Form of Notice of Nonstatutory Stock Option Grant and Nonstatutory Stock Option Terms and Conditions

Name of Participant:

[Name]

Date of Grant:

February 15, 2011

Number of Shares:

[Number] Shares of Common Stock

Option Price:

$________ per share

Type of Grant:

Nonstatutory Stock Option

Vesting:

100% after two years of continued employment by Tredegar or one of its subsidiaries (February 15, 2013)

Expiration Date:

February 15, 2018, unless terminated earlier in accordance with the attached Nonstatutory Stock Option Terms and Conditions.  Please note that the event that most commonly triggers an early termination of your option is the termination of employment with Tredegar.  There are, however, other triggering events, so be sure to review the attached Nonstatutory Stock Option Terms and Conditions carefully.

Transferability:

This Option is transferable by will or by the laws of descent and distribution. This Option is also transferable in accordance with the provisions of Section 6.05 of the Plan, but any such transferee may not subsequently transfer this Option except by will or by the laws of descent and distribution.

 

(1)

any Person or group (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than a Person who is not an Acquiring Person), at any time becomes the Beneficial Owner of 50% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Voting Securi­ties”), other than (i) through an acquisition of Voting Securities directly from the Company, (ii) as a result of the Company’s repur­chase of Voting Secu­rities if, thereafter, such Benefi­cial Owner pur­chases no additional Voting Securities, or (iii) pur­suant to a Business Combina­tion (as defined below) that does not constitute a Change in Control pursuant to subparagraph 8(b)(3) below;

 

(2)

Continuing Directors cease to constitute a majority of the members of the Board other than pur­suant to a Business Combination that does not constitute a Change in Control pursuant to subparagraph 8(b)(3) below;

 

(3)

the shareholders of the Company approve a reorganization, merger, share exchange or consoli­dation (a “Business Combination”), in each case, unless immedi­ately following such Business Combina­tion, (i) all or substantially all of the Persons who were the Beneficial Owners, respectively, of the Common Stock and Voting Securities outstanding imme­diately prior to such Business Combination Benefi­cially Own more than 80% of, respec­tively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securi­ties entitled to vote generally in the election of directors, as the case may be, of the corporation result­ing from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company through one or more Subsidiaries) in substantially the same proportions a s their ownership, immediately prior to such Business Combina­tion, of the Common Stock and Voting Securities, as the case may be, (ii) no Person (other than a Person who is not an Acquiring Person) Beneficially Owns 50% or more of, respectively, the then outstanding shares of common stock of the cor­poration resulting from such Business combination or the combined voting power of the then outstanding voting securities of such corporation and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination are Continuing Directors; or

 

(4)

the shareholders of the Company approve a complete liquidation or dissolution of the Company or the sale or other disposition of all or substan­tially all of the assets of the Company, in each case, unless immediately following such liquidation, dissolution, sale or other disposition, (i) more than 80% of, respectively, the then outstanding shares of common stock of such cor­poration and the combined voting power of the then out­standing voting securities of such corporation entitled to vote generally in the election of directors is then Bene­fi­cially Owned by all or substantially all of the Persons who were the Beneficial Owners, respec­tively, of the Common Stock and Voting Securities outstanding immedi­ately prior to such sale or other disposition in substan­tially the same proportion as their ownership, immedi­ately prior to such sale or other disposition, of s uch Common Stock and Voting Securities, as the case may be, (ii) less than 20% of, respectively, the then out­standing shares of common stock of such corporation and the com­bined voting power of the then outstanding voting securi­ties of such corporation entitled to vote generally in the election of directors is then Beneficially Owned by any Person (other than any Person who is not an Acquiring Person), and (iii) at least a majority of the members of the board of directors of such corporation are Continuing Directors immedi­ately following such sale or disposition.

 

For purposes of the definition of Change of Control, the terms Acquiring Person, Beneficial Owner, Company, Continuing Director, and Person shall have the same definitions given them in the Amended and Restate Rights Agreement between Tredegar Corporation and National City Bank, dated as of June 30, 2009, as amended.