Exhibit 10.1

FARMER BROS. CO.
2007 OMNIBUS PLAN
(Approved by the stockholders at the Annual Stockholders’ Meeting on December 6,
2012)

ARTICLE 1
PURPOSE
 
The purpose of the Farmer Bros. Co. 2007 Omnibus Plan (the “Plan”) is to promote
the success and enhance the stockholder value of Farmer Bros. Co., a Delaware
corporation (the “Company”), by linking the personal interests of the members of
the Board, Employees, and Consultants to those of Company stockholders and by
providing such individuals with an incentive for performance to generate returns
to Company stockholders. The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract, and retain the services of
members of the Board, Employees, and Consultants upon whose judgment, interest,
and special effort the successful conduct of the Company’s operation is largely
dependent.
 
ARTICLE 2
DEFINITIONS AND CONSTRUCTION
 
Wherever the following terms are used in the Plan they shall have the meanings
specified below, unless the context clearly indicates otherwise. The singular
pronoun shall include the plural where the context so indicates.
 
2.1    “Administrator” means the entity that conducts the general administration
of the Plan as provided herein. With reference to the administration of the Plan
with respect to Awards granted to Independent Directors, the term
“Administrator” shall refer to the Board. With reference to the administration
of the Plan with respect to any other Award, the term “Administrator” shall
refer to the Committee unless the Board has assumed the authority for
administration of the Plan generally as provided in Section 13.1. With reference
to the duties of the Committee under the Plan which have been delegated to one
or more persons pursuant to Section 13.5, the term “Administrator” shall refer
to such person(s) unless the Committee or the Board has revoked such delegation.
 
2.2    “Award” means an Option, a Restricted Stock award, a Stock Appreciation
Right award, a Dividend Equivalents award, a Stock Payment award, a Restricted
Stock Unit award, a Performance-Based Award, a Dividend Equivalent award, a
cash-based award or other incentive payable in cash or in shares of Stock
granted to a Participant pursuant to the Plan.

2.3    “Award Agreement” means any written or electronic agreement, contract, or
other instrument or document evidencing an Award.
 
2.4    “Board” means the Board of Directors of the Company.
 
2.5    “Cause,” unless otherwise defined in an employment or services agreement
between the Participant and the Company or any Parent or Subsidiary, means a
Participant’s dishonesty, fraud, gross or willful misconduct against the Company
or any Parent or Subsidiary, unauthorized use or disclosure of confidential
information or trade secrets of the Company or any Parent or Subsidiary, or
conviction of, or plea of nolo contendre to, a crime punishable by law (except
misdemeanor violations), in each case as determined by the Administrator, and
its determination shall be conclusive and binding.

2.6    “Change in Control” means and includes each of the following:
 
(a)    an acquisition by any Person (as such term is defined in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d) thereof) of “beneficial ownership” (as
determined pursuant to Rule 13d-3 promulgated under the Exchange Act) of the
shares of Stock then outstanding (the “Company Shares Outstanding”) or the
voting securities of the Company then outstanding entitled to vote generally in
the election of directors (the “Company Voting Securities Outstanding”), if such
acquisition of beneficial ownership results in the Person beneficially owning
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) fifty
percent (50%) or more of the Company Shares Outstanding or fifty percent (50%)
or more of the combined voting power of the Company Voting Securities
Outstanding; excluding, however, any such acquisition by a trustee or other
fiduciary holding such shares under one or more employee benefit plans
maintained by the Company or any of its Subsidiaries; or

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(b)    the approval of the stockholders of the Company of a reorganization,
merger, consolidation, complete liquidation, or dissolution of the Company, the
sale or disposition of all or substantially all of the assets of the Company or
any similar corporate transaction (in each case referred to in this Section 2.6
as a “Corporate Transaction”), other than a Corporate Transaction that would
result in the outstanding common stock of the Company immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into common stock of the surviving entity or a parent or affiliate thereof) at
least fifty percent (50%) of the outstanding common stock of the Company or such
surviving entity or parent or affiliate thereof (“Successor Entity”) immediately
after such Corporate Transaction; provided, however, if the consummation of such
Corporate Transaction is subject, at the time of such approval by stockholders,
to the consent of any government or governmental agency, the Change in Control
shall not occur until the obtaining of such consent (either explicitly or
implicitly); or

(c)    a change in the composition of the Board such that the individuals who,
as of the Effective Date, constitute the Board (such Board shall be hereinafter
referred to as the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of this Section
2.6 that any individual who becomes a member of the Board subsequent to the
Effective Date whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of those individuals
who are members of the Board and who were also members of the Incumbent Board
(or deemed to be such pursuant to this proviso) shall be considered as though
such individual were a member of the Incumbent Board; but, provided, further,
that any such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, including any
successor to such Rule), or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board, shall not be so
considered as a member of the Incumbent Board.

The Administrator shall have full and final authority, which shall be exercised
in its discretion, to determine conclusively whether a Change in Control of the
Company has occurred pursuant to the above definition, and the date of the
occurrence of such Change in Control and any incidental matters relating
thereto.
 
2.7    “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations issued thereunder.
 
2.8    “Committee” means the committee of the Board described in Article 13.
 
2.9    “Consultant” means any consultant or adviser if:

(a)    The consultant or adviser renders bona fide services to the Company or
any Parent or Subsidiary;
 
(b)    The services rendered by the consultant or adviser are not in connection
with the offer or sale of securities in a capital-raising transaction and do not
directly or indirectly promote or maintain a market for the Company’s
securities; and
 
(c)    The consultant or adviser is a person who has contracted directly with
the Company or any Parent or Subsidiary to render such services.
 
2.10    “Covered Employee” means an Employee who is, or is likely to become, a
“covered employee” within the meaning of Section 162(m)(3) of the Code.
 
2.11    “Disability” means a permanent and total disability within the meaning
of Section 22(e)(3) of the Code, as it may be amended from time to time.
 
2.12    “Dividend Equivalents” means a right granted to a Participant pursuant
to Article 8 to receive the equivalent value (in cash or Stock) of dividends
paid on Stock.
 
2.13    “Effective Date” shall mean August 23, 2007.
 
2.14     “Eligible Individual” means any person who is a member of the Board, a
Consultant or an Employee, as determined by the Administrator.
 

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2.15    “Employee” means any officer or other employee (as defined in accordance
with Section 3401(c) of the Code) of the Company or any Parent or Subsidiary.
 
2.16    “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time.
 
2.17    “Expiration Date” has the meaning set forth in Section 14.3.
 
2.18    “Fair Market Value” means, as of any date, the value of Stock determined
as follows:
 
(a)    If the Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such stock as quoted on such exchange or system
on the date of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
 
(b)    If the Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean of the
closing bid and asked prices for the Stock on the date of determination as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or
 
(c)    In the absence of an established market for the Stock, the Fair Market
Value thereof shall be determined in good faith by the Administrator.
 
2.19    “Incentive Stock Option” means an Option that is intended to be an
incentive stock option and meets the requirements of Section 422 of the Code or
any successor provision thereto.
 
2.20    “Independent Director” means a member of the Board who is not an
Employee.
 
2.21    “Non-Employee Director” means a member of the Board who qualifies as a
“Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or
any successor rule.
 
2.22    “Non-Qualified Stock Option” means an Option that is not intended to be
or otherwise does not qualify as an Incentive Stock Option.
 
2.23    “Option” means a right granted to a Participant pursuant to Article 5 of
the Plan to purchase a specified number of shares of Stock at a specified price
during specified time periods. An Option may be either an Incentive Stock Option
or a Non-Qualified Stock Option.
 
2.24    “Parent” means any “parent corporation” as defined in Section 424(e) of
the Code and any applicable regulations promulgated thereunder of the Company or
any other entity which beneficially owns, directly or indirectly, a majority of
the outstanding voting stock or voting power of the Company.

2.25    “Participant” means any Eligible Individual who, as a member of the
Board, a Consultant or an Employee, has been granted an Award pursuant to the
Plan.
 
2.26     “Performance-Based Award” means an Award granted to selected Covered
Employees pursuant to Articles 6 and 8, but which is subject to the terms and
conditions set forth in Article 9.
 
2.27    “Performance Criteria” means the criteria, either individually,
alternatively or in any combination, that the Administrator selects for purposes
of establishing the Performance Goal or Performance Goals for a Participant for
a Performance Period. The Performance Criteria that will be used to establish
Performance Goals are limited to the following: net earnings (either before or
after interest, taxes, depreciation and amortization), sales or revenue, income
or net income (either before or after taxes), operating income or net operating
income, operating profit or net operating profit, cash flow (including, but not
limited to, operating cash flow and free cash flow), economic profit (including
economic profit margin), return on assets, return on capital, return on
investment, return on operating revenue, return on equity or average
stockholders’ equity, total stockholder return, growth in sales or return on
sales, gross, operating or net profit margin, working capital, earnings per
share, growth in earnings or earnings per share, price per share of Stock,
market share, overhead or other expense reduction, growth in stockholder value
relative to various indices, and strategic plan development and implementation,
any of which may be used to measure the performance of the Company as a whole or
with respect to any business unit, Subsidiary or business segment of the
Company,

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either individually, alternatively or in any combination, and may be measured
either annually or cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous period results or to a
designated comparison group, in each case as specified by the Administrator in
the Award. The Administrator shall, within the time prescribed by Section 162(m)
of the Code, define in an objective fashion the manner of calculating the
Performance Criteria it selects to use for such Performance Period for such
Participant.

2.28    “Performance Goals” means, for a Performance Period, the goals
established in writing by the Administrator for the Performance Period based
upon the Performance Criteria. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a Subsidiary,
division or other operational unit, or an individual. The Administrator, in its
discretion, may, within the time prescribed by Section 162(m) of the Code,
adjust or modify the calculation of Performance Goals for such Performance
Period in order to prevent the dilution or enlargement of the rights of
Participants (i) in the event of, or in anticipation of, any unusual or
extraordinary corporate item, transaction, event, or development, or (ii) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions.
 
2.29    “Performance Period” means the one or more periods of time, which may be
of varying and overlapping durations, as the Administrator may select, over
which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant’s right to, and the payment of, a
Performance-Based Award.
 
2.30    “Plan” means this Farmer Bros. Co. 2007 Omnibus Plan, as it may be
amended from time to time.
 
2.31    “Qualified Performance-Based Compensation” means any compensation that
is intended to qualify as “qualified performance-based compensation” as
described in Section 162(m)(4)(C) of the Code.
 
2.32    “Restricted Stock” means Stock awarded to a Participant pursuant to
Article 6 that is subject to certain restrictions and may be subject to risk of
forfeiture or repurchase.
 
2.33    “Restricted Stock Unit” means a right to receive a share of Stock during
specified time periods granted pursuant to Section 8.3.

2.34    “Securities Act” means the Securities Act of 1933, as amended from time
to time.
 
2.35    “Section 409A Award” has the meaning set forth in Section 10.1.
 
2.36    “Stock” means the common stock of the Company and such other securities
of the Company that may be substituted for Stock pursuant to Article 12.
 
2.37    “Stock Appreciation Right” or “SAR” means a right granted pursuant to
Article 7 to receive a payment equal to the excess of the Fair Market Value of a
specified number of shares of Stock on the date the SAR is exercised over the
Fair Market Value of such number of shares of Stock on the date the SAR was
granted as set forth in the applicable Award Agreement.
 
2.38    “Stock Payment” means (a) a payment in the form of shares of Stock, or
(b) an option or other right to purchase shares of Stock, as part of any bonus,
deferred compensation or other arrangement, made in lieu of all or any portion
of the compensation, granted pursuant to Section 8.2.
 
2.39    “Subsidiary” means any “subsidiary corporation” as defined in Section
424(f) of the Code and any applicable regulations promulgated thereunder of the
Company or any other entity of which a majority of the outstanding voting stock
or voting power is beneficially owned directly or indirectly by the Company.
 
2.40    “Successor Entity” has the meaning set forth in Section 2.6.
 
2.41    “Termination of Consultancy” means the time when the engagement of a
Participant as a Consultant to the Company or a Parent or Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, by resignation, discharge, death or retirement, but excluding
terminations where there is a simultaneous commencement of employment with the
Company or any Parent or Subsidiary. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the
question

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of whether a Termination of Consultancy resulted from a discharge for good
cause, and all questions of whether a particular leave of absence constitutes a
Termination of Consultancy. Notwithstanding any other provision of the Plan, the
Company or any Parent or Subsidiary has an absolute and unrestricted right to
terminate a Consultant’s service at any time for any reason whatsoever, with or
without cause, except to the extent expressly provided otherwise in writing.
 
2.42    “Termination of Directorship” shall mean the time when a Participant who
is an Independent Director ceases to be a member of the Board for any reason,
including, but not by way of limitation, a termination by resignation, failure
to be elected, death or retirement. The Board, in its sole and absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Directorship with respect to Independent Directors.
 
2.43    “Termination of Employment” shall mean the time when the
employee-employer relationship between a Participant and the Company or any
Parent or Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding: (a) terminations
where there is a simultaneous reemployment or continuing employment of a
Participant by the Company or any Parent or Subsidiary, (b) at the discretion of
the Administrator, terminations which result in a temporary severance of the
employee-employer relationship, and (c) at the discretion of the Administrator,
terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company or a Parent or Subsidiary with the former
employee. The Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination
of Employment resulted from a discharge for good cause, and all questions of
whether a particular leave of absence constitutes a Termination of Employment;
provided, however, that, with respect to Incentive Stock Options, unless
otherwise determined by the Administrator in its discretion, a leave of absence,
change in status from an employee to an independent contractor or other change
in the employee-employer relationship shall constitute a Termination of
Employment if, and to the extent that, such leave of absence, change in status
or other change interrupts employment for the purposes of Section 422(a)(2) of
the Code and the then applicable regulations and revenue rulings under said
Section.
 
ARTICLE 3
SHARES SUBJECT TO THE PLAN
 
3.1    Number of Shares

(a)    Subject to Article 12 and Section 3.1(b), the aggregate number of shares
of Stock which may be issued or transferred pursuant to Awards under the Plan
shall be 1,125,000 shares.
 
(b)    Shares of Stock covered by an Award shall be counted as used at the time
the Award is granted to a Participant. If any Award lapses, expires, terminates
or is canceled prior to the issuance of shares thereunder or if shares of Stock
are issued under the Plan to a Participant and are thereafter reacquired by the
Company, the shares subject to such Awards and the reacquired shares shall again
be available for issuance under the Plan. In addition to the shares of Stock
that are actually issued to a Participant, the following items shall be counted
against the total number of shares available for issuance under the Plan:
(i) shares of Stock subject to an Award that are not delivered to a Participant
because the Award is exercised through a reduction of shares of Stock subject to
the Award (i.e., “net exercised”) (including an appreciation distribution in
respect of a Stock Appreciation Right that is paid in shares of Stock);
(ii) shares of Stock subject to an Award that are not delivered to a Participant
because such shares are withheld in satisfaction of the withholding of taxes
incurred in connection with the exercise of an Option or Stock Appreciation
Right, or the issuance of shares under a Restricted Stock Award or Restricted
Stock Unit Award or other Award; and (iii) shares that are tendered to the
Company (either by actual delivery or attestation) to pay the exercise price of
any stock Award. The following items shall not be counted against the total
number of shares available for issuance under the Plan: (A) the payment in cash
of dividends or Dividend Equivalents; and (B) any Award that is settled in cash
rather than by issuance of Stock. All shares issued under the Plan may be either
authorized and unissued shares or issued shares reacquired by the Company or
shares held in trust for issuance under the Plan.

(c)    The Administrator shall have the authority to grant Awards as an
alternative to or as the form of payment for grants or rights earned or due
under other compensation plans or arrangements of the Company.

(d)    Notwithstanding the provisions of this Section 3.1, (i) no shares of
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an Incentive Stock Option under
Section 422 of the Code; and (ii) the maximum number of shares that may be
issued upon the exercise of Incentive Stock Options shall equal the aggregate
share number stated in Section 3.1(a), subject to adjustment as provided in
Article 12; and provided,

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further, that for purposes of Section 3.3, any such shares shall be counted in
accordance with the requirements of Section 162(m) of the Code.

3.2    Stock Distributed. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury stock
or Stock purchased on the open market.
 
3.3    Limitation on Number of Shares Subject to Awards. Notwithstanding any
provision in the Plan to the contrary, and subject to Article 12, the maximum
number of shares of Stock with respect to one or more Awards that may be granted
to any one Participant during any calendar year shall be 250,000.
 
ARTICLE 4
ELIGIBILITY AND PARTICIPATION

4.1    Eligibility. Persons eligible to participate in this Plan include
Employees, Consultants and members of the Board, as determined by the
Administrator.
 
4.2    Participation. Subject to the provisions of the Plan, the Administrator
may, from time to time, select from among all Eligible Individuals those to whom
Awards shall be granted and shall determine the nature and amount of each Award.
No individual shall have any right to be granted an Award pursuant to this Plan.
 
4.3    Foreign Participants. Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws in other countries in which the
Company and its Parents or Subsidiaries operate or have Eligible Individuals,
the Administrator, in its sole discretion, shall have the power and authority
to: (i) determine which Parents or Subsidiaries shall be covered by the Plan;
(ii) determine which Eligible Individuals outside the United States are eligible
to participate in the Plan; (iii) modify the terms and conditions of any Award
granted to Eligible Individuals outside the United States to comply with
applicable foreign laws; (iv) establish subplans and modify exercise procedures
and other terms and procedures, to the extent such actions may be necessary or
advisable (any such subplans and/or modifications shall be attached to this Plan
as appendices); provided, however, that no such subplans and/or modifications
shall increase the share limitations contained in Sections 3.1 and 3.3 of the
Plan; and (v) take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local governmental
regulatory exemptions or approvals. Notwithstanding the foregoing, the
Administrator may not take any actions hereunder, and no Awards shall be
granted, that would violate the Exchange Act, the Code, any securities law or
governing statute or any other applicable law.

ARTICLE 5
STOCK OPTIONS
 
5.1    General. The Administrator is authorized to grant Options to Eligible
Individuals on the following terms and conditions:
 
(a)    Exercise Price. The exercise price per share of Stock subject to an
Option shall be determined by the Administrator and set forth in the Award
Agreement; provided that the exercise price per share for any Option shall not
be less than 100% of the Fair Market Value per share of the Stock on the date of
grant.
 
(b)    Time and Conditions of Exercise. The Administrator shall determine the
time or times at which an Option may be exercised in whole or in part; provided
that the term of any Option granted under the Plan shall not exceed ten years.
The Administrator shall also determine the performance or other conditions, if
any, that must be satisfied before all or part of an Option may be exercised;
provided that in no event shall Options vest and be fully exercisable at any
time earlier than one year from the grant date except as may be specifically
provided as a result of an acceleration upon a Change in Control, Termination of
Employment, Termination of Directorship, Termination of Consultancy or other
event providing for accelerated vesting. The Administrator may extend the term
of any outstanding Option in connection with any Termination of Employment,
Termination of Directorship or Termination of Consultancy of the Participant
holding such Option, or amend any other term or condition of such Option
relating to such a Termination of Employment, Termination of Directorship or
Termination of Consultancy.
 
(c)    Payment. The Administrator shall determine the methods, terms and
conditions by which the exercise price of an Option may be paid, and the form
and manner of payment, including, without limitation, payment in the form of
cash, a promissory note bearing interest at no less than such rate as shall then
preclude the imputation of interest under the Code,

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shares of Stock, or other property acceptable to the Administrator and payment
through the delivery of a notice that the Participant has placed a market sell
order with a broker with respect to shares of Stock then issuable upon exercise
of the Option, and that the broker has been directed to pay a sufficient portion
of the net proceeds of the sale to the Company in satisfaction of the Option
exercise price; provided that payment of such proceeds is then made to the
Company upon settlement of such sale, and the methods by which shares of Stock
shall be delivered or deemed to be delivered to Participants. Notwithstanding
any other provision of the Plan to the contrary, no Participant who is a member
of the Board or an “executive officer” of the Company within the meaning of
Section 13(k) of the Exchange Act shall be permitted to pay the exercise price
of an Option, or continue any extension of credit with respect to the exercise
price of an Option with a loan from the Company or a loan arranged by the
Company, in any method which would violate Section 13(k) of the Exchange Act.
 
(d)    Evidence of Grant. All Options shall be evidenced by an Award Agreement
between the Company and the Participant. The Award Agreement shall include such
additional provisions as may be specified by the Administrator.
 
5.2    Incentive Stock Options. Incentive Stock Options may be granted only to
employees (as defined in accordance with Section 3401(c) of the Code) of the
Company or a Subsidiary which constitutes a “subsidiary corporation” of the
Company within Section 424(f) of the Code or a Parent which constitutes a
“parent corporation” of the Company within the meaning of Section 424(e) of the
Code, and the terms of any Incentive Stock Options granted pursuant to the Plan
must comply with the following additional provisions of this Section 5.2 in
addition to the requirements of Section 5.1:
 
(a)    Ten Percent Owners. An Incentive Stock Option shall be granted to any
individual who, at the date of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of Stock of the
Company or any “subsidiary corporation” of the Company or “parent corporation”
of the Company (each within the meaning of Section 424 of the Code) only if such
Option is granted at an exercise price per share that is not less than 110% of
the Fair Market Value per share of the Stock on the date of the grant and the
Option is exercisable for no more than five years from the date of grant.
 
(b)    Transfer Restriction. An Incentive Stock Option shall not be transferable
by the Participant other than by will or by the laws of descent or distribution.
 
(c)    Right to Exercise. During a Participant’s lifetime, an Incentive Stock
Option may be exercised only by the Participant.
 
(d)    Failure to Meet Requirements. Any Option (or portion thereof) purported
to be an Incentive Stock Option which, for any reason, fails to meet the
requirements of Section 422 of the Code shall be considered a Non-Qualified
Stock Option.
 
5.3    Substitution of Stock Appreciation Rights. The Administrator may provide
in the Award Agreement evidencing the grant of an Option that the Administrator,
in its sole discretion, shall have to right to substitute a Stock Appreciation
Right for such Option at any time prior to or upon exercise of such Option;
provided that such Stock Appreciation Right shall be exercisable with respect to
the same number of shares of Stock for which such substituted Option would have
been exercisable.

ARTICLE 6
RESTRICTED STOCK AWARDS
 
6.1    Grant of Restricted Stock. The Administrator is authorized to make Awards
of Restricted Stock to any Eligible Individual selected by the Administrator in
such amounts and subject to such terms and conditions as determined by the
Administrator. All Awards of Restricted Stock shall be evidenced by an Award
Agreement. In no event shall an Award of Restricted Stock payable in shares vest
sooner than one year after the date of grant. Notwithstanding the foregoing, the
Administrator may accelerate vesting of any Award in the event of a
Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy or a Change in Control.
 
6.2    Issuance and Restrictions. Restricted Stock shall be subject to such
repurchase restrictions, forfeiture restrictions, restrictions on
transferability and other restrictions as the Administrator may impose
(including, without limitation, limitations on the right to vote Restricted
Stock or the right to receive dividends on the Restricted Stock). These
restrictions may lapse separately or in combination at such times, pursuant to
such circumstances or installments or otherwise as the Administrator determines
at the time of the grant of the Award or thereafter. Alternatively, these
restrictions may lapse pursuant to the satisfaction of one or more Performance
Goals or other specific performance goals as the Administrator determines to be
appropriate at the

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time of the grant of the Award or thereafter, in each case on a specified date
or dates or over any period or periods determined by the Administrator.
 
6.3    Repurchase or Forfeiture. Except as otherwise determined by the
Administrator at the time of the grant of the Award or thereafter, upon a
Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy during the applicable restriction period, Restricted
Stock that is at that time subject to restrictions shall be forfeited or subject
to repurchase by the Company (or its assignee) under such terms as the
Administrator shall determine; provided, however, that the Administrator may (a)
provide in any Restricted Stock Award Agreement that restrictions or forfeiture
conditions relating to Restricted Stock will be waived in whole or in part in
the event of a Participant’s Termination of Employment, Termination of
Directorship or Termination of Consultancy under certain circumstances, and (b)
in other cases waive in whole or in part restrictions or forfeiture conditions
relating to Restricted Stock.
 
6.4    Certificates for Restricted Stock. Restricted Stock granted pursuant to
the Plan may be evidenced in such manner as the Administrator shall determine.
If certificates representing shares of Restricted Stock are registered in the
name of the Participant, certificates must bear an appropriate legend referring
to the terms, conditions, and restrictions applicable to such Restricted Stock,
and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse or the Award
Agreement may provide that the shares shall be held in escrow by an escrow agent
designated by the Company.
 
ARTICLE 7
STOCK APPRECIATION RIGHTS

7.1    Grant of Stock Appreciation Rights. A Stock Appreciation Right may be
granted to any Eligible Individual selected by the Administrator. A Stock
Appreciation Right shall be subject to such terms and conditions not
inconsistent with the Plan as the Administrator shall impose and shall be
evidenced by an Award Agreement.
 
7.2    Terms of Stock Appreciation Rights
 
(a)    A Stock Appreciation Right shall have a term set by the Administrator. A
Stock Appreciation Right shall be exercisable in such installments as the
Administrator may determine. A Stock Appreciation Right shall cover such number
of shares of Stock as the Administrator may determine. The exercise price per
share of Stock subject to each Stock Appreciation Right shall be set by the
Administrator.
 
(b)    A Stock Appreciation Right shall entitle the Participant (or other person
entitled to exercise the Stock Appreciation Right pursuant to the Plan) to
exercise all or a specified portion of the Stock Appreciation Right (to the
extent then exercisable pursuant to its terms) and to receive from the Company
an amount determined by multiplying (i) the amount (if any) by which the Fair
Market Value of a share of Stock on the date of exercise of the Stock
Appreciation Right exceeds the exercise price per share of the Stock
Appreciation Right, by (ii) the number of shares of Stock with respect to which
the Stock Appreciation Right shall have been exercised, subject to any
limitations the Administrator may impose.
 
7.3    Payment and Limitations on Exercise
 
(a)    Subject to Sections 7.3(b) and (c), payment of the amounts determined
under Sections 7.2(b) above shall be in cash, in Stock (based on its Fair Market
Value as of the date the Stock Appreciation Right is exercised) or a combination
of both, as determined by the Administrator.
 
(b)    To the extent payment for a Stock Appreciation Right is to be made in
cash, the Award Agreement shall, to the extent necessary to comply with the
requirements of Section 409A of the Code, specify the date of payment, which may
be different than the date of exercise of the Stock Appreciation Right. If the
date of payment for a Stock Appreciation Right is later than the date of
exercise, the Award Agreement may specify that the Participant be entitled to
earnings on such amount until paid.
 
(c)     To the extent any payment under Section 7.2(b) is effected in Stock, it
shall be made subject to satisfaction of all provisions of Article 5 above
pertaining to Options.

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ARTICLE 8
OTHER TYPES OF AWARDS
 
8.1    Dividend Equivalents
 
(a)    Any Eligible Individual selected by the Administrator may be granted
Dividend Equivalents based on the dividends on the shares of Stock that are
subject to any Award, to be credited as of dividend payment dates, during the
period between the date the Award is granted and the date the Award is
exercised, vests or expires, as determined by the Administrator. Such Dividend
Equivalents shall be converted to cash or additional shares of Stock by such
formula and at such time and subject to such limitations as may be determined by
the Administrator.
 
(b)    Dividend Equivalents granted with respect to Options or SARs that are
intended to be Qualified Performance-Based Compensation shall be payable, with
respect to pre-exercise periods, regardless of whether such Option or SAR is
subsequently exercised.
         
8.2    Stock Payments. Any Eligible Individual selected by the Administrator may
receive Stock Payments in the manner determined from time to time by the
Administrator; provided, that unless otherwise determined by the Administrator
such Stock Payments shall be made in lieu of base salary, bonus, or other cash
compensation otherwise payable to such Eligible Individual. The number of shares
shall be determined by the Administrator and may be based upon the Performance
Goals or other specific performance goals determined appropriate by the
Administrator.
 
8.3    Restricted Stock Units. The Administrator is authorized to make Awards of
Restricted Stock Units to any Eligible Individual selected by the Administrator
in such amounts and subject to such terms and conditions as determined by the
Administrator. At the time of grant, the Administrator shall specify the date or
dates on which the Restricted Stock Units shall become fully vested and
nonforfeitable, and may specify such conditions to vesting as it deems
appropriate. Alternatively, Restricted Stock Units may become fully vested and
nonforfeitable pursuant to the satisfaction of one or more Performance Goals or
other specific performance goals as the Administrator determines to be
appropriate at the time of the grant of the Restricted Stock Units or
thereafter, in each case on a specified date or dates or over any period or
periods determined by the Administrator. At the time of grant, the Administrator
shall specify the maturity date applicable to each grant of Restricted Stock
Units which shall be no earlier than the vesting date or dates of the Award and
may be determined at the election of the Eligible Individual to whom the Award
is granted. On the maturity date, the Company shall transfer to the Participant
one unrestricted, fully transferable share of Stock for each Restricted Stock
Unit that is vested and scheduled to be distributed on such date and not
previously forfeited. The Administrator shall specify the purchase price, if
any, to be paid by the Participant to the Company for such shares of Stock. In
no event shall an Award of Restricted Stock Units payable in shares vest sooner
than one year after the date of grant. Notwithstanding the foregoing, the
Administrator may accelerate vesting of any Award in the event of a
Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy or a Change in Control.

8.4    Term. Except as otherwise provided herein, the term of any Award of
Dividend Equivalents, Stock Payments or Restricted Stock Units shall be set by
the Administrator in its discretion.
 
8.5    Exercise or Purchase Price. The Administrator may establish the exercise
or purchase price, if any, of any Award of Stock Payments or Restricted Stock
Units; provided, however, that such price shall not be less than the par value
of a share of Stock on the date of grant, unless otherwise permitted by
applicable state law.
 
8.6    Form of Payment. Payments with respect to any Awards granted under
Sections 8.1, 8.2 or 8.3 shall be made in cash, in Stock or a combination of
both, as determined by the Administrator.
 
8.7    Award Agreement. All Awards under this Article 8 shall be subject to such
additional terms and conditions as determined by the Administrator and shall be
evidenced by a written Award Agreement.

8.8    Other Stock or Cash-Based Awards. Subject to the terms of the Plan, the
Administrator may grant other incentives payable in cash or in shares of Stock
under the Plan as it determines to be in the best interests of the Company and
subject to such other terms and conditions as it deems appropriate. The
Administrator may grant such other Awards and designate the Participants to whom
such Awards are to be awarded and determine the number of shares of Stock or the
amount of cash payment subject to such Awards and the terms and conditions of
each such Award. Such other Awards may, subject to the provisions of the Plan,
entitle the Participant to a payment in cash or Stock only upon the attainment
of performance goals and other terms and conditions specified by the
Administrator. Notwithstanding the satisfaction of any performance goals, the
amount

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to be paid under such other Award may be adjusted on the basis of such further
consideration as the Administrator shall determine, in its sole discretion.
However, the Administrator may not, in any event, increase the amount earned
under such other Awards upon satisfaction of any performance goal by any Covered
Employee.

ARTICLE 9
PERFORMANCE-BASED AWARDS

9.1    Purpose. The purpose of this Article 9 is to provide the Administrator
the ability to qualify Awards other than Options and SARs and that are granted
pursuant to Articles 6 and 8 as Qualified Performance-Based Compensation. If the
Administrator, in its discretion, decides to grant a Performance-Based Award to
a Covered Employee, the provisions of this Article 9 shall control over any
contrary provision contained in Articles 6 or 8; provided, however, that the
Administrator may in its discretion grant Awards to Covered Employees that are
based on Performance Criteria or Performance Goals but that do not satisfy the
requirements of this Article 9.
 
9.2    Applicability. This Article 9 shall apply only to those Covered Employees
selected by the Administrator to receive Performance-Based Awards. The
designation of a Covered Employee as a Participant for a Performance Period
shall not in any manner entitle the Participant to receive an Award for the
period. Moreover, designation of a Covered Employee as a Participant for a
particular Performance Period shall not require designation of such Covered
Employee as a Participant in any subsequent Performance Period and designation
of one Covered Employee as a Participant shall not require designation of any
other Covered Employees as a Participant in such period or in any other period.
 
9.3    Procedures with Respect to Performance-Based Awards. To the extent
necessary to comply with the Qualified Performance-Based Compensation
requirements of Section 162(m)(4)(C) of the Code, with respect to any Award
granted under Articles 6 and 8 which may be granted to one or more Covered
Employees, no later than ninety (90) days following the commencement of any
fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m) of
the Code), the Administrator shall, in writing, (a) designate one or more
Covered Employees, (b) select the Performance Criteria applicable to the
Performance Period, (c) establish the Performance Goals, and amounts of such
Awards, as applicable, which may be earned for such Performance Period, and (d)
specify the relationship between Performance Criteria and the Performance Goals
and the amounts of such Awards, as applicable, to be earned by each Covered
Employee for such Performance Period. Following the completion of each
Performance Period, the Administrator shall certify in writing whether the
applicable Performance Goals have been achieved for such Performance Period. In
determining the amount earned by a Covered Employee, the Administrator shall
have the right to reduce or eliminate (but not to increase) the amount payable
at a given level of performance to take into account additional factors that the
Administrator may deem relevant to the assessment of individual or corporate
performance for the Performance Period.
 
9.4    Payment of Performance-Based Awards. Unless otherwise provided in the
applicable Award Agreement, a Participant must be employed by the Company or a
Parent or Subsidiary on the day a Performance-Based Award for such Performance
Period is paid to the Participant. Furthermore, a Participant shall be eligible
to receive payment pursuant to a Performance-Based Award for a Performance
Period only if the Performance Goals for such period are achieved.
 
9.5    Additional Limitations. Notwithstanding any other provision of the Plan,
any Award which is granted to a Covered Employee and is intended to constitute
Qualified Performance-Based Compensation shall be subject to any additional
limitations set forth in Section 162(m) of the Code (including any amendment to
Section 162(m) of the Code) or any regulations or rulings issued thereunder
 that are requirements for qualification as qualified performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and the Plan
shall be deemed amended to the extent necessary to conform to such requirements.
 
ARTICLE 10
COMPLIANCE WITH SECTION 409A OF THE CODE
 
10.1    Awards subject to Code Section 409A. Any Award that constitutes, or
provides for, a deferral of compensation subject to Section 409A of the Code (a
“Section 409A Award”) shall satisfy the requirements of Section 409A of the Code
and this Article 10, to the extent applicable. The Award Agreement with respect
to a Section 409A Award shall incorporate the terms and conditions required by
Section 409A of the Code and this Article 10.
 

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10.2    Distributions under a Section 409A Award.
 
(a)    Subject to subsection (b), any shares of Stock or other property or
amounts to be paid or distributed upon the grant, issuance, vesting, exercise or
payment of a Section 409A Award shall be distributed in accordance with the
requirements of Section 409A(a)(2) of the Code, and shall not be distributed
earlier than:
 
(i)    the Participant’s separation from service, as determined by the Secretary
of the Treasury;
 
(ii)    the date the Participant becomes disabled;
 
(iii)    the Participant’s death;
 
(iv)    a specified time (or pursuant to a fixed schedule) specified under the
Award Agreement at the date of the deferral of such compensation;
 
(v)    to the extent provided by the Secretary of the Treasury, a change in the
ownership or effective control of the Company or a Parent or Subsidiary, or in
the ownership of a substantial portion of the assets of the Company or a Parent
or Subsidiary; or
 
(vi)    the occurrence of an unforeseeable emergency with respect to the
Participant.
 
(b)    In the case of a Participant who is a “specified employee,” the
requirement of paragraph (a)(i) shall be met only if the distributions with
respect to the Section 409A Award may not be made before the date which is six
months after the Participant’s separation from service (or, if earlier, the date
of the Participant’s death). For purposes of this subsection (b), a Participant
shall be a “specified employee” if such Participant is a key employee (as
defined in Section 416(i) of the Code without regard to paragraph (5) thereof)
of a corporation any stock of which is publicly traded on an established
securities market or otherwise, as determined under Section 409A(a)(2)(B)(i) of
the Code and the Treasury Regulations thereunder.
 
(c)    The requirement of paragraph (a)(vi) shall be met only if, as determined
under Treasury Regulations under Section 409A(a)(2)(B)(ii) of the Code, the
amounts distributed with respect to the unforeseeable emergency do not exceed
the amounts necessary to satisfy such unforeseeable emergency plus amounts
necessary to pay taxes reasonably anticipated as a result of the distribution,
after taking into account the extent to which such unforeseeable emergency is or
may be relieved through reimbursement or compensation by insurance or otherwise
or by liquidation of the Participant’s assets (to the extent the liquidation of
such assets would not itself cause severe financial hardship).
 
(d)    For purposes of this Section, the terms specified therein shall have the
respective meanings ascribed thereto under Section 409A of the Code and the
Treasury Regulations thereunder.
 
10.3    Prohibition on Acceleration of Benefits. The time or schedule of any
distribution or payment of any shares of Stock or other property or amounts
under a Section 409A Award shall not be accelerated, except as otherwise
permitted under Section 409A(a)(3) of the Code and the Treasury Regulations
thereunder.
 
10.4    Elections under Section 409A Awards
 
(a)    Any deferral election provided under or with respect to an Award to any
Eligible Individual, or to the Participant holding a Section 409A Award, shall
satisfy the requirements of Section 409A(a)(4)(B) of the Code, to the extent
applicable, and, except as otherwise permitted under paragraph (i) or (ii)
below, any such deferral election with respect to compensation for services
performed during a taxable year shall be made not later than the close of the
preceding taxable year, or at such other time as provided in the Treasury
Regulations.
 
(i)    In the case of the first year in which an Eligible Individual or a
Participant holding a Section 409A Award, becomes eligible to participate in the
Plan, any such deferral election may be made with respect to services to be
performed subsequent to the election with thirty days after the date the
Eligible Individual, or the Participant holding a Section 409A Award, becomes
eligible to participate in the Plan, as provided under Section 409A(a)(4)(B)(ii)
of the Code.
 
(ii)    In the case of any performance-based compensation based on services
performed by an Eligible Individual, or the Participant holding a Section 409A
Award, over a period of at least twelve months, any such deferral

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election may be made no later than six months before the end of the period, as
provided under Section 409A(a)(4)(B)(iii) of the Code.
 
(b)    In the event that a Section 409A Award permits, under a subsequent
election by the Participant holding such Section 409A Award, a delay in a
distribution or payment of any shares of Stock or other property or amounts
under such Section 409A Award, or a change in the form of distribution or
payment, such subsequent election shall satisfy the requirements of Section
409A(a)(4)(C) of the Code, and:
 
(i)    such subsequent election may not take effect until at least twelve months
after the date on which the election is made,
 
(ii)    in the case such subsequent election relates to a distribution or
payment not described in Section 10.2(a)(ii), (iii) or (vi), the first payment
with respect to such election may be deferred for a period of not less than five
years from the date such distribution or payment otherwise would have been made,
and
 
(iii)    in the case such subsequent election relates to a distribution or
payment described in Section 10.2(a)(iv), such election may not be made less
than twelve months prior to the date of the first scheduled distribution or
payment under Section 10.2(a)(iv).

10.5    Compliance in Form and Operation. A Section 409A Award, and any election
under or with respect to such Section 409A Award, shall comply in form and
operation with the requirements of Section 409A of the Code and the Treasury
Regulations thereunder.
 
ARTICLE 11
PROVISIONS APPLICABLE TO AWARDS
 
11.1    Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may,
in the discretion of the Administrator, be granted either alone, in addition to,
or in tandem with, any other Award granted pursuant to the Plan. Awards granted
in addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.
 
11.2    Award Agreement. Awards under the Plan shall be evidenced by Award
Agreements that set forth the terms, conditions and limitations for each Award
which may include the term of an Award, the provisions applicable in the event
of the Participant’s Termination of Employment, Termination of Directorship or
Termination of Consultancy, and the Company’s authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind an Award. The provisions
governing Awards need not be the same with respect to each recipient.
 
11.3    Limits on Transfer
 
(a)    Except as otherwise provided by the Administrator pursuant to Section
11.3(b), no right or interest of a Participant in any Award may be pledged,
encumbered, or hypothecated to or in favor of any party other than the Company
or a Parent or Subsidiary, or shall be subject to any lien, obligation, or
liability of such Participant to any other party other than the Company or a
Parent or Subsidiary. Except as otherwise provided by the Administrator pursuant
to Section 11.3(b), no Award shall be assigned, transferred, or otherwise
disposed of by a Participant other than by will or the laws of descent and
distribution, unless and until such Award has been exercised, or the shares
underlying such Award have been issued, and all restrictions applicable to such
shares have lapsed.
 
(b)    Notwithstanding Section 11.3(a), the Administrator, in its sole
discretion, may permit an Award (other than an Incentive Stock Option) to be
transferred to, exercised by and paid to any one or more Permitted Transferees
(as defined below), subject to the following terms and conditions: (i) an Award
transferred to a Permitted Transferee shall not be assignable or transferable by
the Permitted Transferee other than by will or the laws of descent and
distribution; (ii) any Award which is transferred to a Permitted Transferee
shall continue to be subject to all the terms and conditions of the Award as
applicable to the original Participant (other than the ability to further
transfer the Award); and (iii) the Participant and the Permitted Transferee
shall execute any and all documents requested by the Administrator, including,
without limitation documents to (A) confirm the status of the transferee as a
Permitted Transferee, (B) satisfy any requirements for an exemption for the
transfer under applicable federal and state securities laws and (C) evidence the
transfer. For purposes of this Section 11.3(b), “Permitted Transferee” shall
mean, with respect to a Participant, any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse,

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sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Participant’s household (other than a
tenant or employee), a trust in which these persons (or the Participant) control
the management of assets, and any other entity in which these persons (or the
Participant) own more than fifty percent of the voting interests, or any other
transferee specifically approved by the Administrator.
 
11.4    Beneficiaries. Notwithstanding Section 11.3, a Participant may, in the
manner determined by the Administrator, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant’s death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights pursuant to the Plan is
subject to all terms and conditions of the Plan and any Award Agreement
applicable to the Participant, except to the extent the Plan and Award Agreement
otherwise provide, and to any additional restrictions deemed necessary or
appropriate by the Administrator. If the Participant is married and resides in a
community property state, a designation of a person other than the Participant’s
spouse as his or her beneficiary with respect to more than 50% of the
Participant’s interest in the Award shall not be effective without the prior
written consent of the Participant’s spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto pursuant to the Participant’s will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Administrator.
 
11.5    Stock Certificates; Book-Entry Procedures
 
(a)    Notwithstanding anything herein to the contrary, the Company shall not be
required to issue or deliver any certificates evidencing shares of Stock
pursuant to the exercise of any Award, unless and until the Board has
determined, with advice of counsel, that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on
which the shares of Stock are listed or traded. All Stock certificates delivered
pursuant to the Plan are subject to any stop-transfer orders and other
restrictions as the Administrator deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The
Administrator may place legends on any Stock certificate to reference
restrictions applicable to the Stock. In addition to the terms and conditions
provided herein, the Administrator may require that a Participant make such
reasonable covenants, agreements, and representations as the Administrator, in
its discretion, deems advisable in order to comply with any such laws,
regulations, or requirements. The Administrator shall have the right to require
any Participant to comply with any timing or other restrictions with respect to
the settlement or exercise of any Award, including a window-period limitation,
as may be imposed in the discretion of the Administrator.
 
(b)    Notwithstanding any other provision of the Plan, unless otherwise
determined by the Administrator or required by applicable law, rule or
regulation, the Company shall not deliver to any Participant certificates
evidencing shares of Stock issued in connection with any Award and instead such
shares of Stock shall be recorded in the books of the Company (or, as
applicable, its transfer agent or stock plan administrator).
 
11.6    Paperless Exercise. In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the
exercise of Awards, such as a system using an internet website or interactive
voice response, then the paperless exercise of Awards by a Participant may be
permitted through the use of such an automated system.
 
ARTICLE 12
CHANGES IN CAPITAL STRUCTURE
 
12.1    Adjustments
 
(a)    In the event of any stock dividend, stock split, combination or exchange
of shares, merger, consolidation, spin-off, recapitalization, distribution of
Company assets to stockholders (other than normal cash dividends), or any other
corporate event affecting the Stock or the share price of the Stock, the
Administrator shall make such proportionate adjustments, if any, as the
Administrator in its discretion may deem appropriate to reflect such change with
respect to (i) the aggregate number and type of shares that may be issued under
the Plan (including, but not limited to, adjustments of the limitations in
Sections 3.1 and 3.3, provided that any adjustment of the limitations in Section
3.1 shall be subject to the fourth sentence of Section 3.1); (ii) the terms and
conditions of any outstanding Awards (including, without limitation, any
applicable performance targets or criteria with respect thereto); and (iii) the
grant, exercise or purchase price per share for any outstanding Awards under the
Plan. Any adjustment affecting an Award intended as Qualified Performance-Based
Compensation shall be made consistent with the requirements of Section 162(m) of
the Code.

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(b)    In the event of any transaction or event described in Section 12.1(a) or
any unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate (including without limitation any Change in Control), or of changes in
applicable laws, regulations or accounting principles, and whenever the
Administrator determines that such action is appropriate in order to prevent the
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to any Award under the Plan, to
facilitate such transactions or events or to give effect to such changes in
laws, regulations or principles, the Administrator, in its sole discretion and
on such terms and conditions as it deems appropriate, either by the terms of the
Award or by action taken prior to the occurrence of such transaction or event
and either automatically or upon the Participant’s request, is hereby authorized
to take any one or more of the following actions:
 
(i)    To provide for either (A) termination of any such Award in exchange for
an amount of cash, if any, equal to the amount that would have been received
upon the exercise of such Award or realization of the Participant’s rights (and,
for the avoidance of doubt, if as of the date of the occurrence of the
transaction or event described in this Section 12.1(b) the Administrator
determines in good faith that no amount would have been attained upon the
exercise of such Award or realization of the Participant’s rights, then such
Award may be terminated by the Company without payment) or (B) the replacement
of such Award with other rights or property selected by the Administrator in its
sole discretion;
 
(ii)    To provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted for by
similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; and
 
(iii)    To make adjustments in the number and type of shares of Stock (or other
securities or property) subject to outstanding Awards, and in the number and
kind of outstanding Restricted Stock and/or in the terms and conditions of
(including the grant or exercise price), and the criteria included in,
outstanding options, rights and awards and options, rights and awards which may
be granted in the future;
 
(iv)    To provide that such Award shall be exercisable or payable or fully
vested with respect to all shares covered thereby, notwithstanding anything to
the contrary in the Plan or the applicable Award Agreement; and
 
(v)    To provide that the Award cannot vest, be exercised or become payable
after such event.
 
12.2    Acceleration Upon a Change in Control. Notwithstanding Section 12.1(b),
and except as may otherwise be provided in any applicable Award Agreement or
other written agreement entered into between the Company and a Participant, if a
Change in Control occurs and a Participant’s Awards are not continued,
converted, assumed, or replaced by (i) the Company or a Parent or Subsidiary of
the Company, or (ii) a Successor Entity, such Awards shall become fully
exercisable and/or payable, as applicable, and all forfeiture, repurchase and
other restrictions on such Awards shall lapse immediately prior to such Change
in Control. Subject to the foregoing, the Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation, dissolution or change in control of the Company, as
defined by the Administrator, to take such further action as it determines to be
necessary or advisable with respect to Awards. Such authorized action may
include (but shall not be limited to) establishing, amending or waiving the
type, terms, conditions or duration of, or restrictions on, Awards so as to
provide for earlier, later, extended or additional time for exercise, lifting
restrictions and other modifications, and the Administrator may take such
actions with respect to all Participants, to certain categories of Participants
or only to individual Participants. The Administrator may take such action
before or after granting Awards to which the action relates and before or after
any public announcement with respect to such sale, merger, consolidation,
reorganization, liquidation, dissolution or change in control that is the reason
for such action.

12.3    No Other Rights. Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the
Administrator under the Plan, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to an Award or the grant or exercise price of
any Award.
 

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ARTICLE 13
ADMINISTRATION
 
13.1    Administrator. The Administrator of the Plan shall be the Compensation
Committee of the Board (or another committee or a subcommittee of the Board to
which the Board delegates administration of the Plan) (such committee, the
“Committee”), which Committee shall consist solely of two or more members of the
Board each of whom is both an “outside director,” within the meaning of Section
162(m) of the Code, a Non-Employee Director and an “independent director” under
the rules of the Nasdaq Stock Market. Notwithstanding the foregoing: (a) the
full Board, acting by a majority of its members in office, shall conduct the
general administration of the Plan with respect to all Awards granted to
Independent Directors, and for purposes of such Awards the term “Administrator”
as used in this Plan shall be deemed to refer to the Board, and (b) the
Committee may delegate its authority hereunder to the extent permitted by
Section 13.5. Appointment of Committee members shall be effective upon
acceptance of appointment. In its sole discretion, the Board may at any time and
from time to time exercise any and all rights and duties of the Administrator
under the Plan except with respect to matters which under Rule 16b-3 under the
Exchange Act or Section 162(m) of the Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee. Committee members may resign at any time by delivering written notice
to the Board. Vacancies in the Committee may only be filled by the Board.
 
13.2    Action by the Administrator. A majority of the Administrator shall
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present, and, subject to applicable law, acts
approved in writing by a majority of the Administrator in lieu of a meeting,
shall be deemed the acts of the Administrator. Each member of the Administrator
is entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Company or any
Parent or Subsidiary, the Company’s independent certified public accountants, or
any executive compensation consultant or other professional retained by the
Company to assist in the administration of the Plan.
 
13.3    Authority of Administrator. Subject to any specific designation in the
Plan, the Administrator has the exclusive power, authority and discretion to:
 
(a)    Designate Participants to receive Awards;
 
(b)    Determine the type or types of Awards to be granted to each Participant;
 
(c)    Determine the number of Awards to be granted and the number of shares of
Stock to which an Award will relate;
 
(d)    Determine the terms and conditions of any Award granted pursuant to the
Plan, including, but not limited to, the exercise price, grant price, or
purchase price, any reload provision, any restrictions or limitations on the
Award, any schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, any provisions
related to non-competition and recapture of gain on an Award, based in each case
on such considerations as the Administrator in its sole discretion determines;
provided, however, that the Administrator shall not have the authority to
accelerate the vesting or waive the forfeiture of any Performance-Based Awards;
 
(e)    Determine whether, to what extent, and pursuant to what circumstances an
Award may be settled in, or the exercise price of an Award may be paid in, cash,
Stock, other Awards, or other property, or an Award may be canceled, forfeited,
or surrendered;
 
(f)    Prescribe the form of each Award Agreement, which need not be identical
for each Participant;
 
(g)    Decide all other matters that must be determined in connection with an
Award;
 
(h)    Establish, adopt, or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan;
 
(i)    Interpret the terms of, and any matter arising pursuant to, the Plan or
any Award Agreement;

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(j)    determine whether, to what extent and under what circumstances cash,
shares of Stock, other property and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the
Participant; and
 
(k)    Make all other decisions and determinations that may be required pursuant
to the Plan or as the Administrator deems necessary or advisable to administer
the Plan.
 
13.4    Decisions Binding. The Administrator’s interpretation of the Plan, any
Awards granted pursuant to the Plan, any Award Agreement and all decisions and
determinations by the Administrator with respect to the Plan are final, binding,
and conclusive on all parties.
 
13.5    Delegation of Authority. To the extent permitted by applicable law, the
Committee may from time to time delegate to a committee of one or more members
of the Board or one or more officers of the Company the authority to grant or
amend Awards to Participants other than (a) senior executives of the Company who
are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c)
officers of the Company (or members of the Board) to whom authority to grant or
amend Awards has been delegated hereunder. Any delegation hereunder shall be
subject to the restrictions and limits that the Committee specifies at the time
of such delegation, and the Committee may at any time rescind the authority so
delegated or appoint a new delegatee. At all times, the delegatee appointed
under this Section 13.5 shall serve in such capacity at the pleasure of the
Committee.
 
ARTICLE 14
EFFECTIVE AND EXPIRATION DATES
 
14.1    Effective Date. The Plan will be effective as of the Effective Date.
 
14.2    Approval of Plan by Stockholders. The Plan will be submitted for the
approval of the Company’s stockholders within twelve (12) months after the date
of the Board’s initial adoption of the Plan. Awards may be granted or awarded
prior to such stockholder approval, provided, that such Awards shall not be
exercisable nor shall such Awards vest prior to the time when the Plan is
approved by the stockholders, and provided further, that if such approval has
not been obtained at the end of said twelve-month period, all Awards previously
granted or awarded under the Plan shall thereupon be canceled and become null
and void. In addition, if the Board determines that Awards other than Options or
Stock Appreciation Rights which may be granted to Section 162(m) Participants
should continue to be eligible to qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code, the Performance Criteria must be
disclosed to and approved by the Company’s stockholders no later than the first
stockholder meeting that occurs in the fifth year following the year in which
the Company’s stockholders previously approved the Plan, as amended and restated
to include the Performance Criteria.
 
14.3    Expiration Date. The Plan will expire on, and no Award may be granted
pursuant to the Plan after, the earlier of the tenth anniversary of (i) the date
this Plan is approved by the Board or (ii) the date this Plan is approved by the
Company’s stockholders (the “Expiration Date”). Any Awards that are outstanding
on the tenth anniversary of the Effective Date shall remain in force according
to the terms of the Plan and the applicable Award Agreement.
 
ARTICLE 15
AMENDMENT, MODIFICATION, AND TERMINATION

15.1    Amendment, Modification, And Termination. The Board may terminate, amend
or modify the Plan at any time and from time to time; provided, however, that
(a) to the extent necessary to comply with any applicable law, regulation, or
stock exchange rule, the Company shall obtain stockholder approval of any Plan
amendment in such a manner and to such a degree as required, and (b) stockholder
approval is required for any amendment to the Plan that increases the number of
shares available under the Plan (other than any adjustment as provided by
Article 12). Notwithstanding any provision in this Plan to the contrary, absent
approval of the stockholders of the Company, no Option may be amended to reduce
the per share exercise price of the shares subject to such Option below the per
share exercise price as of the date the Option is granted and, except as
permitted by Article 12, no Option may be granted in exchange for, or in
connection with, the cancellation or surrender of an Option having a higher per
share exercise price.
 
15.2    Awards Previously Granted. No termination, amendment, or modification of
the Plan shall adversely affect in any material way any Award previously granted
pursuant to the Plan without the prior written consent of the Participant.
 

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ARTICLE 16
GENERAL PROVISIONS
 
16.1    No Rights to Awards. No Participant, Employee, or other person shall
have any claim to be granted any Award pursuant to the Plan, and neither the
Company nor the Administrator is obligated to treat Participants, Employees, and
other persons uniformly.
 
16.2    No Stockholders Rights. Except as otherwise provided herein, a
Participant shall have none of the rights of a stockholder with respect to
shares of Stock covered by any Award until the Participant becomes the record
owner of such shares of Stock.
 
16.3    Withholding. The Company or any Parent or Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company an amount sufficient to satisfy federal, state, local and foreign
taxes (including the Participant’s employment tax obligations) required by law
to be withheld with respect to any taxable event concerning a Participant
arising as a result of this Plan. The Administrator may in its discretion and in
satisfaction of the foregoing requirement allow a Participant to elect to have
the Company or a Parent or Subsidiary, as applicable, withhold shares of Stock
otherwise issuable under an Award (or allow the return of shares of Stock)
having a Fair Market Value equal to the sums required to be withheld.
Notwithstanding any other provision of the Plan, the number of shares of Stock
which may be withheld with respect to the issuance, vesting, exercise or payment
of any Award (or which may be repurchased from the Participant of such Award
within six months (or such other period as may be determined by the
Administrator) after such shares of Stock were acquired by the Participant from
the Company) in order to satisfy the Participant’s federal, state, local and
foreign income and payroll tax liabilities with respect to the issuance,
vesting, exercise or payment of the Award shall be limited to the number of
shares which have a Fair Market Value on the date of withholding or repurchase
equal to the aggregate amount of such liabilities based on the minimum statutory
withholding rates for federal, state, local and foreign income tax and payroll
tax purposes that are applicable to such supplemental taxable income.
 
16.4    No Right to Employment or Services. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Company or
any Parent or Subsidiary to terminate any Participant’s employment or services
at any time, nor confer upon any Participant any right to continue in the employ
or service of the Company or any Parent or Subsidiary.
 
16.5    Unfunded Status of Awards. The Plan is intended to be an unfunded plan
for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Parent or Subsidiary.
 
16.6    Indemnification. To the extent allowable pursuant to applicable law, the
Administrator (and each member thereof) shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action or failure to act
pursuant to the Plan and against and from any and all amounts paid by him or her
in satisfaction of judgment in such action, suit, or proceeding against him or
her; provided he or she gives the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
 
16.7    Relationship to Other Benefits. No payment pursuant to the Plan shall be
taken into account in determining any benefits pursuant to any pension,
retirement, savings, profit sharing, group insurance, welfare or other benefit
plan of the Company or any Parent or Subsidiary except to the extent otherwise
expressly provided in writing in such other plan or an agreement thereunder.
 
16.8    Expenses. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries.
 
16.9    Titles and Headings. The titles and headings of the Sections in the Plan
are for convenience of reference only and, in the event of any conflict, the
text of the Plan, rather than such titles or headings, shall control.
 

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16.10    Fractional Shares. No fractional shares of Stock shall be issued and
the Administrator shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.
 
16.11    Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any
Participant who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3
under the Exchange Act) that are requirements for the application of such
exemptive rule. To the extent permitted by applicable law, the Plan and Awards
granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule.
 
16.12    Government and Other Regulations. The obligation of the Company to make
payment of awards in Stock or otherwise shall be subject to all applicable laws,
rules, and regulations, and to such approvals by government agencies as may be
required. The Company shall be under no obligation to register pursuant to the
Securities Act, any of the shares of Stock paid pursuant to the Plan. If the
shares paid pursuant to the Plan may in certain circumstances be exempt from
registration pursuant to the Securities Act, the Company may restrict the
transfer of such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
 
16.13    Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Delaware, without
regard to the conflicts of law principles thereof.

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