20% Uses in Exercise Schedule Clause

Exercise Schedule from Stock Option Agreement

THIS STOCK OPTION AGREEMENT (Agreement) is made as of the day of March, 1997 (Grant Date) by and between FENDER MUSICAL INSTRUMENTS CORPORATION, a Delaware corporation (Company), and (Participant). All definitions contained in the Fender Musical Instruments Corporation 1997 Stock Option Plan (Plan) are hereby incorporated by reference and shall have the same meanings in this Agreement as in the Plan.

Exercise Schedule. The Option granted hereunder shall be exercisable with respect to a portion of the shares subject to the Option over the course of the Option Period as follows: (i) up to and including 20% of the shares subject to the Option shall be exercisable on and after the first anniversary of the Grant Date; (ii) up to and including 40% of the shares subject to the Option shall be exercisable on and after the second anniversary of the Grant Date; (iii) up to and including 60% of the shares subject to the Option shall be exercisable on and after the third anniversary of the Grant Date; (iv) up to and including 80% of the shares subject to the Option shall be exercisable on and after the fourth anniversary of the Grant Date; and (v) up to and including 100% of the shares subject to the Option shall be exercisable on and after May 1, 2008. Each percentage referred to in the preceding sentence shall be construed to include and not to be in addition to the percentages in the preceding clauses. In the event the Participant incurs a Termination of Employment prior to May 1, 2008, all or any portion of the Option which is not exercisable on the date of the Termination of Employment pursuant to the foregoing schedule shall not be nor become exercisable at any time on or after the date of Termination of Employment, except that if the Participants Termination of Employment is due to death or disability, as determined by the Committee, all outstanding Options shall be fully exercisable. In addition, upon the occurrence of a Change of Control as defined in the Plan, all outstanding Options shall be fully exercisable.

Exercise Schedule from Stock Option Plan

Amendments to the Restated 1998 Key Employee Stock Option Plan (in effect as of the 19th day of April 2001) have been approved by the Board of Directors of the Corporation as of February 12th, 2003, subject to approval of the Shareholders and the Toronto Stock Exchange. These amendments have been integrated with the remnant of the Plan to form the Restated 1998 Key Employee Stock Option Plan, the text of which is as follows:

Exercise Schedule. Options granted pursuant to the Plan may be exercised for a period of up to ten years from the date of the grant The holder of an option may exercise his or her option, in whole or in part, in respect of 20% of the common shares under option during the second year following the grant thereof, in respect of 20% of the common shares under option during the third year following the grant thereof, in respect of 20% of the common shares under the option during the fourth year following the grant thereof, in respect of 20% of the common shares under option during the fifth year following the grant thereof and the balance of the common shares under the option during the sixth year following the grant thereof. In the event that an option is not exercised prior to expiry during the period when it may initially be exercised, it may nonetheless be exercised during a subsequent period. Notwithstanding the provision of the above paragraph