EXHIBIT 10.5.1

MUELLER WATER PRODUCTS, INC.

AMENDED AND RESTATED 2006 STOCK INCENTIVE PLAN

I. PURPOSE.

1.1. The purpose of this Plan is to aid the Company and its Affiliates in
recruiting and retaining key Employees (including officers), Directors, and
Consultants of outstanding ability and to motivate such persons to exert their
best efforts on behalf of the Company and its Affiliates by providing incentives
through the granting of Stock Awards. The Company expects that it will benefit
from the added interest which such key Employees, Directors and Consultants will
have in the welfare of the Company as a result of their proprietary interest in
the Company’s success.

II. DEFINITIONS.

2.1. “Affiliate” means, with respect to the Company, any entity directly or
indirectly controlling, controlled by, or under common control with, the Company
or any other entity designated by the Board in which the Company or any
Affiliate has an interest.

2.2. “Applicable Law” means the legal requirements relating to the
administration of an equity compensation plan under applicable U.S. federal and
state corporate and securities laws, the Code, any stock exchange rules or
regulations, and the applicable laws of any other country or jurisdiction, as
such laws, rules, regulations and requirements shall be in place from time to
time.

2.3. “Beneficial Owner” means the definition given in Rule 13d-3 promulgated
under the Exchange Act.

2.4. “Board” means the board of directors of the Company.

2.5. “Cause” means any of the following: (1) the Participant’s theft,
dishonesty, or falsification of any documents or records related to the Company
or any of its Affiliates; (2) the Participant’s improper use or disclosure of
the Company’s or any of its Affiliate’s confidential or proprietary information;
(3) any action by the Participant which has a material detrimental effect on the
reputation or business of the Company or any of its Affiliates; (4) the
Participant’s failure or inability to perform any reasonable assigned duties, if
such failure or inability is reasonably capable of cure, after being provided
with a reasonable opportunity to cure, such failure or inability; (5) any
material breach by the Participant of any employment or service agreement
between the Participant and the Company or any of its Affiliates or applicable
policy of the Company or any of its Affiliates, which breach is not cured
pursuant to the terms of such agreement; or (6) the Participant’s indictment or
plea of guilty or nolo contendere with respect to any criminal act which impairs
the Participant’s ability to perform his or her duties with the Company or any
of its Affiliates. Notwithstanding the foregoing, the definition of “Cause” in
an individual written agreement between the Company or any of its

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Affiliates and the Participant shall supersede the foregoing definition with
respect to Stock Awards subject to such individual agreement to the extent
expressly provided for in such individual written agreement (it being
understood, however, that if no definition of the term “Cause” is set forth in
such an individual written agreement, the foregoing definition shall apply).

2.6. “Change of Control” means , unless otherwise provided in a Stock Award
Agreement, the occurrence of any of the following events:

(i) The sale, exchange, lease or other disposition, in one or a series of
related transactions, of all or substantially all of the assets of the Company
to a person or group of related persons, as such terms are defined or described
in Sections 3(a)(9) and 13(d)(3) of the Exchange Act;

(ii) A merger or consolidation or similar transaction involving the Company if
the stockholders of the Common Stock of the Company immediately prior to such
transaction do not own a majority of the outstanding common stock of the
surviving company or its parent immediately after the transaction in
substantially the same proportions relative to each other as immediately prior
to such transaction;

(iii) Any person or group becomes the Beneficial Owner, directly or indirectly,
of more than 50% of the total voting power of the voting stock of the Company,
including by way of merger, consolidation or otherwise (for the purposes of this
clause (iii), a member of a group will not be considered to be the Beneficial
Owner of the securities owned by other members of the group other than in
response to a contested proxy or other control battle); or

(iv) During any period of two (2) consecutive years, individuals who at the
beginning of such period constituted the Board (together with any new Directors
whose election by such Board or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
Directors of the Company then still in office, who were either Directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office.

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

2.8. “Committee” means the Board, or a committee of one or more members of the
Board (or other individuals who are not members of the Board to the extent
allowed by law) duly appointed by the Board in accordance with the Plan and
Applicable Law. At any time that no such committee has been appointed, the Board
shall constitute the “Committee” hereunder.

2.9. “Common Stock” means the Series A common stock of the Company, par value
$0.01 per Share.

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2.10. “Company” means Mueller Water Products, Inc., a Delaware corporation.

2.11. “Consultant” means any person (i) engaged by the Company or an Affiliate
to render consulting or advisory services and who is compensated for such
services or (ii) who is a member of the board of directors of an Affiliate. For
purposes of determining eligibility to participate in the Plan, the term
Consultant shall be clarified pursuant to the provisions of Section 5.4.

2.12. “Continuous Service” means that the Participant’s service with the Company
or an Affiliate, whether as an Employee, Director, or Consultant, as applicable,
is not interrupted or terminated. Unless otherwise expressly provided in the
Stock Award, the Participant’s Continuous Service shall be deemed to have
terminated when the Participant “separates from service” within the meaning of
Code Section 409A.

2.13. “Covered Employee” means a “covered employee” as determined for purposes
of Section 162(m) of the Code.

2.14. “Director” means a member of the Board of Directors of the Company.

2.15. “Disability” (a) means with respect to all Incentive Stock Options, the
permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code, (b) for all other purposes, has the meaning under
Section 409A(a)(2)(C)(i) of the Code, that is, the Participant (a) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months or (b) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three (3) months under an accident and
health plan covering employees of the Participant’s employer.

2.16. “Employee” means any person employed by the Company or an Affiliate.
Compensation by the Company or an Affiliate solely for services as a Director or
as a Consultant shall not be sufficient to constitute “employment” by the
Company or an Affiliate.

2.17. “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time.

2.18. “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:

(i) If the Common Stock is listed on any established stock exchange or traded on
the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value
of a share of Common Stock shall be the closing sales price for such stock (or
the closing bid, if no such sales were reported) as quoted on such exchange or
market (or the exchange or market with the greatest volume of trading in the
Common Stock) on the date of determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable;

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(ii) If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the day of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable; or

(iii) In the absence of such markets for the Common Stock, the Fair Market Value
shall be determined in good faith by the Board.

(iv) Notwithstanding the foregoing, to the extent required to comply with
Section 409A of the Code in order to avoid the imposition of penalties or
interest in respect thereof, the value of the Common Stock shall be determined
in a manner consistent with Section 409A (and the regulations and guidance
promulgated thereunder).

2.19. “Full-Value Stock Award” shall mean any of a Restricted Stock Bonus,
Restricted Stock Units, Phantom Stock Units, Performance Share Bonus, or
Performance Share Units.

2.20. “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

2.21. “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

2.22. “Option” means an Incentive Stock Option or a Nonstatutory Stock Option
granted pursuant to the Plan.

2.23. “Optionholder” means a person to whom an Option is granted pursuant to the
Plan or, if applicable, such other person who holds an outstanding Option.

2.24. “Participant” means an Employee, Director or Consultant to whom a Stock
Award is granted pursuant to the Plan or, if applicable, such other person who
holds an outstanding Stock Award.

2.25. “Performance Share Bonus” means a grant of shares of the Company’s Common
Stock not requiring a Participant to pay any amount of monetary consideration
(other than par value to the extent required by Applicable Law), and subject to
the provisions of Section 8.2 of the Plan.

2.26. “Performance Share Unit” means the right to receive the value of one
(1) share of the Company’s Common Stock at the time the Performance Share Unit
vests, with the further right to elect to defer receipt of that value otherwise
deliverable upon the vesting of an award of Performance Share Units to the
extent permitted in the Participant’s agreement. These Performance Share Units
are subject to the provisions of Section 8.2 of the Plan.

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2.27. “Phantom Stock Unit” means the right to receive the value of one (1) share
of the Company’s Common Stock, subject to the provisions of Section 8.2 of the
Plan.

2.28. “Plan” means this Mueller Water Products, Inc. 2006 Stock Incentive Plan,
as amended and in effect from time to time.

2.29. “Restricted Stock Bonus” means a grant of shares of the Company’s Common
Stock not requiring a Participant to pay any amount of monetary consideration
(other than par value to the extent required by Applicable Law), and subject to
the provisions of Section 8.2 of the Plan.

2.30. “Restricted Stock Purchase Right” means the right to acquire shares of the
Company’s Common Stock upon the payment of the agreed-upon monetary
consideration, subject to the provisions of Section 8.2 of the Plan.

2.31. “Restricted Stock Unit” means the right to receive the value of one
(1) share of the Company’s Common Stock at the time the Restricted Stock Unit
vests, with the further right to elect to defer receipt of that value otherwise
deliverable upon the vesting of an award of restricted stock to the extent
permitted in the Participant’s agreement. These Restricted Stock Units are
subject to the provisions of Section 8.2 of the Plan.

2.32. “Retirement” means the voluntary termination of a Participant’s Continuous
Service at such time that the Participant’s age and years of service equal or
exceed 70, but only after the Participant’s 60th birthday.

2.33. “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule l6b-3, as in effect from time to time.

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

2.35. “Stock Appreciation Right” means the right to receive an amount equal to
the Fair Market Value of one (1) share of the Company’s Common Stock on the day
the Stock Appreciation Right is redeemed, reduced by the deemed exercise price
or base price of such right, subject to the provisions of Section 8.1 of the
Plan.

2.36. “Stock Award” means any award of an Option, Restricted Stock Bonus,
Restricted Stock Purchase Right, Stock Appreciation Right, Phantom Stock Unit,
Restricted Stock Unit, Performance Share Bonus, Performance Share Unit, or other
stock-based award.

2.37. “Stock Award Agreement” means a written agreement between the Company and
a holder of a Stock Award setting forth the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

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2.38. “Subsidiary” means a subsidiary corporation, as defined in Section 424(f)
of the Code.

2.39. “Ten Percent Shareholder” means a person who owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of its parent or subsidiary corporation.

III. ADMINISTRATION.

3.1. Administration. The Plan shall be administered by a Committee consisting of
two or more directors, each of whom shall be a “non-employee director” within
the meaning of Rule 16b-3 and an “outside director” within the meaning of
Section 162(m) of the Code, unless otherwise determined by the Board. The
Committee shall administer the Plan and shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

(i) To determine from time to time which of the persons eligible under the Plan
shall be granted Stock Awards; when and how each Stock Award shall be granted;
what type or combination of types of Stock Awards shall be granted; the terms
and conditions of each Stock Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive cash
and/or Common Stock pursuant to a Stock Award; the number of shares of Common
Stock with respect to which a Stock Award shall be granted to each such person;
and whether a Stock Award will be adjusted to account for dividends paid with
respect to the Company’s Common Stock (subject to the requirements of Code
Section 409A).

(ii) To construe and interpret the Plan and Stock Awards granted under it, and
to establish, amend and revoke rules and regulations for the administration of
the Plan. The Committee, in the exercise of this power, may correct any defect,
omission or inconsistency in the Plan or in any Stock Award Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
and the terms of the Stock Award fully effective (but only to the extent
consistent with the requirements of Code Section 409A, where applicable).

(iii) To amend the Plan or a Stock Award as provided in the Plan.

(iv) Generally, to exercise such powers and to perform such acts as the
Committee deems necessary, desirable, convenient or expedient to promote the
best interests of the Company consistent with the provisions of the Plan
(subject to the requirements of Code Section 409A, where applicable).

(v) To adopt sub-plans and/or special provisions applicable to Stock Awards
regulated by the laws of a jurisdiction other than and outside of the United
States. Except with respect to Section 4 of the Plan and such other sections as
required by Applicable Law, the sub-plans and/or special provisions may take
precedence over other provisions of the Plan to the extent expressly set forth
in the terms of such sub-plans and/or special provisions.

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(vi) To authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of a Stock Award previously granted by the
Committee.

(vii) To impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a Participant or other
subsequent transfers by the Participant of any shares of Common Stock issued as
a result of or under a Stock Award, including, without limitation,
(A) restrictions under an insider trading policy and (B) restrictions as to the
use of a specified brokerage firm for such resales or other transfers.

(viii) To provide, either at the time a Stock Award is granted or by subsequent
action, that a Stock Award shall contain as a term thereof, a right, either in
tandem with the other rights under the Stock Award or as an alternative thereto,
of the Participant to receive, without payment to the Company, a number of
shares of Common Stock, cash or a combination thereof, the amount of which is
determined by reference to the value of the Stock Award.

(ix) To assume, or provide for the issuance of substitute Stock Awards that will
substantially preserve the otherwise applicable terms of, stock options and
other stock-based awards previously granted by an Affiliate to an award holder
who is or becomes eligible to participate in the Plan, as determined by the
Committee in its sole discretion; provided, however, that any such assumption or
substitution shall comply with Applicable Law, including but not limited to
Sections 409A and 424 of the Code, and any such substitute Stock Awards may be
granted at a price below Fair Market Value only to the extent that such grants
would otherwise comply with the terms of this Plan, including but not limited to
Section 10.10 hereof.

3.2. Delegation by the Committee. In no way limiting any other provision of the
Plan, the Committee may delegate its duties and powers hereunder in whole or in
part to any subcommittee thereof consisting solely of at least two individuals
who are intended to qualify as “Non-Employee Directors” within the meaning of
Rule 16b-3 under the Exchange Act and “outside directors” within the meaning of
Section 162(m) of the Code.

3.3. Stock Pool. The Committee may, by resolution, authorize the Chief Executive
Officer or another director to grant a Stock Award, to the extent permitted by
Delaware law, to any Employee who is not a Covered Employee or expected to
become a Covered Employee or is not a named executive officer, in accordance
with the limitations established by the Committee including the maximum number
of shares of Common Stock subject to all such Stock Awards made in a fiscal year
of the Company, the maximum Shares subject to all Stock Awards made to any one
person at any one time, the requirement that no Stock Award be made at less than
Fair Market Value, and subject to any other restrictions required by law. Any
Stock Awards made pursuant to this delegation shall be reported periodically to
the Committee.

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3.4. Effect of the Committee’s Decision. All determinations, interpretations and
constructions made by the Committee or its duly authorized sub-committee(s) in
good faith shall not be subject to review by any person and shall be final,
binding and conclusive on all persons.

IV. SHARES SUBJECT TO THE PLAN.

4.1. Share Reserve. Subject to the provisions of Section 11 of the Plan relating
to adjustments upon changes in Common Stock, the maximum aggregate number of
shares of Common Stock that may be issued pursuant to Stock Awards shall not
exceed 8,000,000 shares of Common Stock (“Share Reserve”), provided that each
share of Common Stock issued pursuant to an Option or Restricted Stock Purchase
Right shall reduce the Share Reserve by one (1) share and each share of Common
Stock subject to the redeemed portion of a Stock Appreciation Right (whether the
distribution upon redemption is made in cash, stock or a combination of the two)
shall reduce the Share Reserve by one (1) share. Each share of Common Stock
issued pursuant to a Full-Value Stock Award shall reduce the Share Reserve by
one (1) share. To the extent that a distribution pursuant to a Stock Award is
made in cash, the Share Reserve shall be reduced by the number of shares of
Common Stock subject to the redeemed or exercised portion of the Stock Award.
Notwithstanding any other provision of the Plan to the contrary, the maximum
aggregate number of shares of Common Stock that may be issued under the Plan
pursuant to Incentive Stock Options is 1,250,000 shares of Common Stock (“ISO
Limit”), subject to the adjustments provided for in Section 11 of the Plan.

4.2. Reversion of Shares to the Share Reserve. If any Stock Award granted under
this Plan shall for any reason (i) expire, be cancelled or otherwise terminate,
in whole or in part, without having been exercised or redeemed in full, (ii) be
reacquired by the Company prior to vesting, or (iii) be repurchased at cost by
the Company prior to vesting, the shares of Common Stock not acquired under such
Stock Award shall revert or be added to the Share Reserve and become available
for issuance under the Plan; provided, however, that such shares of Common Stock
shall not be available for issuance pursuant to the exercise of Incentive Stock
Options.

4.3. Source of Shares. The shares of Common Stock subject to the Plan may be
unissued shares or reacquired shares (whether purchased on the market or
otherwise reacquired).

V. ELIGIBILITY.

5.1. Eligibility for Specific Stock Awards. Incentive Stock Options may be
granted only to Employees. Stock Awards other than Incentive Stock Options may
be granted to Employees, Directors, and Consultants. Nonstatutory Stock Options
and Stock Appreciation Rights may be granted only with respect to “service
recipient stock” as such term is used in Code Section 409A.

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5.2. Ten Percent Stockholders. A Ten Percent Shareholder shall not be granted an
Incentive Stock Option unless the exercise price of such Option is at least one
hundred ten percent (110%) of the Fair Market Value of the Common Stock at the
date of grant and the Option is not exercisable after the expiration of five
(5) years from the date of grant, except as provided in Section 3.1(ix) above.

5.3. Annual Limitation. Subject to the provisions of Section 11 of the Plan
relating to adjustments upon changes in the shares of Common Stock, no Employee
shall be eligible to be granted Options and other Stock Awards covering more
than 1,000,000 shares of Common Stock (with respect to Stock Awards payable in
shares) or with a value in excess of $5,000,000 (with respect to Stock Awards
payable in cash) during any fiscal year; provided that in connection with his or
her initial service, an Employee may be granted Options and other Stock Awards
covering not more than an additional 300,000 shares of Common Stock (with
respect to Stock Awards payable in shares) or with a value in excess of
$5,000,000 (with respect to Stock Awards payable in cash), which shall not count
against the limit set forth in the preceding sentence.

5.4. Consultants. A Consultant shall not be eligible for the grant of a Stock
Award if, at the time of grant, a Form S-8 Registration Statement under the
Securities Act (“Form S-8”) is not available to register either the offer or the
sale of the Company’s securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (1) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (2) that such grant complies with the securities laws of
all other relevant jurisdictions.

VI. OPTION PROVISIONS.

6.1 Form of Options. Each Option shall be in such form and shall contain such
terms and conditions as the Committee shall deem appropriate. All Options shall
be separately designated Incentive Stock Options or Nonstatutory Stock Options
at the time of grant, and, if certificates are issued, a separate certificate or
certificates will be issued for shares of Common Stock purchased upon exercise
of each type of Option. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

6.2 Term. In the absence of a provision to the contrary in the individual
Optionholder’s Stock Award Agreement, and subject to the provisions of
Section 5.2 of the Plan regarding grants of Incentive Stock Options to Ten
Percent Stockholders, the term of the Option shall be ten (10) years from the
date it was granted.

6.3 Incentive Stock Option $100,000 Limitation. To the extent that the aggregate
Fair Market Value (determined at the time of grant) of Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by any
Optionholder during

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any calendar year (under all plans of the Company and its Affiliates) exceeds
one hundred thousand dollars ($100,000), or such other limit as may be set by
Applicable Law, the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.

6.4 Exercise Price of an Incentive Stock Option. The exercise price of each
Incentive Stock Option shall be not less than one hundred percent (100%) of the
Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted (or less than one hundred and ten percent (110%) in the case
of a Ten Percent Shareholder), except as provided in Section 3.1(ix) above.

6.5 Exercise Price of a Nonstatutory Stock Option. The exercise price of each
Nonstatutory Stock Option shall be not less than one hundred percent (100%) of
the Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted, except as provided in Section 3.1(ix) above.

6.6 Consideration.

(i) The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either
(a) in cash or by check at the time the Option is exercised or (b) at the
discretion of the Committee (in the case of Incentive Stock Options, at the time
of the grant of the Option): (1) by delivery to the Company of other shares of
Common Stock (subject to such requirements as may be imposed by the Committee),
(2) if there is a public market for the Common Stock at such time, and to the
extent permitted by Applicable Law, pursuant to a “same day sale” program that
results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds, (3) reduction of the Company’s liability to the
Optionholder, (4) by any other form of consideration permitted by law, but in no
event shall a promissory note or other form of deferred payment constitute a
permissible form of consideration for an Option granted under the Plan, or
(5) by some combination of the foregoing. In each such case, the combination of
any cash and property used to pay the purchase price shall have a Fair Market
Value on the exercise date equal to the applicable exercise price.

(ii) Unless otherwise specifically provided in the Stock Award Agreement, the
purchase price of Common Stock acquired pursuant to a Stock Award that is paid
by delivery to the Company of other Common Stock, which Common Stock was
acquired, directly or indirectly from the Company, shall be paid only by shares
of the Common Stock that have been held for more than six (6) months (or such
longer or shorter period of time required to avoid a supplemental charge to
earnings for financial accounting purposes).

(iii) Whenever a Participant is permitted to pay the exercise price of a Stock
Award and/or taxes relating to the exercise of a Stock Award by delivering
Common Stock, the Participant may, subject to procedures satisfactory to the
Committee, satisfy

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such delivery requirements by presenting proof of beneficial ownership of such
Common Stock, in which case the Company shall treat the Stock Award as exercised
or redeemed without further payment and shall withhold such number of shares of
Common Stock from the Common Stock acquired under the Stock Award. When
necessary to avoid a supplemental charge to earnings for financial accounting
purposes, any such withholding for tax purposes shall be made at the statutory
minimum rate of withholding.

6.7 Transferability of an Incentive Stock Option. An Incentive Stock Option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder.

6.8 Transferability of a Nonstatutory Stock Option. Except as otherwise provided
in the Stock Award Agreement, a Nonstatutory Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.

6.9 Vesting Generally. Options granted under the Plan shall be exercisable at
such times and upon such terms and conditions as may be determined by the
Committee. The vesting provisions of individual Options may vary. The provisions
of this Section 6.9 are subject to any Option provisions governing the minimum
number of shares of Common Stock as to which an Option may be exercised.

6.10 Termination of Unvested Options. Any Option or portion thereof that is not
vested at the time of termination of Continuous Service shall lapse and
terminate, and shall not be exercisable by the Optionee or any other person,
unless otherwise provided for in the Stock Award Agreement.

6.11 Termination of Continuous Service. In the event an Optionholder’s
Continuous Service terminates (other than upon the Optionholder’s death,
Disability or Retirement or termination for Cause), the Option shall remain
exercisable for three (3) months following the date of termination (to the
extent that the Option was exercisable at that time), or such other period
specified in the Stock Award Agreement. In no event may the Option be exercised
after the expiration of the term of the Option as set forth in the Stock Award
Agreement. If the Optionholder does not exercise his or her Option within the
specified time, the Option shall terminate.

6.12 Extension of Termination Date. An Optionholder’s Stock Award Agreement may
also provide that if the exercise of the Option following the termination of the
Optionholder’s Continuous Service (other than upon the Optionholder’s death or
termination for Cause) would be prohibited at any time solely because the
issuance of shares of Common Stock would violate the registration requirements
under the Securities Act or other applicable securities law, then the Option
shall terminate on the earlier of (i) the expiration of the term of the Option
set forth in the Stock Award Agreement or (ii) the expiration of a period of
three (3) months after the termination of the Optionholder’s Continuous Service
during which the exercise of the Option would not be in violation of such
registration requirements or other applicable securities law. The provisions of
this Section 6.12 notwithstanding, in the event that a

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sale of the shares of Common Stock received upon exercise of his or her Option
would subject the Optionholder to liability under Section 16(b) of the Exchange
Act, then the Option will terminate on the earlier of (1) the fifteenth
(15th) day after the last date upon which such sale would result in liability,
or (2) two hundred ten (210) days following the date of termination of the
Optionholder’s employment or other service to the Company (and in no event later
than the expiration of the term of the Option).

6.13 Disability or Retirement of Optionholder. In the event an Optionholder’s
Continuous Service terminates upon the Optionholder’s Disability or Retirement,
the Option shall remain exercisable for two (2) years following the date of
termination (to the extent that the Option was exercisable at that time), or
such other period specified in the Stock Award Agreement. In no event may the
Option be exercised after than the expiration of the term of the Option as set
forth in the Stock Award Agreement. If the Optionholder does not exercise his or
her Option within the specified time, the Option shall terminate.

6.14 Death of Optionholder. In the event (i) an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s death or (ii) the
Optionholder dies after the termination of his or her Continuous Service but
within the post-termination exercise period applicable to the Option, then,
except as otherwise provided in the Stock Award Agreement, the Option shall
remain exercisable for two (2) years following the date of death (to the extent
that the Option was exercisable at that time). In no event may the Option be
exercised after the expiration of the term of the Option as set forth in the
Stock Award Agreement. If the Option is not exercised by the person entitled to
do so within the specified time, the Option shall terminate.

6.15 Termination for Cause. Unless otherwise provided in the applicable Stock
Award Agreement, the Option shall cease to be exercisable as to all unexercised
shares of Common Stock (including any vested shares) immediately upon the
termination of the Optionholder’s Continuous Service for Cause.

6.16 Early Exercise Generally Not Permitted. The Company may grant Options which
permit the Optionholder to exercise the Option as to any part or all of the
shares of Common Stock subject to the Option prior to the vesting of the Option.
If a Stock Award Agreement does permit such early exercise, any unvested shares
of Common Stock so purchased may be subject to a repurchase option in favor of
the Company or to any other restriction the Committee determines to be
appropriate.

6.17 No Repricing of Options. The Committee shall have no authority to make any
adjustment or amendment (except as provided in Section 3.1(ix) or Article XI of
this Plan), and no such adjustment or amendment shall be made, that reduces or
would have the effect of reducing the exercise price of an Option previously
granted under the Plan, whether through amendment, cancellation or replacement
grants, or other means, unless the Company’s stockholders shall have approved
such adjustment or amendment.

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VII. NON-DISCRETIONARY STOCK AWARDS FOR ELIGIBLE DIRECTORS.

7.1 Stock Awards for Eligible Directors. In addition to any other Stock Awards
that Directors may be granted on a discretionary basis under the Plan, each
Director of the Company who is not an Employee of the Company or any Affiliate
(each, an “Eligible Director”) shall be automatically granted, without the
necessity of action by the Committee, the following Stock Awards:

(i) Initial Grant. On the date that a Director commences service on the Board
and satisfies the definition of an Eligible Director, an initial grant of a
Stock Award (the “Initial Grant”) shall automatically be made to that Eligible
Director. The type of Stock Award, the number of shares subject to this Initial
Grant and other terms governing this Initial Grant shall be as determined by the
Committee in its sole discretion. If the Committee does not establish the terms
and conditions of the Initial Grant for a given newly-elected Eligible Director
prior to the date of grant, then the Stock Award shall be of the same type, and
for the same number of shares, as the Initial Grant made to the immediately
preceding newly-elected Eligible Director. If at the time a Director first
commences service on the Board, the Director does not satisfy the definition of
an Eligible Director, such Director shall not be entitled to an Initial Grant at
any time, even if such Director subsequently becomes an Eligible Director.

(ii) Annual Grant. An annual Stock Award grant (the “Annual Grant”) shall
automatically be made to each Director who (1) is re-elected to the Board,
(2) is an Eligible Director on the relevant grant date, and (3) has served as a
Director for a period of at least six (6) months on the relevant grant date. The
type of Stock Award, the number of shares subject to the Annual Grant and other
terms governing the Annual Grant shall be as determined by the Committee in its
sole discretion. If the Committee does not establish the terms and conditions of
the Annual Grant prior to the date of grant, then the Annual Grant shall be of
the same type, and for the same number of shares of Common Stock, as the Annual
Grants made for the immediately preceding year. The date of grant of an Annual
Grant is the date on which the Director is re-elected to serve on the Board.

(iii) Vesting. Notwithstanding the foregoing, if the vesting of the Stock Award
is based solely on the Director’s Continuous Service, the Stock Award will not
fully vest in less than three (3) years.

(iv) Vesting on Retirement. All Initial Grants and Annual Grants held by an
Eligible Director shall become fully vested and exercisable upon the termination
of the Eligible Director’s Continuous Service by reason of Retirement, unless
otherwise expressly set forth in the applicable Stock Award Agreement(s).

VIII. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

8.1. Stock Appreciation Rights. Each award of Stock Appreciation Rights (“SARs”)
granted under the Plan shall be subject to such terms and conditions as the
Committee shall deem appropriate. The terms and conditions of SAR agreements
need not be

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identical, but each SAR agreement shall include the substance of each of the
applicable provisions of this Section 8.1. The two types of SARs that are
authorized for issuance under this Plan are:

(i) Stand-Alone SARs. The following terms and conditions shall govern the grant
and redeemability of stand-alone SARs:

(A) The stand-alone SAR shall cover a specified number of underlying shares of
Common Stock and shall be redeemable upon such terms and conditions as the
Committee may establish. Upon redemption of the stand-alone SAR, the holder
shall be entitled to receive a distribution from the Company in an amount equal
to the excess of (i) the aggregate Fair Market Value (on the redemption date) of
the shares of Common Stock underlying the redeemed right over (ii) the aggregate
base price in effect for those shares.

(B) The number of shares of Common Stock underlying each stand-alone SAR and the
base price in effect for those shares shall be determined by the Committee in
its sole discretion at the time the stand-alone SAR is granted. In no event,
however, may the base price per share be less than one hundred percent (100%) of
the Fair Market Value per underlying share of Common Stock on the grant date.

(C) The distribution with respect to any redeemed stand-alone SAR may be made in
shares of Common Stock valued at Fair Market Value on the redemption date, in
cash, or partly in shares and partly in cash, as the Committee shall in its sole
discretion deem appropriate.

(ii) Stapled SARs. The following terms and conditions shall govern the grant and
redemption of stapled SARs:

(A) Stapled SARs may only be granted concurrently with an Option to acquire the
same number of shares of Common Stock as the number of such shares underlying
the stapled SARs.

(B) Stapled SARs shall be redeemable upon such terms and conditions as the
Committee may establish and shall grant a holder the right to elect among
(i) the exercise of the concurrently granted Option for shares of Common Stock,
whereupon the number of shares of Common Stock subject to the stapled SARs shall
be reduced by an equivalent number, (ii) the redemption of such stapled SARs in
exchange for a distribution from the Company in an amount equal to the excess of
the Fair Market Value (on the redemption date) of the number of vested shares
which the holder redeems over the aggregate base price for such vested shares,
whereupon the number of shares of Common Stock subject to the concurrently
granted Option shall be reduced by any equivalent number, or (iii) a combination
of (i) and (ii).

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(C) The distribution to which the holder of stapled SARs shall become entitled
upon the redemption of stapled SARs may be made in shares of Common Stock valued
at Fair Market Value on the redemption date, in cash, or partly in shares and
partly in cash, as the Committee shall in its sole discretion deem appropriate.

(iii) Limitations. The total number of shares of Common Stock subject to a SAR
may, but need not, vest in period installments that may, but need not, be equal.
The Committee shall determine the criteria under which shares of Common Stock
under the SAR may vest. If the Stock Award Agreement does not provide for
transferability, then the shares subject to the SAR shall not be transferable
except by will or by the laws of descent and distribution.

(iv) No Repricing of Stock Appreciation Rights. The Committee shall have no
authority to make any adjustment or amendment (except as provided in
Section 3.1(ix) or Article XI of this Plan), and no such adjustment or amendment
shall be made, that reduces or would have the effect of reducing the base price
of a Stock Appreciation Right previously granted under the Plan, whether through
amendment, cancellation or replacement grants, or other means, unless the
Company’s stockholders shall have approved such adjustment or amendment.

8.2. Other Stock-Based Awards. The Committee, in its sole discretion, may grant
or sell an award of a Restricted Stock Bonus, Restricted Stock Purchase Right,
Phantom Stock Unit, Restricted Stock Unit, Performance Share Bonus, Performance
Share Unit, or other stock-based award that is valued in whole or in part by
reference to, or is otherwise based on, the Fair Market Value of the Company’s
Common Stock (each, an “Other Stock-Based Award”). Each Other Stock-Based Award
shall be subject to a Stock Award Agreement which shall contain such terms and
conditions as the Committee shall deem appropriate, including any provisions for
the deferral of the receipt of any shares of Common Stock, cash or property
otherwise distributable to the Participant in respect of the Stock Award. The
terms and conditions of Other Stock-Based Awards may change from time to time,
and the terms and conditions of separate Other Stock-Based Awards need not be
identical, but each Other Stock-Based Award shall be subject to the following
provisions (either through incorporation of provisions hereof by reference in
the applicable Stock Award Agreement or otherwise):

(i) Purchase Price. Other Stock-Based Awards may be granted in consideration for
past services actually rendered to the Company or an Affiliate. The purchase
price (if any) under each Other Stock-Based Award shall be such amount as the
Committee shall determine and designate in the applicable Stock Award Agreement.
To the extent required by Applicable Law, the purchase price shall not be less
than one hundred percent (100%) of the Fair Market Value of the Common Stock
subject to the Other Stock-Based Award on the date such award is made or at the
time the purchase is consummated, as applicable.

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(ii) Consideration.

(A) The purchase price (if any) of Common Stock acquired pursuant to Other
Stock-Based Awards shall be paid either: (1) in cash or by check, or (2) as
determined by the Committee (and to the extent required by Applicable Law, at
the time of the grant): (v) by delivery to the Company of other shares of Common
Stock (subject to such requirements as may be imposed by the Committee), (w) if
there is a public market for the Common Stock at such time, and to the extent
permitted by Applicable Law, pursuant to a “same day sale” program that results
in either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from
the sales proceeds, (x) reduction of the Company’s liability to the Participant,
(y) by any other form of consideration permitted by law, but in no event shall a
promissory note or other form of deferred payment constitute a permissible form
of consideration, or (z) by some combination of the foregoing.

(B) Unless otherwise specifically provided in the Stock Award Agreement, the
purchase price of Common Stock acquired pursuant to any Other Stock-Based Award
that is paid by delivery to the Company of other Common Stock, which Common
Stock was acquired, directly or indirectly from the Company, shall be paid only
by shares of the Common Stock that have been held for more than six (6) months
(or such longer or shorter period of time required to avoid a supplemental
charge to earnings for financial accounting purposes). To the extent required by
Applicable Law, the Participant shall pay the Common Stock’s “par value” solely
in cash or by check.

(C) Whenever a Participant is permitted to pay the exercise price of any Other
Stock-Based Award and/or taxes relating to the exercise thereof by delivering
Common Stock, the Participant may, subject to procedures satisfactory to the
Committee, satisfy such delivery requirements by presenting proof of beneficial
ownership of such Common Stock, in which case the Company shall treat the Other
Stock-Based Award as exercised or redeemed without further payment and shall
withhold such number of shares of Common Stock from the Common Stock acquired
under the Other Stock-Based Award. When necessary to avoid a supplemental charge
to earnings for financial accounting purposes, any such withholding for tax
purposes shall be made at the statutory minimum rate of withholding.

(iii) Vesting. The total number of shares of Common Stock subject to each Other
Stock-Based Award may, but need not, vest and/or become redeemable in periodic
installments that may, but need not, be equal. The Committee shall determine the
criteria under which shares of Common Stock under the each Other Stock-Based
Award may vest. The criteria may or may not include performance criteria or
Continuous Service. Shares of Common Stock acquired under each Other Stock-Based
Award may, but need not, be subject to a share repurchase right or similar
forfeiture feature in favor of the Company in accordance with a vesting schedule
to be determined by the Committee.

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(iv) Distributions. The distribution with respect to any Other Stock-Based Award
may be made in shares of Common Stock valued at Fair Market Value on the
redemption or exercise date, in cash, or partly in shares and partly in cash, as
the Committee shall in its sole discretion deem appropriate.

(v) Termination of Participant’s Continuous Service. In the event a
Participant’s Continuous Service terminates, the Company may repurchase or
reacquire, and/or the Participant shall forfeit (as applicable), any or all of
the shares of Common Stock held by the Participant that have not vested as of
the date of termination on such terms and conditions as set forth in the Stock
Award Agreement.

(vi) Transferability. Rights to acquire shares of Common Stock under Other
Stock-Based Award shall be transferable by the Participant only upon such terms
and conditions as are set forth in the applicable Stock Award Agreement, as the
Committee shall determine in its discretion. If the Stock Award Agreement does
not provide for transferability, then the shares subject to Other Stock-Based
Award shall not be transferable except by will or by the laws of descent and
distribution.

IX. ISSUANCE OF SHARES.

9.1. Availability of Shares. During the terms of the outstanding Stock Awards,
the Company shall keep available at all times the number of shares of Common
Stock required to satisfy such Stock Awards.

9.2. Securities Law Compliance. The grant of Stock Awards and the issuance of
Common Stock pursuant to Stock Awards shall be subject to compliance with all
applicable requirements of federal, state and foreign law with respect to
securities. The Company shall use commercially reasonable efforts to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Stock Awards and to issue and sell shares
of Common Stock upon exercise, redemption or satisfaction of the Stock Awards;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act or under any foreign law of similar effect the
Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after commercially reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of Common Stock under the Plan, the Company shall be relieved from any liability
for failure to issue and sell Common Stock related to such Stock Awards unless
and until such authority is obtained.

9.3. Proceeds. Proceeds from the sale of Common Stock pursuant to Stock Awards
shall constitute general funds of the Company.

X. MISCELLANEOUS.

10.1. Vesting Generally. If the vesting of a Stock Award is based solely on the
Participant’s Continuous Service, the Stock Award will not fully vest in less
than three (3) years and if the vesting of a Stock Award is based on the
achievement of performance criteria, the Stock Award will not fully vest in less
than one (1) year.

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10.2. Acceleration of Exercisability and Vesting. The Committee shall have the
power to accelerate exercisability and/or vesting of any Stock Award only in the
case of death, disability, retirement or Change of Control. Subject to the prior
sentence, the Committee shall have the power to accelerate the time at which a
Stock Award may first be exercised or the time during which a Stock Award or any
part thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.

10.3. Clawback. The Company may provide in any Stock Award Agreement that, upon
the Committee’s discovery of facts that would be grounds for a termination for
Cause of a Participant’s Continuous Service, and regardless of whether such
discovery is made prior to or following a termination of Continuous Service for
any reason, the Committee may (in its sole discretion, but acting in good faith)
direct that the Company recover all or a portion of the Stock Award, including
any shares of Common Stock then held by the Participant as well as any gain
recognized by the Participant upon any sale of the shares of Common Stock issued
pursuant to the Stock Award. In no event shall the amount to be recovered by the
Company be less than any amount required to be repaid or recovered as a matter
of law. The Committee shall determine whether the Company shall effect any such
recovery or repayment (i) by seeking recovery or repayment from the Participant,
(ii) by reducing (subject to Applicable Law and the terms and conditions of the
applicable plan, program or arrangement) the amount that would otherwise be
payable to the Participant under any compensatory plan, program, agreement or
arrangement maintained by the Company or any of its Affiliates, (iii) by
withholding payment of future compensation (including the payment of any
discretionary bonus amount) or grants of compensatory awards that would
otherwise have been made in accordance with the otherwise applicable
compensation practices of the Company or any Affiliate, or (iv) by any
combination of the foregoing.

10.4. Compliance of Performance Awards. Notwithstanding anything to the contrary
herein, any Stock Award granted under this Plan may, but need not, be granted in
a manner which may be deductible by the Company under Section 162(m) of the Code
and, as applicable, compliant with the requirements of Section 409A of the Code
(such awards, “Performance-Based Awards”). A Participant’s Performance-Based
Award shall be determined based on the attainment of written performance goals
approved by the Committee for a performance period established by the Committee,
which goals are approved (i) while the outcome for that performance period is
substantially uncertain and (ii) during such period of time as permitted by
Applicable Law. The performance goals, which must be objective, shall be based
upon one or more of the following criteria: (i) consolidated earnings before or
after taxes (including earnings before one or more of the following: interest,
taxes, depreciation and amortization); (ii) net income; (iii) operating income;
(iv) earnings per share; (v) book value per share; (vi) return on stockholders’
equity; (vii) expense management; (viii) return on investment; (ix) improvements
in capital structure; (x) profitability of an identifiable business unit or
product; (xi) maintenance or improvement of profit margins; (xii) stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs

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and/or cost reductions or savings; (xvi) cash flow; (xvii) working capital;
(xviii) return on invested capital or assets; (xix) consummations of
acquisitions or sales of certain Company assets, subsidiaries or other
businesses; (xx) funds from operations and (xxi) pre-tax income . The foregoing
criteria may relate to the Company, one or more of its Affiliates or one or more
of its divisions or units, or any combination of the foregoing, and may be
applied on an absolute basis and/or be relative to one or more peer group
companies or indices, or any combination thereof, all as the Committee shall
determine. In addition, to the degree consistent with Section 162(m) of the Code
(or any successor section thereto) and/or Section 409A of the Code, the
performance goals may be calculated without regard to extraordinary items. The
Committee shall determine whether, with respect to a performance period, the
applicable performance goals have been met with respect to a given Participant
and, if they have, to so certify and ascertain the amount of the applicable
Performance-Based Award. No Performance-Based Awards will be paid for such
performance period until such certification is made by the Committee. The amount
of the Performance-Based Award actually paid to a given Participant may be less
than the amount determined by the applicable performance goal formula, at the
discretion of the Committee. The amount of the Performance-Based Award
determined by the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however, that a Participant
may, if and to the extent permitted by the Committee and consistent with the
provisions of Section 162(m) and/or Section 409A of the Code, elect to defer
payment of a Performance-Based Award.

10.5. Stockholder Rights. No Participant shall be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares of Common
Stock subject to a Stock Award except to the extent that the Company has issued
the shares of Common Stock relating to such Stock Award or except as expressly
provided in a Stock Award Agreement.

10.6. No Employment or Other Service Rights. Nothing in the Plan or any
instrument executed or Stock Award granted pursuant thereto shall confer upon
any Participant any right to continue to serve the Company or an Affiliate in
the capacity in effect at the time the Stock Award was granted or shall affect
the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company, and any applicable provisions of the corporate law of the state or
other jurisdiction in which the Company is domiciled, as the case may be.

10.7. Investment Assurances. The Company may require a Participant, as a
condition of exercising or redeeming a Stock Award or acquiring Common Stock
under any Stock Award, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of acquiring
the Common Stock; (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring Common Stock subject to the Stock
Award for the Participant’s

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own account and not with any present intention of selling or otherwise
distributing the Common Stock; and (iii) to give such other written assurances
as the Company may determine are reasonable in order to comply with Applicable
Law. The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares of Common
Stock under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act or (2) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws, and in either case otherwise complies with Applicable Law. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with Applicable Laws, including, but not limited
to, legends restricting the transfer of the Common Stock.

10.8. Designation of a Beneficiary. The Committee may establish rules pertaining
to the designation by the Participant of a beneficiary who is to receive any
shares of Common Stock and/or any cash, or have the right to exercise or redeem
that Participant’s Stock Award, in the event of such Participant’s death.

10.9. Withholding Obligations. To the extent provided by the terms of a Stock
Award Agreement, the Participant may satisfy any federal, state, local, or
foreign tax withholding obligation relating to the grant, exercise, acquisition
or redemption of a Stock Award or the acquisition, vesting, distribution or
transfer of Common Stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the
Participant by the Company) or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares of Common Stock
from the shares of Common Stock otherwise issuable to the Participant, provided,
however, that no shares of Common Stock are withheld with a value exceeding the
minimum amount of tax required to be withheld by law (where withholding in
excess of the minimum amount will result in a supplemental charge to earnings
for financial accounting purposes); or (iii) delivering to the Company owned and
unencumbered shares of Common Stock; provided, however, that in the case of the
tender of shares, that any such shares have been held by the Participant for not
less than six (6) months (or such other period as established from time to time
by the Committee in order to avoid a supplemental charge to earnings for
financial accounting purposes).

10.10. Section 409A. Notwithstanding anything in the Plan to the contrary, it is
the intent of the Company that the administration of the Plan, and the granting
of all Stock Awards under this Plan, shall be done in accordance with
Section 409A of the Code and the Department of Treasury regulations and other
interpretive guidance issued thereunder, including any guidance or regulations
that may be issued after the effective date of this Plan, and shall not cause
the acceleration of, or the imposition of the additional, taxes provided for in
Section 409A of the Code. Any Stock Award shall be granted, deferred, paid out
or modified under this Plan in a manner that shall be intended to avoid
resulting in the acceleration of taxation, or the imposition of penalty
taxation, under Section 409A upon a Participant. In the event that it is
reasonably determined by the Committee that any amounts payable in

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respect of any Stock Award under the Plan will be taxable to a Participant under
Section 409A of the Code prior to the payment and/or delivery to such
Participant of such amounts under the applicable Stock Award Agreement or will
be subject to the acceleration of taxation or the imposition of penalty taxation
under Section 409A of the Code, the Company may either (i) adopt such amendments
to the Plan and related Stock Award, and appropriate policies and procedures,
including amendments and policies with retroactive effect, that the Committee
determines necessary or appropriate to preserve the intended tax treatment of
the benefits provided by the Plan and Stock Awards hereunder, and/or (ii) take
such other actions as the Committee determines necessary or appropriate to
comply with the requirements of Section 409A of the Code. Notwithstanding
anything to the contrary herein, if Participant is a “specified employee” under
Section 409A of the Code, then any payment(s) to the Participant described
herein upon his or her termination of continuous service that (A) constitute
“deferred compensation” to a Participant under Section 409A; (B) are not exempt
from Section 409A and (C) are otherwise payable within 6 months after
Participant’s termination of continuous service, shall instead be made on the
date 6 months and 1 day after such termination of continuous service, and such
payment(s) shall be increased by an amount equal to interest on such payment(s)
at a rate of interest equal to the Federal Funds Rate in effect as of the date
of termination of continuous service from the date on which such payment(s)
would have been made in the absence of this provision and the payment date
described in this sentence.

10.11. Market Standoff Provision. If required by the Company (or a
representative of the underwriter(s)) in connection with the first underwritten
registration of the offering of any equity securities of the Company under the
Securities Act, for a specified period of time, the Participant shall not sell,
dispose of, transfer, make any short sale of, grant any option for the purchase
of, or enter into any hedging or similar transaction with the same economic
effect as a sale, any shares of the Common Stock acquired by the Participant
pursuant to a Stock Award, and shall execute and deliver such other agreements
as may be reasonably requested by the Company and/or the underwriter(s) that are
consistent with the foregoing or that are necessary to give further effect
thereto. In order to enforce the foregoing covenant, the Company may impose stop
transfer instructions with respect to such shares until the end of such period.

10.12 De Minimis Cap. Notwithstanding any other provision of the Plan, the
Committee may grant Stock Awards that do not conform to the requirements of the
Plan so long as such Stock Awards do not exceed 10% of the shares authorized for
issuance under the Plan.

XI. ADJUSTMENTS UPON CHANGES IN STOCK.

11.1. Capitalization Adjustments. In the event of any change in the Common Stock
subject to the Plan or subject to or underlying any Stock Award, by reason of
any stock dividend, stock split, reverse stock split, reorganization,
recapitalization, merger, consolidation, spin-off, combination, exchange of
shares of Common Stock or other corporate exchange, or any distribution or
dividend to stockholders of Common Stock (whether paid in cash or otherwise) or
any transaction similar to the foregoing, the

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Committee shall, without liability to any person, make such substitution or
adjustment, if any, as it deems to be equitable to (i) the type, class(es) and
maximum number of securities or other property subject to the Plan pursuant to
the Share Reserve, the ISO Limit, and Section 5.3, (ii) the type, class(es) and
number of securities subject to option grants to Eligible Directors under
Section 7 of the Plan, (iii) the type, class(es) and number of securities or
other property subject to, as well as the exercise price, base price, redemption
price or purchase price applicable to, outstanding Stock Awards or (iv) any
other affected terms of any outstanding Stock Awards. Any determination,
substitution or adjustment made by the Committee under this Section 11.1, shall
be final, binding and conclusive on all persons. The conversion of any
convertible securities of the Company shall not be treated as a transaction that
shall cause the Committee to make any determination, substitution or adjustment
under this Section 11.1. Any actions taken under this Section 11.1 shall be made
in accordance with the applicable restrictions of Code Section 409A, including
without limitation such restrictions with regard to the adjustment of stock
options and stock appreciation rights that are considered exempt from Code
Section 409A.

11.2. Adjustments Upon a Change of Control. In the event of a Change of Control,
then the Committee or the board of directors of any surviving entity or
acquiring entity may provide or require that the surviving or acquiring entity
shall: (1) assume or continue all or any part of the Stock Awards outstanding
under the Plan or (2) substitute substantially equivalent stock awards
(including an award to acquire substantially the same consideration paid to the
stockholders in the transaction by which the Change of Control occurs) for those
Stock Awards outstanding under the Plan. In the event any surviving entity or
acquiring entity refuses to assume or continue outstanding Stock Awards or to
substitute similar stock awards for those outstanding under the Plan, then with
respect to Stock Awards held by Participants whose Continuous Service has not
terminated, the Committee in its sole discretion and without liability to any
person may: (1) provide for the payment of a cash amount in exchange for the
cancellation of a Stock Award equal to the product of (x) the excess, if any, of
the Fair Market Value per share of Common Stock at such time over the exercise
or redemption price, if any, and (y) the total number of shares then subject to
such Stock Award; (2) continue the Stock Awards upon such terms as the Committee
determines in its sole discretion; (3) provide for the issuance of substitute
awards that will substantially preserve the otherwise applicable terms of any
affected Stock Awards (including any unrealized value immediately prior to the
Change of Control) previously granted hereunder, as determined by the Committee
in its sole discretion; or (4) notify Participants holding Stock Awards that
they must exercise or redeem any portion of such Stock Award (including, at the
discretion of the Committee, any unvested portion of such Stock Award) at or
prior to the closing of the transaction by which the Change of Control occurs
and that the Stock Awards shall terminate if not so exercised or redeemed at or
prior to the closing of the transaction by which the Change of Control occurs.
With respect to any other Stock Awards outstanding under the Plan, such Stock
Awards shall terminate if not exercised or redeemed with respect to the vested
portion of the Stock Award (and, at the discretion of the Committee, any
unvested portion of such Stock Award) at or prior to the closing of the
transaction by which the Change of Control occurs. In the event of the
dissolution or liquidation of the Company, unless the Board determined
otherwise, all outstanding Stock Awards will

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terminate immediately prior to the dissolution or liquidation of the Company. In
all cases, the Committee shall not be obligated to treat all Stock Awards, even
those that are of the same type, in the same manner. Any actions taken under
this Section 11.2 shall be made in accordance with the applicable restrictions
of Code Section 409A.

XII. AMENDMENT OR TERMINATION OF THE PLAN OR STOCK AWARDS.

12.1. Term and Termination of the Plan. The Committee may suspend or terminate
the Plan at any time. Unless sooner terminated, the Plan shall terminate on the
day before the tenth (10th) anniversary of the earlier of the date that the Plan
is approved by the stockholders of the Company or the date the Plan is adopted
by the Board. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.

12.2. Amendment of the Plan and Stock Awards. The Committee at any time, and
from time to time, may amend the Plan, subject to the approval of the Company’s
stockholders to the extent such approval is necessary under Applicable Law or is
required by the terms of Section 6.17 or Section 8.1(iv) of the Plan. The
Committee at any time, and from time to time, may amend the terms of one or more
Stock Awards. It is expressly contemplated that the Committee may amend the Plan
and Stock Awards in any respect the Committee deems necessary or advisable
(i) to provide eligible Participants with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and deferred compensation and/or
(ii) to bring the Plan and/or Stock Awards granted under the Plan into
compliance with Applicable Law.

12.3. No Material Impairment of Rights. Notwithstanding anything to the contrary
in the Plan, the amendment, suspension or termination of the Plan and the
amendment of outstanding Stock Awards, shall not materially impair rights and
obligations under any Stock Award granted while the Plan is in effect except
with the written consent of the Participant unless such amendment is necessary
pursuant to Section 10.10 hereof, in which case the Participant will be deemed
to have consented to the amendment by virtue of accepting the grant of the Stock
Award.

XIII. EFFECTIVE DATE OF PLAN.

13.1 Effective Date. The Plan shall become effective as of the date the Board
approves the Plan, or such later date as is designated by the Board (such date,
as set forth on the first page of this Plan, the “Effective Date”), subject to
the approval of the Plan by the stockholders of the Company within twelve
(12) months before or after the date the Plan is adopted by the Board.

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XIV. CHOICE OF LAW.

14.1 Choice of Law. The law of the State of Delaware shall govern all questions
concerning the construction, validity and interpretation of this Plan, without
regard to such state’s conflict of laws rules.