Document:

exv4w3

 

   Exhibit 4.3

    EXTERRAN
    HOLDINGS, INC.

    2007 STOCK INCENTIVE PLAN

 

    I.  PURPOSE

 

    The purpose of the EXTERRAN HOLDINGS, INC. 2007 STOCK
    INCENTIVE PLAN is to provide a means through which
    Exterran Holdings, Inc., a Delaware corporation, and its
    Affiliates may attract highly-qualified persons to serve as
    Directors or to enter the employ of the Company and its
    Affiliates and to provide a means whereby those individuals,
    whose present and potential contributions to the Company and its
    Affiliates are of importance, can acquire and maintain stock
    ownership, thereby strengthening their concern for the welfare
    of the Company and its Affiliates. A further purpose of the Plan
    is to provide such individuals with additional incentive and
    reward opportunities designed to enhance the profitable growth
    of the Company and its Affiliates. Accordingly, the Plan
    provides for the grant of Options, Restricted Stock, Restricted
    Stock Units, Stock Appreciation Rights and Performance Awards,
    or any combination of the foregoing, as is best suited to the
    circumstances of the particular Employee or Director as
    determined by the Committee in its sole discretion.

 

    II.  DEFINITIONS

 

    The following definitions shall be applicable throughout the
    Plan unless specifically modified by any paragraph:

 

    (a) “Affiliate” means any
    corporation, partnership, limited liability company or
    partnership, association, trust or other organization which,
    directly or indirectly, controls, is controlled by, or is under
    common control with, the Company. For purposes of the preceding
    sentence, “control” (including, with correlative
    meanings, the terms “controlled by” and “under
    common control with”), as used with respect to any entity
    or organization, shall mean the possession, directly or
    indirectly, of the power (i) to vote more than 50% of the
    securities having ordinary voting power for the election of
    directors of the controlled entity or organization, or
    (ii) to direct or cause the direction of the management and
    policies of the controlled entity or organization, whether
    through the ownership of voting securities or by contract or
    otherwise.

 

    (b) “Award” means, individually or
    collectively, any Options, Restricted Stock, Restricted Stock
    Units, Stock Appreciation Rights, or Performance Awards granted
    under the terms of the Plan.

 

    (c) “Award Notice” means a written
    notice setting forth the terms of an Award.

 

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

 

    (e) “Cause” means (i) the
    commission by a Participant of an act of fraud, embezzlement or
    willful breach of a fiduciary duty to the Company or an
    Affiliate (including the unauthorized disclosure of confidential
    or proprietary material information of the Company or an
    Affiliate), (ii) a conviction of a Participant (or a plea
    of nolo contendere in lieu thereof) for a felony or a crime
    involving fraud, dishonesty or moral turpitude,
    (iii) willful failure of a Participant to follow the
    written directions of the chief executive officer of the Company
    or the Board, in the case of executive officers of the Company;
    (iv) willful misconduct as an Employee of the Company or an
    Affiliate; (v) willful failure of a Participant to render
    services to the Company or an Affiliate in accordance with his
    employment arrangement, which failure amounts to a material
    neglect of his duties to the Company or an Affiliate or
    (vi) substantial dependence, as determined by the
    Committee, in its sole discretion, on any drug, immediate
    precursor or other substance listed on Schedule IV of the
    Federal Comprehensive Drug Abuse Prevention and Control Act of
    1970, as amended. With respect to any Participant residing
    outside of the United States, the Committee may revise the
    definition of “Cause” as appropriate to conform to the
    laws of the applicable
    non-U.S. jurisdiction.

    

    1

 

 

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

 

    (g) “Committee” means the Committee
    defined in Paragraph IV(a) of the Plan.

 

    (h) “Common Stock” means the common
    stock, par value $.01 per share, of the Company, or any
    security into which such common stock may be changed by reason
    of any transaction or event of the type described in
    Paragraph XII.

 

    (i) “Company” means Exterran
    Holdings, Inc., a Delaware corporation, or any successors
    thereto.

 

    (j) “Corporate Change” means:

 

    (i) The acquisition by any individual, entity or group
    (within the meaning of Section 13(d)(3) or 14(d)(2) of the
    Securities Exchange Act of 1934, as amended (the “Exchange
    Act”)) (a “Person”) of beneficial ownership
    (within the meaning of
    Rule 13d-3
    promulgated under the Exchange Act) of 40% or more of either
    (A) the then outstanding shares of common stock of the
    Company (the “Outstanding Company Common Stock”) or
    (B) the combined voting power of the then outstanding
    voting securities of the Company entitled to vote generally in
    the election of directors (the “Outstanding Company Voting
    Securities”); provided, however, that for purposes of this
    subsection (i), any acquisition by any Person pursuant to a
    transaction which complies with clause (A) of
    subsection (iii) of this definition shall not
    constitute a Corporate Change; or

 

    (ii) Individuals, who, as of the date hereof, constitute
    the Board (the “Incumbent Board”) cease for any reason
    to constitute at least a majority of the Board; provided,
    however, that any individual becoming a director subsequent to
    the date hereof whose election, or nomination for election by
    the Company’s stockholders, was approved by a vote of at
    least a majority of the directors then comprising the Incumbent
    Board shall be considered for purposes of this definition as
    though such individual was a member of the Incumbent Board, but
    excluding, for these purposes, any such individual whose initial
    assumption of office occurs as a result of an actual or
    threatened election contest with respect to the election or
    removal of directors or other actual or threatened solicitation
    of proxies or consents by or on behalf of a Person other than
    the Board; or

 

    (iii) The consummation of a reorganization, merger or
    consolidation involving the Company or any of its subsidiaries,
    or the sale, lease or other disposition of all or substantially
    all of the assets of the Company and its subsidiaries, taken as
    a whole (other than to an entity wholly owned, directly or
    indirectly, by the Company) (each, a “Corporate
    Transaction”), in each case, unless, following such
    Corporate Transaction, (A) all or substantially all of the
    individuals and entities who were the beneficial owners of the
    Outstanding Company Common Stock and Outstanding Company Voting
    Securities immediately prior to such Corporate Transaction
    beneficially own, directly or indirectly, more than 60% of,
    respectively, the then outstanding shares of common stock and
    the combined voting power of the then outstanding voting
    securities entitled to vote generally in the election of
    directors, as the case may be, of the Resulting Corporation in
    substantially the same proportions as their ownership,
    immediately prior to such Corporate Transaction, of the
    Outstanding Company Common Stock and the Outstanding Company
    Voting Securities, as the case may be, and (B) at least a
    majority of the members of the board of directors of the
    Resulting Corporation were members of the Incumbent Board at the
    time of the execution of the initial agreement, or of the action
    of the Board, providing for such Corporate Transaction. The term
    “Resulting Corporation” means (1) the Company or
    its successor, or (2) if as a result of a Corporate
    Transaction the Company or its successor becomes a subsidiary of
    another entity, then such entity or the parent of such entity,
    as applicable, or (3) in the event of a Corporate
    Transaction involving the sale, lease or other disposition of
    all or substantially all of the assets of the Company and its
    subsidiaries, taken as a whole, then the transferee of such
    assets in such Corporate Transaction. Notwithstanding the
    foregoing, neither the sale, lease or other disposition of
    assets by the Company or its subsidiaries to Universal
    Compression Partners, L.P. or its subsidiaries or their
    successor nor the sale, lease or other

    

    2

 

    disposition of any interest in Universal Compression Partners,
    L.P., its general partner, or its subsidiaries or their
    successors shall, in and of itself, constitute a Corporate
    Change for purposes of this Plan.

 

    (k) “Director” means an individual
    elected to the Board by the stockholders of the Company or by
    the Board under applicable corporate law and who is serving on
    the Board on the date the Plan is adopted by the Board, or is
    subsequently elected to the Board, and is not an Employee.

 

    (l) “Disability” means any physical
    or mental condition for which the Participant would be eligible
    to receive long-term disability benefits under the
    Company’s long-term disability plan. With respect to any
    Participant residing outside of the United States, the Committee
    may revise the definition of “Disability” as
    appropriate to conform to the laws of the applicable
    non-U.S. jurisdiction.

 

    (m) “Employee” means any person who
    is an employee of the Company or any Affiliate. If an entity
    ceases to be an Affiliate of the Company, a Participant employed
    by such entity shall be deemed to have terminated his employment
    with the Company and its Affiliates and shall cease to be an
    Employee under the Plan. For any and all purposes under the
    Plan, the term “Employee” shall exclude an individual
    hired as an independent contractor, leased employee, consultant,
    or a person otherwise designated by the Committee, the Company
    or an Affiliate at the time of hire as not eligible to
    participate in or receive benefits under the Plan, even if such
    ineligible individual is subsequently determined to be an
    employee by any governmental or judicial authority. For purposes
    of any Award granted to a person residing outside of the United
    States, the Committee may revise the definition of
    “Employee” as appropriate to conform to the laws of
    the applicable
    non-U.S. jurisdiction.

 

    (n) “Fair Market Value” of a share
    of Common Stock means, as of any specified date: (i) if the
    Common Stock is listed on a national securities exchange or
    quoted on the National Association of Securities Dealers, Inc.
    Automated Quotation System (“NASDAQ”), the closing
    sales price of a share of Common Stock on that date, or if no
    prices are reported on that date, on the last preceding day on
    which the Common Stock was traded, as reported by such exchange
    or NASDAQ, as the case may be; and (ii) if the Common Stock
    is not listed on a national securities exchange or quoted on the
    NASDAQ, but is traded in the
    over-the-counter
    market, the average of the bid and asked prices for a share of
    Common Stock on the most recent date on which the Common Stock
    was publicly traded. In the event the Common Stock is not
    publicly traded at the time a determination of its value is
    required to be made hereunder, the determination of its Fair
    Market Value shall be made by the Committee in such manner as it
    deems appropriate.

 

    (o) “Incentive Stock Option” means
    an Option granted under Paragraph VII of the Plan that is
    an incentive stock option within the meaning of Section 422
    of the Code.

 

    (p) “1934 Act” means the
    U.S. Securities Exchange Act of 1934, as amended.

 

    (q) “Non-Qualified Option” means an
    Option granted under Paragraph VII of the Plan that is not
    an Incentive Stock Option.

 

    (r) “Option” means an option to
    purchase shares of Common Stock granted under Paragraph VII
    of the Plan that may be either an Incentive Stock Option or a
    Non-Qualified Option.

 

    (s) “Participant” means an Employee
    or Director who has been granted an Award under the Plan.

 

    (t) “Performance Award” means an
    opportunity for a Participant to earn additional compensation if
    certain Performance Measures or other criteria are met, as
    described in Paragraph XI of the Plan.

 

    (u) “Performance Measure” means any
    performance objective established by the Committee in its sole
    discretion, including, but not limited to, one or more of the
    following:

 

    (1) the price of a share of Common Stock;

 

    (2) the Company’s earnings per share;

 

    (3) the Company’s market share;

    

    3

 

 

    (4) the market share of a business unit of the Company
    designated by the Committee;

 

    (5) the Company’s sales;

 

    (6) the sales of a business unit of the Company designated
    by the Committee;

 

    (7) the net income (before or after taxes) of the Company
    or any business unit of the Company designated by the Committee;

 

    (8) the cash flow return on investment, cash value added,
    and/or
    working cash flow of the Company or any business unit of the
    Company designated by the Committee;

 

    (9) the earnings before or after interest, leasing expense,
    taxes, depreciation, distributions on mandatorily redeemable
    preferred stock,
    and/or
    amortization of the Company or any business unit of the Company
    designated by the Committee;

 

    (10) the economic value added;

 

    (11) the return on stockholders’ equity achieved by
    the Company;

 

    (12) the return on capital employed of the Company or any
    business unit of the Company designated by the Committee; or

 

    (13) the total stockholders’ return achieved by the
    Company.

 

    A Performance Measure may be subject to adjustment for changes
    in accounting standards required by the Financial Accounting
    Standards Board after the goal is established, for specified
    significant items or events, and may be absolute, relative to
    one or more other companies, or relative to one or more indexes,
    and may be contingent upon future performance of the Company or
    any Affiliate, division, or department thereof.

 

    (v) “Plan” means the Exterran
    Holdings, Inc. 2007 Stock Incentive Plan, as amended from time
    to time.

 

    (w) “Restricted Stock” means Common
    Stock subject to certain restrictions, as described in
    Paragraph VIII of the Plan.

 

    (x) “Restricted Stock Unit” means a
    promise to deliver a share of Common Stock, or the Fair Market
    Value of such share in cash, in the future if certain criteria
    are met, as described in Paragraph IX of the Plan.

 

    (y) “Retirement” means a
    Termination of Service, other than due to Cause or death, on or
    after the Participant attains (i) age 65 or
    (ii) age 55 and with the written consent of the
    Committee. Notwithstanding the foregoing, with respect to a
    Participant residing outside of the United States, the Committee
    may revise the definition of “Retirement” as
    appropriate to conform to the laws of the applicable
    non-U.S. jurisdiction.

 

    (z) “Stock Appreciation Right”
    means a right entitling the Participant to the difference
    between the Fair Market Value of a share of Common Stock on the
    date of exercise and the Fair Market Value of a share of Common
    Stock on the date of grant, as described in Paragraph X of
    the Plan.

 

    (aa) “Termination of Service” means
    a Participant’s termination of employment, if an Employee,
    or a termination of service, if a Director, as the case may be.
    A Participant who is both an Employee and a Director shall not
    incur a Termination of Service until the Participant terminates
    both positions.

 

    III.  EFFECTIVE
    DATE AND DURATION OF THE PLAN

 

    After its adoption by the Board, the Plan shall become effective
    upon the effective date of the consummation of the mergers
    pursuant to that certain Agreement and Plan of Merger dated
    February 5, 2007, among Hanover Compressor Company,
    Universal Compression Holdings, Inc., Exterran Holdings, Inc.,
    Hector Sub, Inc., and Ulysses Sub, Inc., provided that the Plan
    has been approved by the stockholders of each of Hanover
    Compressor Company and Universal Compression Holdings, Inc.
    Notwithstanding any provision in

    

    4

 

    the Plan, no Award shall be granted hereunder prior to such
    stockholder approval. No further Awards may be granted under the
    Plan after 7 years from the effective date of the Plan. The
    Plan shall remain in effect until all Awards granted under the
    Plan have been exercised or expired or vested or forfeited.

 

    IV.  ADMINISTRATION

 

    (a) Composition of Committee.  The Plan
    shall be administered by the Compensation Committee of the Board
    or such other committee, if any, that may be designated by the
    Board to administer the Plan (the “Committee”);
    provided, however, that any and all members of the Committee
    shall satisfy any independence requirements prescribed by any
    stock exchange on which the Company lists its Common Stock;
    provided, further, that Awards may be granted to individuals who
    are subject to Section 16(b) of the 1934 Act only if
    the Committee is comprised solely of two or more
    “Non-Employee Directors” as defined in Securities and
    Exchange Commission
    Rule 16b-3
    (as amended from time to time, and any successor rule,
    regulation or statute fulfilling the same or similar function);
    provided, further, that any Award intended to qualify for the
    “performance-based compensation” exception under
    Section 162(m) of the Code shall be granted only if the
    Committee is comprised solely of two or more “outside
    directors” within the meaning of Section l62(m) of the Code
    and regulations pursuant thereto.

 

    (b) Powers.  Subject to
    Paragraph IV(d), and the express provisions of the Plan,
    the Committee shall have authority, in its discretion, to
    determine which Employees or Directors shall receive an Award,
    the time or times when such Award shall be made, the terms and
    conditions of an Award, the type of Award that shall be made,
    the number of shares subject to an Award and the value of an
    Award. In making such determinations, the Committee shall take
    into account the nature of the services rendered by the
    respective Employees or Directors, their present and potential
    contribution to the Company’s success and such other
    factors as the Committee, in its sole discretion, shall deem
    relevant.

 

    (c) Additional Powers.  The Committee
    shall have such additional powers as are delegated to it by the
    other provisions of the Plan. Subject to the express provisions
    of the Plan, this shall include the power to construe the Plan
    and the respective notices provided hereunder, to prescribe
    rules and regulations relating to the Plan, and to determine the
    terms, restrictions and provisions of the notice relating to
    each Award, including such terms, restrictions and provisions as
    shall be required in the judgment of the Committee to cause
    designated Options to qualify as Incentive Stock Options, and to
    make all other determinations necessary or advisable for
    administering the Plan. The Committee may correct any defect or
    supply any omission or reconcile any inconsistency in the Plan
    or in any notice relating to an Award in the manner and to the
    extent it shall deem expedient to carry it into effect. Any
    determination or decision made by the Committee or its delegate
    (pursuant to Paragraph IV(d)) under the terms of the Plan
    shall be made in the sole discretion of the Committee or such
    delegate and shall be final and binding on all persons,
    including the Company and Participants, but subject to
    ratification by the Board if the Board so provides.

 

    (d) Delegation of Powers.  Subject to
    Paragraph IV(a) above, the Committee may delegate to the
    Board or to the Chief Executive Officer or one or more other
    senior officers of the Company the authority to grant Awards to
    Employees who are not subject to Section 16(b) of the
    1934 Act. Further, the Committee may delegate to the
    Governance Committee of the Board the authority to make Awards
    to Directors, including to determine which Director shall
    receive an Award, the time or times when such an Award shall be
    made, the terms and conditions of such an Award, the type of
    Award that shall be made to a Director, the number of shares
    subject to such an Award, and the value of such an Award. The
    Committee may delegate to the Chief Executive Officer or one or
    more other senior officers of the Company its administrative
    functions under this Plan with respect to the Awards. Any
    delegation described in this paragraph shall contain such
    limitations and restrictions as the Committee may provide and
    shall comply in all respects with the requirements of applicable
    law, including the Delaware General Corporation Law. The
    Committee may engage or authorize the engagement of a third
    party administrator or administrators to carry out
    administrative functions under the Plan.

 

    No member of the Committee or officer of the Company or an
    Affiliate to whom the Committee has delegated authority in
    accordance with the provisions of Paragraph IV of this Plan
    shall be liable for anything

    

    5

 

    done or omitted to be done by him or her, by any member of the
    Committee or by any officer of the Company or Affiliate in
    connection with the performance of any duties under this Plan,
    except for his or her own willful misconduct or as expressly
    provided by statute.

 

    (e) Awards Outside of the United
    States.  With respect to any Participant or
    eligible Employee who is resident outside of the United States,
    the Committee may, in its sole discretion, amend or vary the
    terms of the Plan in order to conform such terms with the
    requirements of local law, to meet the goals and objectives of
    the Plan, and may, in its sole discretion, establish
    administrative rules and procedures to facilitate the operation
    of the Plan in such
    non-U.S. jurisdictions.
    The Committee may, where it deems appropriate in its sole
    discretion, establish one or more
    sub-plans of
    the Plan for these purposes.

 

    V.  SHARES SUBJECT
    TO THE PLAN; AWARD LIMITATIONS

 

    (a) Shares Subject to the
    Plan.  Subject to adjustment as provided in
    Paragraph XII, the aggregate number of shares of Common
    Stock that may be issued under the Plan shall not exceed
    4,750,000. The issuance of Common Stock under the Plan shall be
    counted against the overall number of shares available for
    delivery under a fungible reserve approach. Any Shares of Common
    Stock issued or reserved for issuance pursuant to Options or
    Stock Appreciation Rights shall be counted against the aggregate
    share limitation of the Plan as one share for every share
    subject thereto. Each Share of Common Stock issued pursuant to
    Restricted Stock or Restricted Stock Units shall be counted
    against the aggregate share limitation of the Plan as two shares
    for every share subject thereto. However, (a) if any
    Options or other stock-settled Awards are cancelled, expired,
    forfeited, settled in cash, or otherwise terminated without
    issuing the underlying shares of Common Stock to the
    Participant, such shares shall remain available for future grant
    under the Plan, and (b) if issued but unvested shares of
    Restricted Stock are forfeited, such shares shall become
    available for future grant under the Plan. Shares of Common
    Stock that are otherwise issuable to the Participant pursuant to
    an Award that are withheld to satisfy tax withholding
    obligations or to pay the exercise price of an Option shall be
    counted against the aggregate limitation of the Plan as provided
    herein and shall not become available for future grant under the
    Plan.

 

    (b) Share and Value Limitation on Individual
    Awards.  The maximum number of shares of Common
    Stock that may be issuable under Awards granted to any one
    individual during any twelve month period shall not exceed
    500,000 shares of Common Stock (subject to adjustment in
    the manner as provided in Paragraph XII). In addition, the
    maximum amount of cash compensation that may be paid under
    Awards intended to qualify for the “performance-based
    compensation” exception under Section 162(m) of the
    Code granted to any one individual during any twelve month
    period may not exceed $5,000,000. The limitations set forth in
    this paragraph are intended to permit certain awards under the
    Plan to constitute “performance-based” compensation
    for purposes of Section 162(m) of the Code.

 

    (c) Stock Offered.  Subject to the
    limitations set forth in Paragraph V(a), the stock to be
    offered pursuant to the grant of an Award may be authorized but
    unissued Common Stock or Common Stock previously issued and
    outstanding and reacquired by the Company. Any of such shares
    which remain unissued and which are not subject to outstanding
    Awards at the termination of the Plan shall cease to be subject
    to the Plan but, until termination of the Plan, the Company
    shall at all times make available a sufficient number of shares
    to meet the requirements of the Plan.

 

    VI.  ELIGIBILITY
    AND GRANT OF AWARDS

 

    Subject to the delegation of power in Paragraph IV(d), the
    Committee, in its sole discretion, may from time to time grant
    Awards under the Plan as provided herein to any individual who,
    at the time of grant, is an Employee or a Director. An Award may
    be granted on more than one occasion to the same person, and,
    subject to the limitations set forth in the Plan. Awards may
    include Options, Restricted Stock, Restricted Stock Units, Stock
    Appreciation Rights, Performance Awards or any combination
    thereof. The Plan is discretionary in nature, and the grant of
    Awards by the Committee is voluntary and occasional. The
    Committee’s selection of an eligible Employee or Director
    to receive an Award in any year or at any time shall not require
    the

    

    6

 

    Committee to select such Employee or Director to receive an
    Award in any other year or at any other time. The selection of
    an Employee or Director to receive one type of Award under the
    Plan does not require the Committee to select such Employee or
    Director to receive any other type of Award under the Plan. The
    Committee shall consider such factors as it deems pertinent in
    selecting Participants and in determining the type and amount of
    their respective Awards.

 

    VII.  STOCK
    OPTIONS

 

    (a) Option Types and Option
    Period.  Options may be in the form of Incentive
    Stock Options
    and/or
    Non-Qualified Options for eligible Employees (as described
    below), as determined by the Committee, in its sole discretion.
    Any Options granted to Directors shall be Non-Qualified Options.
    Except as otherwise provided in Subparagraph (c) below
    or such shorter term as may be provided in an Award Notice, each
    Option shall expire 7 years from its date of grant and,
    unless provided otherwise in the Award Notice, shall be subject
    to earlier termination as follows: Options, to the extent vested
    as of the date a Participant incurs a Termination of Service,
    may be exercised only within three months of such date, unless
    such Termination of Service results from (i) death,
    Retirement or Disability of the Participant, in which case all
    vested Options held by such Participant may be exercised by the
    Participant, the Participant’s legal representative, heir
    or devisee, as the case may be, within two years from the date
    of the Participant’s Termination of Service, or
    (ii) Cause, in which event all outstanding vested Options
    held by such Participant shall be automatically forfeited
    unexercised on such termination; provided, however, that
    notwithstanding the foregoing, no termination event described in
    (i) above shall extend the expiration date of an Option
    beyond the 7th anniversary of its date of grant or, such
    shorter period, if any, as may be provided in the Award Notice.

 

    (b) Vesting.  Subject to the further
    provisions of the Plan, Options shall vest and become
    exercisable in accordance with such vesting schedule as the
    Committee may establish in its sole discretion, including
    vesting upon the satisfaction of one or more Performance
    Measures. A Participant may not exercise an Option except to the
    extent it has become vested. Unless otherwise provided in the
    Award Notice, all unvested Options shall automatically become
    fully vested upon a Participant’s Termination of Service
    due to his or her death, Disability or Retirement. Options that
    are not vested on a Participant’s Termination of Service
    shall automatically terminate and be cancelled unexercised on
    such date.

 

    (c) Special Limitations on Incentive Stock
    Options.  An Incentive Stock Option may be granted
    only to an Employee of the Company or any parent or subsidiary
    corporation (as defined in Section 424 of the Code) at the
    time the Option is granted. To the extent that the aggregate
    Fair Market Value (determined at the time the respective
    Incentive Stock Option is granted) of Common Stock with respect
    to which Incentive Stock Options are exercisable for the first
    time by an individual during any calendar year under all
    incentive stock option plans of the Company and its parent and
    subsidiary corporations exceeds $100,000, such Incentive Stock
    Options shall be treated as Non-Qualified Options. The Committee
    shall determine, in accordance with applicable provisions of the
    Code, any applicable treasury regulations and other
    administrative pronouncements, which of a Participant’s
    Incentive Stock Options will not constitute Incentive Stock
    Options because of such limitation and shall notify the
    Participant of such determination as soon as practicable after
    such determination is made. No Incentive Stock Option shall be
    granted to an individual if, at the time the Option is granted,
    such individual owns stock possessing more than 10% of the total
    combined voting power of all classes of stock of the Company or
    of any parent or subsidiary corporation, within the meaning of
    Section 422(b)(6) of the Code, unless (i) at the time
    such Option is granted the Option price is at least 110% of the
    Fair Market Value of the Common Stock subject to the Option and
    (ii) such Option by its terms is not exercisable after the
    expiration of five years from the date of grant. An Incentive
    Stock Option shall not be transferable otherwise than by will or
    the laws of descent and distribution, and shall be exercisable
    during the Participant’s lifetime only by such Participant
    or the Participant’s guardian or legal representative.

 

    (d) Award Notice.  Each Option shall be
    evidenced by an Award Notice in such form and containing such
    provisions not inconsistent with the provisions of the Plan and
    under such terms as the Committee from time to time shall
    establish, including, without limitation, provisions to qualify
    an Incentive Stock Option under Section 422 of the Code. An
    Award Notice may provide for the payment of the Option price, in
    whole

    

    7

 

    or in part, by cash, a check acceptable to the Company, the
    delivery of a number of already-owned shares of Common Stock
    (plus cash if necessary) having a Fair Market Value equal to
    such Option price (provided such shares have been owned for more
    than six months by the Participant), a “cashless broker
    exercise” of the Option through any other procedures
    established or approved by the Committee with respect thereto,
    or any combination of the foregoing. Further, an Award Notice
    may provide, in the sole discretion of the Committee, for the
    surrender of the right to purchase shares under the Option in
    return for a payment in cash or shares of Common Stock or a
    combination of cash and shares of Common Stock equal in value to
    the excess of the Fair Market Value of the shares with respect
    to which the right to purchase is surrendered over the Option
    price therefor, on such terms and conditions as the Committee in
    its sole discretion may prescribe. In the case of any such right
    that is granted in connection with an Incentive Stock Option,
    such right shall be exercisable only when the Fair Market Value
    of the Common Stock exceeds the price specified therefor in the
    Option or the portion thereof to be surrendered. The terms and
    conditions of the respective Award Notices need not be
    identical. Subject to the consent of the Participant, the
    Committee may, in its sole discretion, amend an outstanding
    Award Notice from time to time in any manner that is not
    inconsistent with the provisions of the Plan (including, without
    limitation, an amendment that accelerates the time at which the
    Option, or a portion thereof, may be exercisable).

 

    (e) Option Price and Payment.  The price
    at which a share of Common Stock may be purchased upon exercise
    of an Option shall be determined by the Committee but, subject
    to adjustment as provided in Paragraph XII, such purchase
    price shall not be less than the Fair Market Value of a share of
    Common Stock on the date such Option is granted. The Option or
    portion thereof shall be exercised, and any applicable taxes
    shall be withheld, in accordance with such procedures as are
    established or approved by the Committee.

 

    (f) Restrictions on Repricing of
    Options.  Except as provided in
    Paragraph XII, the Committee may not amend any outstanding
    Award Notice to lower the exercise price (or cancel and replace
    any outstanding Option with Options having a lower exercise
    price).

 

    (g) Stockholder Rights and
    Privileges.  The Participant shall be entitled to
    all the privileges and rights of a stockholder only with respect
    to such shares of Common Stock as have been purchased upon
    exercise of the Option and registered in the Participant’s
    name.

 

    (h) Options in Substitution for Options Granted by Other
    Employers.  Options may be granted under the Plan
    from time to time or approved by the Committee or the Board in
    substitution of options held by individuals providing services
    to corporations or other entities who become Employees or
    Directors as result of a merger or consolidation or other
    business transaction with the Company or any Affiliate.

 

    VIII.  RESTRICTED
    STOCK

 

    (a) Restrictions to be Established by the
    Committee.  Restricted Stock shall be subject to
    restrictions on disposition by the Participant and an obligation
    of the Participant to forfeit and surrender the shares to the
    Company under certain circumstances, and any other restrictions
    determined by the Committee in its sole discretion on the date
    of grant; provided, however, that such restrictions shall lapse
    upon:

 

    (i) the attainment of one or more Performance Measures;

 

    (ii) the Participant’s continued employment with the
    Company and its Affiliates or continued service as a Director
    for a specified period of time;

 

    (iii) the occurrence of any event or the satisfaction of
    any other condition specified by the Committee in its sole
    discretion; or

 

    (iv) a combination of any of the foregoing.

 

    Each grant of Restricted Stock may have different restrictions
    as established in the sole discretion of the Committee.

 

    (b) Other Terms and
    Conditions.  Restricted Stock shall be registered
    in the name of the Participant. Unless provided otherwise in an
    Award Notice, the Participant shall have the right to receive
    dividends with

    

    8

 

    respect to Restricted Stock, to vote Restricted Stock, and to
    enjoy all other stockholder rights, except that: (i) the
    Company shall retain custody of the Restricted Stock until the
    Restrictions have expired; (ii) the Participant may not
    sell, transfer, pledge, exchange, hypothecate or otherwise
    dispose of the Restricted Stock until the restrictions have
    expired; and (iii) a breach of the terms and conditions
    established by the Committee pursuant to the Restricted Stock
    Notice shall cause a forfeiture of the Restricted Stock. If a
    Participant’s Termination of Service is due to his or her
    death or Disability, all Awards of Restricted Stock of such
    Participant then outstanding shall immediately vest in full and
    all restrictions applicable to such Awards shall terminate as of
    such date with all performance criteria, if any, applicable to
    such Awards deemed met at 100% of target. At the time of grant,
    the Committee may, in its sole discretion, establish additional
    terms, conditions or restrictions relating to the Restricted
    Stock. Such additional terms, conditions or restrictions shall
    be set forth in an Award Notice delivered in conjunction with
    the Award.

 

    (c) Payment for Restricted Stock.  The
    Committee shall determine the amount and form of payment
    required from the Participant in exchange for a grant of
    Restricted Stock, if any, provided that in the absence of such a
    determination, a Participant shall not be required to make any
    payment for Restricted Stock, except to the extent otherwise
    required by law.

 

    (d) Committee’s Discretion to Accelerate Vesting of
    Restricted Stock.  The Committee may, in its
    discretion and as of a date determined by the Committee, fully
    vest any or all of a Participant’s Restricted Stock and,
    upon such vesting, all restrictions applicable to such
    Restricted Stock shall terminate as of such date. Any action by
    the Committee pursuant to this Subparagraph may vary among
    individual Participants and may vary among the Restricted Stock
    held by any individual Participant. Notwithstanding the
    preceding provisions of this paragraph, the Committee may not
    take any action described in this Subparagraph with respect to
    Restricted Stock that has been granted to a “covered
    employee” (within the meaning of Treasury
    Regulation Section 1.162-27(c)(2))
    if such Award has been designed to meet the exception for
    performance-based compensation under Section 162(m) of the
    Code; provided, however, this prohibition shall not apply to an
    acceleration pursuant to Paragraph XII or due to death or
    Disability of the Participant.

 

    (e) Award Notice.  Each grant of
    Restricted Stock shall be evidenced by an Award Notice in such
    form and containing such provisions not inconsistent with the
    provisions of the Plan and under such terms as the Committee
    from time to time shall establish. The terms and provisions of
    the respective Award Notices need not be identical. Subject to
    the consent of the Participant and the restriction set forth in
    the last sentence of Subparagraph (d) above, the Committee
    may, in its sole discretion, amend an outstanding Award Notice
    from time to time in any manner that is not inconsistent with
    the provisions of the Plan.

 

    IX.  RESTRICTED
    STOCK UNITS

 

    (a) Restrictions to be Established by the
    Committee.  Restricted Stock Units shall be
    subject to a restriction on disposition by the Participant and
    an obligation of the Participant to forfeit the Restricted Stock
    Units under certain circumstances, and any other restrictions
    determined by the Committee in its sole discretion on the date
    of grant; provided, however, that such restrictions shall lapse
    upon:

 

    (i) the attainment of one or more Performance Measures;

 

    (ii) the Participant’s continued employment with the
    Company and its Affiliates or continued service as a Director
    for a specified period of time;

 

    (iii) the occurrence of any event or the satisfaction of
    any other condition specified by the Committee in its sole
    discretion; or

 

    (iv) a combination of any of the foregoing.

 

    Each Award of Restricted Stock Units may have different
    restrictions as established in the sole discretion of the
    Committee.

 

    (b) Other Terms and Conditions.  The
    Participant shall not be entitled to vote the shares of Common
    Stock underlying the Restricted Stock Units or enjoy any other
    stockholder rights unless and until the

    

    9

 

    restrictions have lapsed and such shares have been registered in
    the Participant’s name. If a Participant’s Termination
    of Service is due to his or her death or Disability, all
    Restricted Stock Units of such Participant then outstanding
    shall immediately vest in full and all restrictions applicable
    to such Restricted Stock Units shall terminate as of such date
    with all performance criteria, if any, applicable to such
    Restricted Stock Units deemed met at 100% of target. At the time
    of grant, the Committee may, in its sole discretion, establish
    additional terms, conditions or restrictions relating to the
    Restricted Stock Units. Such additional terms, conditions or
    restrictions shall be set forth in an Award Notice delivered in
    conjunction with the Award.

 

    (c) Payment.  Upon the lapse of the
    restrictions described in the Award Notice, the Participant
    shall receive as soon as practicable payment equal to the Fair
    Market Value of the shares of Common Stock underlying the
    Restricted Stock Units on the vesting date, less applicable
    withholding. Payment shall be in the form of shares of Common
    Stock, cash, other equity compensation, or a combination
    thereof, as determined by the Committee. Any cash payment shall
    be made in a lump sum or in installments, as prescribed in the
    Award Notice. Payment shall be made no later than
    21/2 months
    following the end of the year in which the Restricted Stock
    Units vest, unless payment is to be made in installments, in
    which case such installments shall comply with the rules under
    Section 409A of the Code.

 

    (d) Committee’s Discretion to Accelerate Vesting of
    Restricted Stock Units.  The Committee may, in its
    discretion and as of a date determined by the Committee, fully
    vest any portion or all of a Participant’s Restricted Stock
    Units and, upon such vesting, all restrictions applicable to
    such Restricted Stock Units shall terminate as of such date. Any
    action by the Committee pursuant to this Subparagraph may vary
    among Participants and may vary among the Restricted Stock Units
    held by any Participant. Notwithstanding the preceding
    provisions of this paragraph, the Committee may not take any
    action described in this Subparagraph with respect to Restricted
    Stock Units that have been granted to a “covered
    employee” (within the meaning of Treasury
    Regulation Section 1.162-27(c)(2))
    if such Award has been designed to meet the exception for
    performance-based compensation under Section 162(m) of the
    Code; provided, however, this prohibition shall not apply to an
    acceleration pursuant to Paragraph XII or due to death or
    Disability of the Participant.

 

    (e) Award Notice.  Restricted Stock Units
    shall be evidenced by an Award Notice in such form and
    containing such provisions not inconsistent with the provisions
    of the Plan and under such terms as the Committee from time to
    time shall establish. The terms and provisions of the respective
    Award Notices need not be identical. Subject to the consent of
    the Participant and the restriction set forth in the last
    sentence of Subparagraph (d) above, the Committee may,
    in its sole discretion, amend an outstanding Award Notice from
    time to time in any manner that is not inconsistent with the
    provisions of the Plan.

 

    X. STOCK
    APPRECIATION RIGHTS

 

    (a) Restrictions to be Established by the
    Committee.  Stock Appreciation Rights shall be
    subject to a restriction on disposition by the Participant and
    an obligation of the Participant to forfeit the Stock
    Appreciation Rights under certain circumstances, and any other
    restrictions determined by the Committee in its sole discretion
    on the date of grant; provided, however, that such restrictions
    shall lapse upon:

 

    (i) the attainment of one or more Performance Measures;

 

    (ii) the Participant’s continued employment with the
    Company and its Affiliates or continued service as a Director
    for a specified period of time;

 

    (iii) the occurrence of any event or the satisfaction of
    any other condition specified by the Committee in its sole
    discretion; or

 

    (iv) a combination of any of the foregoing.

 

    Each Award of Stock Appreciation Rights may have different
    restrictions as established in the sole discretion of the
    Committee.

 

    (b) Other Terms and Conditions.  If a
    Participant’s Termination of Service is due to his or her
    death or Disability, all Stock Appreciation Rights of such
    Participant then outstanding shall immediately vest in full

    

    10

 

    and all restrictions applicable to such Stock Appreciation
    Rights shall terminate as of such date with all performance
    criteria, if any, applicable to such Stock Appreciation Rights
    deemed met at 100% of target. At the time of grant, the
    Committee may, in its sole discretion, establish additional
    terms, conditions or restrictions relating to the Stock
    Appreciation Rights. Such additional terms, conditions or
    restrictions shall be set forth in the Award Notice delivered in
    conjunction with the Award.

 

    (c) Exercise Price and Payment.  Subject
    to adjustment as provided in Paragraph XII, the exercise
    price of the Stock Appreciation Rights shall not be less than
    the Fair Market Value of the shares of Common Stock underlying
    the Stock Appreciation Rights on the date of grant. Upon the
    lapse of the restrictions described in the Award Notice, the
    Participant shall be entitled to exercise his or her Stock
    Appreciation Rights at any time up until the end of the period
    specified in the Award Notice. The Stock Appreciation Rights, or
    portion thereof, shall be exercised and any applicable taxes
    withheld, in accordance with such procedures as are established
    or approved by the Committee. Upon exercise of the Stock
    Appreciation Rights, the Participant shall be entitled to
    receive payment in an amount equal to: (i) the difference
    between the Fair Market Value of the underlying shares of Common
    Stock subject to the Stock Appreciation Rights on the date of
    exercise and the exercise price; times (ii) the number of
    shares of Common Stock with respect to which the Stock
    Appreciation Rights are exercised; less (iii) any
    applicable withholding taxes. Payment shall be made in the form
    of shares of Common Stock or cash, or a combination thereof, as
    determined by the Committee. Cash shall be paid in a lump sum
    payment and shall be based on the Fair Market Value of the
    underlying Common Stock on the exercise date.

 

    (d) Committee’s Discretion to Accelerate Vesting of
    Stock Appreciation Rights.  The Committee may, in
    its discretion and as of a date determined by the Committee,
    fully vest any portion or all of a Participant’s Stock
    Appreciation Rights and, upon such vesting, all restrictions
    applicable to such Stock Appreciation Rights shall terminate as
    of such date. Any action by the Committee pursuant to this
    Subparagraph may vary among Participants and may vary among the
    Stock Appreciation Rights held by any Participant.
    Notwithstanding the preceding provisions of this paragraph, the
    Committee may not take any action described in this Subparagraph
    with respect to any Stock Appreciation Rights that have been
    granted to a “covered employee” (within the meaning of
    Treasury
    Regulation Section 1.162-27(c)(2))
    if such Award has been designed to meet the exception for
    performance-based compensation under Section 162(m) of the
    Code; provided, however, this prohibition shall not apply to an
    acceleration pursuant to Paragraph XII or due to death or
    Disability of the Participant.

 

    (e) Award Notice.  Stock Appreciation
    Rights shall be evidenced by an Award Notice in such form and
    containing such provisions not inconsistent with the provisions
    of the Plan and under such terms as the Committee from time to
    time shall establish. The terms and provisions of the respective
    Award Notices need not be identical. Subject to the consent of
    the Participant and the restriction set forth in the last
    sentence of Subparagraph (d) above, the Committee may,
    in its sole discretion, amend an outstanding Award Notice from
    time to time in any manner that is not inconsistent with the
    provisions of the Plan.

 

    XI. PERFORMANCE
    AWARDS

 

    (a) Performance Period.  The Committee
    shall establish, with respect to and at the time of each
    Performance Award, the maximum value of the Performance Award
    and the performance period over which the performance applicable
    to the Performance Award shall be measured.

 

    (b) Performance Measures and Other
    Criteria.  A Performance Award shall be awarded to
    a Participant contingent upon future performance of the Company
    or any Affiliate, or a division or department of the Company or
    any Affiliate, during the performance period. With respect to
    Performance Awards intended to qualify as performance-based
    compensation under Section 162(m) of the Code, the
    Committee shall establish the Performance Measures applicable to
    such performance either (i) prior to the beginning of the
    performance period or (ii) within 90 days after the
    beginning of the performance period if the outcome of the
    performance targets is substantially uncertain at the time such
    targets are established, but not later than the date that 25% of
    the performance period has elapsed. The Committee shall provide
    that the vesting of the

    

    11

 

    Performance Award will be based upon the Participant’s
    continued employment with the Company or its Affiliates or
    continued service as a Director for a specified period of
    time and

 

    (i) the attainment of one or more Performance Measures, or
    a combination thereof;

 

    (ii) the occurrence of any event or the satisfaction of any
    other condition specified by the Committee in its sole
    discretion; or

 

    (iii) a combination of any of the foregoing.

 

    The Committee, in its sole discretion, may also provide for an
    adjustable Performance Award value-based upon the level of
    achievement of Performance Measures.

 

    (c) Vesting.  If a Participant’s
    Termination of Service is due to his or her death or Disability,
    all Performance Awards of such Participant then outstanding
    shall immediately vest in full and all restrictions applicable
    to such Awards shall terminate as of such date with all
    performance criteria, if any, applicable to such Awards deemed
    met at 100% of target.

 

    (d) Award Criteria.  In determining the
    value of a Performance Award, the Committee shall take into
    account a Participant’s responsibility level, performance,
    potential, other Awards, total annual compensation and such
    other considerations as it deems appropriate. The Committee, in
    its sole discretion, may provide for a reduction in the value of
    a Participant’s Performance Award during the performance
    period.

 

    (e) Payment.  Following the end of the
    performance period, the holder of a Performance Award shall be
    entitled to receive payment as soon as practicable of an amount
    not exceeding the maximum value of the Performance Award, based
    on the achievement of the Performance Measures for such
    performance period, as determined and certified in writing by
    the Committee. Payment of a Performance Award may be made in
    cash, Common Stock, Options or other equity compensation, or a
    combination thereof, as determined by the Committee. Payment
    shall be made in a lump sum or in installments as prescribed in
    the Award Notice. If a Performance Award covering shares of
    Common Stock is to be paid in cash, such payment shall be based
    on the Fair Market Value of a share of Common Stock on the
    payment date. Payment shall be made no later than
    21/2 months
    following the end of the year in which the Performance Award
    vests, unless payment is to be made in installments, in which
    case such installments shall comply with the rules under
    Section 409A of the Code.

 

    (f) Award Notice.  Each Performance Award
    shall be evidenced by a Award Notice in such form and containing
    such provisions not inconsistent with the provisions of the Plan
    and under such terms as the Committee from time to time shall
    establish. The terms and provisions of the respective Award
    Notices need not be identical. Subject to the consent of the
    Participant, the Committee may, in its sole discretion, amend an
    outstanding Award Notice from time to time in any manner that is
    not inconsistent with the provisions of the Plan.

 

    XII.  RECAPITALIZATION
    OR REORGANIZATION

 

    (a) No Effect on Right or Power.  The
    existence of the Plan and the Awards granted hereunder shall not
    affect in any way the right or power of the Board or the
    stockholders of the Company to make or authorize any adjustment,
    recapitalization, reorganization or other change in the
    Company’s or any Affiliate’s capital structure or its
    business, any merger or consolidation of the Company or any
    Affiliate, any issue of debt or equity securities ahead of or
    affecting Common Stock or the rights thereof, the dissolution or
    liquidation of the Company or any Affiliate or any sale, lease,
    exchange or other disposition of all or any part of its assets
    or business or any other corporate act or proceeding.

 

    (b) Subdivision or Consolidation of Shares; Stock
    Dividends.  If, and whenever, prior to the
    expiration of an Award previously granted, the Company shall
    effect a subdivision or consolidation of shares of Common Stock
    or the payment of a dividend on Common Stock which is paid in
    the form of Company stock without receipt of consideration by
    the Company, the number of shares of Common Stock with respect
    to which such Award may thereafter be exercised or satisfied,
    shall be adjusted as follows: (i) in the event of an
    increase in the number of outstanding shares, the number shares
    of Common Stock subject to the Award shall

    

    12

 

    be proportionately increased, and the purchase price per share
    shall be proportionately reduced; and (ii) in the event of
    a reduction in the number of outstanding shares, the number
    shares of Common Stock subject to the Award shall be
    proportionately reduced, and the purchase price per share shall
    be proportionately increased, other than in the event of a
    Company-directed share repurchase program. Any fractional share
    resulting from such adjustment shall be rounded up to the next
    whole share. Such proportionate adjustments will be made for
    purposes of making sure that to the extent possible, the fair
    value of the Awards after the subdivision, consolidation or
    dividend is equal to the fair value before the change.

 

    (c) Corporate Changes.  Except as
    otherwise specifically provided in an Award Notice, effective
    upon a Corporate Change (or at such earlier time as the
    Committee may provide), all Options then outstanding shall
    immediately become exercisable in full, all Restricted Stock
    shall vest in full and cease to be subject to any restrictions,
    all Restricted Stock Units shall vest in full and cease to be
    subject to any restrictions, any Stock Appreciation Rights shall
    immediately be exercisable in full, and all Awards, the payout
    of which is subject to Performance Measures, shall vest in full
    and become immediately payable at such levels as the Committee
    in its sole discretion shall determine. In addition, the
    Committee, acting in its sole discretion without the consent or
    approval of any Participant, may effect one or more of the
    following alternatives, which alternatives may vary among
    individual Participants and which may vary among Awards held by
    any individual Participant: (i) require the mandatory
    surrender to the Company by selected Participants of some or all
    of the outstanding Options, stock-settled Restricted Stock Units
    and stock-settled Stock Appreciation Rights held by such
    Participants as of a date, before or after such Corporate
    Change, specified by the Committee, in which event the Committee
    shall thereupon cancel such Awards and the Company shall pay (or
    cause to be paid) to each such Participant an amount of cash per
    share equal to the excess, if any, of the amount calculated in
    Subparagraph (d) below (the “Change of Control
    Value”) of the shares subject to such Awards over the
    exercise price(s), if any, under such Awards for such shares, or
    (ii) provide that the number and class of shares of Common
    Stock covered by such Awards shall be adjusted so that such
    Awards shall thereafter cover securities of the surviving or
    acquiring corporation or other property (including, without
    limitation, cash) as determined by the Committee in its sole
    discretion.

 

    (d) Change of Control Value.  For the
    purposes of clause (i) in Subparagraph (c) above,
    the “Change of Control Value” shall equal the amount
    determined in clause (i), (ii) or (iii), whichever is
    applicable, as follows: (i) the per share price offered to
    stockholders of the Company in any such merger, consolidation,
    sale of assets or dissolution transaction, (ii) the price
    per share offered to stockholders of the Company in any tender
    offer or exchange offer whereby a Corporate Change takes place,
    or (iii) if such Corporate Change occurs other than
    pursuant to a tender or exchange offer, the fair market value
    per share of the shares into which such Awards being surrendered
    are exercisable or payable, as determined by the Committee as of
    the date determined by the Committee to be the date of
    cancellation and surrender of such Awards. In the event that the
    consideration offered to stockholders of the Company in any
    transaction described in this Subparagraph (d) or
    Subparagraph (c) above consists of anything other than
    cash, the Committee shall determine the fair cash equivalent of
    the portion of the consideration offered which is other than
    cash.

 

    (e) Other Changes in the Common Stock.  In
    the event of changes in the outstanding Common Stock by reason
    of recapitalization, reorganization, merger, consolidation,
    combination, stock split, stock dividend, spin-off, exchange or
    other relevant changes in capitalization or distributions to the
    holders of Common Stock occurring after the date of the grant of
    any Award and not otherwise provided for by this
    Paragraph XII, which would have the effect of diluting or
    enlarging the rights of Participants, such Award and any notice
    evidencing such Award shall be subject to equitable or
    proportionate adjustment by the Committee at its sole discretion
    as to the number and price of shares of Common Stock or other
    consideration subject to such Award. In the event of any such
    change in the outstanding Common Stock or distribution to the
    holders of Common Stock, or upon the occurrence of any other
    event described in this Paragraph XII, the aggregate number
    of shares available under the Plan and the maximum number of
    shares that may be subject to Awards granted to any one
    individual may be appropriately adjusted to the extent, if any,
    determined by the Committee, whose determination shall be
    conclusive. Such proportionate adjustments will be made for
    purposes of making sure that to the extent possible, the fair
    value of the Awards after the subdivision, consolidation or
    dividend is equal to the fair value before the change.

    

    13

 

 

    (f) No Adjustments Unless Otherwise
    Provided.  Except as hereinbefore expressly
    provided, the issuance by the Company of shares of stock of any
    class or securities convertible into shares of stock of any
    class, for cash, property, labor or services, upon direct sale,
    upon the exercise of rights or warrants to subscribe therefor,
    or upon conversion of shares or obligations of the Company
    convertible into such shares or other securities, and in any
    case whether or not for fair value, shall not affect, and no
    adjustment by reason thereof shall be made with respect to, the
    number of shares of Common Stock subject to Awards theretofore
    granted or the purchase price per share, if applicable.

 

    XIII.
    AMENDMENT AND TERMINATION OF THE PLAN

 

    The Board in its discretion may terminate the Plan at any time
    with respect to any shares of Common Stock for which Awards have
    not theretofore been granted. The Board shall have the right to
    alter or amend the Plan or any part thereof from time to time;
    provided that no change in the Plan may be made that would
    impair the rights of a Participant with respect to any
    outstanding Award without the consent of the Participant, and
    provided, further, that the Board may not, without approval of
    the stockholders of the Company (a) amend the Plan to
    increase the maximum aggregate number of shares that may be
    issued under the Plan or change the class of individuals
    eligible to receive Awards under the Plan, (b) amend or
    delete Paragraph VII(f), or (c) amend Paragraph XII to
    delete items (a) or (b).

 

    XIV.
    MISCELLANEOUS

 

    (a) No Right To An Award.  Neither the
    adoption of the Plan nor any action of the Board or of the
    Committee shall be deemed to give any individual any right to be
    granted an Option, Restricted Stock, Restricted Stock Units,
    Stock Appreciation Rights, or a Performance Award, or any other
    rights hereunder except as may be evidenced by an Award Notice,
    and then only to the extent and on the terms and conditions
    expressly set forth therein.

 

    (b) Unfunded Status of Plan.  The Plan is
    intended to constitute an “unfunded” plan for
    incentive and deferred compensation purposes, including
    Section 409A of the Code. The Committee may authorize the
    creation of trusts or other arrangements to meet the obligations
    created under the Plan to deliver shares of Common Stock or make
    payments; provided the Committee first determines in its sole
    discretion that the structure of such trusts or other
    arrangements shall not cause any change in the
    “unfunded” status of the Plan.

 

    (c) No Employment/Membership Rights
    Conferred.  Nothing contained in the Plan or any
    Award shall (i) confer upon any Employee any right to
    continued employment with the Company or any Affiliate or
    (ii) interfere in any way with the right of the Company or
    any Affiliate to terminate his or her employment at any time.
    Nothing contained in the Plan shall confer upon any Director any
    right to service, or interfere in any way with the right of the
    Company to terminate his or her service at any time.

 

    (d) Compliance with Securities Laws.  The
    Company shall not be obligated to issue any shares of Common
    Stock pursuant to an Award granted under the Plan at any time
    when the shares covered by such Award have not been registered
    pursuant to applicable U.S. federal, state or
    non-U.S. securities
    laws, or, in the opinion of legal counsel for the Company, the
    issuance and sale of such shares is not covered under an
    applicable exemption from such registration requirements.

 

    (e) No Fractional Shares.  No fractional
    shares of Common Stock nor cash in lieu of fractional shares of
    Common Stock shall be distributed or paid pursuant to an Award.
    For purposes of the foregoing, any fractional shares of Common
    Stock shall be rounded up to the nearest whole share.

 

    (f) Tax Obligations; Withholding of
    Shares.  Except with respect to non-Employee
    Directors and as otherwise provided under the Plan, no later
    than the date as of which an amount first becomes includible in
    a Participant’s taxable income for U.S. federal,
    state, local or
    non-U.S. income
    or social insurance tax purposes with respect to an Award
    granted under the Plan, the Participant shall pay to the Company
    or the Affiliate employing the Participant, or make arrangements
    satisfactory to the Company or the Affiliate employing the
    Participant for the payment of any such income or social
    insurance taxes of any kind required by law to be

    

    14

 

    withheld with respect to such taxable amount. Notwithstanding
    the foregoing, the Company and its Affiliates may, in its sole
    discretion, withhold a sufficient number of shares of Common
    Stock that are otherwise issuable to the Participant pursuant to
    an Award to satisfy any such income or social insurance taxes of
    any kind required by law to be withheld, as may be necessary in
    the opinion of the Company or the Affiliate to satisfy all
    obligations for the payment of such taxes. For purposes of the
    foregoing, the Committee may establish such rules, regulations
    and procedures as it deems necessary or appropriate.

 

    (g) No Restriction on Corporate
    Action.  Nothing contained in the Plan shall be
    construed to prevent the Company or an Affiliate from taking any
    action that is deemed by the Company or such Affiliate to be
    appropriate or in its best interest, regardless of whether such
    action would have an adverse effect on the Plan or any Award
    made under the Plan. No Employee, Participant, representative of
    an Employee or Participant, or other person shall have any claim
    against the Company or any Affiliate as a result of any such
    action.

 

    (h) Restrictions on Transfer.  An Award
    (other than an Incentive Stock Option, which shall be subject to
    the transfer restrictions set as forth in Paragraph VII(c))
    shall not be transferable otherwise than (i) by will or the
    laws of descent and distribution, (ii) pursuant to a
    qualified domestic relations order as defined by the Code or
    Title I of the Employee Retirement Income Security Act of
    1974, as amended, or the rules thereunder, or (iii) if
    vested, with the consent of the Committee, in its sole
    discretion provided that any such transfer is permitted under
    the applicable securities laws.

 

    (i) Limitations Period.  Any Participant
    who believes he or she is being denied any benefit or right
    under the Plan may file a written claim with the Committee. Any
    claim must be delivered to the Committee within forty-five
    (45) days of the specific event giving rise to the claim.
    Untimely claims will not be processed and shall be deemed
    denied. The Committee, or its designee, will notify the
    Participant of its decision in writing as soon as
    administratively practicable. Claims not responded to by the
    Committee in writing within one hundred and twenty
    (120) days of the date the written claim is delivered to
    the Committee shall be deemed denied. The Committee’s
    decision is final and conclusive and binding on all persons. No
    lawsuit relating to the Plan may be filed before a written claim
    is filed with the Committee and is denied or deemed denied and
    any lawsuit must be filed within one year of such denial or
    deemed denial or be forever barred.

 

    (j) Section 409A of the Code.  It is
    intended that any Awards under the Plan satisfy the requirements
    of Section 409A of the Code to avoid imposition of
    applicable taxes thereunder. Thus, notwithstanding anything in
    this Plan to the contrary, if any Plan provision or Award under
    the Plan would result in the imposition of an applicable tax
    under Section 409A of the Code and related regulations and
    Treasury pronouncements, that Plan provision or Award may be
    reformed by the Committee solely to the extent the Committee, in
    its sole discretion, determines is necessary to avoid imposition
    of the applicable tax and no action taken to comply with
    Section 409A shall be deemed to adversely affect the
    Participant’s rights to an Award.

 

    (k) Governing Law.  The Plan shall be
    governed by, and construed in accordance with, the laws of the
    State of Delaware, without regard to its conflicts of laws
    principles.

    

    15exv4w4

 

Exhibit 4.4

 

    EXTERRAN
    HOLDINGS, INC.

    EMPLOYEE STOCK PURCHASE PLAN

 

    Section 1

    

 

    PURPOSE

 

    The purpose of the Exterran Holdings, Inc. Employee Stock
    Purchase Plan is to provide Employees of the Company and its
    Designated Subsidiaries with an opportunity to acquire a
    proprietary interest in the Company’s long-term performance
    and success through the purchase of shares of Common Stock at a
    price that may be less than the Fair Market Value of the stock
    on the date of purchase from funds accumulated through payroll
    deductions.

 

    Section 2

    

 

    BACKGROUND

 

    The Plan is intended to qualify as an “employee stock
    purchase plan” under Code Section 423. The Plan will,
    accordingly, be construed so as to extend and limit
    participation in a manner within the requirements of that Code
    section. In addition, this Plan authorizes the grant of options
    and issuance of Common Stock that do not qualify under Code
    Section 423 pursuant to rules and procedures adopted by the
    Committee and designed to achieve desired tax or other
    objectives in particular locations outside the United States.
    The terms of the Plan as contained in this document will apply
    with respect to Purchase Periods beginning on and after the
    Effective Date.

 

    Section 3

    

 

    DEFINITIONS

 

    As used in the Plan, the following terms, when capitalized, have
    the following meanings:

 

    (a) “Board” means the Company’s Board
    of Directors.

 

    (b) “Business Day” means a day that the
    New York Stock Exchange, or any other exchange on which the
    Company’s Common Stock is traded, is open.

 

    (c) “Code” means the Internal Revenue Code
    of 1986, as amended.

 

    (d) “Committee” means the committee
    described in Section 11.

 

    (e) “Common Stock” means the common stock
    of the Company, $.01 par value per share, or any stock into
    which that common stock may be converted.

 

    (f) “Company” means Exterran Holdings,
    Inc., a Delaware corporation, and any successor corporation.

 

    (g) “Compensation” means (a) for
    salaried Employees, the regular basic salary or wages, and
    commissions, paid by the Company or a Designated Subsidiary for
    services performed by such Employees which are computed on a
    weekly, monthly, annual or other comparable basis, before any
    payroll deductions for taxes or any other purposes; and
    (b) for hourly Employees, wages paid by the Company or a
    Designated Subsidiary for services performed by such Employees
    which are computed on a biweekly or other comparable basis,
    before any payroll deductions for taxes or any other purposes.
    However, in the case of both (a) and (b), above,
    Compensation shall not include overtime, shift premium, bonuses
    and other special payments, incentive payments, pension,
    severance pay, foreign service premiums or other foreign
    assignment uplifts or any other extraordinary compensation, nor
    Company or

    

    1

 

    Designated Subsidiary contributions to a retirement plan or any
    other deferred compensation or employee benefit plan or program
    of the Company or any Designated Subsidiary.

 

    (h) “Contributions” means all amounts
    contributed by a Participant to the Plan in accordance with
    Section 6.

 

    (i) “Corporate Transaction” means
    (i) any stock dividend, stock split, combination or
    exchange of shares, recapitalization or other change in the
    capital structure of the Company, (ii) any merger,
    consolidation, spin-off, spin-out, split-off,
    split-up,
    reorganization, partial or complete liquidation or other
    distribution of assets (other than a normal cash dividend),
    issuance of rights or warrants to purchase securities or
    (iii) any other corporate transaction or event having an
    effect similar to any of the foregoing.

 

    (j) “Designated Subsidiary” means a
    Subsidiary that has been designated by the Board or the
    Committee as eligible to participate in the Plan as to its
    eligible Employees.

 

    (k) “Disability” means any physical or
    mental condition for which the Participant would be eligible to
    receive long-term disability benefits under the Company’s
    or a Designated Subsidiary’s long-term disability plan.
    With respect to any Participant residing outside of the United
    States, the Committee may revise the definition of
    “Disability” as appropriate to conform to the laws of
    the applicable
    non-U.S. jurisdiction.

 

    (l) “Effective Date” means the effective
    date of the consummation of the mergers pursuant to that certain
    Agreement and Plan of Merger dated February 5, 2007, as
    amended by Amendment No. 1 thereto dated June 25,
    2007, among Hanover Compressor Company, Universal Compression
    Holdings, Inc., Exterran Holdings, Inc. (formerly known as Iliad
    Holdings, Inc.), Hector Sub, Inc., and Ulysses Sub, Inc. (the
    “Merger”), provided that the Plan has been approved by
    the stockholders of each of Hanover Compressor Company and
    Universal Compression Holdings, Inc.

 

    (m) “Employee” means any person who
    performs services for, and who is classified as an employee on
    the payroll records of the Company or a Designated Subsidiary.

 

    (n) “Fair Market Value” of a share of
    Common Stock means, as of any specified date: (i) if the
    Common Stock is listed on a national securities exchange or
    quoted on the National Association of Securities Dealers, Inc.
    Automated Quotation System (“NASDAQ”), the closing
    sales price of a share of Common Stock on that date, or if no
    prices are reported on that date, on the last preceding day on
    which the Common Stock was traded, as reported by such exchange
    or NASDAQ, as the case may be; and (ii) if the Common Stock
    is not listed on a national securities exchange or quoted on the
    NASDAQ, but is traded in the
    over-the-counter
    market, the average of the bid and asked prices for a share of
    Common Stock on the most recent date on which the Common Stock
    was publicly traded. In the event the Common Stock is not
    publicly traded at the time a determination of its value is
    required to be made hereunder, the determination of its Fair
    Market Value shall be made by the Committee in such manner as it
    deems appropriate.

 

    (o) “Insider” means any officer of the
    Company or a Designated Subsidiary who is subject to the
    reporting requirements of Section 16 of the Securities
    Exchange Act of 1934, as amended.

 

    (p) “Offering Date” means the first
    Business Day of each Purchase Period.

 

    (q) “Participant” means a participant in
    the Plan as described in Section 5.

 

    (r) “Payroll Deduction Account” means the
    bookkeeping account established for a Participant in accordance
    with Section 6.

 

    (s) “Plan” means the Exterran Holdings,
    Inc. Employee Stock Purchase Plan, as set forth herein, and as
    amended from time to time.

 

    (t) “Purchase Date” means the last
    Business Day of each Purchase Period or such other date as
    required by administrative operational requirements.

    

    2

 

 

    (u) “Purchase Period” means a period of
    three months commencing on January 1, April 1,
    July 1 or October 1, or such other period as
    determined by the Committee. The initial Purchase Period after
    the Merger shall be set by the Committee and may be, in the
    Committee’s discretion, for a period of less than three
    months.

 

    (v) “Purchase Price” means an amount equal
    to 85% to 100% of the Fair Market Value of a Share on one of the
    following dates: (i) the Offering Date, (ii) the
    Purchase Date or (iii) the Offering Date or the Purchase
    Date, whichever is lower, as the Committee in its sole
    discretion shall determine and communicate to the Participants.

 

    (w) “Retirement” means, with respect to a
    Participant, the Participant’s termination of employment
    with the Company or a Designated Subsidiary after attaining
    age 65. Notwithstanding the foregoing, with respect to a
    Participant residing outside the United States, the Committee
    may revise the definition of “Retirement” as
    appropriate to conform to the laws of the applicable
    non-U.S. jurisdiction.

 

    (x) “Share” means a share of Common Stock,
    as adjusted in accordance with Section 13.

 

    (y) “Subsidiary” means a domestic or
    foreign corporation of which not less than 50% of the voting
    shares are held by the Company or a Subsidiary, whether or not
    such corporation now exists or is hereafter organized or
    acquired by the Company or a Subsidiary. The definition of
    Subsidiary should be interpreted so as to include any entity
    that would be treated as a “subsidiary corporation”
    under Code Section 424(f).

 

    Section 4

    

 

    ELIGIBILITY

 

    (a) Eligible Employees.  Any person who is
    an Employee as of an Offering Date in a given Purchase Period
    will be eligible to participate in the Plan for that Purchase
    Period, subject to the requirements of Section 5 and the
    limitations imposed by Code Section 423(b). Notwithstanding
    the foregoing, the Committee may, on a prospective basis,
    (i) exclude from participation in the Plan any or all
    Employees whose customary employment is 20 hours per week
    or less or is not for more than five months in a calendar year,
    and (ii) impose an eligibility service requirement of up to
    two years of employment. The Committee may also determine that a
    designated group of highly compensated employees (within the
    meaning of Code Section 414(q)) are ineligible to
    participate in the Plan.

 

    (b) Five Percent
    Shareholders.  Notwithstanding any other provision
    of the Plan, no Employee will be eligible to participate in the
    Plan if the Employee (or any other person whose stock would be
    attributed to the Employee pursuant to Code Section 424(d))
    owns an amount of capital stock of the Company
    and/or holds
    outstanding options to purchase stock which equals or exceeds
    five percent (5%) or more of the total combined voting power or
    value of all classes of stock of the Company or a Designated
    Subsidiary.

 

    Section 5

    

 

    PARTICIPATION

 

    An Employee may elect to become a Participant in the Plan by
    completing such enrollment documents as are provided by the
    Committee or its designee, including where applicable a payroll
    deduction authorization form, and submitting them to the
    Committee or its designee in accordance with the administrative
    requirements and any limitations established by the Committee.
    The enrollment documents will set forth the amount of the
    Participant’s Contributions, which may be established as a
    percentage of the Participant’s Compensation or a specific
    dollar amount; provided, however, in no event shall a
    Participant’s Contributions exceed ten percent (10%) of the
    Participant’s Compensation. Contributions to the Plan may
    be also subject to such other limits designated by the
    Committee, including any minimum Contribution amount or
    percentage.

 

    The Plan is a discretionary plan. Participation by any Employee
    is purely voluntary. Participation in the Plan with respect to
    any Purchase Period shall not entitle any Participant to
    participate with respect to any other Purchase Period.

    

    3

 

 

    Section 6

    

 

    CONTRIBUTIONS

 

    (a) Payroll Deductions.  A
    Participant’s Contributions will begin on the first payroll
    paid following the Offering Date and will end on the last
    payroll paid on or before the Purchase Date of the Purchase
    Period, unless the Participant elects to withdraw from the Plan
    as provided in Section 9. A Participant’s enrollment
    documents will remain in effect for successive Purchase Periods
    unless the Participant elects to withdraw from the Plan as
    provided in Section 9, or timely submits new enrollment
    documents to change the rate of payroll deductions for a
    subsequent Purchase Period in accordance with rules established
    by the Committee.

 

    (b) Payroll Deduction Account.  For each
    payroll for which the Participant has elected to make
    Contributions to the Plan by means of payroll deduction or
    otherwise (as approved by the Committee), the Committee will
    credit the amount of each Participant’s Contributions to
    the Participant’s Payroll Deduction Account. A Participant
    may not make any additional payments to the Participant’s
    Payroll Deduction Account, except as expressly provided in the
    Plan or as authorized by the Committee.

 

    (c) No Changes to Payroll Deductions.  A
    Participant may discontinue his participation in the Plan as
    provided in Section 9, but may not make any other change
    during a Purchase Period and, specifically, a Participant may
    not alter the amount of his payroll deductions for that Purchase
    Period.

 

    (d) Continued Contributions and
    Participation.  So long as a Participant remains
    an Employee of the Company or a Designated Subsidiary,
    Contributions shall continue in effect from Purchase Period to
    Purchase Period, unless: (i) at least fifteen
    (15) days prior to the first day of the next succeeding
    Purchase Period the Participant elects a different Contribution
    in accordance with procedures established by the Committee; or
    (ii) the Participant withdraws from the Plan in accordance
    with Section 9 or terminates employment in accordance with
    Section 10 hereof.

 

    (e) No Interest.  No interest or other
    earnings will accrue on a Participant’s Contributions to
    the Plan.

 

    (f) Non-U.S. Contributions.  In
    countries where payroll deductions are not permissible or
    feasible, the Committee may, in its sole discretion, permit an
    Employee to participate in the Plan by alternative means. Except
    as otherwise specified by the Committee, Contributions
    (including payroll deductions) made with respect to Employees
    paid in currencies other than U.S. dollars will be
    accumulated in local currency and converted to U.S. dollars
    as of the Purchase Date.

 

    Section 7

    

 

    STOCK
    PURCHASES

 

    (a) Automatic Purchase.  Effective as of
    the close of business on each Purchase Date, but subject to the
    limitations of Section 8, each Participant will be deemed,
    without further action, to have automatically purchased the
    number of whole Shares that the Participant’s Payroll
    Deduction Account balance can purchase at the Purchase Price on
    that Purchase Date and such Shares will be considered to be
    issued and outstanding. Except as otherwise specified by the
    Committee, any amounts that are not sufficient to purchase a
    whole Share will be (i) retained in the Participant’s
    Payroll Deduction Account for the subsequent Purchase Period or
    (ii) returned to the each Participant who is not eligible
    or has elected not to participate in the following Purchase
    Period.

 

    (b) Delivery of Shares.  Purchased Shares
    shall be credited in book entry form as soon as practicable
    after each Purchase Date to an account administered by a
    designated custodian, bank or financial institution. At any
    time, a Participant may request issuance of a stock certificate
    representing all or a portion of the Shares (in a whole number)
    held in such Participant’s account; provided, however,
    that the Committee may require that Shares be retained by
    the account administrator for a specified period of time and may
    restrict dispositions during that period, and the Committee may
    establish other procedures to permit tracking of disqualifying
    dispositions of the Shares or to restrict transfer of the
    Shares. A Participant shall not be permitted to pledge,
    transfer, or sell Shares until they are issued in certificate
    form or book entry, except as otherwise permitted by the
    Committee and subject to the Company’s policies regarding
    securities trading.

    

    4

 

 

    (c) Notice Restrictions.  The Committee
    may require, as a condition of participation in the Plan, that
    each Participant agree to notify the Company if the Participant
    sells or otherwise disposes of any Shares within two years of
    the Offering Date or one year of the Purchase Date for the
    Purchase Period in which the Shares were purchased.

 

    (d) Shareholder Rights.  A Participant
    will have no interest or voting right in a Share until a Share
    has been purchased on the Participant’s behalf under the
    Plan.

 

    Section 8

    

 

    LIMITATION
    ON PURCHASES

 

    (a) Limitations on Aggregate Shares Available
    During a Purchase Period.  With respect to each
    Purchase Period, the Committee, at its discretion, may specify
    the maximum number of shares of Common Stock that may be
    purchased or such other limitations that it may deem
    appropriate, subject to the aggregate number of shares
    authorized under Section 12 of this Plan. If the number of
    shares of Common Stock for which options are exercised exceeds
    the number of shares available in any Purchase Period under the
    Plan, the shares available for exercise shall be allocated by
    the Committee pro rata among the Participants in the Purchase
    Period in proportion to the relative amounts credited to their
    accounts. Any amounts not thereby applied to the purchase of
    shares of Common Stock under the Plan shall be refunded to the
    Participants after the end of the Purchase Period, without
    interest.

 

    (b) Limitations on Participant
    Purchases.  Participant purchases are subject to
    the following limitations:

 

    (1) Purchase Period Limitation.  Subject
    to the calendar year limits provided in (2) below, the
    maximum number of Shares that a Participant will have the right
    to purchase in any Purchase Period will be determined by
    dividing (i) $25,000 by (ii) the Fair Market Value of
    one Share on the Offering Date for such Purchase Period.

 

    (2) Calendar Year Limitation.  No right to
    purchase Shares under the Plan will be granted to an Employee if
    such right, when combined with all other rights and options
    granted under all of the Code Section 423 employee stock
    purchase plans of the Company, its Subsidiaries or any parent
    corporation (within the meaning of Code Section 424(e)),
    would permit the Employee to purchase Shares with a Fair Market
    Value (determined at the time the right or option is granted) in
    excess of $25,000 for each calendar year in which the right or
    option is outstanding at any time, determined in accordance with
    Code Section 423(b)(8).

 

    (c) Refunds.  As of the first Purchase
    Date on which this Section limits a Participant’s ability
    to purchase Shares, the Participant’s payroll deductions
    will terminate, and the unused balance will (i) remain in
    the Participant’s Payroll Deduction Account or (ii) be
    returned to any Participant who is not eligible or has elected
    not to participate in the following Purchase Period.

 

    Section 9

    

 

    WITHDRAWAL
    FROM PARTICIPATION

 

    Except for any Participant who is deemed to be an Insider, a
    Participant may cease participation in a Purchase Period at any
    time prior to the Purchase Date and withdraw all, but not less
    than all, of the Contributions credited to the
    Participant’s Payroll Deduction Account by providing at
    least 15 days’ prior written notice in the form and
    manner prescribed by the Committee. Partial cash withdrawals
    shall not be permitted. Any Participant who is deemed to be an
    Insider may not make a cash withdrawal under this
    Section 9. If a Participant elects to withdraw, the
    Participant may not make any further Contributions to the Plan
    for the purchase of Shares during that Purchase Period. A
    Participant’s voluntary withdrawal during a Purchase Period
    will not have any effect upon the Participant’s eligibility
    to participate in the Plan during a subsequent Purchase Period.

    

    5

 

 

    Section 10

    

 

    EMPLOYMENT
    TERMINATION

 

    (a) Termination Other Than Death, Disability or
    Retirement.  If a Participant’s employment
    with the Company or a Designated Subsidiary terminates for any
    reason other than death, Disability or Retirement, the
    Participant will cease to participate in the Plan and the
    Company or its designee will refund the balance in the
    Participant’s Payroll Deduction Account.

 

    (b) Termination Due to Death.  In the
    event of a Participant’s death, at the election of the
    Participant’s legal representative, the Participant’s
    Payroll Deduction Account balance will be (i) distributed
    to the Participant’s estate, or (ii) held until the
    end of the Purchase Period and applied to purchase Shares in
    accordance with Section 7. Section 10(b)(ii) shall
    apply in the event the Participant’s estate fails to make a
    timely election pursuant to rules established by the Committee.

 

    (c) Termination Due to Disability or
    Retirement.  If a Participant’s employment
    with the Company or a Designated Subsidiary terminates during a
    Purchase Period due to Disability or Retirement before the
    Purchase Date for such Purchase Period, then, at the
    Participant’s election, the Participant’s Payroll
    Deduction Account balance will either be (i) distributed to
    the Participant, or (ii) held until the end of the Purchase
    Period and applied to purchase Shares in accordance with
    Section 7. Section 10(c)(ii) shall apply in the event
    the Participant fails to make a timely election pursuant to
    rules established by the Committee.

 

    (d) Leaves of Absence.  The Committee may
    establish administrative policies regarding a Participant’s
    rights to continue to participate in the Plan in the event of
    such Participant’s leave of absence.

 

    (e) Stock Certificate.  In the event of a
    Participant’s termination of employment for any reason, a
    stock certificate representing all of the Shares (in a whole
    number) held in such Participant’s account will be issued
    to the Participant, or in the event of his death or Disability,
    his legal representative, as soon as administratively
    practicable.

 

    Section 11

    

 

    PLAN
    ADMINISTRATION AND AMENDMENTS

 

    The Plan will be administered by the Committee, which will be
    appointed by the Board. The Committee will be the Compensation
    Committee of the Board unless the Board appoints another
    committee to administer the Plan; provided, however, that
    such committee shall satisfy the independence requirements under
    Section 16 of the Securities Exchange Act of 1934, as
    amended, and as prescribed by any stock exchange on which the
    Company lists its Common Stock.

 

    Subject to the express provisions of the Plan, the Committee
    will have the discretionary authority to interpret the Plan; to
    take any actions necessary to implement the Plan; to prescribe,
    amend, and rescind rules and regulations relating to the Plan;
    and to make all other determinations necessary or advisable in
    administering the Plan. All such determinations will be final
    and binding upon all persons. The Committee may request advice
    or assistance or employ or designate such other persons as are
    necessary for proper administration of the Plan.

 

    Section 12

    

 

    RESERVED
    SHARES

 

    Subject to adjustments as provided in Section 13, the
    maximum number of Shares available for purchase on or after the
    Effective Date is 650,000 shares. Shares issued under the
    Plan may be Shares of original issuance, Shares held in
    treasury, or Shares that have been reacquired by the Company.

 

    Section 13

    

 

    CAPITAL
    CHANGES

 

    In the event of a Corporate Transaction, other than a Corporate
    Transaction in which the Company is not the surviving
    corporation, the number and kind of shares of stock or
    securities of the Company to be subject

    

    6

 

    to the Plan, the maximum number of shares or securities that may
    be delivered under the Plan, and the selling price and other
    relevant provisions of the Plan will be appropriately adjusted
    by the Committee, whose determination will be binding on all
    persons. If the Company is a party to a Corporate Transaction in
    which the Company is not the surviving corporation, the
    Committee may take such actions with respect to the Plan as the
    Committee deems appropriate.

 

    Section 14

    

 

    AMENDMENT
    OR TERMINATION OF THE PLAN

 

    The Board in its sole discretion, may suspend or terminate the
    Plan, or amend the Plan in any respect; provided, however,
    that the stockholders of the Company must approve any
    amendment that would increase the number of Shares that may be
    issued under the Plan pursuant to options intended to qualify
    under Code Section 423 (other than an increase merely
    reflecting a change in capitalization of the Company pursuant to
    Section 13) or a change in the designation of any
    corporations (other than a Subsidiary) whose employees become
    Employees under the Plan.

 

    The Plan and all rights of Employees under the Plan will
    terminate: (a) on the Purchase Date on which Participants
    become entitled to purchase a number of Shares greater than the
    number of reserved Shares remaining available for purchase as
    set forth in Section 12, or (b) at any date at the
    discretion of the Board; provided, however, in no event
    shall the Plan remain in effect beyond ten years from the
    Effective Date. In the event that the Plan terminates under
    circumstances described in (a) above, reserved Shares
    remaining as of the termination date will be made available for
    purchase by Participants on the Purchase Date on a pro rata
    basis based on the amount credited to each Participant’s
    Payroll Deduction Account. Upon termination of the Plan, each
    Participant will receive the balance in the Participant’s
    Payroll Deduction Account.

 

    Section 15

    

 

    REGULATORY
    AND TAX COMPLIANCE

 

    The Plan, the grant and exercise of the rights to purchase
    Shares under the Plan, and the Company’s obligation to sell
    and deliver Shares upon the exercise of rights to purchase
    Shares, will be subject to all applicable federal, state and
    foreign laws, rules and regulations, and to such approvals by
    any regulatory or government agency as may, in the opinion of
    counsel for the Company, be required or desirable. The Plan is
    intended to comply with
    Rule 16b-3
    under the U.S. Securities Exchange Act of 1934, as amended.
    Any provision inconsistent with such Rule shall be inoperative
    and shall not affect the validity of the Plan. The Committee may
    withhold from any payment due under the Plan or take any other
    action it deems appropriate to satisfy any federal, state or
    local tax withholding requirements.

 

    Section 16

    

 

    NON-U.S. JURISDICTIONS

 

    The Committee may, in its sole discretion, adopt such rules or
    procedures to accommodate the requirements of local laws of
    non-U.S. jurisdictions,
    including rules or procedures relating to the handling of
    payroll deductions, conversion of local currency, payroll taxes
    and withholding procedures, as the Committee in its sole
    discretion deems appropriate. The Committee may also adopt rules
    and procedures different from those set forth in the Plan
    applicable to Participants who are employed by specific
    Designated Subsidiaries or at certain
    non-U.S. locations
    that are not intended to be within the scope of Code
    Section 423, subject to the provisions of Section 12,
    and may where appropriate establish one or more
    sub-plans
    for this purpose.

 

    Section 17

    

 

    MISCELLANEOUS

 

    (a) Nontransferability.  Except by the
    laws of descent and distribution, no benefit provided hereunder,
    including an option to purchase shares of Common Stock, shall be
    subject to alienation, assignment, or transfer by a Participant
    (or by any person entitled to such benefit pursuant to the terms
    of this Plan), nor shall

    

    7

 

    it be subject to attachment or other legal process of whatever
    nature, and any attempted alienation, assignment, attachment, or
    transfer shall be void and of no effect whatsoever and, upon any
    such attempt, the benefit shall terminate and be of no force or
    effect. During a Participant’s lifetime, options granted to
    the Participant shall be exercisable only by the Participant.
    Shares of Common Stock shall be delivered only to the
    Participant or, in the event of his death, his properly
    designated beneficiary entitled to receive the same or, in the
    absence of such designation, to the executor, administrator or
    other legal representative of the Participant’s estate.

 

    (b) Tax Withholding.  The Company or any
    Designated Subsidiary shall have the right to withhold from all
    payments hereunder any federal, state, local, or
    non-U.S. income,
    social insurance, or other taxes that it deems are required by
    law to be withheld with respect to such payments. If such
    withholding is insufficient to satisfy such Federal, state,
    local or
    non-U.S. taxes,
    the Participant shall be required to pay to the Company or
    Designated Subsidiary, as the case may be, such amount required
    to be withheld or make such other arrangements satisfactory to
    the Company or such Designated Subsidiary, as the Committee
    shall determine.

 

    (c) No Employment Right.  Nothing
    contained in this Plan nor any action taken hereunder shall be
    construed as giving any right to any individual to be retained
    as an officer or Employee of the Company or any other employer
    or subsidiary or affiliate of the Company.

 

    (d) No Rights as Shareholder.  A
    Participant shall not be considered a shareholder with respect
    to shares of Common Stock to be purchased until the Purchase
    Date. Thus, a Participant shall not have a right to any dividend
    or distribution on Shares subject to purchase during a Purchase
    Period.

 

    (e) Relationship to Other Benefits.  It is
    not intended that any rights or benefits provided under this
    Plan be considered part of normal or expected compensation for
    purposes of calculating any severance, redundancy, termination
    indemnity, end of service awards, pension, retirement, profit
    sharing, or group insurance plan or similar benefits or
    payments. No payment under this Plan shall be taken into account
    in determining any benefits under any severance, redundancy,
    termination indemnity, end of service awards, pension,
    retirement, profit sharing, or group insurance plan of the
    Company or any Designated Subsidiary or subsidiary or affiliate
    of the Company.

 

    (f) Expenses.  The expenses of
    implementing and administering this Plan shall be borne by the
    Company. Any brokerage fees for the subsequent transfer or sale
    of Shares acquired under this Plan shall be paid by the
    Participant (or his beneficiary or estate, if applicable).

 

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

 

    (h) Application of Funds.  All funds
    received by the Company under the Plan shall constitute general
    funds of the Company.

 

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

 

    (j) Duration of Plan.  Notwithstanding any
    provision in the Plan, no options shall be granted hereunder
    prior to stockholder approval. No Purchase Period may commence
    and no further options may be granted under the Plan after
    10 years from the Effective Date of the Plan. The Plan
    shall remain in effect until all options granted under the Plan
    have been exercised or expired, vested or forfeited,
    and/or
    satisfied or expired.

 

    (k) Governing Law.  The Plan will be
    governed by, and construed in accordance with, the laws of the
    State of Delaware, without regard to that State’s choice of
    law rules, except to the extent preempted by the laws of the
    United States or a foreign jurisdiction.

    

    8

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