Document:

EX-10.1

 

Exhibit 10.1

AMENDED AND RESTATED

TOYS “R” US HOLDINGS, INC.

2005 MANAGEMENT EQUITY PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE; ADMINISTRATION

     1.1 Establishment; Prior Plan. On July 21, 2005, the board of directors (the
“Board”) of Toys “R” Us Holdings, Inc., a Delaware corporation (the “Company”)
adopted and established a stock incentive plan known as the “Toys “R” Us Holdings, Inc. 2005
Management Equity Plan” (the “Initial Plan”). On February 6, 2006, the Board adopted
Amendment No. 1 to the Initial Plan (the “First Amendment”) and on June 28, 2006 the Board
adopted Amendment No. 2 to the Initial Plan (the “Second Amendment” and together with the
Initial Plan and the First Amendment, the “Original Plan”). Effective as of August 3,
2007, and in connection with the adoption and approval of Amendment No. 1 to the Company’s Amended
and Restated Certificate of Incorporation (the “COI Amendment”), the Board has adopted this
“Amended and Restated Toys “R” Us Holdings, Inc. 2005 Management Equity Plan” (the “Plan”),
which such Plan amends and restates in its entirety the provisions of the Original Plan.

     1.2 Purpose. The Plan is intended to promote the long-term growth and profitability
of the Company and its Subsidiaries by providing those persons who are or will be involved in the
Company’s and its Subsidiaries’ growth with an opportunity to acquire an ownership interest in the
Company, thereby encouraging such persons to contribute to and participate in the success of the
Company and its Subsidiaries. Under the Plan, the Company may make Awards (as defined in
Section 3.1 below) to such present and future officers, directors, employees, consultants,
and advisors of the Company or its Subsidiaries as may be selected in the sole discretion of the
Board (collectively, “Participants”).

     1.3 Administration. The Board shall have the power and authority to prescribe, amend
and rescind rules and procedures governing the administration of this Plan, including, but not
limited to the full power and authority (a) to interpret the terms of this Plan, the terms of any
Awards made under this Plan, and the rules and procedures established by the Board governing any
such Awards, (b) to determine the rights of any person under this Plan, or the meaning of
requirements imposed by the terms of this Plan or any rule or procedure established by the Board,
(c) to select Participants for Awards under the Plan, (d) to set the purchase price for sales, if
any, of Restricted Stock, (e) to set the exercise price of any Options or Rollover Options granted
under the Plan, (f) to establish performance and vesting standards, (g) to impose such limitations,
restrictions and conditions upon such Awards as it shall deem appropriate, (h) to adopt, amend, and
rescind administrative guidelines and other rules and regulations relating to the Plan, (i) to
correct any defect or omission or reconcile any inconsistency in the Plan, and (j) to make all
other determinations and take all other actions necessary or advisable for the implementation and
administration of the Plan, subject to such limitations as may be imposed by the Code or other
applicable law. Each action of the Board shall be binding on all
persons. The Board may, to the extent permissible by law, delegate any of its authority hereunder to any
duly authorized committee of the Board or any other persons as it deems appropriate.

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ARTICLE II

DEFINITIONS

     As used in this Plan, the following terms shall have the meanings set forth below:

     “Affiliate” of a Person means any other person, entity, or investment fund
controlling, controlled by, or under common control with such Person and, in the case of a Person
which is a partnership, any partner of such Person.

     “Aggregate Spread” of any option (including any Option or Rollover Option) as of any
particular date means the Fair Market Value of the securities for which such option is exercisable,
minus the aggregate exercise price payable by the holder of such option in order to acquire such
securities.

     “Award Agreement” means a written agreement between the Company and a Participant
setting forth the terms, conditions, and limitations applicable to an Award. All Award Agreements
shall be deemed to include all of the terms and conditions of the Plan, except to the extent
otherwise set forth in an Award Agreement and approved by the Board.

     “Award Stock” with respect to a Participant, means any Common Stock issued to such
Participant upon exercise of any Options or Rollover Options granted hereunder and any Common Stock
issued to such Participant as Restricted Stock. For all purposes of this Plan, Award Stock will
continue to be Award Stock in the hands of any holder (including any Permitted Transferee) other
than a Participant (except for the Company and purchasers pursuant to a Public Sale), and each such
other holder of Award Stock will succeed to all rights and obligations attributable to such
Participant as a holder of Award Stock hereunder. Award Stock will also include shares of the
Company’s capital stock issued with respect to shares of Award Stock by way of a stock split, stock
dividend or other recapitalization.

     “Cause” means, for any Participant, the meaning given to such term in an employment or
other similar agreement entered into by such Participant on or after the Effective Date and
approved by the Board, or in the absence of such an agreement it shall mean with respect to such
Participant any of the following, as determined by the Board, (i) the willful failure of such
Participant to perform any portion of his or her duties, (ii) willful misconduct by such
Participant which is or is likely to be injurious to the Company or any of its Subsidiaries,
monetarily or otherwise, (iii) such Participant’s conviction of a felony (including a plea of nolo
contendere), (iv) such Participant’s negligent performance of his or her duties, (v) any material
breach by such Participant of the terms of this Plan, an Award Agreement, or any other agreement
with the Company or any of its Subsidiaries to which such Participant is a party, or (vi) a
violation of the Toys “R” Us Code of Ethical Standards and Business Practices and Conduct Agreement
or any other serious violation of any written policy of the Company or any of its Subsidiaries.

     “Change in Control” means (i) prior to an Initial Public Offering, any transaction or
series of related transactions which result in the Sponsors ceasing collectively to own shares of
Common Stock which represent at least 50% of the total voting power or economic interest in

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the Company, (ii) at any time, any transaction or series of related transactions which result
in an Independent Third Party acquiring shares of Common Stock which represent more than 50% of the
total voting power or economic interest in the Company, and (iii) at any time, a sale or
disposition of all or substantially all of the assets of the Company and its Subsidiaries on a
consolidated basis; provided that, in the case of clauses (i) and (ii) above, such transactions
shall only constitute a Change in Control if they result in the Sponsors ceasing to have the power
(whether by ownership of voting securities, contractual right, or otherwise) collectively to elect
a majority of the Board.

     “Code” means the Internal Revenue Code of 1986, as it may be amended from time to
time.

     “Common Stock” means the Company’s Common Stock, par value $.01 per share, or, in the
event that the outstanding shares of Common Stock are hereafter recapitalized, converted into or
exchanged for different stock or securities of the Company, such other stock or securities.

     “Competing Business” means, with respect to any Participant at any time, any Person
engaged wholly or in part (directly or through one or more Subsidiaries) in the retail sale or
retail distribution (via stores, mail order, e-commerce, or similar means) of Competing Products,
if more than one-third (1/3) of such Person’s gross sales for the twelve (12) month period
preceding such time (or with respect to the period after such Participant’s Termination Date, as of
such Termination Date) are generated by engaging in such sale or distribution of Competing
Products. Without limiting the foregoing, Competing Businesses shall in any event include
Wal-Mart, K-Mart, Target, Amazon, Zellers, Sears, Right Start, Zany Brainy, FAO Schwartz, Buy Buy
Baby, e-toys, KB Toys, Mattel, Hasbro, Lego, Bandai, Playmobil, Ravensburger, Evenflo, Graco/Little
Tikes, Chicco, Cosco, Maclaren, Britax, Woolworths, Argos, Tesco, Asda, Mothercare, Carrefour,
Auchan, Leclerc, La Grande Recre, Karstadt, Real, Kaufhof, Mueller, El Corte Ingles, Loblaws, or
any of their respective Subsidiaries.

     “Competing Products” means, with respect to any Participant at any time, (i) toys and
games, (ii) video games, computer software for children, and electronic toys or games, (iii)
juvenile or baby: products, apparel, equipment, furniture, or consumables, (iv) wheeled goods for
children, and (v) any other product or group of related products that represents more than twenty
(20) percent of the gross sales of the Company and its Subsidiaries for the twelve (12) month
period preceding such time (or with respect to the period after such Participant’s Termination
Date, as of such Termination Date).

     “Disability” means, for any Participant, the meaning given to such term in an
employment or other similar agreement entered into by such Participant on or after the Effective
Date and approved by the Board, or in the absence of such an agreement it shall mean such
Participant’s eligibility to receive disability benefits under the Company’s or its Subsidiaries’
long-term disability plan or the inability of such Participant, as determined by the Board, to
perform the essential functions of his or her regular duties and responsibilities, with or without
reasonable accommodation, due to a medically determinable physical or mental illness which has
lasted (or can reasonably be expected to last) for a period of six consecutive months.

     “Effective Date” means July 21, 2005.

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     “Fair Market Value” of a share of Award Stock (or any other security) means the fair
market value of a share of Award Stock (or such other security, as applicable) as determined in
good faith by the Board, and such determination shall be binding and conclusive on the Company, the
Participants, and all other Persons interested in this Plan.

     “Independent Third Party” means any Person or group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) who, immediately prior to the
contemplated transaction or series of related transactions, does not own in excess of 5% of the
Company’s Common Stock on a fully-diluted basis, who is not an Affiliate of any such 5% owner of
the Company’s Common Stock and who is not the spouse or descendent (by birth or adoption) of any
such 5% owner of the Company’s Common Stock.

     “Initial Public Offering” means an initial public offering, after the Effective Date,
of the Company’s Common Stock pursuant to an offering registered under the Securities Act, other
than any such offerings which are registered on Forms S-4 or S-8 under the Securities Act.

     “Non-Competition Period” for a Participant means (i) in the case of termination by the
Company with Cause, the period of such Participant’s employment plus one (1) year after such
Participant’s Termination Date, (ii) in the case of resignation for any reason other than
Retirement, the period of such Participant’s employment, (iii) in the case of resignation for
Retirement, the period of such Participant’s employment plus one (1) year after such Participant’s
Termination Date, and (iv) otherwise, the period of such Participant’s employment plus the length
of time, if any, for which the Participant receives (or is eligible to receive, where Participant
declines or otherwise takes action to reject) in connection with such Participant’s termination
severance benefits or other similar payments from the Company or its Subsidiaries pursuant to an
agreement with such Participant, the severance policies of the Company and its Subsidiaries then in
effect, at the Company’s or any of its Subsidiaries’ election, or otherwise (or the length of time
in terms of compensation used to determine the amount of such Participant’s severance benefits in
the event such severance benefits are payable in a lump sum or on a schedule different than such
length of time). In no event shall any amount received by a Participant pursuant to Articles
IX or X of the Plan constitute severance or other similar payments for purposes of this
definition.

     “Original Value” (a) for each share of Award Stock which is originally issued as
Restricted Stock will be equal to the purchase price paid, if any, by the Participant for such
share of Award Stock, (b) for each share of Award Stock which is originally issued upon exercise of
any Options will be equal to the exercise price paid by the Participant for such share of Award
Stock, and (c) for each share of Award Stock which is originally issued upon exercise of any
Rollover Options will be equal to the Fair Market Value of such share of Award Stock on the date on
which such Rollover Option is originally issued, and in each case as proportionally adjusted for
all stock splits, stock dividends, and other recapitalizations affecting the Award Stock subsequent
to the Effective Date.

     “Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a government or any branch, department, agency, political subdivision or official
thereof.

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     “Permitted Transferee” with respect to any Participant means such Participant’s spouse
and descendants (whether or not adopted) and any trust, family limited partnership or limited
liability company that is and remains at all times solely for the benefit of such Participant
and/or such Participant’s spouse and/or descendants, in each case which transferee has executed and
delivered to the Company the documents required under Section 6.6(b) or 7.3(b), as
applicable.

     “Public Sale” means any sale pursuant to a registered public offering under the
Securities Act or any sale to the public through a broker, dealer or market maker pursuant to Rule
144 promulgated under the Securities Act.

     “Retirement” means, for any Participant, the meaning given to such term in an
employment or other similar agreement entered into by such Participant on or after the Effective
Date and approved by the Board, or in the absence of such an agreement it shall mean voluntary
resignation by such Participant at or after the age of sixty-two (62) following continuous
employment by the Company and its Subsidiaries for a period of at least ten (10) years.

     “Securities Act” means the Securities Act of 1933, as amended from time to time.

     “Sponsor Inflows” means, without duplication, as of any measurement date, all cash
payments (excluding management fees and expense reimbursements) received by the Sponsors with
respect to or in exchange for equity securities (including securities which are convertible into
equity securities) of the Company (whether such payments are received from the Company or any third
party) from the Effective Date through such measurement date. If such measurement date is the date
of consummation of a Change in Control, any equity securities (including securities which are
convertible into equity securities) held by the Sponsors and not transferred in such Change in
Control will be deemed to have been sold on such measurement date for the price per share for such
equity securities implied by the Change in Control. After consummation of an Initial Public
Offering, if the measurement date is not the date of a consummation of a Change in Control, any
equity securities (including securities which are convertible into equity securities) held by the
Sponsors will be deemed to have been sold for a price per share equal to the weighted average (by
dollar volume) of the closing trading price for each of the 90 consecutive trading days ending on
such measurement date, and for purposes of calculating the Sponsor IRR such sale will be deemed to
occur on the first day of such 90 trading day period.

     “Sponsor IRR” as of any measurement date, means the annual interest rate (compounded
annually) which, when used to calculate the net present value of all Sponsor Inflows and all
Sponsor Outflows, causes such net present value amount to equal zero. The Sponsor IRR shall be
determined in good faith by the Board.

     “Sponsor Outflows” means, without duplication, as of any measurement date, all cash
payments made by the Sponsors (on a cumulative basis) with respect to or in exchange for equity
securities (including securities which are convertible into equity securities) of the Company
(whether such payments are made to the Company or any third party) from the Effective Date until
such measurement date.

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     “Sponsors” means, collectively, Bain Capital Partners LLC, Toybox Holdings, LLC, and
Vornado Truck, LLC, in each case together with their respective Affiliates.

     “Stockholders Agreement” means the Management Stockholders Addendum, which is attached
hereto as Exhibit A.

     “Subsidiary” means any corporation, partnership, limited liability company, or other
entity in which the Company owns, directly or indirectly, stock or other equity securities or
interests possessing 50% or more of the total combined voting power of such entity.

     “Termination Date” means the earliest date on which a Participant is no longer
employed by the Company or any of its Subsidiaries for any reason. For the avoidance of doubt, a
Participant’s Termination Date shall be considered to be the last date of his actual and active
employment with the Company or one of its Subsidiaries, whether such day is selected by agreement
with the Participant or unilaterally by the Company or such Subsidiary and whether advance notice
is or is not given to the Participant; no period of notice that is or ought to have been given
under applicable law in respect of the termination of employment will be taken into account in
determining entitlement under the Plan. Furthermore, a Participant who goes on a leave of absence
approved by the Company or one of its Subsidiaries shall not be deemed to have ceased their
employment with the Company or its Subsidiaries during the period of such approved leave; provided
that, the time vesting of such Participant’s Options under Section 4.2 shall be suspended
during the period of such leave, except to the extent required by applicable law.

     “Transfer” means any direct or indirect sale, transfer, assignment, pledge,
encumbrance or other disposition (whether with or without consideration and whether voluntary or
involuntary or by operation of law, including to the Company or any of its Subsidiaries) of any
interest.

ARTICLE III

AWARDS AND ELIGIBILITY

     3.1 Awards. Awards under the Plan may be granted in any one or all of the following
three forms: (i) non-qualified stock options (“Options”), as described in Article
IV of the Plan, (ii) non-qualified stock options issued in exchange for options of Subsidiaries
of the Company which a Participant may have been granted prior to the Effective Date (“Rollover
Options”), as described in Article V of the Plan, and (iii) shares of Common Stock
which are subject to certain restrictions (“Restricted Stock” and together with Options and
Rollover Options, “Awards”), as described in Article VII of the Plan. For the
avoidance of doubt, no Option or Rollover Option shall be an incentive stock option within the
meaning of Section 422(a) of the Code or any successor provision. Each grant of Options, Rollover
Options, or Restricted Stock shall be evidenced by a written Award Agreement containing such
restrictions, terms, and conditions, if any, as the Board may require; provided that, except as
otherwise expressly provided in an Award Agreement, if there is any conflict between any provision
of the Plan and an Award Agreement, the provisions of the Plan shall govern.

     3.2 Maximum Shares Available. The Board may authorize Awards consisting of Rollover
Options or Restricted Stock in such numbers of shares as it may determine from time to

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time. An aggregate of no more than 3,889,000 shares of Common Stock shall be reserved for
issuance with respect to Options. All Awards shall be subject to adjustment by the Board as
follows. In the event of any reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation or other change in the Common Stock, the Board shall
make such changes in the number and type of shares of Common Stock covered by outstanding Awards
and the terms thereof as the Board determines in its sole discretion are necessary to prevent
dilution or enlargement of rights of Participants under the Plan. Without limiting the generality
of the foregoing, in the event of any such transaction, the Board shall have the power to make such
changes as it deems appropriate in the number and type of shares covered by outstanding Awards, the
prices specified therein, and the securities or other property to be received upon exercise (which
may include providing for cash payment (or no consideration) in exchange for cancellation of
outstanding Options or Rollover Options). If any Options or Rollover Options expire unexercised or
unpaid or are canceled, terminated or forfeited in any manner without the issuance of Common Stock
or payment thereunder, the shares with respect to which such Options or Rollover Options were
granted shall again be available under this Plan, subject to the foregoing maximum amounts.
Similarly, if any shares of Common Stock issued hereunder, either as Restricted Stock or upon
exercise of Options or Rollover Options, are repurchased hereunder, such shares shall again be
available under this Plan for reissuance, subject to the foregoing maximum amounts. Shares of
Common Stock to be issued upon exercise of Options or Rollover Options or shares of Common Stock to
be issued as Restricted Stock hereunder may be either authorized and unissued shares, treasury
shares, or a combination thereof, as the Board shall determine.

     3.3 Eligibility. The Board may, from time to time, select the Participants who shall
be eligible to participate in the Plan and the Awards to be made to each such Participant. The
Board may consider any factors it deems relevant in selecting Participants and in making Awards to
such Participants. The Board’s determinations under the Plan (including without limitation
determinations of which persons are to receive Awards and in what amount) need not be uniform and
may be made by it selectively among persons who are eligible to receive Awards under the Plan.

     3.4 No Right to Continued Employment. Nothing in this Plan or (in the absence of an
express provision to the contrary) in any Award Agreement, as applicable, shall confer on any
Participant any right to continue in the employment of the Company or its Subsidiaries or interfere
in any way with the right of the Company or its Subsidiaries to terminate such Participant’s
employment at any time for any reason or to continue such Participant’s present (or any other) rate
of compensation.

     3.5 Return of Prior Awards. The Board shall have the right, at its discretion, to
require Participants to return to the Company Awards previously granted to them under the Plan in
exchange for new Awards; provided that, no Participant shall be required, without such
Participant’s prior written consent, to return any Award if the new Award is to be made on terms
less favorable to such Participant than the Award to be returned. Subject to the provisions of the
Plan, such new Awards shall be upon such terms and conditions as are specified by the Board at the
time the new Awards are made.

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     3.6 Securities Laws. The Plan has been instituted by the Company to provide certain
compensatory incentives to Participants and is intended to qualify for an exemption from the
registration requirements (i) under the Securities Act, as amended, pursuant to Rule 701 of the
Securities Act, and (ii) under applicable state securities laws.

ARTICLE IV

OPTIONS

     4.1 Options. The Board shall have the right and power to grant to any Participant, at
any time prior to the termination of this Plan, Options in such quantity, at such price, on such
terms and subject to such conditions that are consistent with this Plan and established by the
Board. Options granted under this Plan shall be in the form described in this Article IV,
or in such other form or forms as the Board may determine, and shall be subject to such additional
terms and conditions and evidenced by Award Agreements, as shall be determined from time to time by
the Board. Except as otherwise set forth in an Award Agreement, Options shall be subject to all of
the terms and conditions contained in this Plan.

     4.2 Vesting of Options. Unless otherwise set forth in an Award Agreement, all Options
shall be subject to vesting in accordance the provisions of this Section 4.2. Options
shall be exercisable only to the extent that they are vested. In addition to the other
requirements set forth in this Section 4.2, Options shall vest only so long as a
Participant remains employed by the Company or one of its Subsidiaries. Unless otherwise set forth
in an Award Agreement, all Awards of Options shall be divided into three equal portions, with each
such portion exercisable for one-third of the number of shares of Common Stock for which such
Options are exercisable, and such portions shall be referred to hereunder as “Tranche I Options”,
“Tranche II Options”, and “Tranche III Options”.

          (a) Tranche I Vesting. The Tranche I Options will be subject to time vesting and
will time vest on each date set forth below with respect to the cumulative percentage of shares of
Common Stock issuable upon each of the Tranche I Options set forth opposite such date if the
respective Participant is, and has been, continuously employed by the Company or any of its
Subsidiaries from the date of award through such date:

	 	 	 	 	 
	 	 	Cumulative Percentage
	Date	 	of Shares Vested
	 
	 	 	 	 
	2nd anniversary of date of grant
	 	 	40	%
	3rd anniversary of date of grant
	 	 	60	%
	4th anniversary of date of grant
	 	 	80	%
	5th anniversary of date of grant
	 	 	100	%

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Notwithstanding the foregoing, all Tranche I Options shall be considered 100% vested upon
consummation of a Change in Control.

          (b) Tranche II Vesting. The Tranche II Options shall be subject to time and
performance vesting, and will only be deemed fully vested when they have both time vested and
performance vested in accordance with the terms hereof. The Tranche II Options will time vest in
the same manner as the Tranche I Options. The Tranche II Options will performance vest upon the
earlier to occur of:

               (i) a Change in Control in which both (A) the Sponsor IRR on consummation of the Change in
Control is equal to or greater than 15%, and (B) the Sponsor Inflows prior to and in connection
with such Change in Control are at least two (2) times the Sponsor Outflows prior to such Change in
Control; or

               (ii) any day on which both (A) the Sponsor IRR measured as of such measurement date is equal
to or greater than 15%, and (B) the Sponsor Inflows through such date are at least two (2) times
the Sponsor Outflows through such measurement date.

          (c) Tranche III Vesting. The Tranche III Options shall be subject to time and
performance vesting, and will only be deemed fully vested when they have both time vested and
performance vested in accordance with the terms hereof. The Tranche III Options will time vest in
the same manner as the Tranche I Options. The Tranche III Options will performance vest upon the
earlier to occur of:

               (i) a Change in Control in which both (A) the Sponsor IRR on consummation of the Change in
Control is equal to or greater than 20%, and (B) the Sponsor Inflows prior to and in connection
with such Change in Control are at least three (3) times the Sponsor Outflows prior to such Change
in Control; or

               (ii) any day on which both (A) the Sponsor IRR measured as of such measurement date is equal
to or greater than 20%, and (B) the Sponsor Inflows through such date are at least three (3) times
the Sponsor Outflows through such measurement date.

          (d) Eight Year Limit. Notwithstanding the provisions of clauses (b) and (c) above,
all Tranche II Options and Tranche III Options shall vest in full on the date which is eight (8)
years after the date on which such options were first granted, so long as a Participant remains
employed by the Company or any of its Subsidiaries from the date of award through such date.

ARTICLE V

ROLLOVER OPTIONS

     5.1 Rollover Options. The Board shall have the right and power to grant to any
Participant, at any time prior to the termination of this Plan, Rollover Options in such quantity,
at such price, on such terms and subject to such conditions that are consistent with this Plan and
established by the Board. Rollover Options granted under this Plan shall be in the form described
in this Article V, or in such other form or forms as the Board may determine, and shall be
subject to such additional terms and conditions and evidenced by Award Agreements, as shall be
determined from time to time by the Board. Except as otherwise set
forth in an Award Agreement, Rollover Options shall be subject to all of the terms and conditions contained in
this Plan.

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     5.2 Issuance for Cancellation of Other Awards. Rollover Options shall only be issued
as consideration for the agreement of Participants to cancel or forgo options issued by
Subsidiaries of the Company to Participants prior to the Effective Date. All Rollover Options
shall have an Aggregate Spread equal, on the day of grant, to the Aggregate Spread of the options
cancelled or foregone in exchange for such Rollover Options.

     5.3 Vesting of Rollover Options. All Rollover Options shall be exercisable in full on
the date on which they are granted to a Participant.

ARTICLE VI

GENERAL OPTION PROVISIONS

     6.1 Normal Expiration. All Options granted under this Plan shall expire at the close
of business on the tenth anniversary of the date of grant to the Participant holding such Options,
subject to earlier expiration as provided in this Article VI. All Rollover Options granted
under this Plan shall expire at the date that is specified in the Award Agreement applicable to
such Rollover Options.

     6.2 Exercise on Termination. If a Participant ceases to be employed by the Company
and its Subsidiaries for any reason, then the portion of such Participant’s Options that have not
fully vested as of the Termination Date shall expire at such time. In addition, upon consummation
of a Change in Control, all unvested Tranche II Options and Tranche III Options shall expire at the
time of such consummation if they do not otherwise vest in connection with such Change in Control
in accordance with the provisions of Section 4.2. Unless otherwise set forth in an Award
Agreement, the portion of a Participant’s Options that have fully vested as of such Participant’s
Termination Date shall expire (i) 30 days after the Termination Date if a Participant is terminated
without Cause or if a Participant resigns for any reason (including Retirement), (ii) 90 days after
the Termination Date if a Participant is terminated due to Disability, (iii) 180 days after the
Termination Date if a Participant is terminated due to death, and (iv) immediately upon termination
if a Participant is terminated with Cause. All of a Participant’s Rollover Options shall expire at
the end of their stated term, notwithstanding any termination of a Participant’s employment.

     6.3 Procedure for Exercise. At any time after all or any portion of a Participant’s
Options or Rollover Options have become vested and prior to their expiration, a Participant may
exercise all or any specified portion of such vested Options or Rollover Options by delivering
written notice of exercise specifically identifying the particular Options or Rollover Options
(including whether Options are Tranche I, II, or III Options or are Rollover Options) to the
Company (an “Exercise Notice”), together with a written acknowledgment that such
Participant has read and has been afforded an opportunity to ask questions of management of the
Company regarding all financial and other information provided to such Participant regarding the
Company. Payment by Participants in connection with any exercise (a) shall be made by delivery of
a cashier’s, certified check or wire transfer in the amount equal to the product of the exercise
price multiplied by the number of Award Shares to be acquired, plus the amount of any

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additional federal and state income taxes or any income taxes or employee’s social security
contributions arising in any jurisdiction outside the United States required to be withheld (or
accounted for to appropriate revenue authorities by the Participant’s employer) by reason of the
exercise of the Options or Rollover Options (which such amount shall be calculated by the Company
and provided to Participants promptly following delivery of an Exercise Notice, and which shall be
subject to later adjustment by the Company (with a corresponding payment by or refund to
Participant) in the event that any such adjustment is required), and (b) shall be due in full from
the Participant either (i) at the same time as delivery of the Exercise Notice (with the portion
representing taxes or contributions due within two (2) days of the date on which the Company
informs the Participant of the amount of such items pursuant to the provisions of this section) or
(ii) in the event the Participant is at the time of exercise not employed by the Company or any of
its Subsidiaries, then upon the first to occur of (A) the date of closing of any repurchase of
Award Stock issuable in connection with such exercise in accordance with the provisions of
Section 9.8, (B) the Company’s delivery of notice that neither it nor the Sponsors will
exercise their Repurchase Option with respect to the Award Stock issuable in connection with such
exercise, and (C) the expiration of the Repurchase Option (in accordance with the provisions of
Section 9.6) applicable to the Award Stock issuable in connection with such exercise. For
United States federal income tax purposes, the Company intends to treat Options and Rollover
Options as exercised at the time the Company issues the applicable Award Stock to the Participant.
At the discretion of the Board, which discretion shall be exercised (among other considerations) in
a manner intended (as determined in good faith by the Board) to cause a Participant’s options not
to be treated as deferred compensation within the meaning of Code Section 409A, a Participant may
be permitted to acquire Award Stock upon the exercise of Options or Rollover Options without
payment in cash therefor pursuant to a cashless exercise of such Options or Rollover Options. Such
cashless exercise shall be effectuated by the Company delivering shares of Common Stock to the
Participant with a Fair Market Value equal to (a) the Fair Market Value of all shares issuable upon
exercise of such Options or Rollover Options, minus (b) the aggregate exercise price of all shares
issuable upon exercise of such Options or Rollover Options (together with the amount of any income
taxes or employee’s social security contributions arising in respect of such cashless exercise).

     6.4 Representations on Exercise. In connection with any exercise of Options or
Rollover Options and the issuance of Award Stock thereunder (other than pursuant to an effective
registration statement under the 1933 Act), Participant shall by the act of delivering the Exercise
Notice (and without any further action on the part of the Participant) represent and warrant to the
Company that as of the time of such exercise:

          (a) The Award Stock to be acquired by Participant upon exercise shall be acquired for
Participant’s own account and not with a view to, or intention of, distribution thereof in
violation of the Securities Act or any applicable state securities laws, and the Award Stock shall
not be disposed of in contravention of the Securities Act or any applicable state securities laws.

          (b) Participant is or was an employee of the Company or one of its Subsidiaries, is
sophisticated in financial matters, and is able to evaluate the risks and benefits of the
investment in the Award Stock.

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          (c) Participant is able to bear the economic risks of his investment in the Award Stock for an
indefinite period of time and is aware that transfer of the Award Stock may not be possible because
(A) such transfer is subject to contractual restrictions on transfer set forth herein and in the
Stockholders Agreement and (B) the Award Stock has not been registered under the Securities Act or
any applicable state securities laws and, therefore, cannot be sold unless subsequently registered
under the Securities Act and such applicable state securities laws or an exemption from such
registration is available.

          (d) Participant has had an opportunity to ask questions and receive answers concerning the
terms and conditions of the offering of the Award Stock issued upon exercise and has had full
access to such other information concerning the Company as Participant has requested.

In connection with any exercise of Options or Rollover Options, Participant shall make such
additional customary investment representations as the Company may require and Participant shall
execute such documents necessary for the Company to perfect exemptions from registration under
federal and state securities laws as the Company may reasonably request. In addition, in
connection with any exercise of Options or Rollover Options, Participant shall make an election
under Section 83(b) of the Code, in the form prescribed by the Board.

     6.5 [Reserved].

     6.6 Non-Transferability.

          (a) All Options and Rollover Options are personal to a Participant and are not Transferable by
such Participant, other than by will or pursuant to applicable laws of descent and distribution.
Only a Participant, his estate or personal representatives or heirs, or any Permitted Transferee
are entitled to exercise Options or Rollover Options. All Award Stock issued pursuant to the
exercise of any Option or Rollover Option shall not be Transferable (other than pursuant to
Article IX or X below, or as otherwise permitted pursuant to the terms of the
Stockholders Agreement) by the Participant or Permitted Transferee who exercised such option and
purchased such Award Stock (or any subsequent transferee) until the occurrence of a Change in
Control. Any attempted Transfer of Options, Rollover Options, or Award Stock issued upon exercise
thereof which is not specifically permitted under the Plan shall be null and void.

          (b) Notwithstanding the provisions of Section 6.6(a) above, Options, Rollover Options,
and Award Stock issued pursuant to the exercise of any Option or Rollover Option shall be
Transferable by a Participant to any of such Participant’s Permitted Transferees; provided that, in
no event shall any Participant be allowed, without the prior consent of the Board, to Transfer
Options or Rollover Options pursuant to this Section 6.6(b) more than once, nor to more
than one (1) of such Participant’s Permitted Transferees, and in such case such Permitted
Transferee shall thereafter not be allowed, without the prior consent of the Board, to Transfer any
of the Options or Rollover Options Transferred to such Permitted Transferee pursuant to this
Section 6.6(b). As part of any such Transfer, the Permitted Transferee shall execute such
documents as the Company may reasonably require, which documents shall provide that the Permitted
Transferee (i) remains bound by the Plan and the applicable
Award Agreement in the same manner as the Participant, and (ii) is bound by all of the terms and conditions of the Stockholders
Agreement.

12

 

          (c) No Participant shall make any Transfer prohibited by this Section 6.6 either
directly or indirectly. Without limiting the generality of the foregoing, no Participant shall
make one or more transfers to one or more Permitted Transferees and then dispose of all or any
portion of such Participant’s interest in any such Permitted Transferee. Any Transfer or attempted
Transfer in violation of this clause (c) shall be null and void.

          (d) Any Award Stock issued upon exercise of any Options or Rollover Options will be subject to
the provisions of Sections 7.4 and 7.5 in the same manner as Restricted Stock is
subject to such provisions.

     6.7 Rights as a Stockholder. A Participant holding Options or Rollover Options shall
have no rights as a stockholder with respect to any shares of Award Stock issuable upon exercise
thereof until the date on which a stock certificate is issued to such Participant representing such
Award Stock. The Company shall issue Award Stock to Participants no later than twenty (20) days
following receipt by the Company of all exercise payments required to be made by a Participant in
connection therewith; provided that, such time period shall be reduced to two (2) days during the
thirty (30) days following any notice given by the Company pursuant to Section 6.8 of the
Plan. Except as otherwise expressly provided in the Plan or in any Award Agreement, no adjustment
shall be made for cash dividends or other rights for which the record date is prior to the date
such stock certificate is issued.

     6.8 Notice of Dividends. The Board shall provide notice to all Participants who hold
vested Options or Rollover Options in the event that it intends to declare any dividend or
distribution in respect of shares of Common Stock. Such notice shall be provided not less than ten
(10) days prior to the record date of such dividend or distribution, and shall describe in
reasonable detail the approximate amounts anticipated to be distributed in respect of the Common
Stock.

ARTICLE VII

RESTRICTED STOCK

     7.1 Restricted Stock. The Board shall have the right and power, at any time prior to
the termination of this Plan, to sell to any Participant for purchase prices equal to Fair Market
Value, or to grant to any Participant without consideration as an incentive for future services,
Restricted Stock in such quantity, on such terms, and subject to such conditions that are
consistent with this Plan and established by the Board. Restricted Stock sold or granted under
this Plan shall be in the form described in this Article VII, or in such other form or
forms as the Board may determine, and shall be subject to such additional terms and conditions and
evidenced by Award Agreements, as shall be determined from time to time by the Board. Except as
otherwise set forth in an Award Agreement, Restricted Stock shall be subject to all of the terms
and conditions contained in this Plan. The consideration for any such sale shall be cash, unless
otherwise determined by the Board. In the case of a sale of Restricted Stock under the Plan, a
Participant may elect to purchase any or all of the Restricted Stock awarded to him or her by the
Board through one or more entities (but not natural persons) that would constitute a Permitted

13

 

Transferee as such term is defined in the Plan, which entity shall be bound by all of the terms of
this Plan, any Award Agreement, and the Stockholders Agreement in the same manner as any
other Permitted Transferee hereunder. In the case of a grant of Restricted Stock under the
Plan without consideration, the grant shall be made solely to the Participant.

     7.2 Representations on Acquisition. In connection with any acquisition of Restricted
Stock (other than pursuant to an effective registration statement under the 1933 Act), Participant
shall, by his or her acceptance of such Restricted Stock (and without any further action on the
part of the Participant), represent and warrant to the Company that as of the time of such
acquisition:

          (a) The Restricted Stock to be acquired by Participant shall be acquired for Participant’s own
account and not with a view to, or intention of, distribution thereof in violation of the
Securities Act or any applicable state securities laws, and the Restricted Stock shall not be
disposed of in contravention of the Securities Act or any applicable state securities laws.

          (b) Participant is an employee of the Company or one of its Subsidiaries, is sophisticated in
financial matters, and is able to evaluate the risks and benefits of the investment in the
Restricted Stock.

          (c) Participant is able to bear the economic risks of his investment in the Restricted Stock
for an indefinite period of time and is aware that transfer of the Restricted Stock may not be
possible because (A) such transfer is subject to contractual restrictions on transfer set forth
herein and in the Stockholders Agreement and (B) the Restricted Stock has not been registered under
the Securities Act or any applicable state securities laws and, therefore, cannot be sold unless
subsequently registered under the Securities Act and such applicable state securities laws or an
exemption from such registration is available.

          (d) Participant has had an opportunity to ask questions and receive answers concerning the
terms and conditions of the offering of the Restricted Stock and has had full access to such other
information concerning the Company as Participant has requested.

In connection with any acquisition of Restricted Stock, Participant shall make such additional
customary investment representations as the Company may require and Participant shall execute such
documents necessary for the Company to perfect exemptions from registration under federal and state
securities laws as the Company may reasonably request. In addition, in connection with any
acquisition of Restricted Stock that is purchased from the Company, Participant shall make an
election under Section 83(b) of the Code, in the form prescribed by the Board. A Participant may,
but is not required to, make such an election in the case of Restricted Stock granted for no
consideration.

     7.3 Restrictions on Transfer.

          (a) All Restricted Stock shall not be Transferable (other than pursuant to Article IX
or X below, or as otherwise permitted pursuant to the terms of the Stockholders Agreement)
by the Participant holding such Restricted Stock until the occurrence of a Change in Control or
such later time as may set forth in the applicable Award Agreement.
Any attempted Transfer of Restricted Stock which is not specifically permitted under the Plan shall be null and void.

14

 

          (b) Notwithstanding the provisions of Section 7.3(a) above, Restricted Stock for which
an election under Section 83(b) of the Code has been timely filed shall be Transferable by a
Participant to any of the Participant’s Permitted Transferees. As part of any such Transfer, the
Permitted Transferee shall execute such documents as the Company may reasonably require, which such
documents shall provide that the Permitted Transferee (i) remains bound by the Plan and the
applicable Award Agreement in the same manner as the Participant, and (ii) is bound by all of the
terms and conditions of the Stockholders Agreement.

          (c) No Participant shall make any Transfer prohibited by this Section 7.3 either
directly or indirectly. Without limiting the generality of the foregoing, no Participant shall
make one or more transfers to one or more Permitted Transferees and then dispose of all or any
portion of such Participant’s interest in any such Permitted Transferee. In addition, in the event
that a Participant acquires Restricted Stock through one or more entities that would otherwise
constitute Permitted Transferees, then such Participant shall not dispose of all or any portion of
such Participant’s interest in any such Permitted Transferee. Any Transfer or attempted Transfer
in violation of this clause (c) shall be null and void.

     7.4 Restricted Stock Certificates. The Company shall issue, in the name of each
Participant to whom Restricted Stock has been granted or sold, stock certificates representing the
total number of shares of Award Stock granted or sold to such Participant, as soon as reasonably
practicable after such grant or sale. The Company shall hold such certificates for the
Participant’s benefit until such Restricted Stock becomes freely Transferable, at which time the
Company shall deliver such certificates (free of all such Transferability restrictions) to the
Participant.

     7.5 Rights of a Participant. Unless the Board determines otherwise, any Participant
who holds Restricted Stock shall have the right to receive dividends and distributions, if any are
declared, with respect to such Restricted Stock. Any shares of Company Stock received by a
Participant as a result of any such dividends or distributions shall be considered Restricted Stock
and shall be subject to all of the restrictions contained in the Plan.

ARTICLE VIII

JOINDERS

     8.1 Stockholders Agreement. Exercise of any Options or Rollover Options, or purchase
of or acceptance of any Restricted Stock, shall constitute agreement by the Participant making such
exercise or purchasing or receiving such Restricted Stock, to be bound by all of the terms and
conditions of the Stockholders Agreement with respect to the Award Stock, or any other Company
capital stock, issuable to or held by such Participant. All of the terms of the Stockholders
Agreement are incorporated herein by reference.

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ARTICLE IX

REPURCHASE OF SHARES

     9.1 Repurchase Option. In order to provide a market for Award Stock, in the event
that a Participant is no longer employed by the Company or any of its Subsidiaries for any reason,
all Award Stock issued or issuable to such Participant (whether as Restricted Stock or
upon the exercise of Options or Rollover Options), whether held by such Participant or one or
more transferees of such Participant, will be subject to repurchase by the Company and the Sponsors
(solely at their option), by delivery of one or more Repurchase Notices (as defined below) within
the time periods set forth below, pursuant to the terms and conditions set forth in this
Article IX (the “Repurchase Option”), unless otherwise set forth in the Award
Agreement between the Company and the Participant. The Repurchase Option shall terminate on the
first to occur of a Change in Control or an Initial Public Offering.

     9.2 Termination Other than for Cause or Resignation. Unless otherwise specified in an
Award Agreement, if a Participant is no longer employed by the Company or any of its Subsidiaries
as a result of any reason other than such Participant’s (a) termination for Cause or (b)
resignation for any reason other than Retirement, then on or after the Termination Date (subject to
the provisions of Section 10.2) the Company may elect to purchase all or any portion of the
Award Stock issued or issuable to such Participant at a price per share equal to the Fair Market
Value thereof, in each case as determined as of a date determined by the Board that is the
anticipated date of the Repurchase Closing (as defined in Section 9.6 below).
Notwithstanding the foregoing, in the event a Participant resigns due to Retirement and
subsequently takes any action described in the first sentence of Section 12.3 at any time
within one (1) year after such Participant’s Termination Date, then the purchase price per share
shall be the lower of Fair Market Value and Original Value; provided that, in the event a
Participant exercises his or her put rights set forth in Section 10.3, the purchase price
shall be calculated so that such Participant does not receive, with respect to all shares of Award
Stock held by such Participant, an aggregate amount greater than (a) the lower of the Fair Market
Value or Original Value of all such shares of Award Stock, minus (b) any amounts paid to the
Participant pursuant to Section 10.3.

     9.3 Termination for Cause. Unless otherwise specified in an Award Agreement, if a
Participant is no longer employed by the Company or any of its Subsidiaries as a result of such
Participant’s termination for Cause, then on or after the Termination Date, the Company may elect
to purchase all or any portion of the Award Stock issued or issuable to such Participant at a price
per share equal to the lower of the Fair Market Value and Original Value thereof, in each case as
determined as of a date determined by the Board that is the anticipated date of the Repurchase
Closing (as defined in Section 9.6 below).

     9.4 Resignation. Unless otherwise specified in an Award Agreement if a Participant is
no longer employed by the Company or any of its Subsidiaries as a result of such Participant’s
resignation (for any reason other than Retirement), then on or after the Termination Date, the
Company may elect to purchase all or any portion of the Award Stock issued or issuable to such
Participant at a price per share equal to the Fair Market Value thereof, in each case as determined
as of a date determined by the Board that is the anticipated date of the Repurchase Closing (as
defined in Section 9.6 below). Notwithstanding the foregoing, in the event a Participant
takes any action described in the first sentence of Section 12.3 at any time within one (1)
year after such Participant’s Termination Date (as if such period was part of such Participant’s
Non-Competition Period), then the purchase price per share shall be the lower of (a) the Fair
Market Value, and (b) Original Value, in each case as determined as of a date determined by the
Board that is the anticipated date of the Repurchase Closing (as defined in Section 9.6
below).

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     9.5 Option Repurchases. In the event the Company and/or the Sponsors, as applicable,
exercise the Repurchase Option with respect to any shares of Award Stock issuable upon exercise of
any Options or Rollover Options held by a Participant, then such Participant shall be required,
promptly following receipt of a Repurchase Notice (as defined below), to exercise such Options
and/or Rollover Options and purchase from the Company (in accordance with the provisions of
Section 6.3) all shares of Award Stock for which the Company and/or the Sponsors, as
applicable, shall have delivered a Repurchase Notice.

     9.6 Repurchase Procedures. Pursuant to the Repurchase Option, the Company may elect
to exercise the right to purchase all or any portion of the shares of Award Stock issued to a
Participant by delivering written notice or notices (each, a “Repurchase Notice”) to the
holder or holders of the such Award Stock at any time and from time to time no later than 120 days
after the Termination Date (or 180 days, in the case of the Participant’s Disability, or 270 days,
in the case of the Participant’s death, or one year and 10 days, in the case of the Participant’s
resignation); provided that such periods may be tolled in accordance with Section 9.9
below; provided further, in the event that Section 10.2 applies to a Participant’s
termination, then the period of exercise for the Repurchase Option applicable in such circumstances
shall be the later of (a) 120 days after the Participant’s Termination Date, and (b) seven (7)
months after the Effective Date. Each Repurchase Notice will specifically identify the shares of
Award Stock to be acquired from such holder(s) (including whether such shares are issuable upon
exercise of Tranche I, II, or III Options or Rollover Options), the repurchase price of such
shares, the aggregate consideration to be paid for such shares and the time and place for the
closing of the transaction (each, a “Repurchase Closing”). In the event that the Company
elects to purchase a portion of such Award Stock pursuant to the terms of this Section 9.6,
if any shares of such Award Stock are held by transferees of such Participant, the Company shall
purchase the shares elected to be purchased first from such Participant to the extent of the shares
of such Award Stock then held by such Participant and second purchase any remaining shares elected
to be purchased from such other holder(s) of Award Stock pro rata according to the number of shares
of Award Stock held by such other holder(s) at the time of delivery of such Repurchase Notice
(determined as nearly as practicable to the nearest share) and the number of shares of each class
of Award Stock to be purchased will be allocated among such other holders pro rata according to the
total number of shares of Award Stock to be purchased from such persons.

     9.7 Sponsor Rights.

          (a) If for any reason the Company does not elect to purchase all of the Award Stock (issued or
issuable to a particular Participant) pursuant to the Repurchase Option pursuant to one or more
Repurchase Notices, the Sponsors will be entitled to exercise the Repurchase Option, in the manner
set forth in this Section 9.7, for the Award Stock the Company has not elected to purchase
(the “Available Shares”). As soon as practicable after the Company has determined that
there will be Available Shares, but in any event within 90 days after the Termination Date (or 150
days, in the case of the Participant’s Disability, or 240 days, in the case of the Participant’s
death), the Company shall give written notice (each, an “Option Notice”) to
the Sponsors setting forth the number of Available Shares and the price for each Available Share as determined
pursuant to the provisions of this Article IX.

17

 

          (b) The Sponsors may elect to purchase any number of Available Shares by delivering written
notice (an “Election Notice”) to the Company within 20 days after receipt of the Option
Notice from the Company. If the Sponsors elect to purchase an aggregate number of shares greater
than the number of Available Shares, each class of Available Shares shall be allocated among the
Sponsors based upon the number of shares of Common Stock owned by each Sponsor on a fully-diluted
basis.

          (c) As soon as practicable, and in any event within ten days after the expiration of the
20-day period set forth above, the Company shall notify the holder(s) of Award Stock as to the
number of shares being purchased from such holder(s) by the Sponsors (each, a “Supplemental
Repurchase Notice”). At the time the Company delivers a Supplemental Repurchase Notice to the
holder(s) of Award Stock, the Company shall also deliver written notice to each electing Sponsor
setting forth the number of shares that the Company and each Sponsor will acquire, the aggregate
purchase price and the time and place of the closing of the transaction.

     9.8 Closing of Repurchase. The closing of the transactions contemplated by this
Article IX will take place on the date designated by the Company in the applicable
Repurchase Notice or Supplemental Repurchase Notice, as the case may be, which date will not be
more than 60 days after the delivery of such notice. The Company and/or the Sponsors, as the case
may be, will pay for the Award Stock to be purchased pursuant to the Repurchase Option by delivery
of a check payable to the holder(s) of Award Stock or a wire transfer of immediately available
funds. In addition, the Company may pay the repurchase price for such Award Stock by offsetting
such amounts against any bona fide debts owed by Participant to the Company or any of its
Subsidiaries. The Company and/or the Sponsors as the case may be, will receive customary
representations and warranties from each seller regarding the sale of Award Stock including, but
not limited to, the representation that such seller has good and marketable title to the Award
Stock to be Transferred free and clear of all liens, claims and other encumbrances, and will be
entitled to require all sellers’ signatures be guaranteed by a national bank or reputable
securities broker. In the event that a repurchase is to take place at a price equal to Fair Market
Value, and the Fair Market Value of the Award Stock has increased or decreased from the date on
which it is determined to the date of closing pursuant to this Section 9.8, then the
repurchase shall be consummated at such higher or lower price.

     9.9 Restrictions on Repurchase. Notwithstanding anything to the contrary contained in
this Agreement, all repurchases of Award Stock by the Company shall be subject to applicable
restrictions contained in the Delaware General Corporation Law and in the Company’s and its
Subsidiaries’ debt and equity financing agreements. If any such restrictions prohibit the
repurchase of Award Stock for cash and the Sponsors have not elected to acquire all Award Stock
which the Company and the Sponsors have a right to repurchase pursuant to this Article IX,
the Company shall have the right to deliver, as payment of the repurchase price, a subordinated
note or notes payable in up to three equal annual installments beginning on the first anniversary
of the closing of such repurchase and bearing interest (accruing quarterly) at a rate per annum
equal to 7%. Any such notes issued by the Company shall be subject to any

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restrictive covenants which the Company is subject to at the time of repurchase. If any such restrictions prohibit the
repurchase of Award Stock for such subordinated notes and the Sponsors have not elected to acquire
all Award Stock which the Company and the Sponsors have a right to
repurchase pursuant to this Article IX, the time periods provided in this Article
IX shall be suspended for a period of up to twelve months, and the Company may make such
repurchases as soon as it is permitted to do so under such restrictions but in no event later than
twelve months after the initial time periods hereunder.

ARTICLE X

PUT RIGHTS

     10.1 Put Rights on Death or Disability. In order to provide a market for Award Stock,
each Participant shall have the right (solely at their option) to require the Company to repurchase
all (but not less than all) of such Participant’s shares of Award Stock (whether actually issued or
issuable upon exercise of Rollover Options) in the event such Participant’s employment is
terminated because of death or Disability. Such put right must be exercised no more than (a) 240
days in event of death, or (b) 150 days in the event of Disability, following such Participant’s
Termination Date by giving written notice to the Company. The purchase price payable by the
Company in connection with such put shall be Fair Market Value. The closing of the transactions
contemplated by this Section 10.1 will take place no later than 60 days after delivery of
notice of exercise of the put right by the Participant and otherwise in accordance with the
provisions of Sections 9.8 and 9.9, to the extent applicable. Notwithstanding the
foregoing put right, the Company and/or the Sponsors, as applicable, shall still have the
repurchase rights set forth in Article IX with respect to any termination otherwise subject
to this Section 10.1.

     10.2 Put Rights on Termination Without Cause. In order to provide Participants with
protection against losses in respect of Award Stock in certain circumstances, each Participant
shall have the right (solely at their option) to require the Company to repurchase all (but not
less than all) of such Participant’s shares of Award Stock (whether actually issued or issuable
upon exercise of Rollover Options) in the event such Participant’s employment is terminated without
Cause within one (1) year of the Effective Date. Such put right shall be exercised by giving
written notice to the Company. Such put right may not be exercised prior to the date that is six
(6) months and one (1) day after the Effective Date and shall expire on the later of (a) the date
that is 30 days following such Participant’s Termination Date or (b) the date that is six (6)
months and ten (10) business days after the Effective Date. The purchase price payable by the
Company in connection with such put shall be Original Value. The closing of the transactions
contemplated by this Section 10.2 will take place no later than 60 days after delivery of
notice of exercise of the put right by the Participant and otherwise in accordance with the
provisions of Sections 9.8 and 9.9, to the extent applicable. Notwithstanding the
foregoing put right, in the event the Participant has not exercised such put right by the deadlines
specified above, then thereafter the Company and/or the Sponsors, as applicable, shall still have
the repurchase rights set forth in Article IX with respect to any termination otherwise
subject to this Section 10.2.

     10.3 Put Rights on Retirement. In order to provide a market for Award Stock, each
Participant shall have the right (solely at their option) to require the Company to repurchase a
portion (as determined below) of such Participant’s shares of Award Stock (whether actually issued
or issuable upon exercise of Rollover Options) in the event such Participant’s employment

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is terminated because of resignation due to Retirement. Such put right must be exercised no more than
30 days following such Participant’s Termination Date by giving written notice to the Company. The
purchase price per share payable by the Company in connection with such put
shall be Fair Market Value. Each Participant shall have the right to require the Company to
repurchase no more than those number of shares of Award Stock (whether actually issued or issuable
upon exercise of Rollover Options) that would produce total pre-tax proceeds to such Participant
equal to the aggregate Original Value of all Rollover Options and Restricted Stock held by such
Participant. The closing of the transactions contemplated by this Section 10.3 will take
place no later than 60 days after delivery of notice of exercise of the put right by the
Participant (or, if later, delivery of a Repurchase Notice or Supplemental Repurchase Notice) and
otherwise in accordance with the provisions of Sections 9.8 and 9.9, to the extent
applicable. Notwithstanding the foregoing put right, the Company and/or the Sponsors, as
applicable, shall still have the repurchase rights set forth in Article IX with respect to
any termination otherwise subject to this Section 10.3.

     10.4 Option Puts. In the event a Participant exercises a put right with respect to
any shares of Award Stock issuable upon exercise of any Rollover Options held by such Participant,
then such Participant shall be required, in connection with the exercise of such put right, to
exercise such Rollover Options and purchase from the Company (in accordance with the provisions of
Section 6.3) all shares of Award Stock for which such Participant shall have exercised such
put right. The closing of any such exercise shall take place concurrently with the closing of the
put transactions set forth in this Article X.

     10.5 Termination of Puts. Notwithstanding any other provision in this Article
X, each of the put rights contained in this Article X shall terminate on the first to
occur of a Change in Control or an Initial Public Offering.

     10.6 Applicability of Puts. Except as otherwise expressly provided in an Award
Agreement, none of the put rights set forth in this Article X shall apply to any Awards
made on or after the date that is one hundred and twenty (120) days after the Effective Date.

ARTICLE XI

PUBLIC OFFERINGS

     11.1 Cooperation in an IPO. In the event that the Company approves an Initial Public
Offering, the holders of Options, Rollover Options, or Award Stock will take all necessary or
desirable actions in connection with the consummation of such offering. In the event that such
Initial Public Offering is an underwritten offering and the managing underwriters advise the
Company in writing that in their opinion the Common Stock structure will adversely affect the
marketability of the offering, each holder of Options, Rollover Options, or Award Stock will
consent to and vote for a recapitalization, reorganization and/or exchange of the Common Stock into
securities that the managing underwriters and the Board find acceptable and will take all necessary
or desirable actions in connection with the consummation of the recapitalization, reorganization
and/or exchange.

     11.2 Holdback. No Participant shall effect any public sale or distribution (including
sales pursuant to Rule 144) of any Award Stock during the 7 days prior to and the 90 days (or

20

 

180 days in the event of an Initial Public Offering) after the effective date of any underwritten
public offering of the Company’s Common Stock, except as part of such underwritten public offering
or if otherwise permitted by the Company.

     11.3 Compliance with Laws. Each Option and Rollover Option shall be subject to the
requirement that if at any time the Board shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to such Option or Rollover Option upon any
securities exchange or under any state or federal securities or other law or regulation or the
consent or approval of any governmental regulatory body, is necessary or desirable as a condition
to or in connection with the granting of such Option or Rollover Option or the issue or purchase of
shares thereunder, no such Option or Rollover Option may be exercised or paid in Common Stock in
whole or in part unless such listing, registration, qualification, consent or approval (a
“Required Listing”) shall have been effected or obtained and the holder of the Option or
Rollover Option, as applicable, will supply the Company with such certificates, representations and
information as the Company shall request which are reasonably necessary or desirable in order for
the Company to obtain such Required Listing, and shall otherwise cooperate with the Company in
obtaining such Required Listing. In the case of officers and other persons subject to Section
16(b) of the Securities Exchange Act of 1934, as amended, the Board may at any time impose any
limitations upon the exercise of an Option or Rollover Option which, in the Board’s discretion, are
necessary or desirable in order to comply with Section 16(b) and the rules and regulations
thereunder. If the Company, as part of an offering of securities or otherwise, finds it desirable
because of federal or state regulatory requirements to reduce the period during which any Options
or Rollover Options may be exercised, the Board may, in its discretion and without the consent of
the holders of any such Options or Rollover Options, so reduce such period on not less than 15
days’ written notice to the holders thereof.

     11.4 Purchaser Representative. If the Company or the holders of the Company’s
securities enter into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated by the Securities Exchange Commission may be available with respect to such
negotiation or transaction (including a merger, consolidation or other reorganization), as a
condition to participation in such sale (whether or not obligated to so participate pursuant to the
provisions of the Stockholders Agreement or otherwise), the holders of Award Stock will, at the
request of the Company, appoint a purchaser representative (as such term is defined in Rule 501)
reasonably acceptable to the Company. If any holder of Award Stock appoints a purchaser
representative designated by the Company, the Company will pay the fees of such purchaser
representative; but if any holder of Award Stock declines to appoint the purchaser representative
designated by the Company, such holder will appoint another purchaser representative and such
holder will be responsible for the fees of the purchaser representative so appointed.

ARTICLE XII

RESTRICTIVE COVENANTS

     The Company and its Subsidiaries operate in a highly sensitive and competitive commercial
environment. As part of their employment with the Company and its Subsidiaries, Participants will
be exposed to highly confidential and sensitive information regarding the Company’s and its
Subsidiaries’ business operations, including corporate strategy, pricing and other market
information, know-how, trade secrets, and valuable customer, supplier, and

21

 

employee relationships. It is critical that the Company take all necessary steps to safeguard its legitimate protectible
interests in such information and to prevent any of its competitors or any other persons from
obtaining any such information. Therefore, as consideration for the
Company’s agreement to grant or sell Options, Rollover Options, and/or Restricted Stock to a
Participant, each Participant shall agree to be bound by the following restrictive covenants:

     12.1 Confidentiality. Each Participant acknowledges that the information,
observations and data obtained by him or her while employed by the Company and its Subsidiaries
concerning the business or affairs of the Company or any of its Subsidiaries (“Confidential
Information”) are the property of the Company or such Subsidiary. Therefore, each Participant
agrees that he or she shall not disclose to any unauthorized Person or use for his or her own
purposes any Confidential Information without the prior written consent of the Board, unless and to
the extent that the aforementioned matters become generally known to and available for use by the
public other than as a result of such Participant’s acts or omissions. Each Participant shall
deliver to the Company or one of its Subsidiaries, at the termination of such Participant’s
employment, or at any other time the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or the business of the
Company or any of its Subsidiaries which he or she may then possess or have under his or her
control.

     12.2 Assignment of Inventions. Each Participant acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings, reports, formulas,
recipes, customer lists, and all similar or related information (whether or not patentable) which
relate to the Company’s or any of its Subsidiaries’ actual or anticipated business, research and
development or existing or future products or services and which are conceived, developed or made
by such Participant while employed by the Company and its Subsidiaries (“Work Product”)
belong to the Company or such Subsidiary. Each Participant shall promptly disclose such Work
Product to the Board and perform all actions reasonably requested by the Board (whether during or
after the period of Participant’s employment) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other instruments).

     12.3 Non-Competition; Non-Solicitation. At any time during a Participant’s
Non-Competition Period, such Participant shall not, for himself or herself or on behalf of any
other Person, participate in, directly or indirectly, any Competing Business in any country in
which the Company or any of its Subsidiaries or licensees operates or conducts business as of such
time (or with respect to the period after such Participant’s Termination Date, as of such
Termination Date); provided that, nothing in this sentence shall restrict a Participant from
passive ownership of three (3) percent or less of the publicly traded securities of any Person.
During a Participant’s employment with the Company and/or its Subsidiaries and for 1 year
thereafter, a Participant shall not (i) induce or attempt to induce any employee of the Company or
its Subsidiaries to leave the employ of the Company or its Subsidiaries, or in any way interfere
with the relationship between the Company or its Subsidiaries and any employee thereof, (ii) hire
directly or through another entity any person who was an employee (other than clerical or
administrative support personnel) of the Company or its Subsidiaries at any time during the
Non-Competition Period or (iii) induce or attempt to induce any customer, supplier, licensee or
other business

22

 

relation of the Company or its Subsidiaries to cease doing business with the Company
or its Subsidiaries, or in any way interfere with the relationship between any such customer,
supplier, licensee or business relation and the Company or its Subsidiaries (including, without
limitation, making any negative statements or communications concerning the Company or its Subsidiaries);
provided that, clauses (i) and (ii) above shall not apply with respect to any person solicited or
employed after the date that is twelve (12) months after the date on which such person’s employment
with the Company and its Subsidiaries is terminated.

     12.4 No Restriction on Earning a Living. By his or her acceptance and/or acquisition
of an Award, each Participant thereby acknowledges that the provisions of this Article XII
do not preclude such Participant from earning a livelihood, nor do they unreasonably impose
limitations on Participant’s ability to earn a living. In addition, each Participant thereby
acknowledges that the potential harm to the Company and/or its Subsidiaries of non-enforcement of
this Article XII outweighs any harm to Participant of enforcement (by injunction or
otherwise) of this Article XII against him. If any portion of the provisions of this
Article XII is found to be invalid or unenforceable by a court of competent jurisdiction
because its duration, territory, definition of activities covered, or definition of information
covered is considered to be unreasonable in scope, the invalid or unenforceable term shall be
redefined, or a new enforceable term provided, such that the intent of the Company and Participant
in agreeing to the provisions of this Article XII will not be impaired and the provision in
question shall be enforceable to the fullest extent of applicable law.

ARTICLE XIII

OTHER PROVISIONS

     13.1 Indemnification. No member of the Board, nor any person to whom ministerial
duties have been delegated, shall be personally liable for any action, interpretation or
determination made with respect to the Plan or Awards made thereunder, and each member of the Board
shall be fully indemnified and protected by the Company with respect to any liability he or she may
incur with respect to any such action, interpretation or determination, to the extent permitted by
applicable law and to the extent provided in the Company’s Certificate of Incorporation and Bylaws,
as amended from time to time, or under any agreement between any such member and the Company.

     13.2 Termination and Amendment. The Board at any time may suspend or terminate this
Plan and make such additions or amendments as it deems advisable under this Plan; provided that,
the Board may not change any of the terms of an Award Agreement in a manner adverse to a
Participant without the prior written approval of such Participant. In the event any Participant
so requests in writing, the Company shall amend the terms of such Participant’s Rollover Options so
that they will expire on the same terms as the options which were cancelled or foregone by such
Participant in exchange for such Rollover Options.

     13.3 Taxes.

          (a) The Company shall have the right to require Participants or their beneficiaries or legal
representatives to remit to the Company an amount sufficient to satisfy his or her minimum Federal,
state, local, and foreign withholding tax requirements, or to deduct

23

 

from all payments under the Plan amounts sufficient to satisfy such minimum withholding tax requirements.
Whenever payments under the Plan are to be made to a Participant in cash, such
payments shall be net of any amounts sufficient to satisfy all Federal, state, local, and
foreign withholding tax requirements.

          (b) Except as otherwise expressly provided in an Award Agreement, the Board may, in its
discretion permit a Participant to satisfy his or her tax withholding obligation either by (i)
surrendering Award Stock owned by the Participant or (ii) having the Company withhold from Award
Stock otherwise deliverable to such Participant. Award Stock surrendered or withheld shall be
valued at Fair Market Value as of the date on which income is required to be recognized for income
tax purposes.

     13.4 Withholding. In a situation where, if a Participant were to receive Award Stock
(by virtue of the exercise of any Options, Rollover Options or the issue to such Participant of any
Restricted Stock), the Company or any of its Affiliates (or a former Affiliate) would be obliged to
(or would suffer a disadvantage if it were not to) account for any tax or social security
contributions in any jurisdiction for which that person would be liable by virtue of the receipt of
Award Stock or which would be recoverable from that person (together, the “Tax Liability”),
the Options and Rollover Options may not be exercised and the Restricted Stock may not be issued
unless that person has either (i) made a payment to the Company or any of its Affiliates (or a
former Affiliate) of an amount at least equal to the Company’s estimate of the Tax Liability, or
(ii) entered into arrangements acceptable to the Company or any of its Affiliates (or a former
Affiliate) to secure that such a payment is made (whether by authorizing the sale of some or all of
the Award Stock on his behalf and the payment to the Company or any of its Affiliates (or a former
Affiliate) of the relevant amount out of the proceeds of sale or otherwise).

     13.5 Data Protection. By participating in the Plan or accepting any rights granted
under it, each Participant consents to the collection and processing of personal data relating to
the Participant so that the Company and its Affiliates can fulfill their obligations and exercise
their rights under the Plan and generally administer and manage the Plan. This data will include,
but may not be limited to, data about participation in the Plan and shares offered or received,
purchased or sold under the Plan from time to time and other appropriate financial and other data
(such as the date on which the Options, Rollover Options or Restricted Stock were granted) about
the Participant and his participation in the Plan.

     13.6 Notices. Notices required or permitted to be made under the Plan shall be in
writing and shall be deemed given, delivered and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile prior to 5:00 p.m. (New
York time) on a business day, (ii) the business day after the date of transmission, if such notice
or communication is delivered via facsimile later than 5:00 p.m. (New York time) on any business
day and earlier than 11:59 p.m. (New York time) on the day preceding the next business day, (iii)
one (1) business day after when sent, if sent by nationally recognized overnight courier service
(charges prepaid), or (iv) upon actual receipt by the person to whom such notice is required to be
given. All notices shall be addressed (a) to a Participant at such Participant’s address as set
forth in the books and records of the Company and its Subsidiaries, or (b) to the Company or the
Board at the principal office of the Company clearly marked “Attention: Board of Directors”.

24

 

     13.7 Severability. Whenever possible, each provision of this Plan shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Plan is held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Plan shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been
contained herein.

     13.8 Prior Agreements. No provision of any employment, severance, incentive award, or
other similar agreement entered into by a Participant, on the one hand, and any Subsidiary of the
Company, on the other hand, prior to the Effective Date shall modify or have any effect in any
manner on any provision of this Plan or any term or condition of any Award Agreement to which such
Participant is a party. Without limiting the generality of the foregoing, any provision in any
such agreement that purports to apply in any manner to options, stock, equity-based awards, or the
like shall not apply to or have any effect on any Awards under the Plan.

     13.9 Governing Law and Forum; Waiver of Jury Trial. The Plan shall be construed and
interpreted in accordance with the laws of the State of Delaware. Each Participant who accepts an
Award thereby agrees that any suit, action or proceeding brought by or against such Participant in
connection with this Plan shall be brought solely in the courts of the State of Delaware or the
United States District Court for the District of Delaware, each Participant consents to the
jurisdiction and venue of each such court, and each Participant agrees to accept service of process
by the Company or any of its agents in connection with any such proceeding. EACH PARTICIPANT WHO
ACCEPTS AN AWARD IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER
PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTICIPANT IN RESPECT OF HIS OR HER RIGHTS OR OBLIGATIONS
HEREUNDER.

     13.10 Section 409A Compliance. It is the intention of the Company and the Board that
the Plan not be subject to the provisions of Section 409A of the Code, as in effect as of the
Effective Date or subsequently modified thereafter, or to the extent subject to such provisions
then to comply in all material respects with such provisions. In the event that Section 409A would
impose a detriment on the Participants, taken as a whole, with respect to Awards under the Plan,
then the Board shall consider in good faith modifications or amendments to the Plan intended to
eliminate or ameliorate such detriment; provided that, in no event shall the Board be required to
modify or amend the Plan in a manner adverse to the Company or the Sponsors. In no event shall the
Company, the Board, or any of their respective Affiliates be liable to any Participant or any other
Person for any such detriment, or any other cost, expense, tax, or liability imposed on a
Participant or any other Person as a result of such Participant’s acceptance of any Award or
participation in the transactions contemplated by the Plan.

     13.11 Amendment and Restatement. This Plan supersedes, in its entirety, all of the
terms and conditions of the Original Plan, and all Awards made pursuant to the terms of the
Original Plan shall be governed by the terms of this Plan.

* * * * *

25

 

Exhibit A

The attached Management Stock Holders Addendum is hereby incorporated in and made a part of the
Amended and Restated Toys “R” Us Holdings, Inc. 2005 Management Equity Plan.EX-4.1

 

Exhibit 4.1

 

AMERICAN INTERNATIONAL GROUP, INC.

 

Fifth Supplemental Indenture

Dated as of December 18, 2007

 

(Supplemental to the Junior Subordinated Debt Indenture Dated as of March 13, 2007)

 

THE BANK OF NEW YORK,

as Trustee

 

 

 

     FIFTH SUPPLEMENTAL INDENTURE, dated as of December 18, 2007, between American International
Group, Inc., a corporation duly organized and existing under the laws of the State of Delaware
(herein called the “Company”), and The Bank of New York, a New York banking corporation, as Trustee
(herein called “Trustee”);

R E C I T A L S:

     WHEREAS, the Company has heretofore executed and delivered to the Trustee a Junior
Subordinated Debt Indenture, dated as of March 13, 2007 (the “Indenture”), providing for
the issuance from time to time of the Company’s unsecured debentures, notes or other evidences of
indebtedness (herein and therein called the “Securities”), to be issued in one or more
series as provided in the Indenture;

     WHEREAS, Section 901 of the Indenture permits the Company and the Trustee to enter into an
indenture supplemental to the Indenture to establish the form and terms of a series of Securities;

     WHEREAS, Section 201 of the Indenture permits the form of Securities of a series to be
established in an indenture supplemental to the Indenture;

     WHEREAS, Section 301 of the Indenture permits certain terms of a series of Securities to be
established pursuant to an indenture supplemental to the Indenture;

     WHEREAS, pursuant to Sections 201 and 301 of the Indenture, the Company desires to provide for
the establishment of a new series of Securities under the Indenture, the form and substance of such
Securities and the terms, provisions and conditions thereof to be set forth as provided in the
Indenture and this Fifth Supplemental Indenture;

     WHEREAS, all things necessary to make this Fifth Supplemental Indenture a valid agreement of
the Company, in accordance with its terms, have been done;

     NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Securities of the series
established by this Fifth Supplemental Indenture by the Holders thereof, it is mutually agreed, for
the equal and proportionate benefit of all such Holders, as follows:

 

 

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

Section 1.1 Relation to Indenture

     This Fifth Supplemental Indenture constitutes a part of the Indenture (the provisions of
which, as modified by this Fifth Supplemental Indenture, shall apply to the Debentures) in respect
of the Debentures but shall not modify, amend or otherwise affect the Indenture insofar as it
relates to any other series of Securities or modify, amend or otherwise affect in any manner the
terms and conditions of the Securities of any other series.

Section 1.2 Definitions

     For all purposes of this Fifth Supplemental Indenture, the capitalized terms used herein
(i) which are defined in this Section 1.2 have the respective meanings assigned hereto in this
Section 1.2 and (ii) which are defined in the Indenture (and which are not defined in this
Section 1.2) have the respective meanings assigned thereto in the Indenture. For all purposes of
this Fifth Supplemental Indenture:

     1.2.1 Unless the context otherwise requires, any reference to an Article or Section refers to
an Article or Section, as the case may be, of this Fifth Supplemental Indenture;

     1.2.2 The words “herein”, “hereof” and “hereunder” and words of similar import refer to this
Fifth Supplemental Indenture as a whole and not to any particular Article, Section or other
subdivision; and

     1.2.3 (a) The terms defined in this Section 1.2.3 have the meanings assigned to them in this
Section and include the plural as well as the singular:

     “Additional Debentures” has the meaning set forth in Section 2.1(b).

     “Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per
annum equal to the quarterly equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date.

     “APM Commencement Date” means, with respect to any Deferral Period, the earlier of
(i) the Business Day following the conclusion of 20 consecutive Interest Periods following the
commencement of such Deferral Period and (ii) the first Interest Payment Date following the
commencement of such Deferral Period on which the Company pays any current interest on the
Debentures.

-2-

 

     “APM Common Stock” means an aggregate number of shares of Common Stock, including any
shares of Common Stock held in treasury, and any shares of Common Stock sold pursuant to the
Company’s dividend reinvestment or similar plan or sold pursuant to any Employee Benefit Plan, up
to the Maximum Share Number.

     “APM Qualifying Securities” means APM Common Stock, Qualifying Warrants, Qualifying
Non-Cumulative Preferred Stock and Mandatorily Convertible Preferred Stock; provided that the
Company may amend the definition of APM Qualifying Securities to eliminate Common Stock, Qualifying
Warrants or Mandatorily Convertible Preferred Stock (but not both Common Stock and Qualifying
Warrants) from the definition if, after December 11, 2007, an accounting standard or interpretive
guidance of an existing standard issued by an organization or regulator that has responsibility for
establishing or interpreting accounting standards in the United States becomes effective so that
there is more than an insubstantial risk that the failure to do so would result in a reduction in
the Company’s earnings per share as calculated for financial reporting purposes.

     “Assurance Agreement” means the agreement of the Company, dated as of June 27, 2005,
in favor of eligible employees and relating to specified obligations of Starr International
Company, Inc. (as such agreement may be amended, supplemented, extended, modified or replaced from
time to time).

     “Bankruptcy Event” means an Event of Default set forth in Sections 501(5) or (6) of
the Indenture.

     “Business Combination” means a merger, consolidation, amalgamation, binding share
exchange or conveyance, transfer or lease of assets substantially as an entirety to any other
Person or a similar transaction.

     “Business Day” is any day, other than (i) a Saturday, Sunday or other day on which
banking institutions in The City of New York are authorized or required by law or executive order
to remain closed or (ii) on or after the Scheduled Maturity Date, a day that is not a London
Banking Day.

     “Calculation Agent” means AIG Financial Products Corp., or any other Person appointed
by the Company, acting as calculation agent for the Debentures. Any successor or substitute
Calculation Agent may be an Affiliate of the Company.

     “Capital Stock” for any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests in (however
designated) shares issued by that Person.

     “Commercially Reasonable Efforts” means, for purposes of selling APM Qualifying
Securities or Qualifying Capital Securities, commercially reasonable efforts to complete the offer
and sale of APM Qualifying Securities or Qualifying Capital Securities, as applicable, to third
parties that are not Subsidiaries of the Company in

-3-

 

public offerings or private placements. The Company shall not be considered to have made
Commercially Reasonable Efforts to effect a sale of APM Qualifying Securities or Qualifying Capital
Securities, as applicable, if it determines not to pursue or complete such sale due to pricing,
coupon, dividend rate or dilution considerations.

     “Common Stock” means the common stock, par value $2.50 per share, of the Company.

     “Comparable Treasury Issue” means the U.S. Treasury security selected by an
independent investment bank selected by the Calculation Agent as having a maturity comparable to
the term remaining from the Redemption Date to December 18, 2012 that would be utilized, at the
time of selection and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity.

     “Comparable Treasury Price” means, with respect to any Redemption Date, the average of
the Reference Treasury Dealer Quotations for such Redemption Date.

     “Continuing Director” means a director who was a director of the Company at the time
of the initial approval of the definitive agreement relating to a Business Combination transaction
by the Company’s Board of Directors.

     “Current Stock Market Price” of the APM Common Stock on any date shall mean (i) the
closing sale price per share (or if no closing sale price is reported, the average of the bid and
ask prices or, if more than one in either case, the average of the average bid and the average ask
prices) on that date as reported in composite transactions by the New York Stock Exchange or, if
the Common Stock is not then listed on the New York Stock Exchange, as reported by the principal
U.S. securities exchange on which the Common Stock is traded, or (ii) if the Common Stock is not
listed on any U.S. securities exchange on the relevant date, the average of the mid-point of the
last bid and ask prices for the Common Stock on the relevant date from each of at least three
nationally recognized independent investment banking firms selected by the Company for this
purpose.

     “Debentures” has the meaning set forth in Section 2.1(a).

     “Deferral Period” means each period beginning on an Interest Payment Date with respect
to which the Company either (A) elects pursuant to Section 2.1(g) to defer all or part of any
interest payment due on an Interest Payment Date or (B) fails to pay all or any part of any
interest payment due on an Interest Payment Date within five Business Days after the Interest
Payment Date and ending on the earlier of (i) the conclusion of 40 consecutive Interest Periods
following such Interest Payment Date and (ii) the next Interest Payment Date on which the Company
has paid all accrued and previously unpaid interest on the Debentures.

     “Eligible APM Proceeds” means, with respect to any Interest Payment Date, the net
proceeds (after underwriters’ or placement agents’ fees, commissions or discounts

-4-

 

and other expenses relating to the issuance or sale) that the Company has received during the
180-days prior to the related Interest Payment Date from the issuance or sale of APM Qualifying
Securities to Persons that are not Subsidiaries. This includes, without limitation, sales pursuant
to any dividend reinvestment or similar plan and sales made pursuant to any Employee Benefit Plan.

     “Eligible Repayment Proceeds” means, with respect to any Repayment Date, the
Applicable Percentage of the net proceeds the Company has received from the issuance of Qualifying
Capital Securities that the Company has sold during a 180-day period ending on a notice date not
more than 30 or less than 10 Business Days prior to such Repayment Date.

     “Employee Benefit Plan” means any written purchase, savings, option, bonus,
appreciation, profit sharing, thrift, incentive, pension or similar plan or arrangement or any
written compensatory contract or arrangement.

     “Enforcement Event” means any one of the following events:

     (1) failure by the Company to observe, satisfy or perform any of the covenants or agreements
contained in this Fifth Supplemental Indenture or the Indenture (other than (i) any covenant or
agreement in the Indenture expressly declared inapplicable herein, (ii) a covenant or agreement in
respect of the Debentures a default in whose observance, satisfaction or performance is elsewhere
specifically dealt with in this Fifth Supplemental Indenture or the Indenture (including without
limitation Article X of the Indenture), or (iii) an event which is, or with the passage of time
and/or giving of notice would result in, an Event of Default) on the part of the Company in respect
of the Debentures that continues following a period of 60 days after the date on which written
notice of such failure, requiring the Company to remedy the same and stating that it is a notice
with respect to an Enforcement Event hereunder, shall have been given to the Company by the Trustee
by registered mail, or to the Company and the Trustee by the Holders of at least a majority in the
aggregate principal amount of the Debentures at the time Outstanding; or

     (2) unless otherwise provided for in Section 2.1(d), the Company’s failure to use Commercially
Reasonable Efforts to raise sufficient Eligible Repayment Proceeds as required by Section 2.1(d);
or

     (3) the Company’s failure (a) to use Commercially Reasonable Efforts to raise Eligible APM
Proceeds, or (b) to pay deferred interest on the Debentures, in either case as required by Section
2.1(h) or (i).

     “Event of Default” has the meaning set forth in Section 2.1(j).

     “Extension Date” means each of December 18, 2012, December 18, 2017 and December 18,
2022.

-5-

 

     “Final Maturity Date” has the meaning set forth in Section 2.1(d)(iii).

     “Indebtedness” means all indebtedness and obligations (other than the Debentures) of,
or Guaranteed or assumed by, the Company that (i) are for borrowed money or (ii) are evidenced by
bonds, debentures, notes or other similar instruments.

     “Interest Payment Date” has the meaning set forth in Section 2.1(e).

     “Interest Period” means the period from and including any Interest Payment Date (or,
in the case of the first Interest Payment Date, December 18, 2007) to but excluding the next
Interest Payment Date.

     “LIBOR Determination Date” means the second London Banking Day immediately preceding
the first day of the relevant Interest Period.

     “London Banking Day” means any day on which dealings in dollars are transacted in the
London interbank market.

     “Make-Whole Redemption Price” means the sum, as determined by the Calculation Agent,
of the present values of the remaining scheduled payments of principal discounted from December 18,
2012 and interest thereon that would have been payable to and including December 18, 2012 (not
including any portion of such payments of interest accrued to the Redemption Date) discounted from
the relevant Interest Payment Date to the Redemption Date on a quarterly basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 0.50%.

     “Mandatorily Convertible Preferred Stock” means cumulative preferred stock with (a) no
prepayment obligation on the part of the Company, whether at the election of the holders or
otherwise, and (b) a requirement that the preferred stock converts into Common Stock within three
years from the date of its issuance at a conversion ratio within a range established at the time of
issuance of the preferred stock, subject to customary anti-dilution adjustments.

     “Market Disruption Event” means, for purposes of sales of APM Qualifying Securities
pursuant to Section 2.1(h) or sales of Qualifying Capital Securities pursuant to

-6-

 

Section 2.1(d), as applicable (collectively, the “Permitted Securities”), the
occurrence or existence of any of the following events or sets of circumstances:

     (a) trading in securities generally (or in the Common Stock specifically) on the New York
Stock Exchange or any other national securities exchange, or in the over-the-counter market, on
which the Company’s Capital Stock is then listed or traded shall have been suspended or its
settlement generally shall have been materially disrupted or minimum prices shall have been
established on any such exchange or market by the relevant regulatory body or governmental agency
having jurisdiction that materially disrupts or otherwise has a material adverse effect on trading
in, or the issuance and sale of, Permitted Securities;

     (b) the Company would be required to obtain the consent or approval of its stockholders or the
consent or approval of, license from, or registration with, a regulatory body (including, without
limitation, any securities exchange) or governmental authority to issue and sell Permitted
Securities, and the Company fails to obtain that consent or approval or to receive such license or
effect such registration notwithstanding its commercially reasonable efforts to obtain that
consent, approval, license or registration;

     (c) an event occurs and is continuing as a result of which the offering document for the offer
and sale of Permitted Securities would, in the Company’s reasonable judgment, contain an untrue
statement of a material fact or omit to state a material fact required to be stated in that
offering document or necessary to make the statements in that offering document not misleading,
provided that (i) one or more events described under this clause (c) shall not constitute a Market
Disruption Event with respect to a period of more than 90 days in any 180-day period and (ii)
multiple suspension periods contemplated by this clause (c) shall not exceed an aggregate of 180
days in any 360-day period;

     (d) the Company reasonably believes that the offering document for the offer and the sale of
Permitted Securities would not be in compliance with a rule or regulation of the Commission (for
reasons other than those referred to in clause (c) of this definition) and the Company is unable to
comply with such rule or regulation or such compliance is unduly burdensome, provided that (i) one
or more events described under this clause (d) shall not constitute a Market Disruption Event with
respect to a period of more than 90 days in any 180-day period and (ii) multiple suspension periods
contemplated by this clause (d) shall not exceed an aggregate of 180 days in any 360-day period;

     (e) a banking moratorium shall have been declared by the federal or state authorities of the
United States that results in a material disruption of any of the markets on which Permitted
Securities are trading;

     (f) a material disruption shall have occurred in commercial banking or securities settlement
or clearance services in the United States;

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     (g) the United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States, there shall have been a declaration of a
national emergency or war by the United States or there shall have occurred any other national or
international calamity or crisis, such that market trading in the Company’s Capital Stock has been
materially disrupted; or

     (h) there shall have occurred such a material adverse change in general domestic or
international economic, political or financial conditions, including without limitation as a result
of terrorist activities, or the effect of international conditions on the financial markets in the
United States, that materially disrupts the capital markets such as to make it, in the Company’s
judgment, impracticable or inadvisable to proceed with the offer and sale of Permitted Securities.

     “Maximum Share Number” has the meaning set forth in Section 2.1(h).

     “Maximum Warrant Number” has the meaning set forth in Section 2.1(h).

     “Outstanding” has the meaning set forth in Section 2.1(d).

     “Outstanding Parity Securities” has the meaning set forth in Section 2.1(v)(iv).

     “pari passu”, as applied to the ranking of any obligation of a Person in relation to
any other obligation of such Person, means in any bankruptcy, insolvency or receivership proceeding
that each such obligation either (i) is not subordinated or junior in right of payment to any other
obligation or (ii) is subordinate or junior in right of payment to the same obligations as is the
other, and is so subordinate or junior to the same extent, and is not subordinate or junior in
right of payment to each other or to any obligation as to which the other is not so subordinate or
junior.

     “Preferred Stock Issuance Cap” has the meaning set forth in Section 2.1(i)(1).

     “Prospectus Supplement” means the prospectus supplement dated December 11, 2007
relating to the Debentures.

     “Qualifying Non-Cumulative Preferred Stock” means the Company’s non-cumulative
perpetual preferred stock that (i) contains no remedies other than Permitted Remedies and (ii)(a)
is redeemable, but is subject to Intent-Based Replacement

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Disclosure, and has a provision that provides for mandatory suspension of distributions or the
payment of distributions solely from Eligible APM Proceeds upon its failure to satisfy one or more
financial tests set forth therein or (b) is subject to a replacement capital covenant substantially
similar to the Replacement Capital Covenant.

     “Qualifying Warrants” means net share settled warrants to purchase shares of Common
Stock that (i) have an exercise price per share greater than the Current Stock Market Price as of
the date of pricing thereof, (ii) the Company is not entitled to redeem for cash and the holders of
which are not entitled to require the Company to repurchase for cash in any circumstances and (iii)
do not entitle the holders thereof to purchase a number of shares of Common Stock in excess of the
applicable Maximum Warrant Number.

     “Rating Agency” means any nationally recognized statistical rating organization as
defined in Section 3(a)(62) of the Exchange Act (or any successor provision), that publishes a
rating for the Company on the relevant date.

     “Rating Agency Event” means that any Rating Agency amends, clarifies or changes the
criteria it uses to assign equity credit to securities such as the Debentures, which amendment,
clarification or change results in:

     (a) the shortening of the length of time the Debentures are assigned a particular level of
equity credit by that Rating Agency as compared to the length of time they would have been assigned
that level of equity credit by that Rating Agency or its predecessor on December 18, 2007; or

     (b) the lowering of the equity credit (including up to a lesser amount) assigned to the
Debentures by that Rating Agency as compared to the equity credit assigned by that Rating Agency or
its predecessor on December 18, 2007.

     “Reference Treasury Dealer” means each of Citigroup Global Markets Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and UBS Securities
LLC or their respective successors; provided, however, that if any of the foregoing shall cease to
be a primary U.S. government securities dealer in the United States (a “Primary Treasury
Dealer”), the Company shall substitute therefor another Primary Treasury Dealer; and any other
Primary Treasury Dealer selected by the Calculation Agent after consultation with the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any Redemption Date, the average, as determined by the Calculation Agent, of the bid and
ask prices for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Calculation Agent by that Reference Treasury Dealer at
5:00 p.m. on the third Business Day preceding such Redemption Date.

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     “Regular Record Date” for the payment of any current interest payable on any Interest
Payment Date, the date specified in Section 2.1(f) and for the payment of deferred interest, the
date specified in Section 2.1(g)(ii).

     “Repayment Date” means the Scheduled Maturity Date and each Interest Payment Date
thereafter until the Company shall have repaid, redeemed, defeased or otherwise acquired all of the
Debentures.

     “Replacement Capital Covenant” means the replacement capital covenant, dated as of
December 18, 2007, of the Company, as the same may be amended or supplemented from time to time in
accordance with the provisions hereof and thereof.

     “Reuters Screen LIBOR01” means the display designated on Reuters Screen LIBOR01 (or
such other page or service as may replace the Reuters Screen LIBOR01 as selected by the Calculation
Agent for the purposes of displaying Three-month LIBOR interest rates of major banks or, if not
available, such other page and service as may be selected by the Calculation Agent from time to
time).

     “Scheduled Maturity Date” has the meaning set forth in Section 2.1(d).

     “Stock and Warrant Issuance Cap” has the meaning set forth in Section 2.1(i)(1).

     “Tax Event” means that the Company has requested and received an Opinion of Counsel
(which counsel need not be satisfactory to the Trustee) experienced in such matters to the effect
that, as a result of any:

     (a) amendment to or change in the laws or regulations of the United States or any political
subdivision or taxing authority of or in the United States that is enacted or becomes effective
after December 11, 2007;

     (b) proposed change in those laws or regulations that is announced after December 11, 2007;

     (c) official administrative decision or judicial decision or administrative action or other
official pronouncement interpreting or applying those laws or regulations that is announced after
December 11, 2007; or

     (d) threatened challenge asserted in connection with an audit of the Company, or a threatened
challenge asserted in writing against any other taxpayer that has raised capital through the
issuance of securities that are substantially similar to the Debentures;

there is more than an insubstantial risk that interest payable by the Company on the Debentures is
not, or will not be, deductible by the Company, in whole or in part, for United States federal
income tax purposes.

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     “Three-month LIBOR” means, with respect to any Interest Period, the rate (expressed as
a percentage per annum and determined by the Calculation Agent) for deposits in U.S. dollars for a
three-month period commencing on the first day of that Interest Period that appears on Reuters
Screen LIBOR01 as of 11:00 a.m. (London time) on the LIBOR Determination Date for that Interest
Period. If such rate does not appear on Reuters Screen LIBOR01, Three-month LIBOR will be
determined on the basis of the rates at which deposits in U.S. dollars for a three-month period
commencing on the first day of that Interest Period are offered to prime banks in the London
interbank market by four major banks in the London interbank market selected by the Calculation
Agent (after consultation with the Company), at approximately 11:00 a.m., London time, on the LIBOR
Determination Date for that Interest Period, in an amount that, in the Calculation Agent’s
judgment, is representative of a single transaction in that market at that time. The Calculation
Agent will request the principal London office of each of such banks to provide a quotation of its
rate. If at least two such quotations are provided, Three-month LIBOR with respect to that
Interest Period will be the arithmetic mean of such quotations. If fewer than two quotations are
provided, Three-month LIBOR with respect to that Interest Period will be the arithmetic mean of the
rates quoted by three major banks in New York City selected by the Calculation Agent, at
approximately 11:00 a.m., New York City time, on the first day of that Interest Period for loans in
U.S. dollars to leading European banks for a three-month period commencing on the first day of that
Interest Period and in an amount that, in the Calculation Agent’s judgment, is representative of a
single transaction in that market at that time. However, if fewer than three banks selected by the
Calculation Agent to provide quotations are quoting as described above, Three-month LIBOR for that
Interest Period will be the same as Three-month LIBOR as determined for the previous Interest
Period or, in the case of the Interest Period beginning on the Scheduled Maturity Date, 5.111%.

     “Voting Stock” means equity securities which ordinarily have voting power for the
election of directors, whether at all times or only so long as no senior class of equity securities
has such voting power by reason of any contingency.

     (b) “Applicable Percentage”, “Intent-Based Replacement Disclosure”, “Permitted Remedies” and
“Qualifying Capital Securities” shall have the respective meanings set forth in the Replacement
Capital Covenant as in effect on the date hereof and as it may be amended pursuant to its terms
consistent with Section 2.1(r).

ARTICLE TWO

GENERAL TERMS AND CONDITIONS OF THE DEBENTURES

Section 2.1 Terms of Debentures

     Pursuant to Sections 201 and 301 of the Indenture, there is hereby established a series of
Securities, the terms of which shall be as follows:

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     (a) Designation. The Securities of this series shall be known and designated as the
“7.70% Series A-5 Junior Subordinated Debentures” of the Company (the “Debentures”). The
CUSIP number of the Debentures is 026874859.

     (b) Aggregate Principal Amount. The maximum aggregate principal amount of the
Debentures that may be authenticated and delivered under the Indenture and this Fifth Supplemental
Indenture is $1,100,000,000 (except for Debentures authenticated and delivered upon registration of
transfer of, or exchange for, or in lieu of, other Debentures pursuant to Section 304, 305, 306,
906 or 1107 of the Indenture or Section 3.5 of this Fifth Supplemental Indenture); provided, that
the Company may from time to time authenticate and deliver under the Indenture and this Fifth
Supplemental Indenture additional Debentures (any such additional Debentures, the “Additional
Debentures”) in addition to the $1,100,000,000 principal amount previously provided for, so
long as the aggregate principal amount of Debentures delivered under the Indenture and this Fifth
Supplemental Indenture does not exceed $1,150,000,000, which Additional Debentures may accrue
interest from a different date than the Debentures, as may be specified pursuant to Section 301 of
the Indenture, so long as the Company reasonably determines the Additional Debentures so
authenticated and delivered will be fungible for United States federal income tax purposes. From
time to time the Company may execute and deliver, and upon Company Order the Trustee shall
authenticate and deliver, additional Debentures.

     (c) Form and Denominations. The Debentures will be issued only in fully registered
form, and the authorized denominations of the Debentures shall be $25 principal amount and integral
multiples of $25 in excess thereof. The Debentures will initially be issued in the form of one or
more Global Securities substantially in the form of Annex A attached hereto, with such
modifications thereto as may be approved by the authorized officer executing the same. The
Debentures will be denominated in U.S. dollars and payments of principal and interest will be made
in U.S. dollars.

     (d) Scheduled Maturity Date.

     (i) The principal amount of, and all accrued and unpaid interest on, the Outstanding
Debentures shall be payable in full on December 18, 2047, or if such day is not a Business
Day, the next Business Day (the “Scheduled Maturity Date”); provided that in the
event the Company has delivered an Officers’ Certificate to the Trustee pursuant to
clause (vi) of this Section 2.1(d) in connection with the Scheduled Maturity Date, (A) the
principal amount of Debentures payable on the Scheduled Maturity Date, if any, shall be the
principal amount set forth in the notice of repayment accompanying such Officers’
Certificate, (B) such specified principal amount of Debentures shall be repaid on the
Scheduled Maturity Date pursuant to Article III, and (C) subject to clause (ii) of this
Section 2.1(d), the remaining Debentures shall remain Outstanding and shall be payable on
the immediately succeeding Interest Payment Date or such earlier date on which they are
redeemed pursuant to Section 2.1(q) or shall

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become due and payable pursuant to Section 502 of the Indenture or clause (iii) of
this Section 2.1(d). The Outstanding Debentures shall be due and payable on the Scheduled
Maturity Date except to the extent otherwise specified in an Officers’ Certificate
delivered to the Trustee not more than 30 and not less than 10 Business Days
immediately preceding the Scheduled Maturity Date.

     (ii) In the event the Company has delivered an Officers’ Certificate to the Trustee
pursuant to clause (vi) of this Section 2.1(d) in connection with any Interest Payment
Date, the principal amount of Debentures payable on such Interest Payment Date shall be the
principal amount set forth in the notice of repayment, if any, accompanying such Officers’
Certificate, such principal amount of Debentures shall be repaid on such Interest Payment
Date pursuant to Article III, and the remaining Debentures shall remain Outstanding and
shall be payable on the immediately succeeding Interest Payment Date or such earlier date
on which they are redeemed pursuant to Section 2.1(q) or shall become due and payable
pursuant to Section 502 of the Indenture or clause (iii) of this Section 2.1(d). The
Outstanding Debentures shall be due and payable on any Interest Payment Date except to the
extent otherwise specified in an Officers’ Certificate delivered to the Trustee not more
than 30 and no less than 10 Business Days immediately preceding such Interest Payment Date.

     (iii) Notwithstanding anything to the contrary set forth in this Fifth Supplemental
Indenture, the principal of, and all accrued and unpaid interest on, all Outstanding
Debentures shall be due and payable on the Final Maturity Date. The “Final Maturity
Date” means December 18, 2062 (or, if this day is not a Business Day, the following
Business Day); provided that, the Company may at its sole option elect to extend such date
up to three times, in each case for an additional five-year period, on each Extension Date,
and as a result the Final Maturity Date may be extended to (and in such case, shall mean)
December 18, 2067, December 18, 2072 or December 18, 2077 (or, if any such date is not a
Business Day, the following Business Day). The Company shall provide irrevocable written
notice of an election to extend the Final Maturity Date no later than the 30th calendar day
prior to the applicable Extension Date in the manner provided for in the Indenture for
notices.

     (iv) Any repayment of principal and current interest on the Debentures pursuant to
this Section 2.1(d) on any date prior to the Final Maturity Date shall not affect the
Company’s obligations under Section 2.1(h) with respect to the payment of deferred interest
on the Debentures. For the purpose of clarity, it is possible that the Company may repay
the principal and current interest on a Debenture pursuant to this Section 2.1(d) but still
be obligated to pay deferred interest on the Debenture. For the purposes of the definition
of “Outstanding” in the Indenture, a Debenture, as to which principal and current
interest has been repaid, redeemed or otherwise satisfied by the Company, shall for all
purposes of the Indenture and this Fifth Supplemental Indenture, other than for purposes of

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Article XI of the Indenture and Section 2.1(d) and Article III of this Fifth
Supplemental Indenture, be deemed Outstanding so long as any deferred interest on such
Debenture remains unpaid.

     (v) Until principal and current interest on all Outstanding Debentures are paid in
full, the principal of all Outstanding Debentures is automatically accelerated as provided
in Section 2.1(k) or a declaration of acceleration pursuant to Section 502 of the Indenture
occurs, the Company shall use Commercially Reasonable Efforts, subject to a Market
Disruption Event:

     (A) to raise sufficient Eligible Repayment Proceeds during a 180-day period
ending on a date not more than 30 and not less than 10 Business Days prior to the
Scheduled Maturity Date to permit repayment of the principal and current interest
on all Outstanding Debentures in full on the Scheduled Maturity Date; and

     (B) if the Company is unable for any reason to raise sufficient Eligible
Repayment Proceeds to permit repayment in full of the principal amount of and
current interest on all the Outstanding Debentures on the Scheduled Maturity Date
or any subsequent Interest Payment Date, to raise sufficient Eligible Repayment
Proceeds to permit repayment of the principal and current interest on all
Outstanding Debentures in full on the next Interest Payment Date pursuant to clause
(ii) of this Section 2.1(d).

     (vi) The Company shall, if it has not raised sufficient Eligible Repayment Proceeds in
connection with any Repayment Date, deliver an Officers’ Certificate to the Trustee no more
than 30 and no less than 10 Business Days in advance of such Repayment Date stating the
amount of Eligible Repayment Proceeds, if any, raised pursuant to clause (v) above in
connection with such Repayment Date. Each Officers’ Certificate delivered pursuant to this
clause (vi), unless no principal amount of Debentures is to be repaid on the applicable
Repayment Date, shall be accompanied by a notice of repayment pursuant to Section 3.1
setting forth the principal amount of the Debentures to be repaid on such Repayment Date,
which amount shall be determined after giving effect to clause (viii) of this
Section 2.1(d).

     (vii) The Company shall be excused from its obligation to use Commercially Reasonable
Efforts to sell Qualifying Capital Securities pursuant to clause (v) above if such
Officers’ Certificate further certifies that: (A) a Market Disruption Event was existing at
any time during the period commencing 180 days prior to the date of such Officers’
Certificate or, in the case of any Repayment Date after the Scheduled Maturity Date, the
period commencing on the immediately preceding Interest Payment Date and ending on the
Business Day immediately preceding the date of such Officers’ Certificate; and (B) either
(1) the Market Disruption Event continued for the entire 180-day period or, in the

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case of any Repayment Date after the Scheduled Maturity Date, the period since the
most recent Interest Payment Date, as the case may be, or (2) the Market Disruption Event
continued for only part of the relevant period, but the Company was unable after
Commercially Reasonable Efforts to raise sufficient Eligible Repayment Proceeds during the
rest of that period to permit repayment of the Debentures in full.

     (viii) Payments on the Debentures on any Repayment Date shall be applied,
first, to the extent permitted by Section 2.1(i), to deferred interest to the
extent of Eligible APM Proceeds raised pursuant to Section 2.1(i), second, to
current interest and, third, to the repayment of the principal of Debentures;
provided that if the Company is obligated to sell Qualifying Capital Securities and repay
any outstanding pari passu securities in addition to the Debentures, then on any date and
for any period such payments shall be applied (A) first, to Outstanding Parity
Securities and any other pari passu securities having an earlier scheduled maturity date
than the Debentures, until the principal of and all accrued and unpaid interest on those
securities has been paid in full, and (B) second, to the Debentures and any
Outstanding Parity Securities or other pari passu securities having the same scheduled
maturity date as the Debentures pro rata in accordance with their respective outstanding
principal amounts. None of such payments shall be applied to any other pari passu
securities having a later scheduled maturity date until the principal of and all accrued
and unpaid interest on the Debentures has been paid in full, except to the extent permitted
by clause (vii) of Section 2.1(g) and the first sentence of Section 2.1(h). If the Company
has raised less than $5,000,000 of Eligible Repayment Proceeds during the relevant 180-day
or three-month period, the Company will not be required to repay any Debentures on the
relevant Repayment Date, but it will repay the applicable principal amount of the
Debentures on the next Interest Payment Date as of which the Company has raised at least
$5,000,000 of Eligible Repayment Proceeds.

     (e) Rate of Interest. The Debentures shall bear interest (i) from and including
December 18, 2007 to but excluding the Scheduled Maturity Date at the rate of 7.70% per annum,
computed on the basis of a 360-day year comprised of twelve 30-day months, and (ii) thereafter, as
to the principal amount of any Outstanding Debentures, at an annual rate equal to Three-month LIBOR
plus 3.616%, computed on the basis of a 360-day year and the actual number of days elapsed. All
percentages resulting from any calculation of Three-month LIBOR will be rounded upward or downward,
as appropriate, to the next higher or lower one hundred-thousandth of a percentage point. Subject
to Sections 2.1(g) and (h): interest on the Debentures shall be payable quarterly in arrears on
March 18, June 18, September 18 and December 18 of each year, beginning on March 18, 2008 (each
such date, an “Interest Payment Date”). In the event any Interest Payment Date on or
before the Scheduled Maturity Date falls on a day that is not a Business Day, the interest payment
due on that date will be postponed to the next day that is a Business Day and no interest shall
accrue as a result of such postponement. If any Interest Payment Date after the Scheduled Maturity
Date would otherwise fall on a day that is not a

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Business Day, such Interest Payment Date will be postponed to the following Business Day,
unless such postponement would cause the day to fall in the next calendar month, in which case it
shall be brought forward to the immediately preceding Business Day. Any installment of interest
(or portion thereof) deferred in accordance with Section 2.1(g) or otherwise unpaid shall bear
additional interest, to the extent permitted by law, at the rate of interest then in effect from
time to time on the Debentures, from the relevant Interest Payment Date, compounded on each
subsequent Interest Payment Date, until paid in accordance with Section 2.1(h).

     (f) To Whom Interest is Payable. Interest (other than deferred interest which shall
be payable to the Persons specified pursuant to Section 2.1(g)(ii)) shall be payable to the Person
in whose name the Debentures are registered at the close of business on the Business Day next
preceding the Interest Payment Date, or in the event the Debentures cease to be held in the form of
one or more Global Securities, at the close of business on the date 15 days prior to that Interest
Payment Date, whether or not a Business Day.

     (g) Option to Defer Interest Payments.

     (i) The Company shall have the right, at any time and from time to time prior to the
Final Maturity Date, to defer the payment of interest on the Debentures for up to 40
consecutive Interest Periods; provided that no Deferral Period shall extend beyond the
Final Maturity Date or the earlier redemption of the Debentures. If an Event of Default
has occurred and is continuing or the Company has given notice of its election to defer
interest payments but the Deferral Period has not yet commenced or a Deferral Period is
continuing, the Company shall not, and shall not permit any Subsidiary, subject to the
exceptions specified in clause (vii) of this Section 2.1(g), to: (a) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any Capital Stock of the Company, (b) make any payment of principal of, or
interest or premium, if any, on, or repay, purchase or redeem any debt securities of the
Company that rank pari passu with or junior to the Debentures or (c) make any payments with
respect to any Guarantee by the Company of securities of any Subsidiary if such Guarantee
ranks pari passu with, or junior to, the Debentures.

     (ii) At the end of any Deferral Period, the Company shall pay all deferred interest on
the Debentures (together with compounded interest thereon, if any, to the extent permitted
by applicable law), to the Person in whose name the Debentures are registered at the close
of business on the Business Day next preceding the Interest Payment Date at the end of such
Deferral Period or, in the event the Debentures cease to be held in the form of one or more
Global Securities, at the close of business on the date 15 days prior to the end of the
Deferral Period, whether or not a Business Day.

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     (iii) Upon termination of any Deferral Period and upon the payment of all deferred
interest and any compounded interest then due on any Interest Payment Date, the Company may
elect to begin a new Deferral Period pursuant to clause (i) of this Section 2.1(g).

     (iv) The Company may elect to pay deferred interest on any Interest Payment Date
during any Deferral Period to the extent permitted by Section 2.1(h).

     (v) The Company shall give written notice to the Trustee and the Holders of the
Debentures of its election to begin any Deferral Period at least one Business Day prior to
the Regular Record Date for that Interest Payment Date. Notwithstanding the previous
sentence, the Company’s failure to pay any interest due within five Business Days after any
Interest Payment Date shall automatically and without any further action by any Person be
deemed to commence a Deferral Period.

     (vi) If any Deferral Period lasts longer than one year, the Company shall not, and
shall cause its Subsidiaries not to, purchase, redeem or otherwise acquire any securities
ranking junior to or pari passu with any APM Qualifying Securities the proceeds of which
were used to pay deferred interest during such Deferral Period until the first anniversary
of the date on which all deferred interest has been paid, subject to the exceptions set
forth in clause (vii) below. If the Company is involved in a Business Combination where
immediately after the consummation of the Business Combination more than 50% of the
surviving or resulting entity’s Voting Stock is owned by the shareholders of the other
party to the Business Combination or Continuing Directors cease for any reason to
constitute a majority of the directors of the surviving or resulting entity, then neither
the restrictions set forth in this clause (vi) nor the provisions of Section 2.1(h) shall
apply to any Deferral Period that is terminated on the next Interest Payment Date following
the date of consummation of the Business Combination.

     (vii) The restrictions in clauses (i) and (vi) of this Section 2.1(g) do not apply to
(a) purchases, redemptions or other acquisitions of shares of the Company’s Capital Stock
in connection with (1) any Employee Benefit Plan or the Assurance Agreement or (2) a
dividend reinvestment, stock purchase plan or other similar plan, (b) any exchange or
conversion of any class or series of the Company’s Capital Stock (or the Capital Stock of
any Subsidiary) for any class or series of the Company’s Capital Stock or of any class or
series of Indebtedness of the Company for any class or series of the Company’s Capital
Stock, (c) the purchase of fractional interests in shares of the Capital Stock of the
Company in accordance with the conversion or exchange provisions of the Company’s Capital
Stock or the security or instrument being converted or exchanged, (d) any declaration of a
dividend in connection with any stockholders’ right plan, or the issuance of rights, equity
securities or other property under any stockholders’

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right plan, or the redemption or repurchase of rights in accordance with any
stockholders’ rights plan, (e) any dividend in the form of equity securities, warrants,
options or other rights where the dividend stock or the stock issuable upon exercise of the
warrants, options or other rights is the same stock as that on which the dividend is being
paid or ranks pari passu with or junior to such equity securities, (f) any payment during a
Deferral Period of current or deferred interest in respect of any debt securities of the
Company that rank pari passu with the Debentures that is made pro rata to the amounts due
on pari passu securities and the Debentures (provided that such payments are made in
accordance with Section 2.1(h) to the extent it applies) and any payments of deferred
interest on such pari passu securities that, if not made, would cause the Company to breach
the terms of the instrument governing such pari passu securities, (g) any payment of
principal in respect of pari passu securities having an earlier scheduled maturity date
than the Debentures, as required under a provision of such pari passu securities that is
substantially the same as Section 2.1(d) or any such payment in respect of any such pari
passu securities having the same scheduled maturity date as the Debentures that is made on
a pro rata basis among one or more series of such securities and the Debentures or (h) any
repayment or redemption of a security necessary to avoid a breach of the instrument
governing that security.

     (h) Payment of Deferred Interest. The Company shall not pay deferred interest
(including compounded interest thereon) on the Debentures on any Interest Payment Date during any
Deferral Period from any source other than Eligible APM Proceeds unless (x) required by an
applicable regulatory authority, (y) permitted under clause (vi) of Section 2.1(g) or (z) an Event
of Default has occurred and is continuing. Notwithstanding the foregoing, the Company may pay
current interest during a Deferral Period from any available funds. To the extent that the Company
is able to raise some, but not all, Eligible APM Proceeds to pay accrued and unpaid interest on the
applicable Interest Payment Date, such Eligible APM Proceeds shall be allocated first to deferred
payments of accrued and unpaid interest in chronological order based on the date each payment was
first deferred. If any Indebtedness of the Company that ranks pari passu with the Debentures is
outstanding in addition to the Debentures under which the Company is obligated to sell APM
Qualifying Securities and apply the net proceeds to the payment of deferred interest or
distributions, then on any date and for any period the amount of Eligible APM Proceeds received by
the Company from such sales and available for payment of the deferred interest and distributions
shall be applied to the Debentures and such pari passu securities on a pro rata basis up to, in the
case of Common Stock, the Stock and Warrant Issuance Cap and the Maximum Share Number, in the case
of Qualifying Warrants, the Stock and Warrant Issuance Cap and the Maximum Warrant Number and, in
the case of Qualifying Non-Cumulative Preferred Stock and Mandatorily Convertible Preferred Stock,
the Preferred Stock Issuance Cap (or comparable provisions in the instruments governing such pari
passu securities) in proportion to the total amounts that are due on the Debentures and such pari
passu securities. The Company may make such pro rata payments on such pari passu

-18-

 

securities so long as it shall have paid or deposited with the paying agent for the Debentures
or shall have segregated and holds in trust for payment the pro rata proceeds applicable to the
Debentures that have not been paid. The “Maximum Share Number” will initially equal
100,000,000 and the “Maximum Warrant Number” will initially equal 100,000,000 (or
200,000,000 if the Company amends the definition of APM Qualifying Securities to eliminate Common
Stock); provided that, if the number of issued and outstanding shares of Common Stock is changed
into a different number of shares or a different class by reason of any stock split, reverse stock
split, stock dividend, reclassification, recapitalization, split-up, combination, exchange of
shares or other similar transaction, then the Maximum Share Number and the Maximum Warrant Number
shall be correspondingly adjusted in a manner reasonably determined by the Company. The Company
may, at its discretion and without the consent of the holders of the Debentures, increase the
Maximum Share Number or the Maximum Warrant Number or both (including through the increase of the
Company’s authorized share capital, if necessary) if the Company determines that such increase is
necessary to allow the Company to issue sufficient Common Stock and/or Qualifying Warrants to pay
deferred interest on the Debentures.

     (i) Alternative Payment Mechanism. Immediately following any APM Commencement Date and
until the termination of the related Deferral Period, the Company will be required to use
Commercially Reasonable Efforts to sell APM Qualifying Securities until the Company has raised an
amount of Eligible APM Proceeds at least equal to the aggregate amount of accrued and unpaid
deferred interest on the Debentures (including compounded interest thereon) and applied such
Eligible APM Proceeds on the next Interest Payment Date to the payment of deferred interest
(including compounded interest thereon) in accordance with Section 2.1(h); provided that:

     (1) the foregoing obligations shall not apply (i) to the issuance of Common Stock and
Qualifying Warrants during the first 20 consecutive Interest Periods of any Deferral Period
to the extent the number of shares of Common Stock issued and the number of shares of
Common Stock subject to such Qualifying Warrants, together with the number of shares of
Common Stock previously issued, and the number of shares of Common Stock subject to
Qualifying Warrants previously issued, during such Deferral Period to pay interest on the
Debentures pursuant to this Section 2.1(i), would, in the aggregate, exceed 2% of the total
number of issued and outstanding shares of Common Stock as of the date of the Company’s
most recent publicly available consolidated financial statements on the date of
determination (the “Stock and Warrant Issuance Cap”) or (ii) to the issuance of
Qualifying Non-Cumulative Preferred Stock and Mandatorily Convertible Preferred Stock at
any time to the extent the Eligible APM Proceeds raised from such issuance, together with
the Eligible APM Proceeds of all prior issuances of Qualifying Non-Cumulative Preferred
Stock and still outstanding Mandatorily Convertible Preferred Stock pursuant to this
Section 2.1(i) applied to pay deferred interest on the Debentures, would exceed
$275,000,000 plus 25% of the aggregate principal amount of any

-19-

 

Additional Debentures issued pursuant to Section 2.1(b) (the “Preferred Stock
Issuance Cap”);

     (2) the foregoing obligations shall not apply in respect of any Interest Payment Date
if the Company shall have provided to the Trustee (which the Trustee will promptly forward
upon receipt to each Holder of the Debentures whose name appears in the Security Register)
no more than 30 and no less than 10 Business Days prior to such Interest Payment Date an
Officers’ Certificate stating that (i) a Market Disruption Event occurred after the
immediately preceding Interest Payment Date and (ii) either (A) the Market Disruption Event
continued for the entire period from the Business Day immediately following the preceding
Interest Payment Date to the Business Day immediately preceding the date on which such
Officers’ Certificate is provided or (B) the Market Disruption Event continued for only
part of such period but the Company was unable after Commercially Reasonable Efforts to
raise sufficient Eligible APM Proceeds during the rest of that period to pay all accrued
and unpaid interest due on the Interest Payment Date with respect to which such Officers’
Certificate is being delivered;

     (3) the sale of Mandatorily Convertible Preferred Stock to pay deferred interest is an
option that may be exercised at the Company’s sole discretion, and the Company will not be
obligated to sell Mandatorily Convertible Preferred Stock or to apply the proceeds of any
such sale to pay deferred interest on the Debentures, and no class of investors of the
Company’s securities or other obligations, or any other Person, may require the Company to
issue Mandatorily Convertible Preferred Stock; and

     (4) to the extent that the Company has raised some but not all Eligible APM Proceeds
necessary to pay all deferred interest on any Interest Payment Date, such Eligible APM
Proceeds shall be applied in accordance with Section 2.1(h).

     Once the Company reaches the Stock and Warrant Issuance Cap for a Deferral Period, the Company
will not be required to issue more shares of Common Stock or Qualifying Warrants under this Section
2.1(i) during the first 20 consecutive Interest Periods of such Deferral Period even if the Stock
and Warrant Issuance Cap subsequently increases because of a subsequent increase in the number of
outstanding shares of Common Stock. The Stock and Warrant Issuance Cap will cease to apply after
the conclusion of 20 consecutive Interest Periods following the commencement of any Deferral
Period, at which point the Company must pay any deferred interest, regardless of the time at which
it was deferred pursuant to Section 2.1(h), subject to the limitations in Section 2.1(g), the
Preferred Stock Issuance Cap, the Maximum Share Number, the Maximum Warrant Number and any Market
Disruption Event. In addition, if the Stock and Warrant Issuance Cap is reached during a Deferral
Period and the Company subsequently pays all deferred interest, the Stock and Warrant Issuance Cap
will cease to

-20-

 

apply at the termination of such Deferral Period, reset to zero and will not apply again
unless and until the start of a new Deferral Period. The Preferred Stock Issuance Cap shall not
reset to zero even if the Company pays all deferred interest for a Deferral Period, and the
Eligible APM Proceeds from sales of Qualifying Non-Cumulative Preferred Stock and then outstanding
Mandatorily Convertible Preferred Stock applied pursuant to Section 2.1(h) during such Deferral
Period and all prior Deferral Periods cumulate as Qualifying Non-Cumulative Preferred Stock is
issued or so long as Mandatorily Convertible Preferred Stock is outstanding to pay deferred
interest. The Company will not be excused from its obligations under this Section 2.1(i) if it
determines not to pursue or complete the sale of APM Qualifying Securities due to pricing, dividend
rate or dilution considerations.

     If the Company eliminates Common Stock from the definition of APM Qualifying Securities, the
Company, during a Deferral Period, must use Commercially Reasonable Efforts, subject to the Maximum
Warrant Number, to set the terms of any Qualifying Warrants that the Company issues pursuant to
this Section 2.1(i) so that the proceeds from the issuance of Qualifying Warrants, together with
the proceeds from the sale of any other APM Qualifying Securities with respect to that Deferral
Period, are sufficient proceeds to pay all deferred interest on the Debentures in accordance with
this Section 2.1(i).

     (j) Events of Default. The Debentures shall not be entitled to the benefits of the
Events of Default in clauses (1) through (4) of Section 501 of the Indenture. The Debentures shall
be entitled to the benefits of the Events of Default in clauses (5) and (6) of Section 501 of the
Indenture. The following events shall be Events of Default with respect to the Debentures
(whatever the reason for such Event of Default and whether it shall be occasioned by the provisions
of Article Fourteen of the Indenture or be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):

     (1) default in the payment of interest, including compounded interest, in full on any
Debenture for a period of 30 days after the conclusion of 40 consecutive Interest Periods
following the commencement of any Deferral Period;

     (2) default in the payment of the principal of the Debentures at the Final Maturity
Date or upon a call for redemption;

Except as provided in this paragraph (j), no breach or default by the Company of any other covenant
or obligation under the Indenture or the terms of the Debentures shall constitute an Event of
Default.

     (k) Acceleration of Maturity; Rescission of Amendment. The remedies provided to the
Trustee and Holders by Section 502 of the Indenture will apply only to an Event of Default under
clause (1) of Section 2.1(j). If an Event of Default specified in Section 501(5) or 501(6) of the
Indenture occurs, then in every such case the principal

-21-

 

amount of all the Debentures shall automatically become due and payable immediately, without
any declaration or other action on the part of the Trustee or any Holder. An Event of Default in
clause (2) of Section 2.1(j) shall not entitle the Holders to the benefits of Section 502 of the
Indenture.

     (l) Collection of Indebtedness and Suits From Enforcement by Trustee. The Debentures
shall not have the benefits of the first paragraph of Section 503 of the Indenture.

     (m) Limitation on Suits. For purposes of the Debentures, Section 507 of the Indenture
is hereby amended (i) by adding “or Enforcement Event” after “Event of Default” in clause (1)
thereof, and (ii) by adding at the end of clause (2) thereof: “or the Holders of no less than a
majority in principal amount of the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such Enforcement Event in its own
name as Trustee hereunder;”

     (n) Unconditional Right of Holders to Receive Principal, Premium and Interest. For
purposes of the Debentures, Section 508 of the Indenture is hereby amended and restated in its
entirety:

“Notwithstanding any other provision in this Indenture or the Fifth Supplemental Indenture,
the Holder of any Debenture shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 2.1(g)(ii) of
the Fifth Supplemental Indenture and Section 307 of the Indenture) interest on such
Debenture when due, it being understood (i) that, in the case of a Deferral Period,
interest shall only become due and payable at the time and in the manner provided for in
Sections 2.1(g) and (h) of the Fifth Supplemental Indenture, and interest shall, in the
case of Section 2.1(i) of the Fifth Supplemental Indenture, only become due and payable in
the amount determined in accordance with such Section, and (ii) that the extent to which
Holders have a right to receive payment of principal on any Repayment Date is determined in
accordance with Section 2.1(d) of the Fifth Supplemental Indenture. Any Holder’s right to
institute suit for the enforcement of any such payment, and such rights referred to in this
Section 508 shall not be impaired without the consent of such Holder.”

For the purposes of Section 316(b) of the Trust Indenture Act, it is understood and agreed that no
payment of principal or interest shall be deemed due and payable under the provisions of Sections
2.1(d), 2.1(g)(ii) and 2.1(h) until the Company has received Eligible Repayment Proceeds or
Eligible APM Proceeds, respectively, to pay such principal or interest.

     (o) Waiver of Past Defaults. Notwithstanding anything to the contrary in Section 513
of the Indenture, for the purposes of the Debentures, a past default that is an Event of Default
under Section 501(5) or 501(6) of the Indenture cannot be waived, with

-22-

 

respect to the Debentures and its consequences, without the consent of each Holder of the
Debentures.

     (p) Notice of Defaults and Enforcement Events. For purposes of the Debentures, Section
602 of the Indenture is hereby amended (i) by adding “and Enforcement Events” after “Defaults” in
the header thereof, and (ii) by adding “or Enforcement Event” after “default” in the first and
second line of such Section.

     (q) Redemption. The Debentures shall be redeemable in accordance with Article Eleven
of the Indenture, provided that the Debentures are redeemable at the Company’s option, (i) in whole
or in part on any Interest Payment Date on or after December 18, 2012, at 100% of their principal
amount, (ii) in whole but not in part at any time prior to December 18, 2012 upon the occurrence of
a Tax Event at 100% of their principal amount and (iii) in whole but not in part at any time prior
to December 18, 2012 upon the occurrence of a Rating Agency Event at (1) 100% of their principal
amount or (2) if greater, the Make-Whole Redemption Price, in the case of each of clauses (i)
through (iii) plus accrued and unpaid interest to the Redemption Date. For purposes of the
Debentures, the first sentence of Section 1104 of the Indenture is replaced in its entirety with
the following: “Notice of redemption shall be given by first-class mail, postage prepaid, mailed
not less than 10 nor more than 60 days prior to the Redemption Date, to each Holders of Securities
to be redeemed, at his address appearing in the Security Register.”

     (r) Replacement Capital Covenant. The Company shall not modify the Replacement
Capital Covenant to (A) amend the definitions incorporated into this Fifth Supplemental Indenture
pursuant to Section 1.2.3(b) in a manner adverse to the Holders or (B) impose additional
restrictions on the type or amount of Qualifying Capital Securities that the Company may include
for purposes of determining the extent to which repayment, redemption, defeasance or repurchase of
the Debentures is permitted, except with the consent of the holders of a majority of the principal
amount of Outstanding Debentures. Except as expressly provided in the preceding sentence, the
Company may modify the Replacement Capital Covenant at any time and in any manner without the
consent of the Holders of the Debentures.

     (s) Limitation on Claims in the Event of Bankruptcy, Insolvency or Receivership. To
the extent permitted by law, each Holder, by such Holder’s acceptance of the Debentures, agrees
that if a Bankruptcy Event shall occur prior to the redemption, repayment or defeasance of such
Debentures, such Holder shall only have a claim for deferred and unpaid interest (including
compounded interest thereon) to the extent such interest (including compounded interest thereon)
relates to the earliest two years of the portion of the Deferral Period for which interest has not
been paid.

     (t) Sinking Fund; Holder Repurchase Right. The Debentures shall not be subject to any
sinking fund or analogous provision or be redeemable at the option of the Holders.

-23-

 

     (u) Forms. The Debentures shall be substantially in the form of Annex A attached
hereto, with such modifications thereto as may be approved by the authorized officer executing the
same.

     (v) Subordination. The Debentures shall be subject to Article XIV of the Indenture,
subject to the following modifications:

     (i) For purposes of the Debentures, the “or” before clause (iii) of the definition of
Senior Debt in the Indenture is deleted, the following clauses are added to the definition
of Senior Debt in the Indenture after the word “contracts,” in clause (iii) for purposes of
the Debentures:

     “, (iv) any subordinated or junior subordinated debt that by its terms is not
expressly pari passu or subordinated to the Debentures, (v) any Guarantee of any
indebtedness, obligation or security issued by any Person that is an Affiliate of the
Company and such Person is viewed by the Company as a vehicle to finance its operations,
and (vi) Indebtedness of the Company to its Subsidiaries”; and

     (ii) For purposes of the Debentures, the following provision is added to the end of
the definition of Senior Debt in the Indenture after the word “Securities”: “provided that
(a) trade account payables and accrued liabilities arising in the ordinary course of the
Company’s business, (b) the Company’s 6.25% Series A-1 Junior Subordinated Debentures,
5.75% Series A-2 Junior Subordinated Debentures, 4.875%
Series A-3 Junior Subordinated
Debentures and 6.45% Series A-4 Junior Subordinated Debentures and (c) any other
indebtedness, Guarantee or other obligation that is specifically designated as being
subordinate, or not superior, in right of payment to the Debentures, shall not be
considered Senior Debt”.

     (iii) For purposes of the Debentures, the provisions of Section 1404 of the Indenture
shall only apply in the case where (A) there has been an event of default with respect to
Senior Debt within the meaning of clause (i) of the definition of Senior Debt, (B) the
principal amount of such Senior Debt has been accelerated, (C) the outstanding principal
amount of Senior Debt at the time of acceleration is at least $100,000,000 and (D) the
event of default or acceleration has not been cured, waived, or otherwise ceased to exist.
In no other case and to no other Senior Debt shall Section 1404 apply.

     (iv) The Debentures shall rank pari passu with the Company’s 6.25% Series A-1 Junior
Subordinated Debentures, 5.75% Series A-2 Junior Subordinated Debentures, 4.875% Series A-3
Junior Subordinated Debentures and 6.45% Series A-4 Junior Subordinated Debentures (the
“Outstanding Parity Securities”).

     (w) Registrar, Paying Agent, Authenticating Agent and Place of Payment. The Company
hereby appoints the Bank of New York as Security Registrar,

-24-

 

Authenticating Agent and Paying Agent with respect to the Debentures. The Debentures may be
surrendered for registration of transfer and for exchange at the office or agency of the Company
maintained for such purpose in the City of New York, New York and at any other office or agency
maintained by the Company for such purpose. The Place of Payment for the Debentures shall be the
Paying Agent’s office in New York, New York.

     (x) Defeasance. Until the Scheduled Maturity Date, the Debentures will be subject to
Sections 1302 and 1303 of the Indenture.

ARTICLE THREE

REPAYMENT OF THE DEBENTURES

     3.1. Repayment

     The Company shall, not more than 30 nor less than 10 Business Days prior to each Repayment
Date (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of the
principal amount of Debentures to be repaid on such date pursuant to Section 2.1(d).

     3.2. Selection of Securities to be Repaid

     If less than all the Debentures are to be repaid on any Repayment Date, the particular
Debentures to be repaid shall be selected not more than 30 days prior to such Repayment Date by the
Trustee, from the Outstanding Debentures not previously repaid or redeemed or as to which notice of
repayment or redemption has been given, by such other method as the Trustee may deem fair and
appropriate and which may provide for the selection for repayment of a portion of the principal
amount of any Debenture, provided that the portion of the principal amount of any Debenture not
repaid shall be in an authorized denomination (which shall not be less than the minimum authorized
denomination).

     The Trustee shall promptly notify the Company in writing of the Debentures selected for
partial repayment and the principal amount thereof to be repaid. For all purposes hereof, unless
the context otherwise requires, all provisions relating to the repayment of Debentures shall
relate, in the case of any Debenture repaid or to be repaid only in part, to the portion of the
principal amount of such Debenture which has been or is to be repaid.

     3.3. Notice of Repayment

     Notice of repayment shall be given by first-class mail, postage prepaid, mailed at least 10
calendar days, but no more than 15 calendar days, prior to the Repayment Date, to each Holder of
Debentures to be repaid, at the address of such Holder as it appears in the Security Register.

-25-

 

     Each notice of repayment shall identify the Debentures to be repaid (including CUSIP number,
if a CUSIP number has been assigned to the Debentures) and shall state:

     (a) the Repayment Date;

     (b) if less than all Outstanding Debentures are to be repaid, the identification (and, in the
case of partial repayment, the respective principal amounts) of the particular Debentures to be
repaid;

     (c) that on the Repayment Date, the principal amount of the Debentures or portions thereof to
be repaid will become due and payable, and that interest thereon, if any, shall cease to accrue on
and after said date;

     (d) whether any deferred interest shall remain outstanding on any Debentures to be repaid, and
if so, the amount of such deferred interest and that compound interest thereon shall continued to
accrue on and after said date until paid; and

     (e) the place or places where such Debentures are to be surrendered for payment of the
principal amount thereof.

     Notice of repayment shall be given by the Company or, at the Company’s request, by the Trustee
in the name and at the expense of the Company and shall be irrevocable.

     3.4. Deposit of Repayment Amount

     Prior to 10:00 a.m., New York City time, on the Repayment Date specified in the notice of
repayment given as provided in Section 3.3, the Company will deposit with the Trustee or with one
or more Paying Agents (or if the Company is acting as its own Paying Agent, the Company will
segregate and hold in trust as provided in Section 1003 of the Indenture) an amount of money
sufficient to pay the principal amount of, and (except to the extent the payment of such accrued
interest shall be prohibited pursuant to Section 2.1(h)) any accrued interest (including compounded
interest) on, all the Debentures which are to be repaid on that date.

     3.5. Payment of Debentures Subject to Repayment

     If any notice of repayment has been given as provided in Section 3.3, the Debentures or
portion of the Debentures with respect to which such notice has been given shall become due and
payable on the Repayment Date. On presentation and surrender of such Debentures as provided in the
notice of repayment, such Debentures or the specified portions thereof shall be paid by the Company
at their principal amount, together with accrued interest (including any compounded interest) to
the Repayment Date (except to the extent the payment of such accrued interest shall be prohibited
pursuant to Section 2.1(h)); provided that, except in the case of a repayment in full of all
Outstanding Debentures, installments of interest whose Stated Maturity is on or prior to the
Repayment Date will be payable to the Holders of such Debentures, or one or more

-26-

 

Predecessor Securities, registered as such at the close of business on the relevant Regular
Record Dates according to their terms and the provisions of Section 307 of the Indenture and
Section 2.1(g)(ii) of this Fifth Supplemental Indenture.

     Section 1107 of the Indenture shall apply to any Debenture repaid in part pursuant to this
Article III.

     If any Debenture subject to repayment shall not be so repaid upon surrender thereof, the
principal of such Debenture shall, until paid, bear interest from the applicable Repayment Date at
the rate prescribed therefore in the Debenture.

ARTICLE FOUR

MISCELLANEOUS

Section 4.1 Relationship to Existing Indenture

     The Fifth Supplemental Indenture is a supplemental indenture within the meaning of the
Indenture. The Indenture, as supplemented and amended by this Fifth Supplemental Indenture, is in
all respects ratified, confirmed and approved and, with respect to the Debentures, the Indenture,
as supplemented and amended by this Fifth Supplemental Indenture, shall be read, taken and
construed as one and the same instrument.

Section 4.2 Modification of the Existing Indenture

     Except as expressly modified by this Fifth Supplemental Indenture, the provisions of the
Indenture shall govern the terms and conditions of the Debentures.

Section 4.3 Governing Law

     This instrument shall be governed by and construed in accordance with the laws of the State of
New York.

Section 4.4 Counterparts

     This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.

Section 4.5 Trustee Makes No Representation

     The recitals contained herein are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no representation as to
the validity or sufficiency of this Fifth Supplemental Indenture (except for its execution thereof
and its certificates of authentication of the Debentures).

-27-

 

     In Witness Whereof, the parties hereto have caused this Fifth Supplemental Indenture
to be duly executed and attested all as of the day and year first above written.

	 	 	 	 	 
	 	AMERICAN INTERNATIONAL GROUP, INC.

 	 
	 	By 	/s/ Robert A. Gender	 
	 	 	Name:  	Robert A. Gender 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 
	Attest:     /s/ Kathleen E. Shannon
	 	
	 

	 	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK,

as Trustee

 	 
	 	By  	/s/ Scott I. Klein	 
	 	 	Name:  	Scott I. Klein	 
	 	 	Title:  	Assistant Treasurer	 
	 

Fifth Supplemental Indenture-Series A-5

 

 

ANNEX A

     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OR TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

AMERICAN INTERNATIONAL GROUP, INC.

			
	No.
	 	CUSIP No.:

      

$ 

     American International Group, Inc., a corporation duly organized and existing under the laws
of Delaware (herein called the “Company”, which term includes any successor Person under
the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co.,
or registered assigns, the principal sum of       Dollars ($      ) on the Final Maturity
Date; provided that the principal amount of, and all accrued and unpaid interest on, this Security
shall be payable in full on December 18, 2047, or if such day is not a Business Day, the next
Business Day (the “Scheduled Maturity Date”), or any subsequent Interest Payment Date (as
hereinafter defined) to the extent set forth in the Indenture hereinafter referred to. The
“Final Maturity Date” initially is December 18, 2062 (or, if this day is not a Business
Day, the following Business Day); provided that, the Company may at its sole option elect to extend
such date up to three times, in each case for an additional five-year period, on each of December
18, 2012, December 18, 2017 and December 18, 2022 (each an “Extension Date”), and as a result the
Final Maturity Date may be extended to (and in such case, shall mean) December 18, 2067, December
18, 2072 or December 18, 2077 (or, if any such date is not a Business Day, the following Business
Day). The Company shall

A-1 

 

provide irrevocable written notice of an election to extend the Final Maturity Date no later
than the 30th calendar day prior to the applicable Extension Date in the manner provided for in the
Indenture for notices. As provided in the Indenture, the principal of this Security is payable on
the Scheduled Maturity Date only to the extent the Company has raised sufficient Eligible Repayment
Proceeds. The Company’s obligation to raise Eligible Repayment Proceeds is subject to certain
limitations and restrictions described in the Fifth Supplemental Indenture hereinafter referred to.
In connection with the issuances of this Security, the Company has entered into a Replacement
Capital Covenant that contains restrictions on the Company’s ability to repay the principal of this
Security.

     This Security shall bear interest (i) from and including December 18, 2007 to, but excluding
the Scheduled Maturity Date, payable (subject to deferral as set forth herein and in the Indenture)
at the rate of 7.70% per annum quarterly in arrears on March 18, June 18, September 18 and December
18 in each year, commencing March 18, 2008 (computed on the basis of a 360-day year comprised of
twelve 30-day months), and (ii) from and including the Scheduled Maturity Date, at an annual rate
equal to Three-month LIBOR (as defined in the Indenture) plus 3.616% (computed on the basis of a
360-day year and the actual number of days elapsed), payable (subject to deferral as set forth
herein and in the Indenture) quarterly in arrears on March 18, June 18, September 18 and
December 18 in each year, commencing March 18, 2048, until the principal hereof is paid or made
available for payment (each such date referred to in clause (i) or (ii), an “Interest Payment
Date”). In the event that any Interest Payment Date on or before the Scheduled Maturity Date
would otherwise fall on a day that is not a Business Day, the interest payment due on that date
shall be postponed to the next day that is a Business Day and no interest shall accrue as a result
of that postponement. In the event that any Interest Payment Date after the Scheduled Maturity Date
would otherwise fall on a day that is not a Business Day, that Interest Payment Date shall be
postponed to the next day that is a Business Day; however, if the postponement would cause the day
to fall in the next calendar month, the Interest Payment Date will instead be brought forward to
the immediately preceding Business Day. Any installment of interest (or portion thereof) deferred
in accordance with the Indenture or otherwise unpaid on the relevant Interest Payment Date shall
bear interest, to the extent permitted by law, at the rate of interest then in effect on this
Security, from the relevant Interest Payment Date, compounded on each subsequent Interest Payment
Date, until paid in accordance with the Indenture.

     A “Business Day” shall mean any day other than (i) a Saturday, Sunday or other day on
which banking institutions in The City of New York are authorized or required by law or executive
order to remain closed or (ii) on or after the Scheduled Maturity Date, a day which is not a London
Banking Day.

     The interest (other than deferred interest) so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered (i) at the close of
business on the Business Day next preceding the Interest Payment Date if this Security is issued in
the form of a Global Security, or (ii) the close of business on the fifteenth day (whether or not a
Business Day) next preceding such Interest Payment Date if this Security is not issued in the form
of a Global Security. Any

A-2 

 

such interest not so punctually paid or duly provided for (other than deferred interest) will
forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than
10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Any deferred interest shall be payable to the holder of record of this
Security as provided below.

     The Company shall have the right, at any time and from time to time, prior to the Final
Maturity Date to defer the payment of interest on this Security for one or more consecutive
Interest Periods that do not exceed 40 consecutive Interest Periods; provided that no Deferral
Period shall extend beyond the Final Maturity Date or the earlier redemption of the Securities of
this series. As provided in the Indenture, the payment of deferred interest is subject to the
Company’s ability to raise Eligible APM Proceeds. The Company’s obligation to raise Eligible APM
Proceeds is subject to certain limitations, restrictions and exceptions described in the Fifth
Supplemental Indenture.

     At the end of any Deferral Period, the Company shall pay all deferred interest on this
Security (together with compounded interest thereon, if any, to the extent permitted by applicable
law), to the Person in whose name this Security is registered at the close of business on the
Business Day next preceding the Interest Payment Date at the end of such Deferral Period or, in the
event this Security ceases to be held in the form of a Global Security, at the close of business on
the date 15 days prior to the end of the Deferral Period, whether or not a Business Day. Upon
termination of any Deferral Period and upon the payment of all deferred interest and any compounded
interest then due on any Interest Payment Date, the Company may elect to begin a new Deferral
Period, subject to the above requirements and those in the Indenture. The Company may elect to pay
deferred interest on any Interest Payment Date during any Deferral Period to the extent permitted,
and shall pay deferred interest (including compounded interest thereon) to the extent required, by
the Indenture.

     To the extent permitted by law, each Holder of this Security, by such Holder’s acceptance of
this Security agrees that if a Bankruptcy Event shall occur prior to the redemption or repayment of
this Security, such Holder shall only have a claim for deferred and unpaid interest (including
compounded interest thereon) to the extent such interest (including compounded interest thereon)
relates to the earliest two years of the portion of the Deferral Period for which interest has not
so been paid.

     The Company shall give written notice to the Trustee and the Holders of this Security of its
election to begin any Deferral Period at least one Business Day prior to the Regular Record Date
for that Interest Payment Date, provided, however, that the Company’s failure to pay any interest
due within five Business Days after any Interest

A-3 

 

Payment Date shall automatically and without any further action by any Person be deemed to
commence a Deferral Period.

     Payment of the principal of (and premium, if any) and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The
City of New York, in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.

     Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.

A-4 

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

Dated:

	 	 	 	 	 
	 	American International Group, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 
	Attest:
	 	 
	 
	 	 
	 

[Secretary or Assistant Secretary]

	 	 

This is one of the Securities of the series designated therein referred to in the within-mentioned
Indenture.

Dated:

	 	 	 	 	 
	 	The Bank of New York,

as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

(Signature Page for Series A-5 Security)

5 

 

REVERSE OF SECURITY

     This Security is one of a duly authorized issue of securities of the Company (herein called
the “Securities”), issued and to be issued in one or more series under a Junior
Subordinated Debt Indenture, dated as of March 13, 2007 (herein called the “Base
Indenture”), which term shall have the meaning assigned to it in such instrument, as
supplemented by a Fifth Supplemental Indenture, dated as of December 18, 2007 (herein called the
“Fifth Supplemental Indenture” and, together with the Base Indenture, the
“Indenture”), in each case, between the Company and The Bank of New York, as Trustee
(herein called the “Trustee”, which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of
Senior Debt and the Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series designated on the face
hereof limited in aggregate principal amount to $1,100,000,000 (except for Securities authenticated
and delivered upon registration or transfer of, or exchange for, or in lieu of, other Securities
pursuant to Section 304, 305, 306, 906, or 1107 of the Base Indenture or Section 3.5 of the Fifth
Supplemental Indenture); provided, that the Company may from time to time authenticate and deliver
under the Indenture and the Fifth Supplemental Indenture additional Securities (any such additional
Securities, the “Additional Securities”) in addition to the $1,100,000,000 principal amount
previously provided for, so long as the aggregate principal amount of Securities delivered under
the Indenture and the Fifth Supplemental Indenture does not exceed $1,150,000,000, which Additional
Securities may accrue interest from a different date than this Security, as may be specified
pursuant to Section 301 of the Base Indenture, so long as the company reasonably determines that
the Additional Securities so authenticated and delivered will be fungible for United States federal
income tax purposes.

     All terms used in this Security that are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

     The Securities of this series are subject to redemption upon not less than 10 days nor more
than 60 days’ prior notice by first class mail, postage pre-paid, to each Holder of Securities to
be redeemed, (i) on any Interest Payment Date on or after December 18, 2012, in whole or in part,
at the option of the Company, at 100% of the principal amount thereof, (ii) prior to December 18,
2012, in whole but not in part upon the occurrence of a Tax Event, at 100% of the principal amount
thereof or (iii) prior to December 18, in whole but not in part upon the occurrence of a Rating
Agency Event at (A) 100% of the principal amount thereof or (B) the Make-Whole Redemption Price, if
greater, in any such case, plus accrued and unpaid interest to the Redemption Date.

     In the event of redemption of this Security in part only, a new Security or Securities of this
series and of like tenor and of an authorized denomination for the

A-6 

 

unredeemed portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.

     The indebtedness evidenced by this Security is, to the extent provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full of all Senior Debt, and
this Security is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take such actions as may
be necessary or appropriate to effectuate the subordination so provided and (c) appoints the
Trustee as his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his
or her acceptance hereof, waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or
hereafter created, incurred, assumed or Guaranteed, and waives reliance by each such holder of
Senior Debt upon said provisions.

     The Indenture contains provisions for defeasance of the entire indebtedness of this Security
at any time prior to the Scheduled Maturity Date upon compliance with certain conditions set forth
in the Indenture.

     The Securities of this series are entitled to the benefits of the Events of Default described
in Section 2.1(j) of the Fifth Supplemental Indenture and the Enforcement Events as defined in the
Fifth Supplemental Indenture. The Holder of this Security and the Trustee shall be entitled to the
remedies provided by Section 502 of the Base Indenture only if an Event of Default specified in
clause (1) of Section 2.1(j) of the Fifth Supplemental Indenture shall occur with respect to the
Securities of this series. If an Event of Default specified in Section 501(5) or Section 501(6) of
the Base Indenture shall occur with respect to the Securities of this series, then in every such
case the principal amount of all the Securities of this series shall become automatically due and
payable immediately, without any declaration or other action on the part of the Trustee or any
Holder. An Event of Default specified in clause (2) of Section 2.1(j) of the Fifth Supplemental
Indenture shall not entitle the Holders to the benefits of Section 502 of the Base Indenture.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of

A-7 

 

this Security and of any Security issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon
this Security.

     As provided in and subject to the provisions of the Indenture, the Holder of this Security
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a continuing Event of Default or Enforcement
Event with respect to the Securities of this series, the Holders of not less than 25% (or, in the
case of an Enforcement Event, a majority) in principal amount of the Securities of this series at
the time Outstanding shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default or Enforcement Event, as the case may be, as Trustee and offered
the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the respective due dates to the extent
provided by Section 2.1(n) of the Fifth Supplemental Indenture.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

     The Securities of this series are issuable only in registered form without coupons in
denominations of $25.00 and integral multiples of $25.00 in excess thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this

A-8 

 

Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.

     The Company and, by its acceptance of this Security or a beneficial interest therein, the
Holder of, and any Person that acquires beneficial interest in, this Security agree that, for
United States federal, state and local tax purposes, it is intended that this Security constitute
indebtedness of the Company.

     THE BASE INDENTURE, THE FIFTH SUPPLEMENTAL INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

A-9

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