{"id":38470,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/acknowledgment-letter-effect-of-write-down-on-return-on-equity.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"acknowledgment-letter-effect-of-write-down-on-return-on-equity","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/acknowledgment-letter-effect-of-write-down-on-return-on-equity.html","title":{"rendered":"Acknowledgment Letter – Effect of Write-Down on Return on Equity Incentive Award – Occidental Petroleum Corp."},"content":{"rendered":"

Occidental Petroleum Corporation<\/strong><\/p>\n

\n<\/p>\n

Form of Acknowledgement Letter<\/strong><\/p>\n

\n<\/p>\n

On July 16, 2008, you were granted a Return on Equity Incentive Award with a
\nperformance period of July 1, 2008 through June 30, 2011 (the “Award”). On July
\n18, 2011, the Executive Compensation and Human Resources Committee (the
\n“Committee”) of Occidental Petroleum Corporation (the “Company”) determined that
\nevents which have occurred in Libya over the course of the performance period
\nmay result in a loss or impairment of the Libyan contract, which may in turn
\ncause the Company to write down the value of certain assets (such action, the
\n“Write-Down”) in such a manner that, had such Write-Down occurred before the end
\nof the performance period, the value of the Award would have been less than the
\nvalue of the Award as certified by the Compensation Committee.<\/p>\n<\/p>\n<\/p>\n

By signing below, you hereby acknowledge that you have been informed that if
\nthe Write-Down is taken on or prior to June 30, 2013, for every $100 million of
\na Write-Down, after-tax, the Committee intends to reduce your future
\ncompensation from the Company by a pre-tax amount up to $______ (the aggregate
\nreduction amount, the “Reduction Amount”) within a period determined by the
\nCommittee. Such reduction may apply to one or more of the following: base
\nsalary, separation or retirement pay, bonus, and stock and incentive awards
\n(through the Committee153s exercise of negative discretion with respect to any
\noutstanding incentive awards), until the earlier of the attainment of the
\nReduction Amount or the end of the period determined by the Committee, except to
\nthe extent such reduction is not permitted under applicable law, or would cause
\nthe imposition of additional taxes and\/or penalties under Section 409A of the
\nInternal Revenue Code.<\/p>\n<\/p>\n<\/p>\n

Any determinations of the Compensation Committee shall be conclusive and
\nbinding on you.<\/p>\n<\/p>\n<\/p>\n<\/p>\n

___________________<\/p>\n<\/p>\n

[Name of Executive]<\/p>\n<\/p>\n

Date:_________________<\/p>\n<\/p>\n<\/p>\n

10597<\/contract-id>Long-Term Incentive Plan – Occidental Petroleum Corp.<\/contract-name><\/p>\n

OCCIDENTAL PETROLEUM CORPORATION 2005 LONG-TERM
\nINCENTIVE PLAN<\/strong><\/p>\n

(AS AMENDED THROUGH OCTOBER 13, 2010)<\/strong><\/p>\n

1. PURPOSE<\/strong><\/p>\n

The purposes of this Plan are (i) to furnish a significant incentive to the
\nemployees and non-employee Directors of the Company and its subsidiaries by
\nmaking available to them the benefits of increased ownership of Shares (ii) to
\npromote the alignment of the interests of employees and non-employee Directors
\non the one hand and stockholders on the other hand and (iii) to assist in the
\nrecruitment and retention of employees and non-employee Directors.<\/p>\n

2. DEFINITIONS<\/strong><\/p>\n

“Board” <\/strong>means the Board of Directors of the Company.<\/p>\n

“Business Combination” <\/strong>means a merger, consolidation, or
\nother reorganization, with or into, or the sale of all or substantially all of
\nthe Company153s business and\/or assets as an entirety to, one or more entities
\nthat are not subsidiaries or other affiliates of the Company.<\/p>\n

“Change in Control”<\/strong> means the occurrence of any of the
\nfollowing events:<\/p>\n

(a) Approval by the stockholders of the Company of the dissolution or
\nliquidation of the Company, other than in the context of a transaction that does
\nnot constitute a Change in Control under clause (b) below;<\/p>\n

(b) Consummation of a Business Combination, unless<\/u> (1) as a result of
\nthe Business Combination, more than 50 percent of the outstanding voting power
\nof the Successor Entity immediately after the reorganization is, or will be,
\nowned, directly or indirectly, by persons who were holders of the Company153s
\nvoting securities immediately before the Business Combination; (2) no
\n“person<\/em>” (as such term is used in Sections 13(d) and 14(d) of the
\nExchange Act), excluding the Successor Entity or an Excluded Person,
\nbeneficially owns, directly or indirectly, more than 20 percent of the
\noutstanding shares or the combined voting power of the outstanding voting
\nsecurities of the Successor Entity, after giving effect to the Business
\nCombination, except to the extent that such ownership existed prior to the
\nBusiness Combination; and (3) at least 50 percent of the members of the board of
\ndirectors of the entity resulting from the Business Combination were Directors
\nat the time of the execution of the initial agreement or of the action of the
\nBoard approving the Business Combination;<\/p>\n

(c) Any “<\/strong>person“<\/strong> (as such term is used in
\nSections 13(d) and 14(d) of the Exchange Act, but excluding any Excluded Person)
\nis or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
\nAct), directly or indirectly, of securities of the Company representing 20
\npercent or more of the combined voting power of the Company153s then outstanding
\nvoting securities, other than as a result of (1) an acquisition directly from
\nthe Company; (2) an acquisition by the Company; or (3) an acquisition by any
\nemployee benefit plan (or related trust) sponsored or maintained by the Company
\nor a Successor Entity; or<\/p>\n

(d) During any period not longer than two consecutive years, individuals who
\nat the beginning of such period constituted the Board cease to constitute at
\nleast a majority thereof, unless the election, or the nomination for election by
\nthe Company153s stockholders, of each new Director was approved by a vote of at
\nleast two-thirds (2\/3) of the Directors then still in office who were Directors
\nat the beginning of such period (including for these purposes, new members whose
\nelection or nomination was so approved), but excluding, for this purpose, any
\nsuch individual whose initial assumption of office occurs as a result of an
\nactual or threatened election contest with respect to the election or removal of
\nDirectors or other actual or threatened solicitation of proxies or consents by
\nor on behalf of a person other than the Board.<\/p>\n

“Code”<\/strong> means the Internal Revenue Code of 1986, as amended
\nfrom time to time.<\/p>\n

“Committee” <\/strong>means the Executive Compensation and Human
\nResources Committee of the Board or its successor, which shall be composed of
\nnot less than two members of the Board, each of whom shall be a “non-employee
\ndirector” within the meaning of Rule 16b-3 and an “outside director” within the
\nmeaning of Section 162(m).<\/p>\n

“Company” <\/strong>means Occidental Petroleum Corporation, a Delaware
\ncorporation.<\/p>\n

“Director” <\/strong>means a member of the Board.<\/p>\n

“Disability”<\/strong> means permanent and total disability as defined
\nin Section 22(e)(3) of the Code.<\/p>\n

1<\/p>\n

\n

<\/p>\n

“Effective Date”<\/strong> means May 6, 2005, or such later date as
\nthis Plan is approved by the stockholders of the Company.<\/p>\n

“Eligible Person” <\/strong>means any person who is an officer or
\nemployee of the Company or any of its subsidiaries and any person who is a
\nnon-employee Director; provided, however that a non-employee Director shall not
\nbe an Eligible Person for purposes of awarding of ISOs.<\/p>\n

“Exchange Act” <\/strong>means the Securities Exchange Act of 1934, as
\namended from time to time.<\/p>\n

“Excluded Person” <\/strong>means any employee benefit plan of the
\nCompany and any trustee or other fiduciary holding securities under a Company
\nemployee benefit plan or any person described in and satisfying the conditions
\nof Rule 13d-1(b)(i) of the Exchange Act.<\/p>\n

“Fair Market Value”<\/strong> means the last reported sale price of a
\nshare of Common Share on the New York Stock Exchange : Composite Transactions on
\nthe relevant date or, if there are no reported sales on such date, then the last
\nreported sales price on the next preceding day on which such a sale is
\ntransacted.<\/p>\n

“ISO”<\/strong> means an incentive stock option qualified under
\nSection 422 of the Code.<\/p>\n

“Performance-Based Award” <\/strong>means an award whose grant,
\nvesting, exercisability or payment depends upon on any one or more of the
\nPerformance Objectives, in each case relative to Performance Goals, on an
\nabsolute or relative basis (including comparisons to peer companies) or ratio
\nwith other Performance Objectives, either as reported currency or constant
\ncurrency, pre-tax or after-tax, before or after special charges, for the Company
\non a consolidated basis or for one or more subsidiaries, segments, divisions or
\nbusiness units, or any combination of the foregoing. The applicable performance
\nperiod may range from one to seven years.<\/p>\n

“Performance Goal” <\/strong>means a preestablished targeted level or
\nlevels of any one or more Performance Objectives.<\/p>\n

“Performance Objectives” <\/strong>mean any one or more of the
\nfollowing business criteria: A\/R day sales outstanding, A\/R to sales, debt, debt
\nto debt plus stockholder equity, debt to EBIT or EBITDA, EBIT, EBITDA, EPS, EVA,
\nexpense reduction, interest coverage, inventory to sales, inventory turns, net
\nincome, operating cash flow, pre-tax margin, return on assets, return on capital
\nemployed, return on equity, sales, stock price appreciation, and total
\nstockholder return (TSR), each as defined further in Appendix A. These terms are
\nused as applied under generally accepted accounting principles (if applicable)
\nand in the Company153s financial reporting.<\/p>\n

“Plan” <\/strong>means this Occidental Petroleum Corporation 2005
\nLong-Term Incentive Plan, as amended from time to time.<\/p>\n

“Qualifying Options” <\/strong>mean options and stock appreciation
\nrights granted with an exercise price not less than Fair Market Value on the
\ndate of grant. Qualifying Options are Performance-Based Awards.<\/p>\n

“Rule 16b-3” <\/strong>means Rule 16b-3 under Section 16 of the
\nExchange Act.<\/p>\n

“Section 162(m)” <\/strong>means Section 162(m) of the Code and the
\napplicable regulations and interpretations thereunder.<\/p>\n

“Section 162(m) Award”<\/strong> means a Performance-Based Award
\nintended to satisfy the requirements for “performance-based compensation” within
\nthe meaning of Section 162(m).<\/p>\n

“Share Limit” <\/strong>means the maximum number of Shares, as
\nadjusted, that may be delivered pursuant to all awards granted under this Plan.\n<\/p>\n

“Shares” <\/strong>mean the Company153s Common Stock, par value $0.20
\nper share.<\/p>\n

“Successor Entity” <\/strong>means the surviving or resulting entity
\nor a parent thereof of a Business Combination.<\/p>\n

3. SHARES SUBJECT TO THE PLAN<\/strong><\/p>\n

3.1 AGGREGATE SHARE LIMIT – <\/strong>Subject to adjustment as
\nprovided in or pursuant to this Section 3 or Section 7, a total of sixty-six
\nmillion (66,000,000) Shares shall be authorized for issuance pursuant to awards
\ngranted under this Plan. Any Shares issued in connection with awards other than
\noptions and stock appreciation rights shall be counted against the limit
\ndescribed above as three (3) Shares for every one Share issued in connection
\nwith such award or by which the award is valued by reference as three (3)
\nShares.<\/p>\n

2<\/p>\n

\n

<\/p>\n

3.2 INDIVIDUAL LIMIT – <\/strong>No individual shall be granted
\noptions, stock appreciation rights or other awards in any 36-month period
\ncovering more than eight million (8,000,000) Shares, and in the case of ISOs
\ngranted to any individual who owns more than ten percent of the outstanding
\nstock of the Company within the meaning of Section 422 of the Code the maximum
\nterm may not exceed five (5) years and the minimum exercise price may not be
\nless than 110 percent of Fair Market Value on the date of grant.<\/p>\n

3.3 REISSUE OF AWARDS AND SHARES – <\/strong>Awards payable in cash or
\npayable in cash or Shares, including restricted shares, that are forfeited,
\ncancelled, or for any reason do not vest under this Plan, and Shares that are
\nsubject to awards that expire or for any reason are terminated, cancelled or
\nfail to vest shall be available for subsequent awards under this Plan. If an
\naward under this Plan is or may be settled only in cash, such award need not be
\ncounted against any of the share limits under this Section 3, except as may be
\nrequired to preserve the status of an award as “performance-based compensation”
\nunder Section 162(m). Shares subject to options or stock appreciation rights
\nthat are exercised shall not be available for subsequent awards. The following
\ntransactions involving Shares will not result in additional Shares becoming
\navailable for subsequent awards under this Plan: (i) Shares tendered in payment
\nof an option; (ii) Shares withheld for taxes; and (iii) Shares repurchased by
\nthe Company using option proceeds.<\/p>\n

4. PLAN ADMINISTRATION<\/strong><\/p>\n

This Plan shall be administered by the Committee.<\/p>\n

4.1 POWERS OF THE COMMITTEE – <\/strong>Subject to the express
\nprovisions of this Plan, the Committee shall be authorized and empowered to do
\nall things necessary or desirable in connection with the authorization of awards
\nand the administration of this Plan within its delegated authority, including,
\nwithout limitation, the authority to:<\/p>\n

(a) adopt, amend and rescind rules, regulations and procedures relating to
\nthis Plan and its administration or the awards granted under this Plan and
\ndetermine the forms of awards;<\/p>\n

(b) determine who is an Eligible Person and to which Eligible Persons, if
\nany, awards will be granted under this Plan;<\/p>\n

(c) grant awards to Eligible Persons and determine the terms and conditions
\nof such awards, including but not limited to the number and value of Shares
\nissuable pursuant thereto, the times (subject to Section 5.5) at which and
\nconditions upon which awards become exercisable or vest or shall expire or
\nterminate, and (subject to applicable law) the consideration, if any, to be paid
\nupon receipt, exercise or vesting of awards;<\/p>\n

(d) determine the date of grant of an award, which may be a designated date
\nafter but not before the date of the Committee153s action;<\/p>\n

(e) determine whether, and the extent to which, adjustments are required
\npursuant to Section 7 hereof;<\/p>\n

(f) interpret and construe this Plan and the terms and conditions of any
\naward granted hereunder, whether before or after the date set forth in Section
\n5;<\/p>\n

(g) determine the circumstances under which, consistent with the provisions
\nof Section 8.2, any outstanding award may be amended and make any amendments
\nthereto that the Committee determines are necessary or appropriate; and<\/p>\n

(h) acquire or settle rights under options, stock appreciation rights or
\nother awards in cash, stock of equivalent value, or other consideration.<\/p>\n

All authority granted herein (except as provided in Section 6) shall remain
\nin effect so long as any award remains outstanding under this Plan.<\/p>\n

4.2 SPECIFIC COMMITTEE RESPONSIBILITY AND DISCRETION REGARDING AWARDS
\n– <\/strong>Subject to the express provisions of this Plan, the Committee, in its
\nsole and absolute discretion, shall determine all of the terms and conditions of
\neach award granted under this Plan, which terms and conditions may include,
\nsubject to such limitations as the Committee may from time to time impose, among
\nother things, provisions that:<\/p>\n

3<\/p>\n

\n

<\/p>\n

(a) permit the recipient of such award to pay the purchase price of the
\nShares or other property issuable pursuant to such award, or any applicable tax
\nwithholding obligation upon such issuance or in respect of such award or Shares,
\nin whole or in part, by any one or more of the following:<\/p>\n

(i) cash, cash equivalent, or electronic funds transfer,<\/p>\n

(ii) the delivery of previously owned shares of capital stock of the Company
\n(including shares acquired as or pursuant to awards) or other property,<\/p>\n

(iii) a reduction in the amount of Shares or other property otherwise
\nissuable pursuant to such award,<\/p>\n

(iv) a cashless exercise, or<\/p>\n

(v) any other legal consideration the Committee deems appropriate;<\/p>\n

(b) qualify such award as an ISO;<\/p>\n

(c) accelerate the receipt of benefits pursuant to an award or adjust the
\nexercisability, term (subject to other limits) or vesting schedule of any or all
\noutstanding awards, adjust the number of Shares subject to any award, adjust the
\nprice of any or all outstanding awards or otherwise change previously imposed
\nterms and conditions, pursuant to a termination of employment or an event
\nreferenced in Section 7 (in which case the Committee153s discretion shall be
\nexercised in a manner consistent with Section 7) or in other circumstances or
\nupon the occurrence of other events as deemed appropriate by the Committee, by
\namendment of an outstanding award, by substitution of an outstanding award, by
\nwaiver or by other legally valid means (which may result, among other changes,
\nin a greater or lesser number of shares subject to the award, a shorter or
\nlonger vesting or exercise period, or, except as provided below, an exercise or
\npurchase price that is higher or lower than the original or prior award), in
\neach case subject to Sections 3 and 8.2; provided, however, that in no case
\n(other than an adjustment contemplated by Section 7.2) shall the exercise price
\nof any option or stock appreciation right be reduced by an amendment to the
\naward or a cancellation and re-grant of the award to effect a repricing of the
\naward to a price below the Fair Market Value of the underlying Shares on the
\ngrant date of the original option or stock appreciation right unless specific
\nstockholder consent is obtained;<\/p>\n

(d) authorize (subject to Sections 7, 8, and 10) the conversion, succession
\nor substitution of one or more outstanding awards upon the occurrence of an
\nevent of the type described in Section 7 or in other circumstances or upon the
\noccurrence of other events as deemed appropriate by the Committee; and<\/p>\n

(e) determine the value of and acquire or otherwise settle awards upon
\ntermination of employment, upon such terms as the Committee (subject to Sections
\n7, 8 and 10) deems appropriate.<\/p>\n

4.3 DELEGATION – <\/strong>Subject to Section 4.5, the Board may
\ndelegate different levels of authority to different committees with
\nadministrative and grant authority under this Plan, provided that each
\ndesignated committee granting any awards hereunder shall consist exclusively of
\na member or members of the Board. A majority of the members of the acting
\ncommittee shall constitute a quorum. The vote of a majority of the members
\npresent assuming the presence of a quorum or the unanimous written consent of
\nthe Committee shall constitute action by the committee. The Committee may
\ndelegate authority to grant awards under this Plan for new employees to an
\nofficer of the Company who is also a director and may delegate ministerial,
\nnon-discretionary functions to individuals who are officers or employees of the
\nCompany or a subsidiary or to third parties.<\/p>\n

4.4 BIFURCATION – <\/strong>Notwithstanding anything to the contrary
\nin this Plan, the provisions of this Plan may at any time be bifurcated by the
\nBoard or the Committee in any manner so that provisions of any award agreement
\n(or this Plan) intended or required in order to satisfy the applicable
\nrequirements of Rule 16b-3, Section 162(m) or other applicable law, to the
\nextent permitted thereby, are applicable only to persons subject to those
\nprovisions and to those awards to those persons intended to satisfy the
\nrequirements of the applicable legal restriction.<\/p>\n

4.5 AWARDS TO NON-EMPLOYEE DIRECTORS –<\/strong> Notwithstanding any
\nprovision in this Plan to the contrary and without being subject to management
\ndiscretion, the Board, acting through the non-employee Directors only, shall
\nhave the authority, in its sole and absolute discretion, to select non-employee
\nDirectors to receive awards other than ISOs under this Plan. The Board, acting
\nthrough the non-employee Directors only shall set the terms of any such awards
\nin its sole and absolute discretion, and the Board, acting through the
\nnon-employee<\/p>\n

4<\/p>\n

\n

<\/p>\n

Directors only, shall be responsible for administering and construing such
\nawards in substantially the same manner that the Committee administers and
\nconstrues awards to other Eligible Persons.<\/p>\n

5. AWARDS<\/strong><\/p>\n

5.1 TYPE AND FORM OF AWARDS – <\/strong>All awards shall be evidenced
\nin writing (including electronic form), substantially in the form approved by
\nthe Committee. The types of awards that the Committee may grant include, but are
\nnot limited to, any of the following, on an immediate or deferred basis, either
\nsingly, or in tandem or in combination with or in substitution for, other awards
\nof the same or another type: (i) Shares, (ii) options (ISOs or nonqualified
\nstock options), stock appreciation rights (including limited stock appreciation
\nrights), restricted stock (which shall vest over a period of not less than three
\nyears), stock units, or similar rights to purchase or acquire shares, whether at
\na fixed or variable price or ratio related to the Shares, upon the passage of
\ntime, the occurrence of one or more events, or the satisfaction of Performance
\nGoals or other conditions, or any combination thereof, (iii) any similar
\nsecurities with a value derived from the value of or related to the Shares or
\nother securities of the Company and\/or returns thereon, or (iv) cash.
\nShare-based awards may include (without limitation) stock options, stock
\npurchase rights, stock bonuses, stock units, stock appreciation rights, limited
\nstock appreciation rights, phantom stock, dividend equivalents (independently or
\nin tandem with any form of stock grant), dividend rights (independently or in
\ntandem with any form of stock grant), Shares, any of which may be payable in
\nShares or cash, and may consist of one or more of such features in any
\ncombination.<\/p>\n

5.2 PERFORMANCE-BASED AWARDS – <\/strong>Any of the types of awards
\nlisted in Section 5.1 may be granted as Performance-Based Awards.<\/p>\n

5.2.1 Section 162(m) Awards. <\/strong>The Committee has discretion to
\ndetermine if any Performance-Based Award is intended to be a Section 162(m)
\nAward. The specific Performance Goals in respect of Section 162(m) Awards, other
\nthan Qualifying Options, must be approved by the Committee in advance of any
\napplicable deadlines under Section 162(m) and while the performance relating to
\nthose goals remains substantially uncertain within the meaning thereof. The
\npersons eligible for Section 162(m) Awards shall be executive officers of the
\nCompany and its subsidiaries and, in the discretion of the Committee, other
\nemployees of the Company or its subsidiaries who are designated by the Committee
\nto receive a Section 162(m) Award because they may be executive officers of the
\nCompany or its subsidiaries by the time their awards are exercised, vested or
\npaid. Except as otherwise permitted under Section 162(m), before any Section
\n162(m) Award is paid, the Committee must certify that the Performance Goal and
\nany other material terms of the Section 162(m) Award were in fact satisfied.\n<\/p>\n

5.2.2 Reservation of Discretion – <\/strong>The Committee shall have
\ndiscretion to determine the conditions, restrictions or other limitations, in
\naccordance with the terms of this Plan and, in the case of Section 162(m)
\nAwards, the limitations of Section 162(m), on the payment of individual
\nPerformance-Based Awards under this Section 5.2.<\/p>\n

5.2.3 Adjustments – <\/strong>Performance Goals or other features of
\nan award under this Section 5.2 may be (i) adjusted to reflect a change in
\ncorporate capitalization, a corporate transaction (such as a reorganization,
\ncombination, separation, merger, acquisition, or any combination of the
\nforegoing) or a complete or partial corporate liquidation, or (ii) calculated
\neither without regard for or to reflect any change in accounting policies or
\npractices affecting the Company and\/or the Performance Objectives or Performance
\nGoals, or (iii) adjusted for any other circumstances or event, or (iv) any
\ncombination of (i) through (iii), but only to the extent in each case that such
\nadjustment or determination in respect of Section 162(m) Awards would be
\nconsistent with the requirements of Section 162(m) to qualify as
\nperformance-based compensation.<\/p>\n

5.3 CONSIDERATION FOR SHARES –<\/strong> Shares may be issued pursuant
\nto an award for any lawful consideration as determined by the Committee,
\nincluding, without limitation, services rendered by the recipient of such award,
\nbut shall not be issued for less than the minimum lawful consideration. Awards
\nmay be payable in cash, stock or other consideration or any combination thereof,
\nas the Committee shall designate in or (except as required by Section 5.2) by
\namendment to the terms and conditions governing such award.<\/p>\n

5.4 LIMITED RIGHTS – <\/strong>Except as otherwise expressly
\nauthorized by the Committee or this Plan or in the applicable award terms and
\nconditions, a participant will not be entitled to any privilege of stock
\nownership as to<\/p>\n

5<\/p>\n

\n

<\/p>\n

any Shares not actually delivered to and held of record by the participant.
\nNo adjustment will be made for dividends or other rights as a stockholder for
\nwhich a record date is prior to such date of delivery.<\/p>\n

5.5 OPTION\/STOCK APPRECIATION RIGHT PRICING AND TERM LIMITS –
\n<\/strong>The purchase price per share of the Shares covered by any option or the
\nbase price of any stock appreciation right shall be determined by the Committee
\nat the time of the grant, but shall not be less than 100 percent of the Fair
\nMarket Value of the Shares on the date of grant. Any option, stock appreciation
\nright, warrant or similar right shall expire and any other award shall vest not
\nmore than 10 years after the date of grant. An award may be converted or
\nconvertible, notwithstanding the foregoing limits, into or payable in, Shares or
\nanother award that otherwise satisfies the requirements of this Plan.<\/p>\n

5.6 TRANSFER RESTRICTIONS – <\/strong>Unless otherwise expressly
\nprovided in or permitted by this Section 5.6, by applicable law or by the award
\nterms and conditions (i) all awards are nontransferable and shall not be subject
\nin any manner to sale, transfer, anticipation, alienation, assignment, pledge,
\nencumbrance or charge; (ii) awards shall be exercised only by the holder; and
\n(iii) amounts payable or shares issuable pursuant to an award shall be delivered
\nonly to (or for the account of) the holder.<\/p>\n

5.6.1<\/strong> Exceptions by Committee Action – <\/strong>The
\nCommittee, in its sole discretion, may permit an award to be transferred for
\nestate and\/or tax planning purposes and on a basis consistent with the Company153s
\nlawful issue of securities and the incentive purposes of the award and this
\nPlan. Notwithstanding the foregoing, awards intended as ISOs or restricted stock
\nawards for purposes of the Code shall be subject to any and all additional
\ntransfer restrictions necessary to preserve their status as ISOs or restricted
\nshares, as the case may be, under the Code.<\/p>\n

5.6.2<\/strong> Exclusions – <\/strong>The exercise and
\ntransfer restrictions in this Section 5.6 shall not apply to:<\/p>\n

(a) transfers to the Company,<\/p>\n

(b) the designation of a beneficiary to receive benefits in the event of the
\nparticipant153s death or, if the participant has died, transfers to or exercise by
\nthe participant153s beneficiary, or, in the absence of a validly designated
\nbeneficiary, transfers by will or the laws of descent and distribution,<\/p>\n

(c) transfers pursuant to a domestic relations order (if approved or ratified
\nby the Committee), if (in the case of ISOs) permitted by the Code,<\/p>\n

(d) if the participant has suffered a Disability, permitted transfers to or
\nexercises on behalf of the holder by his or her legal representative, or<\/p>\n

(e) the authorization by the Committee of “cashless exercise” procedures with
\nthird parties who finance or who otherwise facilitate the exercise of awards
\nconsistent with applicable laws and the express authorization of the Committee.\n<\/p>\n

5.7 TAX WITHHOLDING – <\/strong>Upon any exercise, vesting, or payment
\nof any award, the Company shall:<\/p>\n

(a) require the recipient (or his or her heirs, personal representatives or
\nbeneficiaries, as the case may be) to pay or provide for payment of the amount
\nof any taxes which the Company or any subsidiary may be required to withhold
\nwith respect to such transaction; or<\/p>\n

(b) deduct from any amount payable in cash the amount of any taxes that the
\nCompany or any subsidiary may be required to withhold with respect to such cash
\namount.<\/p>\n

5.8 POSSIBLE SHARE OFFSET – <\/strong>In any case where a tax is
\nrequired to be withheld in connection with the delivery of Shares under this
\nPlan, the Committee may require or may permit the holder the right to offset,
\npursuant to such rules and subject to such conditions as the Committee may
\nestablish, the number of shares to be delivered by (or otherwise reacquire) the
\nappropriate number of shares valued at their then Fair Market Value, to satisfy
\nthe minimum statutory withholding taxes with respect thereto.<\/p>\n

5.9 CASH AWARDS – <\/strong>The Committee shall have the express
\nauthority to pay awards in cash under this Plan, whether in lieu of, in addition
\nto or as part of another award.<\/p>\n

5.10 TERMINATION OF EMPLOYMENT OR SERVICE – <\/strong>If an Eligible
\nPerson153s employment with or service to the Company or to any parent or
\nsubsidiary terminates for any reason, his or her outstanding awards may<\/p>\n

6<\/p>\n

\n

<\/p>\n

thereafter be exercised (if at all) to the extent provided in the agreement
\nevidencing such award, or as otherwise determined by the Committee.<\/p>\n

6. TERM OF PLAN<\/strong><\/p>\n

No award shall be granted under this Plan after the tenth anniversary of the
\nEffective Date of this Plan. After that date, this Plan shall continue in effect
\nas to then outstanding awards. Any then outstanding award may be amended
\nthereafter in any manner that would have been permitted earlier, except that no
\nsuch amendment shall increase the number of Shares subject to, comprising or
\nreferenced in the award or reduce the exercise or base price of an option or
\nstock appreciation right or permit cash payments in an amount that exceeds the
\nlimits of Section 3 (as adjusted pursuant to Section 7.2).<\/p>\n

7. ADJUSTMENTS; CHANGE IN CONTROL<\/strong><\/p>\n

7.1 CHANGE IN CONTROL; ACCELERATION AND TERMINATION OF AWARDS –
\n<\/strong>Unless prior to a Change in Control, the Committee determines that,
\nupon its occurrence, benefits under any or all awards will not accelerate or
\ndetermines that only certain or limited benefits under any or all awards will be
\naccelerated and the extent to which they will be accelerated, or establishes a
\ndifferent time in respect of such Change in Control for such acceleration, then
\nupon the occurrence of a Change in Control:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

<\/td>\n\n

each option and stock appreciation right shall become immediately
\nexercisable,<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

(b)<\/p>\n<\/td>\n

<\/td>\n\n

restricted stock shall immediately vest free of restrictions,<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

(c)<\/p>\n<\/td>\n

<\/td>\n\n

each award under Section 5.2 shall become payable to the participant,<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

(d)<\/p>\n<\/td>\n

<\/td>\n\n

the number of Shares covered by each stock unit account shall be issued to
\nthe participant, and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

(e)<\/p>\n<\/td>\n

<\/td>\n\n

any other rights of a participant under any other award will be accelerated
\nto give the participant the benefit intended under any such award.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Committee may override the limitations on acceleration in this Section
\n7.1 by express provision in the award agreement and may accord any Eligible
\nPerson a right to refuse any acceleration, whether pursuant to the award
\nagreement or otherwise, in such circumstances as the Committee may approve. Any
\nacceleration of awards shall comply with applicable legal and regulatory
\nrequirements. Without limiting the generality of the foregoing, the Committee
\nmay deem an acceleration to occur immediately prior to or up to 30 days before
\nthe applicable event and\/or reinstate the original terms of an award if an event
\ngiving rise to an acceleration does not occur.<\/p>\n

If any option or other right to acquire Shares under this Plan has been fully
\naccelerated as required or permitted by this Plan but is not exercised prior to
\n(i) a dissolution of the Company, or (ii) an event described in this Section 7.1
\nthat the Company does not survive, or (iii) the consummation of an event
\ndescribed in Section 7.2 involving a Change in Control approved by the Board,
\nsuch option or right will terminate, subject to any provision that has been
\nexpressly made by the Committee or the Board through a plan of reorganization
\napproved by the Board or otherwise for the survival, substitution, assumption,
\nexchange or other settlement of such option or right.<\/p>\n

7.2 ADJUSTMENTS – <\/strong>The following provisions will apply if any
\nextraordinary dividend or other extraordinary distribution occurs in respect of
\nthe Shares (whether in the form of cash, Shares, other securities, or other
\nproperty), or any reclassification, recapitalization, stock split (including a
\nstock split in the form of a stock dividend), reverse stock split,
\nreorganization, merger, combination, consolidation, split-up, spin-off,
\nrepurchase, or exchange of Shares or other securities of the Company, or any
\nsimilar, unusual or extraordinary corporate transaction (or event in respect of
\nthe Shares) or a sale of substantially all the assets of the Company as an
\nentirety occurs. The Committee will, in such manner and to such extent (if any)
\nas it deems appropriate and equitable:<\/p>\n

(a) proportionately adjust any or all of (i) the number and type of Shares
\n(or other securities) that thereafter may be made the subject of awards
\n(including the specific maxima and numbers of shares set forth elsewhere in this
\nPlan), (ii) the number, amount and type of shares (or other securities or
\nproperty) subject to any or all outstanding awards, (iii) the grant, purchase,
\nor exercise price of any or all outstanding awards, (iv) the securities, cash or
\nother property deliverable upon exercise of any<\/p>\n

7<\/p>\n

\n

<\/p>\n

outstanding awards, or (v) the Performance Goals or Performance Objectives
\nappropriate to any outstanding awards, or<\/p>\n

(b) in the case of an extraordinary dividend or other distribution,
\nrecapitalization, reclassification, merger, reorganization, consolidation,
\ncombination, sale of assets, split-up, exchange, or spin-off, make provision for
\na cash payment or for the substitution or exchange of any or all outstanding
\nawards or the cash, securities or property deliverable to the holder of any or
\nall outstanding awards based upon the distribution or consideration payable to
\nholders of the Shares of the Company upon or in respect of such event.<\/p>\n

In each case, with respect to awards of ISOs, no such adjustment will be made
\nthat would cause this Plan to violate Section 422 or 424 of the Code or any
\nsuccessor provisions without the written consent of holders materially adversely
\naffected thereby. In any of such events, the Committee may take such action
\nsufficiently prior to such event if necessary or deemed appropriate to permit
\nthe participant to realize the benefits intended to be conveyed with respect to
\nthe underlying shares in the same manner as is available to stockholders
\ngenerally.<\/p>\n

8. PLAN AMENDMENT AND TERMINATION<\/strong><\/p>\n

8.1 AUTHORITY OF THE BOARD – <\/strong>Subject to Sections 8.2 and 8.3
\nand New York Stock Exchange Rules applicable to companies listed on such
\nExchange, the Board may amend or terminate this Plan at any time and in any
\nmanner.<\/p>\n

8.2 RESTRICTIONS – <\/strong>No amendment or termination of this Plan
\nor change in or affecting any outstanding award shall deprive in any material
\nrespect the holder, without the consent of the holder, of any of his or her
\nrights or benefits under or with respect to the award. Adjustments contemplated
\nby Section 7 shall not be deemed to constitute a change requiring such consent.\n<\/p>\n

8.3 STOCKHOLDER APPROVAL – <\/strong>Stockholder approval shall be
\nrequired for any amendment to this Plan that would:<\/p>\n

(a) materially increase the benefits accruing to participants under this
\nPlan,<\/p>\n

(b) materially increase the number of securities which may be issued under
\nthis Plan, or<\/p>\n

(c) materially modify the requirements as to eligibility for participation in
\nthis Plan.<\/p>\n

9. LEGAL MATTERS<\/strong><\/p>\n

9.1 COMPLIANCE AND CHOICE OF LAW; SEVERABILITY – <\/strong>This Plan,
\nthe granting and vesting of awards under this Plan and the issuance and delivery
\nof Shares and\/or the payment of money under this Plan or under awards granted
\nhereunder are subject to compliance with all applicable federal and state laws,
\nrules and regulations and to such approvals by any listing, regulatory or
\ngovernmental authority as may, in the opinion of counsel for the Company, be
\nnecessary or advisable in connection therewith. This Plan, the awards, all
\ndocuments evidencing awards and all other related documents shall be governed
\nby, and construed in accordance with the laws of the state of Delaware. If any
\nprovision shall be held by a court of competent jurisdiction to be invalid and
\nunenforceable, the remaining provisions of this Plan shall continue in effect.\n<\/p>\n

9.2 NON-EXCLUSIVITY OF PLAN – <\/strong>Nothing in this Plan shall
\nlimit or be deemed to limit the authority of the Board or the Committee to grant
\nawards or authorize any other compensation, with or without reference to the
\nShares, under any other plan or authority.<\/p>\n

9.3 NO EMPLOYMENT CONTRACT – <\/strong>Nothing contained in this Plan
\n(or in any other documents relating to this Plan or to any award) shall confer
\nupon any Eligible Person or other participant any right to continue in the
\nemploy or other service of the Company or any subsidiary or constitute any
\ncontract or agreement of employment or other service, nor shall interfere in any
\nway with the right of the Company or any subsidiary to change such person153s
\ncompensation or other benefits or to terminate the employment of such person,
\nwith or without cause.<\/p>\n

10. MISCELLANEOUS<\/strong><\/p>\n

10.1 UNFUNDED PLAN – <\/strong>Unless otherwise determined by the
\nCommittee, this Plan shall be unfunded and shall not create (or be construed to
\ncreate) a trust or a separate fund or funds. This Plan shall not establish any\n<\/p>\n

8<\/p>\n

\n

<\/p>\n

fiduciary relationship between the Company or any subsidiary and any
\nparticipant or other person. To the extent any person holds any rights by virtue
\nof awards granted under this Plan, such rights shall be no greater than the
\nrights of an unsecured general creditor of the Company.<\/p>\n

10.2 AWARDS NOT COMPENSATION – <\/strong>Unless otherwise determined
\nby the Committee, settlements of awards received by participants under this Plan
\nshall not be deemed a part of a participant153s regular, recurring compensation
\nfor purposes of calculating payments or benefits from any Company benefit plan,
\nseverance program or severance pay law of any country.<\/p>\n

10.3 FRACTIONAL SHARES – <\/strong>The Company shall not be required
\nto issue any fractional Shares pursuant to this Plan. The Committee may provide
\nfor the elimination of fractions or for the settlement thereof in cash.<\/p>\n

10.4 FOREIGN PARTICIPANTS – <\/strong>No award shall be made to a
\nparticipant who is a foreign national or who is employed by the Company or any
\nsubsidiary outside the United States of America if such award would violate
\napplicable local law. In order to facilitate the making of an award, the
\nCommittee may provide for such special terms for awards to participants who are
\nforeign nationals, or who are employed by the Company or any subsidiary outside
\nof the United States of America, as the Committee may consider necessary or
\nappropriate to accommodate differences in local law, tax policy or custom.
\nMoreover, the Committee may approve such supplements to or amendments to this
\nPlan as it may consider necessary or appropriate for such purposes unless
\nstockholder approval for any such change would be required in accordance with
\nthe provisions of Section 8.<\/p>\n

APPENDIX A TO 2005 LONG-TERM INCENTIVE PLAN<\/strong>\n<\/p>\n

PERFORMANCE OBJECTIVES<\/p>\n

The Performance Objectives shall have the meanings set forth below, in each
\ncase as reported in the financial statements of the Company or applicable
\nsubsidiary, division, segment, or unit (“financial statements”).<\/p>\n

“A\/R Day Sales Outstanding”<\/strong> means trade accounts receivable
\n(A\/R)(net of reserves) divided by latest historical day Sales.<\/p>\n

“A\/R to Sales”<\/strong> means the ratio of accounts receivable to
\nSales.<\/p>\n

“Debt” <\/strong>means all accounts classified as such in the
\nfinancial statements.<\/p>\n

“Debt to Debt plus stockholder equity”<\/strong> means the ratio of
\nDebt to Debt plus stockholder equity.<\/p>\n

“Debt to EBIT or EBITDA”<\/strong> means the ratio of Debt to EBIT or
\nEBITDA.<\/p>\n

“EBIT” <\/strong>means Net Income before interest expense and taxes,
\nwhich may be adjusted for special charges, if any.<\/p>\n

“EBITDA”<\/strong> means Net Income before interest expense, taxes,
\ndepreciation and amortization, which may be adjusted for special charges, if
\nany.<\/p>\n

“EPS” <\/strong>means Net Income divided by the weighted average
\nnumber of Shares outstanding. The Shares outstanding may be adjusted to include
\nthe dilutive effect of stock options, restricted stock and other dilutive
\nfinancial instruments as required by generally accepted accounting principles.\n<\/p>\n

“EVA” <\/strong>means operating profit after tax (OPAT) (which is
\ndefined as Net Income after tax but before tax adjusted interest income and
\nexpense and goodwill amortization), less a charge for the use of capital
\n(average total capital as such term is used below under “Return on Capital
\nEmployed”). Net Income may be adjusted for special charges and acquisition
\nactivity costs, if any. The charge for capital is the percentage cost of capital
\ntimes the average total capital. The cost of capital is the weighted average
\ncost of capital as calculated for the Company.<\/p>\n

“Expense Reduction”<\/strong> means reduction in actual expense or an
\nimprovement in the expense to Sales ratio compared to a target or prior year
\nactual expense to Sales ratio, which may be adjusted for special charges, if
\nany.<\/p>\n

9<\/p>\n

\n

<\/p>\n

“Interest Coverage” <\/strong>means the ratio of EBIT or EBITDA to
\ninterest expense. Net Income may be adjusted for special charges.<\/p>\n

“Inventory to Sales” <\/strong>means the ratio of total inventory to
\nSales.<\/p>\n

“Inventory Turns” <\/strong>means the ratio of total cost of goods
\nsold on a historical basis to average net inventory. This ratio may be adjusted
\nfor special charges, if any.<\/p>\n

“Net Income”<\/strong> means the difference between total Sales plus
\nother revenues and net total costs and expenses, including income taxes.<\/p>\n

“Operating Cash Flow”<\/strong> means the net cash provided by
\noperating activities less net cash used by operations and investing activities
\nas shown on the statement of cash flows. The numbers relating to the foregoing
\nmay be adjusted for special charges, if any.<\/p>\n

“Pre-Tax Margin”<\/strong> means the ratio of earnings before income
\ntaxes to Sales. Earnings may be adjusted for special charges, if any.<\/p>\n

“Return on Assets”<\/strong> means the ratio of Net Income to total
\naverage assets including goodwill. Earnings may be adjusted for special charges
\nand goodwill amortization for comparative purposes.<\/p>\n

“Return on Capital Employed”<\/strong> means the ratio of Net Income
\nplus tax-effected interest expense to long-term Debt plus stockholder equity.\n<\/p>\n

“Return on Equity”<\/strong> means the ratio of Net Income to
\nstockholder equity.<\/p>\n

“Sales” <\/strong>means sales, service and rental income from third
\nparties net of discounts, returns and allowances.<\/p>\n

“Stock Price Appreciation”<\/strong> means an increase, or an average
\nannualized increase, in the stock price or market value of the Shares of the
\nCompany after purchase of, or the date of grant of, an award or above a
\nspecified stock price.<\/p>\n

“Total Stockholder Return or TSR”<\/strong> means the appreciation in
\nthe price of a Common Share plus reinvested dividends over a specified period of
\ntime.<\/p>\n

10<\/p>\n

\n<\/p>\n

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