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Exhibit 4.3  

 
 

NEUSTAR, INC.    
    
    FORM OF  
    
    STOCKHOLDERS AGREEMENT  
    

        This STOCKHOLDERS AGREEMENT, dated as
of                            , 2005 (as amended, modified or supplemented from time to time, this
"Agreement"), is entered into by and among (i) NeuStar, Inc., a Delaware corporation (the
"Company"); (ii) Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership ("WPEP");
Warburg, Pincus Netherlands Equity Partners I, C.V., a Netherlands limited partnership; and Warburg, Pincus Netherlands Equity Partners III, C.V., a Netherlands limited partnership (collectively, the
"Warburg Entities"); (iii) MidOcean Capital Investors, L.P., a Delaware limited partnership
("MidOcean"), the successor-in-interest to DB Capital Investors, L.P., a Delaware limited partnership
("DB Capital"); (iv) ABS Capital Partners IV, L.P., a Delaware limited partnership; ABS Capital Partners IV Offshore, L.P., a Cayman Islands
Exempted Limited Partnership; ABS Capital Partners IV-A, L.P., a Delaware limited partnership; and ABS Capital Partners IV Special Offshore, L.P., a Cayman Islands Exempted Limited
Partnership (collectively, "ABS" and, together with the Warburg Entities and MidOcean, collectively, the "Institutional
Investors"); and (v) Lynn Etheridge Davis and Edward J. Hawie, each as trustee (together with any additional trustees appointed under the Amended and Restated Trust
Agreement, or successor or successors under the Amended and Restated Trust Agreement, collectively, the "Trustees") under the Amended and Restated Trust
Agreement, dated September 24, 2004 (as amended, modified or supplemented from time to time, the "Voting Trust Agreement"), by and among the
Company, the Warburg Entities, MidOcean, ABS, certain individuals and the Trustees. 

 
 

BACKGROUND  
    

        On August 26, 2004, the Federal Communications Commission ("FCC") released an order,  NeuStar, Inc.
Request to Allow Certain Transactions Without Prior Commission Approval and to Transfer Ownership, Order, CC Docket
No. 92-237 (the "Safe Harbor Order"), authorizing changes and
imposing limitations on the Company, including, among other things, restrictions on the ownership, voting and transfer of shares (each, a "Share" and,
collectively, the "Shares") of the Company's capital stock ("Capital Stock"). 

 
 

AGREEMENT  
    

        In consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows: 

        1.    Board Matters.    

        (a)    Warburg.    

        (i)    For
as long as the Warburg Entities own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) at least twenty percent (20%) of the
outstanding Shares of Capital Stock, including any Shares held by the Trustees on behalf of the Warburg Entities pursuant to the Voting Trust Agreement, then, subject to applicable law (including the
law governing the fiduciary duties of the directors of the Company), compliance with the FCC Neutrality Requirements and the rules and regulations of the SEC and the Nasdaq Stock Market, the Company
will nominate and use its reasonable best efforts to cause to be elected and cause to remain as directors on its board of directors (the "Board"), two
individuals designated by WPEP and reasonably acceptable to the Company (each, a "Warburg Designee"). 

        (ii)   In
the event Section 1(a)(i) is no longer applicable and for as long as the Warburg Entities own beneficially (within the meaning of
Rule 13d-3 under the Exchange Act) at least 

 

five
percent (5%) but less than twenty percent (20%) of the outstanding Shares of Capital Stock, including any Shares held by the Trustees on behalf of the Warburg Entities pursuant to the Voting
Trust Agreement, then, subject to applicable law (including the law governing the fiduciary duties of the directors of the Company), compliance with the FCC Neutrality Requirements and the rules and
regulations of the SEC and the Nasdaq Stock Market, the Company will nominate and use its reasonable best efforts to cause to be elected and cause to remain as directors on the Board, one Warburg
Designee. 

        (b)    MidOcean.    

        (i)    For
as long as MidOcean owns beneficially (within the meaning of Rule 13d-3 under the Exchange Act) at least
two-and-one-half percent (2.5%) of the outstanding Shares of Capital Stock, including any Shares held by the Trustees on behalf of MidOcean pursuant to the Voting
Trust Agreement, then, subject to applicable law (including the law governing the fiduciary duties of the directors of the Company), compliance with the FCC Neutrality Requirements and the rules and
regulations of the SEC and the Nasdaq Stock Market, the Company will nominate and use its reasonable best efforts to cause to be elected and cause to remain as directors on the Board, one individual
designated by MidOcean and reasonably acceptable to the Company (the "MidOcean Designee"). 

        (ii)   In
the event that the FCC Neutrality Requirements require that no MidOcean Designee serve on the Board, then, for as long as MidOcean owns beneficially (within the
meaning of Rule 13d-3 under the Exchange Act) at least two-and-one-half percent (2.5%) of the outstanding Shares of Capital Stock, including any
Shares held by the Trustees on behalf of MidOcean pursuant to the Voting Trust Agreement, subject to applicable law (including the law governing the fiduciary duties of the directors of the Company),
compliance with the FCC Neutrality Requirements and the rules and regulations of the SEC and the Nasdaq Stock Market, the Company will use its reasonable best efforts in order to cause an individual
from time to time designated by MidOcean and reasonably acceptable to the Company (the "MidOcean Observer") to be entitled, in his or her sole
discretion, to attend and participate in, as a non-voting observer, all meetings (including participation in telephonic meetings) of the Board (and any committee thereof);  provided, that the Board or
such committee may exclude the MidOcean Observer from any meeting at which the matters under discussion or consideration
would give rise to a conflict of interest between MidOcean or any of its Affiliates, on the one hand, and the Company or any of its Affiliates, on the other hand. Prior to attending any meeting, the
MidOcean Observer shall be required to enter into a confidentiality agreement with the Company, in form and substance reasonably satisfactory to the Company and the MidOcean Observer. For so long as
the MidOcean Observer is entitled to attend meetings of the Board, the Company shall provide the MidOcean Observer with: 

        (A)  notice
of each meeting of the Board (and any committees thereof), concurrently with providing such notice to any of the members of the Board; 

        (B)  any
and all written information delivered to, and any and all material orally delivered information provided (other than any such material orally delivered information
as may be provided in the course of any meeting of the Board (or any committee thereof)) to, any of the members of the Board in his or her capacity as a director (other than information relating to
any matter that would give rise to a conflict of interest between the Company or any of its Affiliates, on the one hand, and MidOcean or any of its Affiliates, on the other hand), as soon as
reasonably practicable after such information is delivered or provided to any such member of the Board. 

        (c)    ABS.    For as long as ABS owns beneficially (within the meaning of
Rule 13d-3 under the Exchange Act) at least one-and-one-quarter percent (1.25%) of the outstanding Shares of 

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Capital
Stock, including any Shares held by the Trustees on behalf of ABS pursuant to the Voting Trust Agreement, then, subject to applicable law (including the law governing the fiduciary duties of
the directors of the Company), compliance with the FCC Neutrality Requirements and the rules and regulations of the SEC and the Nasdaq Stock Market, the Company will use its reasonable best efforts in
order to cause an individual from time to time designated by ABS and reasonably acceptable to the Company (the "ABS Observer") to be entitled, in his or
her sole discretion, to attend and participate in, as a non-voting observer, all meetings (including participation in telephonic meetings) of the Board (and any committee thereof);  provided, that the
Board or such committee may exclude the ABS Observer from any meeting at which the matters under discussion or consideration would
give rise to a conflict of interest between ABS or any of its Affiliates, on the one hand, and the Company or any of its Affiliates, on the other hand. Prior to attending any meeting, the ABS Observer
shall be required to enter into a confidentiality agreement with the Company, in form and substance reasonably satisfactory to the Company and the ABS Observer. For so long as the ABS Observer is
entitled to attend meetings of the Board, the Company shall provide the ABS Observer with: 

        (i)    notice
of each meeting of the Board (and any committees thereof), concurrently with providing such notice to any of the members of the Board; 

        (ii)   any
and all written information delivered to, and any and all material orally delivered information provided (other than any such material orally delivered information
as may be provided in the course of any meeting of the Board (or any committee thereof)) to, any of the members of the Board in his or her capacity as a director (other than information relating to
any matter that would give rise to a conflict of interest between the Company or any of its Affiliates, on the one hand, and ABS or any of its Affiliates, on the other hand), as soon as reasonably
practicable after such information is delivered or provided to any such member of the Board. 

        2.    Excepted Holder Limit.    The Warburg Entities own 40,941,117 shares of the
Company's Class A common stock, and hold currently exerciseable warrants to acquire an additional 6,361,383 shares of the Company's Class A common stock. The Company hereby establishes
47,302,501 shares of Class A
common stock as the "Excepted Holder Limit" for the Warburg Entities (as that term is defined in the Company's Charter), and the Warburg Entities agree (on behalf of themselves and their Affiliates)
not to acquire any additional securities of the Company (whether directly or indirectly) unless such acquisition (or the ownership of Capital Stock resulting from such acquisition) is in compliance
with the FCC neutrality requirements applicable to the Company. The Company agrees that, except to the extent that it would be consistent with the FCC neutrality requirements applicable to the Company
or otherwise approved by the FCC, it will not enter into any transaction that would have the effect of increasing the Warburg Entities' collective percentage equity interest in the Company. The
Company agrees that it will not change the Excepted Holder Limit for the Warburg Entities, as set forth in this Section 2, without the prior written consent of the Warburg Entities, except to
the extent that an upward adjustment is necessary to effect a stock split or stock dividend in respect of the Company's outstanding shares of Class A common stock. 

        3.    Termination.    

        (a)   This
Agreement shall automatically terminate in the event that: (i) as to the Warburg Entities, when the Warburg Entities own beneficially (within the meaning of
Rule 13d-3 under the Exchange Act) less than five percent (5%) of the outstanding Shares of Capital Stock, including any Shares held by the Trustees on behalf of the Warburg
Entities pursuant to the Voting Trust Agreement, (ii) as to MidOcean, when MidOcean owns beneficially less than two-and-one-half percent (2.5%) of the
outstanding Shares of Capital Stock, including any Shares held by the Trustees on behalf of MidOcean pursuant to the Voting Trust Agreement, and (iii) as to ABS, 

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when
ABS owns less than one-and-one-quarter percent (1.25%) of the outstanding Shares of Capital Stock, including any Shares held by the Trustees on behalf of ABS
pursuant to the Voting Trust Agreement. The termination of the rights and obligations of an Institutional Investor under this Agreement pursuant to clause (i), (ii) or (iii) above
shall not in any way affect the rights and obligations of any other party to this Agreement. 

        (b)   This
Agreement may be terminated by the written consent of the Institutional Investors and the Company. 

        4.    Interpretation of this Agreement.    

        (a)    Terms Defined.    As used in this Agreement, the following terms have the
respective meaning set forth below: 

        "Affiliate" shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person; provided, that no stockholder of the Company shall be deemed an Affiliate of any other stockholder of the
Company solely by reason of any investment (whether equity or debt) in the Company. For the purpose of this definition, the term "control" (including with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. Notwithstanding the foregoing, the term "affiliate," as used to describe a
Person who is affiliated with a TSP, shall have the meaning ascribed in 47 C.F.R. § 52.12(a)(1)(i). 

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and all regulations promulgated thereunder, as in effect from
time to time. 

        "FCC" shall mean the Federal Communications Commission. 

        "FCC Neutrality Requirements" shall mean the neutrality requirements to which the Company is subject under the applicable laws,
regulations, rules and orders of the FCC. 

        "Person" shall mean an individual, partnership, joint-stock company, corporation, limited liability company, trust or unincorporated
organization, and a government or agency or political subdivision thereof, or other entity. 

        "SEC" shall mean the Securities and Exchange Commission. 

        "security, securities" shall have the meaning set forth in Section 2(1) of the Securities Act. 

        vote, voting: shall mean any vote, consent or other approval, whether at a meeting of stockholders or an action by written consent in lieu
of a meeting of stockholders. 

        (b)    Directly or Indirectly.    Where any provision in this Agreement refers to action
to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. 

        4.    Miscellaneous.    

        (a)    Governing Law.    This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts made and to be performed entirely within such State. 

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        (b)    Notices.    All communications under this Agreement shall be in writing and shall
be delivered by hand or facsimile or mailed by overnight courier or by registered or certified mail, postage prepaid: 

        (i)    if
to any of the Institutional Investors, at the address or facsimile number of such Institutional Investor shown on Schedule I  hereto, or at such other address as such Institutional Investor may have
furnished the Company in writing; 

        (ii)   if
to the Company, at 46000 Center Oak Plaza, Sterling, VA 20166 (facsimile: (571) 434-4735), marked for attention of Chief Executive Officer, or at
such other address as it may have furnished in writing to each of the Institutional Investors. 

        Any
notice so addressed shall be deemed to be given: if delivered by hand or facsimile, on the date of such delivery; if mailed by reputable overnight courier, on the first business day
following the date of such mailing; and if mailed by registered or certified mail, on the third business day after the date of such mailing. 

        (c)    Entire Agreement; Amendment and Waiver.    This Agreement constitutes the entire
understanding of the parties hereto relating to the subject matter hereof and supersedes all prior understandings among such parties, including the Amended and Restated Stockholders Agreement, dated
as of September 24, 2004, by and among the Company, the Institutional Investors, the Trustees and certain additional parties named therein, and any predecessor agreement thereto. This Agreement
may be amended, and the observance of any term of this Agreement may be waived, with (and only with) the written consent of the Company and each of the Institutional Investors. 

        (d)    Severability.    Each party to this Agreement shall be required to perform his or
its obligations hereunder only to the maximum extent permitted by law, and this Agreement shall not be construed to require any party to take any action that would violate applicable law or that would
otherwise be unenforceable as to such party. Moreover, if any term or provision specified herein is held by a court of competent jurisdiction to be in violation of any applicable local, state or
federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such term or provision to be illegal, invalid, unlawful, void, voidable or
unenforceable as written, then such provision shall be given full force and effect to the fullest possible extent that it is legal, valid and enforceable, and the remainder of the terms and provisions
herein shall be construed as if such illegal, invalid,
unlawful, void, voidable or unenforceable term or provision were not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof
shall be in accordance with the intent of the parties. 

        (e)    Counterparts.    This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall be considered one and the same agreement. 

[SIGNATURE
PAGES FOLLOW] 

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        IN
WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Stockholders Agreement as of the date first above written. 

	 	 	NEUSTAR, INC.
	

 	
 	

By:	
 	

 Name: Jeffrey Ganek

Title: Chairman and Chief Executive Officer
	

 	
 	
WARBURG, PINCUS EQUITY PARTNERS, L.P.

WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS I, C.V.

WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS III, C.V.
	

 	
 	

Each by: Warburg, Pincus & Co., as General Partner
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	
MIDOCEAN CAPITAL INVESTORS, L.P.
	

 	
 	

By:	
 	

MidOcean Capital Partners, L.P., its General Partner
	

 	
 	

 	
 	

By:	

Existing Fund GP, Ltd., its General Partner
	

 	
 	

By:	
 	

 Name:

Title:

SIGNATURE PAGE TO NEUSTAR AMENDED AND RESTATED STOCKHOLDERS AGREEMENT  

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	 	 	ABS CAPITAL PARTNERS IV, L.P.

ABS CAPITAL PARTNERS IV OFFSHORE, L.P.

ABS CAPITAL PARTNERS IV-A, L.P.

ABS CAPITAL PARTNERS IV SPECIAL OFFSHORE, L.P.
	

 	
 	

Each by: ABS Partners IV, L.L.C., as General Partner
	

 	
 	

By:	
 	

 Name: Timothy T. Weglicki

Title: Managing Member of ABS Partners IV, L.L.C.
	

 	
 	
LYNN ETHERIDGE DAVIS, as trustee
	

 	
 	

By:	
 	

	

 	
 	
EDWARD J. HAWIE, as trustee
	

 	
 	

By:	
 	

SIGNATURE PAGE TO NEUSTAR AMENDED AND RESTATED STOCKHOLDERS AGREEMENT  

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    INSTITUTIONAL INVESTORS    

Investor
Name 

Warburg
Entities

466 Lexington Ave.

New York, NY 10017

Facsimile: (212) 878-9359

Attention: Scott A. Arenare 

MidOcean
Capital Investors, L.P.

320 Park Avenue, 17th Floor

New York, NY 10154

Facsimile: (212) 497-1373 

ABS
Capital Partners IV, L.P.

ABS Capital Partners IV Offshore, L.P.

ABS Capital Partners IV-A, L.P.

ABS Capital Partners IV Special Offshore, L.P.

c/o ABS Capital Partners

400 E. Pratt Street, Suite 910

Baltimore, Maryland 21202

Attention: Tim Weglicki

Facsimile: (410) 246-5606 

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NEUSTAR, INC. FORM OF STOCKHOLDERS AGREEMENT

BACKGROUND

AGREEMENT

INSTITUTIONAL INVESTORSExhibit 10.2

 

AMENDED AND RESTATED

2004 STOCK INCENTIVE PLAN

FOR

KKR FINANCIAL CORP.

 

1.   Purpose of the Plan

 

The purpose of the Plan is to aid the Company
and its Affiliates in recruiting and retaining employees, non-employee
directors or other Persons and to motivate such employees, non-employee
directors or other Persons who perform services for the Company or an Affiliate
to exert their best efforts on behalf of the Company and its Affiliates by
providing incentives through the granting of Awards.  The Company expects that it will benefit from
the added interest which such key employees, non-employee directors or other
Persons will have in the welfare of the Company as a result of their
proprietary interest in the Company’s success.

 

2.   Definitions

 

The following
capitalized terms used in the Plan have the respective meanings set forth in
this Section:

 

(a)                                  Act:  The Securities Exchange Act of 1934, as
amended, or any successor thereto.

 

(b)                                 Affiliate:  Any entity directly or indirectly
controlling, controlled by, or under common control with, the Company or any
other entity designated by the Board in which the Company or shareholder of the
Company has an interest.

 

(c)                                  Award:  An Option, Stock Appreciation Right or Other
Share-Based Award granted pursuant to the Plan.

 

(d)                                 Beneficial Owner:  A “beneficial owner,” as such term is defined
in Rule 13d-3 and 13d-5 under the Act (or any successor rule thereto).

 

(e)                                  Board:  The Board of Directors of the Company.

 

(f)                                    Change in Control:  The occurrence of any of the
following events:

 

(i) shareholder approval of the complete liquidation or dissolution of the Company;
 
(ii)  the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any Person or Group;
 
(iii) (A) any Person or Group is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the voting shares of the Company or (B)

 

 

a merger, consolidation or statutory share exchange where the Company’s shareholders immediately prior to such event hold less than 50% of the voting power of the surviving or resulting entity;
 
(iv) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (together with any new directors whose election by such Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company, then still in office, who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board, then in office; or
 
(v) the Board adopts a resolution to the effect that, in its judgment, as a consequence of any transaction or event a Change in Control has effectively occurred;
 
except, in the case of clauses (i)-(v), if the Change in Control results from a transaction between the Company and the Manager or an Affiliate of the Manager or from a termination of the Management Agreement for “cause” (as such term is defined in the Management Agreement).
 

(g)                                 Code:  The Internal Revenue Code of 1986, as
amended, or any successor thereto.

 

(h)                                 Committee:  The Compensation Committee of the Board or
such other committee as may be appointed by the Board in accordance with
Section 4 of the Plan.

 

(i)                                     Company:  KKR Financial Corp., a Maryland corporation.

 

(j)                                     Effective Date:  The date the Shareholders of the Company
approve the adoption of the Plan by the Board.

 

(k)                                  Fair Market Value:  On a given date, (i) if there should be
a public market for the Shares on such date, the closing price of the Shares as
reported on such date on the Composite Tape of the principal national
securities exchange on which such Shares are listed or admitted to trading, or,
if the Shares are not listed or admitted on any national securities exchange,
the closing price on such date as quoted on the National Association of
Securities Dealers Automated Quotation System (or such market in which such
prices are regularly quoted)(the “NASDAQ”), or, if no sale of Shares shall have
been reported on the Composite Tape of any national securities exchange or
quoted on the NASDAQ on such date, then the immediately preceding date on which
sales of the Shares have been so reported or quoted shall be used, and
(ii) if there should not be a public market for the Shares on such date,
the Fair Market Value shall be the value established by the Committee in good
faith.

 

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(l)                                     Group:  A “group” as such term is used in Sections
13(d) and 14(d) of the Act, acting in concert.

 

(m)                               ISO:  An Option that is also an incentive stock
option, as described in Section 422 of the Code, granted pursuant to Section
6(c) of the Plan.

 

(n)                                 LSAR:  A limited stock appreciation right granted
pursuant to Section 7(d) of the Plan.

 

(o)                                 Management Agreement:  The Management Agreement between the Company
and the Manager, dated as of August 12 2004, as the same may be amended from
time to time.

 

(p)                                 Manager:  KKR Financial
Advisors LLC or any successor or assign.

 

(q)                                 Option:  An option to purchase Shares granted pursuant
to Section 6 of the Plan.

 

(r)                                    Option Price:  The purchase price per Share under the terms
of an Option, as determined pursuant to Section 6(a) of the Plan.

 

(s)                                  Other Share-Based Awards:  Awards granted pursuant to Section 8 of the
Plan.

 

(t)                                    Participant:  An employee of, or any Person who performs
services for, the Company or an Affiliate (whether as a consultant, advisor or
otherwise) who is selected by the Committee to participate in the Plan.

 

(u)                                 Person:  A “person,” as such term is used for purposes
of Section 13(d) or 14(d) of the Act (or any successor section thereto).

 

(v)                                 Plan:  The Amended and Restated 2004 Stock Incentive
Plan for KKR Financial Corp.

 

(w)                               RSU:  A restricted stock unit, granted pursuant to
Section 8 of the Plan, which represents the right to receive a Share.

 

(x)                                   Shares:  Shares of common stock of the Company,
subject to coordination with Section 9 of the Plan.

 

(y)                                 Stock Appreciation Right:  A stock appreciation right granted in
connection with or independent of the grant of an Option, pursuant to Section 7
of the Plan.

 

3.   Shares Subject to the Plan

 

The total number of Shares that may be used
to satisfy Awards under the Plan shall be equal to the sum of (x) 4,217,500 plus
(y) 10% of the total number of Shares that are issued and sold on or prior to
December 31, 2005 in connection with the initial public offering of

 

3

 

the Company’s Shares on a Registration
Statement on Form S-11 filed with the Securities Exchange Commission; provided
that such total number shall not exceed 9,000,000.  In addition, the number of Shares that may be
used to satisfy Awards under the Plan shall be increased by 125,000 Shares on
each January 1 following the Effective Date for so long as the Plan is in
effect, which additional Shares may only be used to satisfy Awards of
restricted Shares to non-employee directors. The Shares that may be used hereunder
may consist, in whole or in part, of unissued Shares or previously issued
Shares.  A maximum of 5,000,000 of Shares may be granted during any
given calendar year to any Participant. 
The issuance of Shares upon the exercise or payment of an Award shall
reduce the total number of Shares available under the Plan, as applicable.  Shares which are subject to Awards that
terminate, lapse or are cancelled may again be used to satisfy Awards under the
Plan.  If the Option Price of any Option
granted under the Plan is satisfied by delivering Shares to the Company in
accordance with the terms of Section 6(b) of the Plan, only the number of
Shares issued net of the Shares delivered shall be deemed delivered for
purposes of determining the maximum number of Shares available under the
Plan.  To the extent any Shares subject
to an Award are not delivered to a Participant because such Shares are used to
satisfy an applicable minimum income tax withholding obligation, such Shares shall
not be deemed to have been delivered for purposes of determining the maximum
number of Shares available under the Plan.

 

4.   Administration

 

The Plan shall be administered by the
Committee, which may delegate its duties and powers in whole or in part as it
determines, including to a subcommittee consisting of at least two individuals
who are intended to qualify as “non-employee directors” within the meaning of
Rule 16b-3 under the Act (or any successor rule thereto) and “outside directors”
within the meaning of Section 162(m) of the Code.  The Committee may grant Awards under this
Plan only to Participants; provided that Awards may also, in the
discretion of the Committee, be made under the Plan in assumption of, or in
substitution for, outstanding awards previously granted by the Company or its
Affiliates or a company that becomes an Affiliate.  The number of Shares underlying such
substitute Awards shall be counted against the aggregate number of Shares
available for Awards under the Plan.  The
Committee is authorized to interpret the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of
the Plan.  The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan in the
manner and to the extent the Committee deems necessary or desirable.  Any decision of the Committee in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors). 
The Committee shall have the full power and authority to establish the
terms and conditions of any Award consistent with the provisions of the Plan
and to waive any such terms and conditions at any time, in its sole discretion
(including, without limitation, accelerating or waiving any vesting conditions
and/or accelerating any payment).  The
Committee shall require payment of any amount it may determine to be necessary
to withhold for federal, state, local or other taxes of any relevant
jurisdiction as a result of the granting, vesting or exercise of an Award, or
upon the sale of Shares acquired by the granting, vesting or exercise of an
Award.  For avoidance of doubt, if at any
time the Committee determines that it has not received or required sufficient
payment in respect of such withholding, the Committee is authorized to require
such additional payments as

 

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it determines are necessary, and may withhold
from such sources as it determines are necessary, including by payroll
deductions.

 

5.   Limitations

 

No Award may be granted under the Plan after
the tenth anniversary of the Effective Date, but Awards theretofore granted may
extend beyond that date and will continue to be governed by the terms of the
Plan.

 

6.   Terms and Conditions of Options

 

Options granted under the Plan shall be, as
determined by the Committee, non-qualified stock options or ISOs for United
States federal income tax purposes (or other types of Options in jurisdictions
outside the United States), as evidenced by the related Award, and shall be
subject to the foregoing, the following terms and conditions, and to such other
terms and conditions, not inconsistent therewith, as the Committee shall
determine:

 

(a)                                  Option Price; Exercisability.  Any Option granted under the Plan shall have
an Option Price of not less than the Fair Market Value of one Share on the date
the Option is granted, and shall be vested and exercisable in installments at
such time and upon such terms and conditions, as may be determined by the
Committee.

 

(b)                                 Exercise of Options.  Except as otherwise provided in the Plan or
in an Award, an Option may be exercised for all, or from time to time any part,
of the Shares for which it is then exercisable. 
For purposes of this Section 6 of the Plan, the exercise date of an Option
shall be the later of the date a notice of exercise is received by the Company
and, if applicable, the date payment is received by the Company pursuant to
clauses (i), (ii), (iii) or (iv) in the following sentence.  Except as otherwise provided in an Award, the
purchase price for the Shares as to which an Option is exercised shall be paid
in full at the time of exercise at the election of the Participant: (i) in cash or its equivalent (e.g., by check);
(ii) to the extent permitted by the
Committee, in Shares having a Fair Market Value equal to the aggregate Option
Price for the Shares being purchased and satisfying such other requirements as
may be imposed by the Committee, provided, that such Shares have been
held by the Participant for no less than six months (or such other period as
established from time to time by the Committee or United States generally
accepted accounting principles); (iii)
partly in cash and, to the extent permitted by the Committee, partly in such
Shares, provided, that such Shares have been held by the Participant for
no less than six months (or such other period as established from time to time
by the Committee or United States generally accepted accounting principles); or
(iv) to the extent permitted by
applicable law through the delivery of irrevocable instructions to a broker to
sell Shares obtained upon the exercise of the Option and deliver promptly to
the Company an amount out of the proceeds of such sale equal to the aggregate
Option Price for the Shares being purchased. 
The Committee may also only authorize the 

 

5

 

Company to make or facilitate loans to
Participants to enable them to exercise Options to the extent not prohibited by
applicable law.  The Committee may permit
Participants to exercise Options in joint-tenancy with the Participant’s
spouse.  No Participant shall have any
rights to dividends or other rights of a shareholder with respect to Shares
subject to an Option until the Participant has given written notice of exercise
of the Option, the Participant has paid in full for such Shares, the Shares in
question have been recorded in the Company’s register of shareholders, and, if
applicable, the Participant has satisfied any other conditions imposed by the
Committee pursuant to the Plan.

 

(c)                                  ISOs.  The Committee may grant Options under the
Plan that are intended to be ISOs.  No
ISO shall have an Option Price of less than the Fair Market Value of one Share
on the date granted or have a term in excess of ten years; provided, however,
that no ISO may be granted to any Participant who at the time of such grant,
owns more than ten percent of the total combined voting power of all classes of
shares of the Company or of any Subsidiary, unless (i) the Option Price for such ISO is at least 110% of the Fair
Market Value of one Share on the date the ISO is granted and (ii) the date on which such ISO terminates
is a date not later than the day preceding the fifth anniversary of the date on
which the ISO is granted.  Any
Participant who disposes of Shares acquired upon the exercise of an ISO either
(A) within two years after the date of grant of such ISO or
(B) within one year after the transfer of such Shares to the Participant,
shall notify the Company of such disposition and of the amount realized upon
such disposition.

 

(d)                                 Attestation.  Wherever in this Plan or any agreement
evidencing an Award a Participant is permitted to pay the Option Price (or
taxes relating to the exercise of an Option) by delivering Shares, the
Participant may, subject to procedures satisfactory to the Committee (and to
the extent permitted by applicable law), satisfy such delivery requirement by
presenting proof of record ownership of such Shares, or, to the extent
permitted by the Committee, beneficial ownership of such Shares, in which case
the Company shall treat the Option as exercised without further payment and
shall withhold such number of Shares from the Shares acquired by the exercise
of the Option.

 

7.   Terms and Conditions of Stock Appreciation Rights

 

(a)                                  Grants.  The Committee also may grant (i) a Stock Appreciation Right independent
of an Option or (ii) a Stock
Appreciation Right in connection with an Option, or a portion thereof.  A Stock Appreciation Right granted pursuant
to clause (ii) of the preceding sentence (A) may
be granted at the time the related Option is granted or at any time prior to
the exercise or cancellation of the related Option, (B) shall cover the same number of Shares covered by an Option
(or such lesser number of Shares as the Committee may determine) and (C) shall be subject to the same terms and

 

6

 

conditions as such Option except for such
additional limitations as are contemplated by this Section 7 (or such
additional limitations as may be included in a Stock Appreciation Right Award).

 

(b)                                 Terms.  The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee.  Each Stock Appreciation Right granted
independent of an Option shall entitle a Participant upon exercise to a payment
from the Company of an amount equal to (i) the excess of (A) the Fair Market Value on the exercise
date of one Share over (B) the
exercise price per Share, times (ii) the number of Shares covered by the
Stock Appreciation Right.  Each Stock
Appreciation Right granted in conjunction with an Option, or a portion thereof,
shall entitle a Participant to surrender to the Company the unexercised Option,
or any portion thereof, and to receive from the Company in exchange therefor an
amount equal to (I) the excess of (x) the Fair Market Value on the
exercise date of one Share over (y) the Option Price, times (II) the
number of Shares covered by the Option, or portion thereof, which is
surrendered.  The date a notice of
exercise is received by the Company shall be the exercise date.  Payment shall be made in Shares or in cash,
or partly in Shares and partly in cash (any such Shares valued at such Fair
Market Value), all as shall be determined by the Committee.  Stock Appreciation Rights may be exercised
from time to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares with respect to which the Stock
Appreciation Right is being exercised. 
No fractional Shares will be issued in payment for Stock Appreciation
Rights, but instead cash will be paid for a fraction or, if the Committee
should so determine, the number of Shares will be rounded downward to the next
whole Share.

 

(c)                                  Limitations.  The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability of Stock
Appreciation Rights as it may deem fit.

 

(d)                                 Limited Stock Appreciation Rights.  The Committee may grant LSARs that are
exercisable upon the occurrence of specified contingent events.  Such LSARs may provide for a different method
of determining appreciation, specify that payment will be made only in cash and
provide that any related Awards are not exercisable while such LSARs are
exercisable.  Unless the context
otherwise requires, whenever the term “Stock Appreciation Right” is used in the
Plan, such term shall include LSARs.

 

8.   Other Share-Based Awards

 

(a)                                  Generally.  The Committee, in its sole discretion, may
grant Awards of Shares, Awards of restricted Shares, Awards of RSUs and other
Awards that are valued in whole or in part by reference to, or are otherwise
based on the Fair Market Value, of Shares (“Other Share-Based Awards”).  Such 

 

7

 

Other Share-Based Awards shall be in such
form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive one or more Shares (or the
equivalent cash value of such Shares) upon the completion of a specified period
of service, the occurrence of an event and/or the attainment of performance
objectives.  Other Share-Based Awards may
be granted alone or in addition to any other Awards granted under the
Plan.  Subject to the provisions of the
Plan, the Committee shall determine: (i) to whom and when Other Share-Based
Awards will be made; (ii) the number of Shares to be awarded under (or
otherwise related to) such Other Share-Based Awards; (iii) whether such Other
Share-Based Awards shall be settled in cash, Shares or a combination of cash
and Shares; and (iv) all other terms and conditions of such Other Share-Based
Awards (including, without limitation, the vesting provisions thereof and
provisions ensuring that all Shares so awarded and issued shall be fully paid
and non-assessable).

 

(b)                                 Performance-Based Awards.  Notwithstanding anything to the contrary
herein, certain Other Share-Based Awards granted under this Section 8 may
be granted in a manner which is intended to be deductible by the Company under
Section 162(m) of the Code (or any successor section thereto) (“Performance-Based
Awards”).  A Participant’s
Performance-Based Award shall be determined based on the attainment of written
performance goals approved by the Committee for a performance period
established by the Committee (i) while the outcome for that performance
period is substantially uncertain and (ii) no more than 90 days after
the commencement of the performance period to which the performance goal
relates or, if less, the number of days which is equal to 25 percent of the
relevant performance period.  The
performance goals, which must be objective, shall be based upon one or more of
the following criteria: (i) consolidated earnings before or after taxes
(including earnings before interest, taxes, depreciation and amortization);
(ii) net income; (iii) operating income; (iv) earnings per Share; (v) book
value per Share; (vi) return on shareholders’ equity; (vii) expense management;
(viii) return on investment; (ix) improvements in capital structure; (x)
profitability of an identifiable business unit or product; (xi) maintenance or
improvement of profit margins; (xii) stock price; (xiii) dividend per Share;
(xiv) revenues or sales; (xv) costs; (xvi) cash flow; and (xvii) return on
assets.  The foregoing criteria may
relate to the Company, one or more of its Affiliates or one or more of its or
their divisions or units, or any combination of the foregoing, and may be
applied on an absolute basis and/or be relative to prior years for the Company,
one or more peer group companies or indices, or any combination thereof, all as
the Committee shall determine.  In
addition, to the degree consistent with Section 162(m) of the Code (or any
successor section thereto), the performance goals may be calculated without
regard to extraordinary items.  The Committee shall determine whether, with
respect to a performance period, the applicable performance goals have been met
with respect to a given Participant and, if they have, shall so certify and
ascertain the amount of the applicable Performance-

 

8

 

Based Award. 
No Performance-Based Awards will be paid for such performance period
until such certification is made by the Committee.  The amount of the Performance-Based Award actually
paid to a given Participant may be less than the amount determined by the
applicable performance goal formula, at the discretion of the Committee.  The amount of the Performance-Based Award
determined by the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however, that
a Participant may, if and to the extent permitted by the Board and consistent
with the provisions of Section 162(m) of the Code, elect to defer payment
of a Performance-Based Award.

 

9.   Adjustments Upon Certain Events

 

Notwithstanding any other provisions in the
Plan to the contrary, the following provisions shall apply to all Awards
granted under the Plan:

 

(a)                                  Generally.  In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off or
combination transaction or exchange of Shares or other corporate exchange, or
any distribution to shareholders of Shares other than regular cash dividends or
any transaction similar to the foregoing, the Committee in its sole discretion
and without liability to any person may make such substitution or adjustment,
if any, as it deems to be equitable, as to (i)
the number or kind of Shares or other securities available for issuance, issued
or reserved for issuance pursuant to the Plan and pursuant to outstanding
Awards, (ii) the Option Price or exercise
price of any Stock Appreciation Right, and/or (iii)
any other affected terms of any Award.

 

(b)                                 Change in Control.  In the event of a Change in Control after the
Effective Date, the Committee may, in its sole discretion, provide for: (i) the
accelerated vesting (including transferability) or exercisability of any outstanding
Awards then held by Participants that are otherwise unexercisable or unvested,
as the case may be, to the extent determined by the Committee and as of a date
selected by the Committee; (ii) the
earning of all or any outstanding performance shares or incentive awards; (iii)
the termination of an Award upon the consummation of the Change in Control, and
the payment of a cash amount in exchange for the cancellation of an Award
which, in the case of Options and Stock Appreciation Rights, may equal the
excess, if any, of the Fair Market Value of the Shares in the Change in Control
subject to such Options or Stock Appreciation Rights over the aggregate
exercise price of such Options or Stock Appreciation Rights; and/or (iv) the
issuance of substitute Awards that will substantially preserve the otherwise
applicable terms of any affected Awards previously granted hereunder.

 

9

 

10.     No Right to Employment or Awards

 

The granting of an Award under the Plan shall
impose no obligation on the Company or any Affiliate to continue the employment
or service or consulting relationship of a Participant and shall not lessen or
affect the Company’s or Affiliate’s right to terminate the employment or
service or consulting relationship of such Participant.  No Participant or other person shall have any
claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards.  The terms and conditions of Awards and the
Committee’s determinations and interpretations with respect thereto need not be
the same with respect to each Participant (whether or not such Participants are
similarly situated).

 

11. Successors and Assigns

 

The Plan shall be binding on all successors
and assigns of the Company and a Participant, including without limitation, the
estate of such Participant and the executor, administrator or trustee of such
estate, or any receiver or trustee in bankruptcy or representative of the
Participant’s creditors.

 

12. Transferability of Awards

 

Unless otherwise permitted by the Committee
on such terms and conditions as it shall determine, an Award shall not be
transferable or assignable by the Participant other than by will or by the laws
of descent and distribution.  An Award
exercisable after the death of a Participant may be exercised by the legatees,
personal representatives or distributees of the Participant.

 

13. Amendments or Termination

 

Subject to Section 9 of the Plan, the Board
may amend, alter or discontinue the Plan, but no amendment, alteration or
discontinuation shall be made which would: (a) increase the maximum number of
Shares available for Awards under the Plan (including the limits applicable to
the different types of Awards) or change the class of eligible Participants
under the Plan (other than amendments having such purpose that are approved by
a majority of the Shareholders of the Company that are present and entitled to
vote on such matter at a meeting duly convened for such purposes (or such other
standard of Shareholder vote as may be required by applicable state or federal
law)); (b) without the consent of a Participant, diminish any of the rights of
the Participant under any Award theretofore granted to such Participant under
the Plan; or (c) be prohibited by applicable law or otherwise require
shareholder approval (whether in order to maintain the full tax deductibility
of all Awards under Section 162(m) of the Code or otherwise); provided, however,
that the Committee may amend the Plan in such manner as it deems necessary to
permit Awards to meet the requirements of the Code or other applicable
laws.  In no event may the Board amend
the Plan or any Award to provide for the repricing of any Option price or
exercise price of any Stock Appreciation Rights without the approval by the
Shareholders of the Company.

 

10

 

14. International Participants

 

With respect to Participants, if any, who
reside or work outside the United States of America, the Committee may, in its
sole discretion, amend the terms of the Plan or Awards with respect to such
Participants in order to conform such terms with the provisions of local law,
and the Committee may, where appropriate, establish one or more sub-plans to
reflect such amended or varied provisions.

 

15. Choice of Law

 

The Plan shall be governed by and construed
in accordance with the laws of the State of New York without regard to conflicts of laws.

 

16. Effectiveness of the Plan

 

The Plan shall be effective as of the
Effective Date subject to approval of the shareholders of the Company.

 

11

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