and
    other conditions on which the non-transferability of the
    Restricted Stock and the Company’s right of repurchase or
    forfeiture shall lapse. Notwithstanding the foregoing, in the
    event that any such Restricted Stock granted to employees shall
    have a performance-based goal, the restriction period with
    respect to such shares shall not be less than one year, and in
    the event any such Restricted Stock granted to employees shall
    have a time-based restriction, the total restriction period with
    respect to such shares shall not be less than three years;
    provided, however, that Restricted Stock with a time-based
    restriction may become vested incrementally over such three-year
    period. Subsequent to such date or dates
    and/or the
    attainment of such pre-established performance goals, objectives
    and other conditions, the shares on which all restrictions have
    lapsed shall no longer be Restricted Stock and shall be deemed
    “vested.” Except as may otherwise be provided by the
    Administrator either in the Award Document or, subject to
    Section 18 below, in writing after the Award Document is
    issued, a grantee’s rights in any shares of Restricted
    Stock that have not vested shall automatically terminate upon
    the grantee’s termination of employment (or other service
    relationship) with the Company and its Subsidiaries and such
    shares shall be subject to the provisions of Section 7(c)
    above.

 

		
	
    SECTION 8.  
    
	
    DEFERRED
    STOCK AWARDS

 

    (a) Nature of Deferred Stock
    Awards.  The Administrator shall determine the
    restrictions and conditions applicable to each Deferred Stock
    Award at the time of grant. Conditions may be based on
    continuing employment (or other service relationship)
    and/or
    achievement of pre-established performance goals and objectives.
    The grant of a Deferred Stock Award is contingent on the grantee
    executing the Deferred Stock Award Document. The terms and
    conditions of each such Award Document shall be determined by
    the Administrator, and such terms and conditions may differ
    among individual Awards and grantees. Notwithstanding the
    foregoing, in the event that any such Deferred Stock Award
    granted to employees shall have a performance-based goal, the
    restriction period with respect to such Award shall not be less
    than one year, and in the event any such Deferred Stock Award
    granted to employees shall have a time-based restriction, the
    total restriction period with respect to such Award shall not be
    less than three years; provided, however, that any Deferred
    Stock Award with a time-based restriction may become vested
    incrementally over such three-year period. At the end of the
    deferral period, the Deferred Stock Award, to the extent vested,
    shall be settled in the form of shares of Stock. To the extent
    that a Deferred Stock Award is subject to Section 409A, it
    may contain such additional terms and conditions as the
    Administrator shall determine in its sole discretion in order
    for such Award to comply with the requirements of
    Section 409A.

    

    9

 

    (b) Election to Receive Deferred Stock Awards in Lieu
    of Compensation.  The Administrator may, in
    its sole discretion, permit a grantee to elect to receive a
    portion of future cash compensation otherwise due to such
    grantee in the form of a Deferred Stock Award. Any such election
    shall be made in writing and shall be delivered to the Company
    no later than the date specified by the Administrator and in
    accordance with Section 409A and such other rules and
    procedures established by the Administrator. Any such future
    cash compensation that the grantee elects to defer shall be
    converted to a fixed number of phantom stock units based on the
    Fair Market Value of Stock on the date the compensation would
    otherwise have been paid to the grantee if such payment had not
    been deferred as provided herein. The Administrator shall have
    the sole right to determine whether and under what circumstances
    to permit such elections and to impose such limitations and
    other terms and conditions thereon as the Administrator deems
    appropriate.

 

    (c) Rights as a Shareholder.  A
    grantee shall have the rights as a shareholder only as to shares
    of Stock acquired by the grantee upon settlement of a Deferred
    Stock Award.

 

    (d) Termination.  Except as may
    otherwise be provided by the Administrator either in the Award
    Document or, subject to Section 18 below, in writing after
    the Award Document is issued, a grantee’s right in all
    Deferred Stock Awards that have not vested shall automatically
    terminate upon the grantee’s termination of employment (or
    cessation of service relationship) with the Company and its
    Subsidiaries for any reason.

 

		
	
    SECTION 9.  
    
	
    UNRESTRICTED
    STOCK AWARDS

 

    (a) Grant or Sale of Unrestricted
    Stock.  The Administrator may, in its sole
    discretion, grant (or sell at par value or such higher purchase
    price determined by the Administrator) an Unrestricted Stock
    Award under the Plan. Unrestricted Stock Awards may be granted
    in respect of past services or other valid consideration, or in
    lieu of cash compensation due to such grantee.

 

    (b) Elections to Receive Unrestricted Stock In Lieu
    of Compensation.  Upon the request of a
    grantee and with the consent of the Administrator, each grantee
    may, pursuant to an irrevocable written election delivered to
    the Company no later than the date or dates specified by the
    Administrator, receive a portion of the cash compensation
    otherwise due to him in Unrestricted Stock (valued at Fair
    Market Value on the date or dates the cash compensation would
    otherwise be paid). Such Unrestricted Stock shall be paid to the
    grantee at the same time as the cash compensation would
    otherwise be paid.

 

		
	
    SECTION 10.  
    
	
    CASH-BASED
    AWARDS

 

    Grant of Cash-Based Awards.  The
    Administrator may, in its sole discretion, grant Cash-Based
    Awards to any grantee in such number or amount and upon such
    terms, and subject to such conditions, as the Administrator
    shall determine at the time of grant. The Administrator shall
    determine the maximum duration of the Cash-Based Award, the
    amount of cash to which the Cash-Based Award pertains, the
    conditions upon which the Cash-Based Award shall become vested
    or payable, and such other provisions as the Administrator shall
    determine. Each Cash-Based Award shall specify a
    cash-denominated payment amount, formula or payment ranges as
    determined by the Administrator. Payment, if any, with respect
    to a Cash-Based Award shall be made in accordance with the terms
    of the Award and may be made in cash or in shares of Stock, as
    the Administrator determines.

 

		
	
    SECTION 11.  
    
	
    PERFORMANCE
    SHARE AWARDS

 

    (a) Nature of Performance Share
    Awards.  The Administrator may, in its sole
    discretion, grant Performance Share Awards independent of, or in
    connection with, the granting of any other Award under the Plan.
    The Administrator shall determine whether and to whom
    Performance Share Awards shall be granted, the Performance

    

    10

 

    Goals, the periods during which performance is to be measured,
    which may not be less than one year, and such other limitations
    and conditions as the Administrator shall determine.

 

    (b) Rights as a Shareholder.  A
    grantee receiving a Performance Share Award shall have the
    rights of a shareholder only as to shares actually received by
    the grantee under the Plan and not with respect to shares
    subject to the Award but not actually received by the grantee. A
    grantee shall be entitled to receive shares of Stock under a
    Performance Share Award only upon satisfaction of all conditions
    specified in the Performance Share Award agreement (or in a
    performance plan adopted by the Administrator).

 

    (c) Termination.  Except as may
    otherwise be provided by the Administrator either in the Award
    agreement or, subject to Section 18 below, in writing after
    the Award agreement is issued, a grantee’s rights in all
    Performance Share Awards shall automatically terminate upon the
    grantee’s termination of employment (or cessation of
    service relationship) with the Company and its Subsidiaries for
    any reason.

 

		
	
    SECTION 12.  
    
	
    DIVIDEND
    EQUIVALENT RIGHTS

 

    (a) Dividend Equivalent Rights.  A
    Dividend Equivalent Right may be granted hereunder to any
    grantee as a component of a Deferred Stock Award, Restricted
    Stock Award or Performance Share Award or as a freestanding
    award. The terms and conditions of Dividend Equivalent Rights
    shall be specified in the Award Document. Dividend equivalents
    credited to the holder of a Dividend Equivalent Right may be
    paid currently or may be deemed to be reinvested in additional
    shares of Stock, which may thereafter accrue additional
    equivalents. Any such reinvestment shall be at Fair Market Value
    on the date of reinvestment or such other price as may then
    apply under a dividend reinvestment plan sponsored by the
    Company, if any. Dividend Equivalent Rights may be settled in
    cash or shares of Stock or a combination thereof, in a single
    installment or installments. A Dividend Equivalent Right granted
    as a component of a Deferred Stock Award, Restricted Stock Award
    or Performance Share Award may provide that such Dividend
    Equivalent Right shall be settled upon settlement or payment of,
    or lapse of restrictions on, such other Award, and that such
    Dividend Equivalent Right shall expire or be forfeited or
    annulled under the same conditions as such other Award. A
    Dividend Equivalent Right granted as a component of a Deferred
    Stock Award, Restricted Stock Award or Performance Share Award
    may also contain terms and conditions different from such other
    Award.

 

    (b) Interest Equivalents.  Any
    Award under this Plan that is settled in whole or in part in
    cash on a deferred basis may provide in the grant for interest
    equivalents to be credited with respect to such cash payment.
    Interest equivalents may be compounded and shall be paid upon
    such terms and conditions as may be specified by the grant.

 

    (c) Termination.  Except as may
    otherwise be provided by the Administrator either in the Award
    Document or, subject to Section 18 below, in writing after
    the Award Document is issued, a grantee’s rights in all
    Dividend Equivalent Rights or interest equivalents granted as a
    component of a Deferred Stock Award, Restricted Stock Award or
    Performance Share Award that has not vested shall automatically
    terminate upon the grantee’s termination of employment (or
    cessation of service relationship) with the Company and its
    Subsidiaries for any reason.

 

		
	
    SECTION 13.  
    
	
    PERFORMANCE-BASED
    AWARDS TO COVERED EMPLOYEES

 

    (a) Performance-Based Awards.  Any
    employee or other key person providing services to the Company
    and who is selected by the Administrator may be granted one or
    more Performance-Based Awards in the form of a Restricted Stock
    Award, Deferred Stock Award, Performance Share Awards or
    Cash-Based Award payable upon the attainment of Performance
    Goals that are established by the Administrator and relate to
    one or more of the Performance Criteria, in each case on a
    specified date or dates or over any period or periods determined
    by the Administrator. The Administrator shall define in an
    objective fashion the manner of calculating the Performance
    Criteria it selects to use for any Performance Period. Depending
    on the Performance Criteria used to establish such Performance
    Goals, the Performance Goals may be expressed in terms of
    overall Company performance or the

    

    11

 

    performance of a division, business unit, or an individual. The
    Administrator, in its discretion, may adjust or modify the
    calculation of Performance Goals for such Performance Period in
    order to prevent the dilution or enlargement of the rights of an
    individual (i) in the event of, or in anticipation of, any
    unusual or extraordinary corporate item, transaction, event or
    development, (ii) in recognition of, or in anticipation of,
    any other unusual or nonrecurring events affecting the Company,
    or the financial statements of the Company, or (iii) in
    response to, or in anticipation of, changes in applicable laws,
    regulations, accounting principles, or business conditions
    provided however, that the Administrator may not exercise such
    discretion in a manner that would increase the Performance-Based
    Award granted to a Covered Employee. Each Performance-Based
    Award shall comply with the provisions set forth below.

 

    (b) Grant of Performance-Based
    Awards.  With respect to each
    Performance-Based Award granted to a Covered Employee, the
    Administrator shall select, within the first 90 days of a
    Performance Cycle (or, if shorter, within the maximum period
    allowed under Section 162(m) of the Code) the Performance
    Criteria for such grant, and the Performance Goals with respect
    to each Performance Criterion (including a threshold level of
    performance below which no amount will become payable with
    respect to such Award). Each Performance-Based Award will
    specify the amount payable, or the formula for determining the
    amount payable, upon achievement of the various applicable
    performance targets. The Performance Criteria established by the
    Administrator may be (but need not be) different for each
    Performance Cycle and different Performance Goals may be
    applicable to Performance-Based Awards to different Covered
    Employees.

 

    (c) Payment of Performance-Based
    Awards.  Following the completion of a
    Performance Cycle, the Administrator shall meet to review and
    certify in writing whether, and to what extent, the Performance
    Goals for the Performance Cycle have been achieved and, if so,
    to also calculate and certify in writing the amount of the
    Performance-Based Awards earned for the Performance Cycle. The
    Administrator shall then determine the actual size of each
    Covered Employee’s Performance-Based Award, and, in doing
    so, may reduce or eliminate the amount of the Performance-Based
    Award for a Covered Employee if, in its sole judgment, such
    reduction or elimination is appropriate.

 

    (d) Maximum Award Payable.  The
    maximum Performance-Based Award payable to any one Covered
    Employee under the Plan for a Performance Cycle is
    200,000 Shares (subject to adjustment as provided in
    Section 3(c) hereof) or $2,000,000 in the case of a
    Performance-Based Award that is a Cash-Based Award.

 

		
	
    SECTION 14.  
    
	
    TRANSFERABILITY
    OF AWARDS

 

    (a) Transferability.  Except as
    provided in Section 14(b) below, during a grantee’s
    lifetime, his or her Awards shall be exercisable only by the
    grantee, or by the grantee’s legal representative or
    guardian in the event of the grantee’s incapacity. No
    Awards shall be sold, assigned, transferred or otherwise
    encumbered or disposed of by a grantee other than by will or by
    the laws of descent and distribution or pursuant to a qualified
    domestic relations order. No Awards shall be subject, in whole
    or in part, to attachment, execution, or levy of any kind, and
    any purported transfer in violation hereof shall be null and
    void.

 

    (b) Administrator
    Action.  Notwithstanding Section 14(a),
    the Administrator, in its discretion, may provide either in the
    Award Document regarding a given Award or by subsequent written
    approval that the grantee (who is an employee or director) may
    transfer his or her Awards (other than any Incentive Stock
    Options or Deferred Stock Awards) to his or her immediate family
    members, to trusts for the benefit of such family members, or to
    partnerships in which such family members are the only partners,
    provided that the transferee agrees in writing with the Company
    to be bound by all of the terms and conditions of this Plan and
    the applicable Award.

 

    (c) Family Member.  For purposes of
    Section 14(b), “family member” shall mean a
    grantee’s child, stepchild, grandchild, parent, stepparent,
    grandparent, spouse, former spouse, sibling, niece, nephew,
    mother-in-law,
    father-in-law,
    son-in-law,
    daughter-in-law,
    brother-in-law,
    or
    sister-in-law,
    including adoptive relationships, any person sharing the
    grantee’s household (other than a tenant of the grantee), a
    trust in which these persons (or the

    

    12

 

    grantee) have more than 50 percent of the beneficial
    interest, a foundation in which these persons (or the grantee)
    control the management of assets, and any other entity in which
    these persons (or the grantee) own more than 50 percent of
    the voting interests.

 

    (d) Designation of
    Beneficiary.  Each grantee to whom an Award
    has been made under the Plan may designate a beneficiary or
    beneficiaries to exercise any Award or receive any payment under
    any Award payable on or after the grantee’s death. Any such
    designation shall be on a form provided for that purpose by the
    Administrator and shall not be effective until received by the
    Administrator. If no beneficiary has been designated by a
    deceased grantee, or if the designated beneficiaries have
    predeceased the grantee, the beneficiary shall be the
    grantee’s estate.

 

		
	
    SECTION 15.  
    
	
    TAX
    WITHHOLDING

 

    (a) Payment by Grantee.  Each
    grantee shall, no later than the date as of which the value of
    an Award or of any Stock or other amounts received thereunder
    first becomes includable in the gross income of the grantee for
    Federal income tax purposes, pay to the Company, or make
    arrangements satisfactory to the Administrator regarding payment
    of, any Federal, state, or local taxes of any kind required by
    law to be withheld by the Company with respect to such income.
    The Company and its Subsidiaries shall, to the extent permitted
    by law, have the right to deduct any such taxes from any payment
    of any kind otherwise due to the grantee. The Company’s
    obligation to deliver evidence of book entry (or stock
    certificates) to any grantee is subject to and conditioned on
    tax withholding obligations being satisfied by the grantee.

 

    (b) Payment in Stock.  Subject to
    approval by the Administrator, a grantee may elect to have the
    Company’s minimum required tax withholding obligation
    satisfied, in whole or in part, by authorizing the Company to
    withhold from shares of Stock to be issued pursuant to any Award
    a number of shares with an aggregate Fair Market Value (as of
    the date the withholding is effected) that would satisfy the
    withholding amount due.

 

		
	
    SECTION 16.  
    
	
    SECTION 409A
    AWARDS

 

    To the extent that any Award is determined to constitute
    “nonqualified deferred compensation” within the
    meaning of Section 409A (a “409A Award”), the
    Award shall be subject to such additional rules and requirements
    as specified by the Administrator from time to time in order to
    comply with Section 409A. In this regard, if any amount
    under a 409A Award is payable upon a “separation from
    service” (within the meaning of Section 409A) to a
    grantee who is then considered a “specified employee”
    (within the meaning of Section 409A), then no such payment
    shall be made prior to the date that is the earlier of
    (i) six months and one day after the grantee’s
    separation from service, or (ii) the grantee’s death,
    but only to the extent such delay is necessary to prevent such
    payment from being subject to interest, penalties
    and/or
    additional tax imposed pursuant to Section 409A. Further,
    the settlement of any such Award may not be accelerated except
    to the extent permitted by Section 409A.

 

		
	
    SECTION 17.  
    
	
    TRANSFER,
    LEAVE OF ABSENCE,
    ETC.  
    

 

    For purposes of the Plan, the following events shall not be
    deemed a termination of employment:

 

    (a) a transfer to the employment of the Company from a
    Subsidiary or from the Company to a Subsidiary, or from one
    Subsidiary to another; or

 

    (b) an approved leave of absence for military service or
    sickness, or for any other purpose approved by the Company, if
    the employee’s right to re-employment is guaranteed either
    by a statute or by contract or under the policy pursuant to
    which the leave of absence was granted or if the Administrator
    otherwise so provides in writing.

    

    13

 

		
	
    SECTION 18.  
    
	
    AMENDMENTS
    AND TERMINATION

 

    The Board may, at any time, amend or discontinue the Plan and
    the Administrator may, at any time, amend or cancel any
    outstanding Award for the purpose of satisfying changes in law
    or for any other lawful purpose, but no such action shall
    adversely affect rights under any outstanding Award without the
    holder’s consent. Except as provided in Section 3(c)
    or 3(d), without prior shareholder approval, in no event may the
    Administrator exercise its discretion to reduce the exercise
    price of outstanding Stock Options or Stock Appreciation Rights
    or effect repricing through cancellation and re-grants. To the
    extent required under the rules of any securities exchange or
    market system on which the Stock is listed, to the extent
    determined by the Administrator to be required by the Code to
    ensure that Incentive Stock Options granted under the Plan are
    qualified under Section 422 of the Code, or to ensure that
    compensation earned under Awards qualifies as performance-based
    compensation under Section 162(m) of the Code, Plan
    amendments shall be subject to approval by the Company
    shareholders entitled to vote at a meeting of shareholders.
    Nothing in this Section 18 shall limit the
    Administrator’s authority to take any action permitted
    pursuant to Section 3(d).

 

		
	
    SECTION 19.  
    
	
    STATUS
    OF PLAN

 

    With respect to the portion of any Award that has not been
    exercised and any payments in cash, Stock or other consideration
    not received by a grantee, a grantee shall have no rights
    greater than those of a general creditor of the Company unless
    the Administrator shall otherwise expressly determine in
    connection with any Award or Awards. In its sole discretion, the
    Administrator may authorize the creation of trusts or other
    arrangements to meet the Company’s obligations to deliver
    Stock or make payments with respect to Awards hereunder,
    provided that the existence of such trusts or other arrangements
    is consistent with the foregoing sentence.

 

		
	
    SECTION 20.  
    
	
    GENERAL
    PROVISIONS

 

    (a) No Distribution.  The
    Administrator may require each person acquiring Stock pursuant
    to an Award to represent to and agree with the Company in
    writing that such person is acquiring the shares without a view
    to distribution thereof.

 

    (b) Delivery of Stock
    Certificates.  Stock certificates to grantees
    under this Plan shall be deemed delivered for all purposes when
    the Company or a stock transfer agent of the Company shall have
    mailed such certificates in the United States mail, addressed to
    the grantee, at the grantee’s last known address on file
    with the Company. Uncertificated Stock shall be deemed delivered
    for all purposes when the Company or a Stock transfer agent of
    the Company shall have given to the grantee by electronic mail
    (with proof of receipt) or by United States mail, addressed to
    the grantee, at the grantee’s last known address on file
    with the Company, notice of issuance and recorded the issuance
    in its records (which may include electronic “book
    entry” records). Notwithstanding anything herein to the
    contrary, the Company shall not be required to issue or deliver
    any certificates evidencing shares of Stock pursuant to the
    exercise of any Award, unless and until the Administrator has
    determined, with advice of counsel (to the extent the
    Administrator deems such advice necessary or advisable), that
    the issuance and delivery of such certificates is in compliance
    with all applicable laws, regulations of governmental
    authorities and, if applicable, the requirements of any exchange
    on which the shares of Stock are listed, quoted or traded. All
    Stock certificates delivered pursuant to the Plan shall be
    subject to any stop-transfer orders and other restrictions as
    the Administrator deems necessary or advisable to comply with
    federal, state or foreign jurisdiction, securities or other
    laws, rules and quotation system on which the Stock is listed,
    quoted or traded. The Administrator may place legends on any
    Stock certificate to reference restrictions applicable to the
    Stock. In addition to the terms and conditions provided herein,
    the Administrator may require that an individual make such
    reasonable covenants, agreements, and representations as the
    Administrator, in its discretion, deems necessary or advisable
    in order to comply with any such laws, regulations, or
    requirements. The Administrator shall have the right to require
    any

    

    14

 

    individual to comply with any timing or other restrictions with
    respect to the settlement or exercise of any Award, including a
    window-period limitation, as may be imposed in the discretion of
    the Administrator.

 

    (c) Shareholder Rights.  Until
    Stock is deemed delivered in accordance with Section 20(b),
    no right to vote or receive dividends or any other rights of a
    shareholder will exist with respect to shares of Stock to be
    issued in connection with an Award, notwithstanding the exercise
    of a Stock Option or any other action by the grantee with
    respect to an Award.

 

    (d) Other Compensation Arrangements; No Employment
    Rights.  Nothing contained in this Plan shall
    prevent the Board from adopting other or additional compensation
    arrangements, including trusts, and such arrangements may be
    either generally applicable or applicable only in specific
    cases. The adoption of this Plan and the grant of Awards do not
    confer upon any employee any right to continued employment with
    the Company or any Subsidiary.

 

    (e) Trading Policy
    Restrictions.  Option exercises and other
    Awards under the Plan shall be subject to the Company’s
    insider trading policies and procedures, as in effect from time
    to time.

 

    (f) Forfeiture of Awards under Sarbanes-Oxley
    Act.  If the Company is required to prepare an
    accounting restatement due to the material noncompliance of the
    Company, as a result of misconduct, with any financial reporting
    requirement under the securities laws, then any grantee who is
    one of the individuals subject to automatic forfeiture under
    Section 304 of the Sarbanes-Oxley Act of 2002 shall
    reimburse the Company for the amount of any Award received by
    such individual under the Plan during the
    12-month
    period following the first public issuance or filing with the
    United States Securities and Exchange Commission, as the case
    may be, of the financial document embodying such financial
    reporting requirement.

 

		
	
    SECTION 21.  
    
	
    EFFECTIVE
    DATE OF PLAN

 

    This Plan shall become effective upon approval by the holders of
    a majority of the votes cast at a meeting of shareholders at
    which a quorum is present. No grants of Stock Options and other
    Awards may be made hereunder after the tenth anniversary of the
    Effective Date and no grants of Incentive Stock Options may be
    made hereunder after the tenth anniversary of the date the Plan
    is approved by the Board.

 

		
	
    SECTION 22.  
    
	
    GOVERNING
    LAW

 

    This Plan and all Awards and actions taken thereunder shall be
    governed by, and construed in accordance with, the laws of the
    Commonwealth of Massachusetts, applied without regard to
    conflict of law principles.

 

    DATE APPROVED BY BOARD OF DIRECTORS: March 12, 2008

 

    DATE APPROVED BY SHAREHOLDERS: April 24, 2008

    

    15Exhibit 10.1

MANAGEMENT AGREEMENT

AGREEMENT made as of the 21st day of November, 2006 among CITIGROUP MANAGED FUTURES LLC, a Delaware limited liability company (‘‘CMF’’ or the ‘‘General Partner’’), CITIGROUP ABINGDON FUTURES FUND L.P., a New York limited partnership (the ‘‘Partnership’’) and WINTON CAPITAL MANAGEMENT LIMITED, a United Kingdom company (‘‘Winton’’ or the ‘‘Advisor’’).

WITNESSETH:

WHEREAS, CMF is the general partner of Citigroup Abingdon Futures Fund L.P., a limited partnership organized for the purpose of speculative trading of commodity interests, including futures contracts, options, swaps and forward contracts on U.S. and non-U.S. markets with the objective of achieving substantial capital appreciation, such trading to be conducted directly or through investment in CMF Winton Master L.P., a New York limited partnership (the ‘‘Master Fund’’) of which CMF is the general partner and Winton is the Advisor; and

WHEREAS, the Limited Partnership Agreement establishing the Partnership (the ‘‘Limited Partnership Agreement’’) permits CMF to delegate to one or more commodity trading advisors CMF’s authority to make trading decisions for the Partnership; and

WHEREAS, the Advisor is registered as a commodity trading advisor with the Commodity Futures Trading Commission (‘‘CFTC’’) and is a member of the National Futures Association (‘‘NFA’’) and is authorized and regulated by the Financial Services Authority (‘‘FSA’’) in the United Kingdom; and

WHEREAS, CMF is registered as a commodity pool operator with the CFTC and is a member of the NFA; and

WHEREAS, CMF, the Partnership and the Advisor wish to enter into this Agreement in order to set forth the terms and conditions upon which the Advisor will render and implement advisory services in connection with the conduct by the Partnership of its commodity trading activities during the term of this Agreement;

NOW, THEREFORE, the parties agree as follows:

1.    DUTIES OF THE ADVISOR.    (a) Upon the commencement of trading operations by the Partnership and for the period and on the terms and conditions of this Agreement, the Advisor shall have sole authority and responsibility, as one of the Partnership’s agents and attorneys-in-fact, for directing the investment and reinvestment of the assets and funds of the Partnership allocated to it from time to time by the General Partner in commodity interests, including commodity futures contracts, options and forward contracts. The Advisor may also engage in swap transactions and other derivative transactions on behalf of the Partnership with the prior approval of CMF. The Advisor may, with the consent of the General Partner, engage in such trading through investment in the Master Fund. All such trading on behalf of the Partnership shall be in accordance with the trading strategies and trading policies set forth in the Partnership’s Private Placement Offering Memorandum and Disclosure Document to be dated on or about November 21, 2006 (the ‘‘Memorandum’’), and as such trading policies may be changed from time to time upon receipt by the Advisor of prior written notice of such change and pursuant to the trading strategy selected by CMF to be utilized by the Advisor in managing the Partnership’s assets. CMF has initially selected the Advisor’s Diversified Program (the ‘‘Program’’) to manage the Partnership’s assets allocated to it. Any open positions or other investments at the time of receipt of such notice of a change in trading policy shall not be deemed to violate the changed policy and shall be closed or sold in the ordinary course of trading. The Advisor may not deviate from the trading policies set forth in the Memorandum without the prior written consent of the Partnership given by CMF. CMF and the Partnership each acknowledge that the Advisor may utilize exchange for physicals transactions in its trading for the Partnership. The Advisor makes no representation or warranty that the trading to be directed by it for the Partnership will be profitable or will not incur losses.

(b)    CMF acknowledges receipt of the Advisor’s Disclosure Document dated as of May 24, 2006, as filed with the NFA (the ‘‘Disclosure Document’’). All trades made by the Advisor for the account of the Partnership shall be made through such commodity broker or brokers as CMF shall direct, and the Advisor shall have no authority or responsibility for selecting or supervising any such broker in connection with the execution, clearance or confirmation of transactions for the Partnership or for the negotiation of brokerage rates charged therefor; provided that the Advisor shall not enter into any ‘‘soft’’ commission agreements with any such broker. However, the Advisor, with the prior written permission (by either original or fax copy) of CMF, may direct all trades in commodity futures and options to a futures commission merchant or independent floor broker it chooses for execution with instructions to give-up the trades to the broker designated by CMF, provided that the futures commission merchant or independent floor broker and any give-up or floor brokerage fees are approved in advance by CMF. All give-up or similar fees relating to the foregoing shall be paid by the Partnership after all parties have executed the relevant give-up agreements (by either original or fax copy).

(c)    The initial allocation of the Partnership’s assets to the Advisor will be made to the Program. In the event the Advisor wishes to use a trading system or methodology other than or in addition to the system or methodology outlined in the Memorandum in connection with its trading for the Partnership, either in whole or in part, it may not do so unless the Advisor gives CMF prior written notice of its intention to utilize such different trading system or methodology and CMF consents thereto in writing. In addition, the Advisor will provide five days’ prior written notice to CMF of any change in the trading system or methodology to be utilized for the Partnership which the Advisor deems material. If the Advisor deems such change in system or methodology or in markets traded to be material, the changed system or methodology or markets traded will not be utilized for the Partnership without the prior written consent of CMF. In addition, the Advisor will notify CMF of any changes to the trading system or methodology that would require a change in the description of the trading strategy or methods described in the Memorandum. Further, the Advisor will provide the Partnership with a current list of all commodity interests to be traded for the Partnership’s account and will not trade any additional commodity interests for such account without providing notice thereof to CMF and receiving CMF’s written approval. The Advisor also agrees to provide CMF, on a monthly basis, with a written report of the assets under the Advisor’s management together with all other matters deemed by the Advisor to be material changes to its business not previously reported to CMF. The Advisor further agrees that it will convert foreign currency balances (not required to margin positions denominated in a foreign currency) to U.S. dollars no less frequently than monthly. U.S. dollar equivalents in individual foreign currencies of more than $100,000 will be converted to U.S. dollars within one business day after such funds are no longer needed to margin foreign positions.

(d)    The Advisor agrees to make all material disclosures to the Partnership regarding itself and its principals as defined in Part 4 of the CFTC’s regulations (‘‘principals’’), shareholders, directors, officers and employees, their trading performance and general trading methods, its customer accounts (but not the identities of or identifying information with respect to its customers) and otherwise as are required in the reasonable judgment of CMF to be made in any filings required by Federal or state law or NFA rule or order. Notwithstanding Paragraphs 1(d) and 4(d) of this Agreement, the Advisor shall not be required to disclose the actual trading results of proprietary accounts of the Advisor or its principals unless CMF reasonably determines that such disclosure is required in order to fulfill its fiduciary obligations to the Partnership or the reporting, filing or other obligations imposed on it by Federal or state law or NFA rule or order. The Partnership and CMF acknowledge that the trading advice to be provided by the Advisor is a property right belonging to the Advisor and that they will keep all such advice confidential. Further, CMF agrees to treat as confidential any results of proprietary accounts and/or proprietary information with respect to trading systems obtained from the Advisor. Nothing contained in this Agreement shall be deemed or construed to require the Advisor to disclose any confidential or proprietary details of the Advisor’s trading strategies or the names or identities of the Advisor’s clients.

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(e)    The Advisor understands and agrees that CMF may designate other trading advisors for the Partnership and apportion or reapportion to such other trading advisors the management of an amount of Net Assets (as defined in Paragraph 3(b) hereof) as it shall determine in its absolute discretion. The designation of other trading advisors and the apportionment or reapportionment of Net Assets to any such trading advisors pursuant to this Paragraph 1 shall neither terminate this Agreement nor modify in any regard the respective rights and obligations of the parties hereunder.

(f)    CMF may, from time to time, in its absolute discretion, select additional trading advisors and reapportion funds among such other trading advisors for the Partnership as it deems appropriate. CMF shall use its best efforts to make reapportionments, if any, as of the first day of a month. The Advisor agrees that it may be called upon at any time promptly to liquidate positions in CMF’s sole discretion so that CMF may reallocate the Partnership’s assets, meet margin calls on the Partnership’s account, fund redemptions, or for any other reason, except that CMF will not require the liquidation of specific positions by the Advisor. CMF will use its best efforts to give two days’ prior notice to the Advisor of any reallocations or liquidations.

(g)    The Advisor will not be liable for trading losses in the Partnership’s account including losses caused by errors; provided, however, that (i) the Advisor will be liable to the Partnership with respect to losses incurred due to errors committed or caused by it or any of its principals or employees in communicating improper trading instructions or orders to any broker on behalf of the Partnership and (ii) the Advisor will be liable to the Partnership with respect to losses incurred due to errors committed or caused by any executing broker (other than Citigroup Global Markets Inc. or any of its affiliates) selected by the Advisor (it also being understood that CMF, with the assistance of the Advisor, will first attempt to recover such losses from the executing broker).

(h)    CMF acknowledges and agrees that the Advisor shall not be obligated to comply with the ‘‘best execution’’ requirement of Rule 7.5.3 of the FSA with respect to orders placed on behalf of the Partnership; provided, however, that such waiver shall not relieve the Advisor of its obligations under any provision of this Agreement (including without limitation Paragraphs 4(b) and 8(a)(iii)) and under the rules of the CFTC and NFA.

2.    INDEPENDENCE OF THE ADVISOR.    For all purposes herein, the Advisor shall be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Partnership in any way and shall not be deemed an agent, promoter or sponsor of the Partnership, CMF, or any other trading advisor. The Advisor shall not be responsible to the Partnership, the General Partner, any trading advisor or any limited partners for any acts or omissions of any other trading advisor to the Partnership.

3.    COMPENSATION.    (a) In consideration of and as compensation for all of the services to be rendered by the Advisor to the Partnership under this Agreement, the Partnership shall pay the Advisor (i) an incentive fee payable as of the end of each calendar quarter equal to 20% of New Trading Profits (as such term is defined below) earned by the Advisor for the Partnership and (ii) a monthly fee for professional management services equal to 1/6 of 1% (2% per year) of the month-end Net Assets of the Partnership allocated to the Advisor.

(b)    ‘‘Net Assets’’ shall have the meaning set forth in Paragraph 7(d)(1) of the Limited Partnership Agreement dated as of November 8, 2005, and without regard to further amendments thereto, provided that in determining the Net Assets of the Partnership on any date, no adjustment shall be made to reflect any distributions, redemptions or incentive fees payable as of the date of such determination.

(c)    ‘‘New Trading Profits’’ shall mean the excess, if any, of Net Assets managed by the Advisor at the end of the fiscal period over Net Assets managed by the Advisor at the end of the highest previous fiscal period or Net Assets allocated to the Advisor at the date trading commences, whichever is higher, and as further adjusted to eliminate the effect on Net Assets resulting from new capital contributions, redemptions, reallocations or capital distributions, if any, made during the fiscal period, decreased by interest or other income, not directly related to trading activity, earned on the Partnership’s assets during the fiscal period, whether the assets are held separately or in margin 

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accounts. Ongoing expenses will be attributed to the Advisor based on the Advisor’s proportionate share of Net Assets as of the end of each month. Ongoing expenses above will not include expenses of litigation not involving the activities of the Advisor on behalf of the Partnership. Ongoing expenses also will not include initial offering and organizational expenses of the Partnership. No incentive fee shall be paid to the Advisor until the end of the first full calendar quarter of the Advisor’s trading for the Partnership, which incentive fee shall be based on New Trading Profits (if any) earned from the commencement of trading for the Partnership by the Advisor through the end of the first full calendar quarter of such trading. Interest income earned, if any, will not be taken into account in computing New Trading Profits earned by the Advisor. If Net Assets allocated to the Advisor are reduced due to redemptions, distributions or reallocations (net of additions), there will be a corresponding proportional reduction in the related loss carryforward amount that must be recouped before the Advisor is eligible to receive another incentive fee.

(d)    Quarterly incentive fees and monthly management fees shall be paid within twenty (20) business days following the end of the period, as the case may be, for which such fee is payable. In the event of the termination of this Agreement as of any date which shall not be the end of a calendar quarter or a calendar month, as the case may be, the quarterly incentive fee shall be computed as if the effective date of termination were the last day of the then current quarter and the monthly management fee shall be prorated to the effective date of termination. If, during any month, the Partnership does not conduct business operations or the Advisor is unable to provide the services contemplated herein for more than two successive business days, the monthly management fee shall be prorated by the ratio which the number of business days during which CMF conducted the Partnership’s business operations or utilized the Advisor’s services bears in the month to the total number of business days in such month.

(e)    The provisions of this Paragraph 3 shall survive the termination of this Agreement.

4.    RIGHT TO ENGAGE IN OTHER ACTIVITIES.     (a) The services provided by the Advisor hereunder are not to be deemed exclusive. CMF on its own behalf and on behalf of the Partnership acknowledges that, subject to the terms of this Agreement, the Advisor and its officers, directors, employees and shareholder(s), may render advisory, consulting and management services to other clients and accounts. The Advisor and its officers, directors, employees and shareholder(s) shall be free to trade for their own accounts and to advise other investors and manage other commodity accounts during the term of this Agreement and to use the same information, computer programs and trading strategies, programs or formulas which they obtain, produce or utilize in the performance of services to CMF for the Partnership. However, the Advisor represents, warrants and agrees that it believes the rendering of such consulting, advisory and management services to other accounts and entities will not require any material change in the Advisor’s Program and will not affect the capacity of the Advisor to continue to render services to CMF for the Partnership of the quality and nature contemplated by this Agreement.

(b)    If, at any time during the term of this Agreement, the Advisor is required to aggregate the Partnership’s commodity positions with the positions of any other person for purposes of applying CFTC- or exchange-imposed speculative position limits, the Advisor agrees that it will promptly notify CMF if the Partnership’s positions are included in an aggregate amount which exceeds the applicable speculative position limit. The Advisor agrees that, if its trading recommendations are altered because of the application of any speculative position limits, it will not modify the trading instructions with respect to the Partnership’s account in such manner as to affect the Partnership substantially disproportionately as compared with the Advisor’s other accounts. The Advisor further represents, warrants and agrees that under no circumstances will it knowingly or deliberately use trading strategies or methods for the Partnership that are inferior to strategies or methods employed for any other client or account and that it will not knowingly or deliberately favor any client or account managed by it over any other client or account in any manner, it being acknowledged, however, that different trading strategies or methods may be utilized for differing sizes of accounts, accounts with different trading policies, accounts experiencing differing inflows or outflows of equity, accounts which commence trading at different times, accounts which have different portfolios or different fiscal years, 

4

accounts utilizing different executing brokers and accounts with other differences, and that such differences may cause divergent trading results.

(c)    It is acknowledged that the Advisor and/or its officers, employees, directors and shareholder(s) presently act, and it is agreed that they may continue to act, as advisor for other accounts managed by them, and may continue to receive compensation with respect to services for such accounts in amounts which may be more or less than the amounts received from the Partnership.

(d)    The Advisor agrees that it shall make such information available to CMF respecting the performance of the Partnership’s account as compared to the performance of other accounts managed by the Advisor or its principals as shall be reasonably requested by CMF. The Advisor presently believes and represents that existing speculative position limits will not materially adversely affect its ability to manage the Partnership’s account given the potential size of the Partnership’s account and the Advisor’s and its principals’ current accounts and all proposed accounts for which they have contracted to act as advisor.

5.    TERM.    (a) This Agreement shall continue in effect until June 30, 2007. CMF may, in its sole discretion, renew this Agreement for additional one-year periods upon notice to the Advisor not less than 30 days prior to the expiration of the previous period. At any time during the term of this Agreement, CMF may terminate this Agreement at any month-end upon 30 days’ notice to the Advisor. At any time during the term of this Agreement, CMF may elect to immediately terminate this Agreement upon 30 days’ notice to the Advisor if (i) the Net Asset Value per unit shall decline as of the close of business on any day to $400 or less; (ii) the Net Assets allocated to the Advisor (adjusted for redemptions, distributions, withdrawals or reallocations, if any) decline by 50% or more as of the end of a trading day from such Net Assets’ previous highest value; (iii) limited partners owning at least 50% of the outstanding units shall vote to require CMF to terminate this Agreement; (iv) the Advisor fails to comply with the terms of this Agreement; (v) CMF, in good faith, reasonably determines that the performance of the Advisor has been such that CMF’s fiduciary duties to the Partnership require CMF to terminate this Agreement; (vi) CMF reasonably believes that the application of speculative position limits will substantially affect the performance of the Partnership; or (vii) the Advisor fails to conform to the trading policies set forth in the Limited Partnership Agreement or the Memorandum as they may be changed from time to time. At any time during the term of this Agreement, CMF may elect immediately to terminate this Agreement if (i) the Advisor merges or consolidates with another entity, sells a substantial portion of its assets, or becomes bankrupt or insolvent, (ii) David Winton Harding dies, becomes incapacitated, leaves the employ of the Advisor, ceases to control the Advisor or is otherwise not managing the trading programs or systems of the Advisor, or (iii) the Advisor’s registration as a commodity trading advisor with the CFTC or its membership in the NFA or any other regulatory authority, is terminated or suspended. This Agreement will immediately terminate upon dissolution of the Partnership or upon cessation of trading prior to dissolution.

(b)    The Advisor may terminate this Agreement by giving not less than 30 days’ notice to CMF (i) in the event that the trading policies of the Partnership as set forth in the Memorandum are changed in such manner that the Advisor reasonably believes will adversely affect the performance of its trading strategies; (ii) after June 30, 2007; or (iii) in the event that the General Partner or Partnership fails to comply with the terms of this Agreement. The Advisor may immediately terminate this Agreement if CMF’s registration as a commodity pool operator or its membership in the NFA is terminated or suspended.

(c)    Except as otherwise provided in this Agreement, any termination of this Agreement in accordance with this Paragraph 5 or Paragraph 1(e) shall be without penalty or liability to any party, except for any fees due to the Advisor pursuant to Paragraph 3 hereof.

6.    INDEMNIFICATION.    (a) (i) In any threatened, pending or completed action, suit, or proceeding to which the Advisor was or is a party or is threatened to be made a party arising out of or in connection with this Agreement or the management of the Partnership’s assets by the Advisor or the offering and sale of units in the Partnership, CMF shall, subject to subparagraph (a)(iii) of this Paragraph 6, indemnify and hold harmless the Advisor against any loss, liability, damage, cost, expense 

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(including, without limitation, attorneys’ and accountants’ fees), judgments and amounts paid in settlement actually and reasonably incurred by it in connection with such action, suit, or proceeding if the Advisor acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Partnership, and provided that its conduct did not constitute negligence, intentional misconduct, or a breach of its fiduciary obligations to the Partnership as a commodity trading advisor, unless and only to the extent that the court or administrative forum in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, the Advisor is fairly and reasonably entitled to indemnity for such expenses which such court or administrative forum shall deem proper; and further provided that no indemnification shall be available from the Partnership if such indemnification is prohibited by Paragraph 16 of the Limited Partnership Agreement. The termination of any action, suit or proceeding by judgment, order or settlement shall not, of itself, create a presumption that the Advisor did not act in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Partnership.

(i)    Without limiting subparagraph (a)(i) above, to the extent that the Advisor has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subparagraph (a)(i) above, or in defense of any claim, issue or matter therein, CMF shall indemnify the Advisor against the expenses (including, without limitation, attorneys’ and accountants’ fees) actually and reasonably incurred by it in connection therewith.

(ii)    Any indemnification under subparagraph (a)(i) above, unless ordered by a court or administrative forum, shall be made by CMF only as authorized in the specific case and only upon a determination by independent legal counsel in a written opinion that such indemnification is proper in the circumstances because the Advisor has met the applicable standard of conduct set forth in subparagraph (a)(i) above. Such independent legal counsel shall be selected by CMF in a timely manner, subject to the Advisor’s approval, which approval shall not be unreasonably withheld. The Advisor will be deemed to have approved CMF’s selection unless the Advisor notifies CMF in writing, received by CMF within five days of CMF’s telecopying to the Advisor of the notice of CMF’s selection, that the Advisor does not approve the selection.

(iii)    In the event the Advisor is made a party to any claim, dispute or litigation or otherwise incurs any loss or expense as a result of, or in connection with, the Partnership’s or CMF’s activities or claimed activities unrelated to the Advisor, CMF shall indemnify, defend and hold harmless the Advisor against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees) actually and reasonably incurred by it in connection therewith.

(iv)    As used in this Paragraph 6(a), the term ‘‘Advisor’’ shall include the Advisor, its principals, officers, directors and employees and the term ‘‘CMF’’ shall include the Partnership.

(b)    (i)    The Advisor agrees to indemnify, defend and hold harmless CMF, the Partnership and their principals, officers, directors or employees against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees), judgments and amounts paid in settlement actually and reasonably incurred by them (A) as a result of the material breach of any material representations and warranties made by the Advisor in this Agreement, or (B) as a result of any act or omission of the Advisor relating to the Partnership if there has been a final judicial or regulatory determination or, in the event of a settlement of any action or proceeding with the prior written consent of the Advisor, a written opinion of an arbitrator pursuant to Paragraph 14 hereof, to the effect that such acts or omissions violated the terms of this Agreement in any material respect or involved negligence, bad faith, recklessness or intentional misconduct on the part of the Advisor (except as otherwise provided in Paragraph 1(g)).

(ii)    In the event CMF, the Partnership or any of their principals, officers, directors or employees is made a party to any claim, dispute or litigation or otherwise incurs any loss or expense as a result of, or in connection with, the activities or claimed activities of the Advisor or its principals, officers, directors or employees unrelated to CMF’s or the Partnership’s business, the Advisor shall indemnify, defend and hold harmless CMF, the Partnership or any of their 

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principals, officers, directors or employees against any loss, liability, damage, cost or expense (including, without limitation, attorneys’ and accountants’ fees) actually and reasonably incurred by them in connection therewith.

(c)    In the event that a person entitled to indemnification under this Paragraph 6 is made a party to an action, suit or proceeding alleging both matters for which indemnification can be made hereunder and matters for which indemnification may not be made hereunder, such person shall be indemnified only for that portion of the loss, liability, damage, cost or reasonable expense incurred in such action, suit or proceeding which relates to the matters for which indemnification can be made.

(d)    None of the indemnifications contained in this Paragraph 6 shall be applicable with respect to default judgments, confessions of judgment or settlements entered into by the party claiming indemnification without the prior written consent, which shall not be unreasonably withheld, of the party obligated to indemnify such party.

(e)    The provisions of this Paragraph 6 shall survive the termination of this Agreement.

7.    REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

(a)    The Advisor represents and warrants that:

(i)    All references to the Advisor and its principals in the Memorandum are accurate in all material respects and as to them the Memorandum does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein not misleading, except that with respect to Table B and other pro forma or hypothetical performance information in the Memorandum, if any, this representation and warranty extends only to the underlying data made available by the Advisor for the preparation thereof and not to any hypothetical or pro forma adjustments. Subject to such exception, all references to the Advisor and its principals in the Memorandum will, after review and approval of such references by the Advisor prior to the use of such Memorandum in connection with the offering of the Partnership’s units, be accurate in all material respects.

(ii)    The information with respect to the Advisor set forth in the actual performance tables in the Memorandum is based on all of the customer accounts managed on a discretionary basis by the Advisor’s principals and/or the Advisor during the period covered by such tables and required to be disclosed therein. The Advisor’s performance tables have been examined by an independent certified public accountant. The Advisor will have its performance tables so examined no less frequently than annually during the term of this Agreement.

(iii)    The Advisor will be acting as a commodity trading advisor with respect to the Partnership and not as a securities investment adviser and is duly registered with the CFTC as a commodity trading advisor, is a member of the NFA, and is in compliance with such other registration and licensing requirements as shall be necessary to enable it to perform its obligations hereunder, and agrees to maintain and renew such registrations and licenses during the term of this Agreement.

(iv)    The Advisor is a company duly organized, validly existing and in good standing under the laws of the United Kingdom and has full corporate power and authority to enter into this Agreement and to provide the services required of it hereunder.

(v)    The Advisor will not, by acting as a commodity trading advisor to the Partnership, breach or cause to be breached any undertaking, agreement, contract, statute, rule or regulation to which it is a party or by which it is bound.

(vi)    This Agreement has been duly and validly authorized, executed and delivered by the Advisor and is a valid and binding agreement enforceable in accordance with its terms.

(vii)    At any time during the term of this Agreement that a prospectus relating to the units is required to be delivered in connection with the offer and sale thereof, the Advisor agrees upon the request of CMF to provide the Partnership with such information as shall be necessary so that, as to the Advisor and its principals, such prospectus is accurate.

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(b)    CMF represents and warrants for itself and the Partnership that:

(i)    The Memorandum (as from time to time amended or supplemented, which amendment or supplement is approved by the Advisor as to descriptions of itself and its actual performance) does not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements therein not misleading, except that the foregoing representation does not apply to any statement or omission concerning the Advisor in the Memorandum, which is made in reliance upon, and in conformity with, information furnished to CMF by or on behalf of the Advisor expressly for use in the Memorandum (it being understood that the hypothetical and pro forma adjustments in Table B were not furnished by the Advisor).

(ii)    It is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has full limited liability company power and authority to perform its obligations under this Agreement.

(iii)    CMF and the Partnership have the capacity and authority to enter into this Agreement on behalf of the Partnership.

(iv)    This Agreement has been duly and validly authorized, executed and delivered on CMF’s and the Partnership’s behalf and is a valid and binding agreement of CMF and the Partnership enforceable in accordance with its terms.

(v)    CMF will not by acting as General Partner to the Partnership and the Partnership will not, breach or cause to be breached any undertaking, agreement, contract, statute, rule or regulation to which it is a party or by which it is bound which would materially limit or affect the performance of its duties under this Agreement.

(vi)    CMF is registered as a commodity pool operator and is a member of the NFA, and it will maintain and renew such registration and membership during the term of this Agreement.

(vii)    The Partnership is a limited partnership duly organized and validly existing under the laws of the State of New York and has full limited partnership power and authority to enter into this Agreement and to perform its obligations under this Agreement.

8.    COVENANTS OF THE ADVISOR, CMF AND THE PARTNERSHIP.

(a)    The Advisor agrees as follows:

(i)    In connection with its activities on behalf of the Partnership, the Advisor will comply with all applicable rules and regulations of the CFTC and/or the commodity exchange on which any particular transaction is executed.

(ii)    The Advisor will promptly notify CMF of the commencement of any material suit, action or proceeding involving it, whether or not any such suit, action or proceeding also involves CMF.

(iii)    In the placement of orders for the Partnership’s account and for the accounts of any other client, the Advisor will utilize a pre-determined, systematic, fair and reasonable order entry system, which shall, on an overall basis, be no less favorable to the Partnership than to any other account managed by the Advisor. The Advisor acknowledges its obligation to review the Partnership’s positions, prices and equity in the account managed by the Advisor daily and within two business days to notify, in writing, the broker and CMF and the Partnership’s brokers of (i) any error committed by the Advisor or its principals or employees; (ii) any trade which the Advisor believes was not executed in accordance with its instructions; or (iii) any discrepancy with a value of $10,000 or more (due to differences in the positions, prices or equity in the account) between its records and the information reported on the account’s daily and monthly broker statements.

(iv)    The Advisor will maintain a net worth of not less than USD $2,000,000 during the term of this Agreement.

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(b)    CMF agrees for itself and the Partnership that:

(i)    CMF and the Partnership will comply with all applicable laws, including rules and regulations of the Securities and Exchange Commission, CFTC and/or the commodity exchange on which any particular transaction is executed.

(ii)    CMF will promptly notify the Advisor of the commencement of any material suit, action or proceeding involving it or the Partnership, whether or not such suit, action or proceeding also involves the Advisor.

(iii) CMF will be responsible for compliance with the USA Patriot Act and related anti-money laundering regulations with respect to the Partnership and its limited partners.

9    COMPLETE AGREEMENT.    This Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof.

10.    ASSIGNMENT.    This Agreement may not be assigned by any party without the express written consent of the other parties.

11.    AMENDMENT.    This Agreement may not be amended except by the written consent of the parties.

12.    NOTICES.    All notices, demands or requests required to be made or delivered under this Agreement shall be in writing and delivered personally or, by facsimile or by registered or certified mail or expedited courier, return receipt requested, postage prepaid, to the addresses below or to such other addresses as may be designated by the party entitled to receive the same by notice similarly given:

If to CMF:

Citigroup Managed Futures LLC

731 Lexington Avenue

 25th Floor

New York, New York 10022

Attention:     Mr. David J. Vogel

Fax:                212-793-1969

If to the Advisor:

Winton Capital Management Limited

1-5 St. Mary Abbot’s Place

London W8 6LS

England

Attention:       Mr. David Harding

                        Mr. Martin Hunt

Fax:                +44 (0)20 7610 5301

13.    GOVERNING LAW.    This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law.

14.    ARBITRATION.    The parties agree that any dispute or controversy arising out of or relating to this Agreement or the interpretation thereof, shall be settled by arbitration in accordance with the rules, then in effect, of the National Futures Association or, if the National Futures Association shall refuse jurisdiction, then in accordance with the rules, then in effect, of the American Arbitration Association; provided, however, that the power of the arbitrator shall be limited to interpreting this Agreement as written and the arbitrator shall state in writing his reasons for his award. Judgment upon any award made by the arbitrator may be entered in any court of competent jurisdiction. Each party shall provide notice of any such dispute or controversy to the other party prior to the submission of such dispute or controversy to the applicable agency for arbitration. Any such notice to the Advisor shall be dealt with in accordance with the Rules of the FSA to the extent such rules do not contradict the provisions of this Agreement (including, without limitation, Paragraph 13 or this Paragraph 14) or the rules of the CFTC or NFA.

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15.    NO THIRD PARTY BENEFICIARIES.    There are no third party beneficiaries to this Agreement, except that certain persons not parties to this Agreement have rights under Paragraph 6 hereof.

IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of the undersigned as of the day and year first above written.

							
	 			CITIGROUP MANAGED FUTURES LLC
	 			By    /s/ David J. Vogel                                                        
	 			 			David J. Vogel
	 			 			President and Director
	 			CITIGROUP ABINGDON FUTURES FUND L.P.
	 			By: Citigroup Managed Futures LLC

         (General Partner)
	 			By    /s/ David J. Vogel                                                        
	 			 			David J. Vogel

President and Director
	 			WINTON CAPITAL MANAGEMENT LIMITED
	 			By    /s/ Martin Hunt                                                            
	 			 			Martin Hunt

Director, Winton Capital Management

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