Exhibit 10.1

 

CANDELA CORPORATION

 

SECOND AMENDED AND RESTATED 1998 STOCK PLAN

 

October 5, 2005

 

PURPOSE.  The purpose of the Candela Corporation 1998 Stock Plan (the “Plan”) is
to encourage employees of Candela Corporation (the “Company”) and of any present
or future parent or subsidiary of the Company (collectively, “Related
Corporations”) and other individuals who render services to the Company or a
Related Corporation, by providing opportunities to participate in the ownership
of the Company and its future growth through (a) the grant of options which
qualify as “incentive stock options” (“ISOs”) under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the “Code”); (b) the grant of options
that do not qualify as ISOs (“Non-Qualified Options”); (c) awards of stock in
the Company (“Awards”); (d) the grant of stock appreciation rights (“SARs”); and
(e) opportunities to make direct purchases of stock in the Company
(“Purchases”).  Both ISOs and Non-Qualified Options are referred to hereafter
individually as an “Option” and collectively as “Options.”  Options, Awards,
SARs and authorizations to make Purchases are referred to hereafter collectively
as “Stock Rights.”  As used herein, the terms “parent” and “subsidiary” mean
“parent corporation” and “subsidiary corporation,” respectively, as those terms
are defined in Section 424 of the Code.

 

ADMINISTRATION OF THE PLAN.

 

BOARD OR COMMITTEE ADMINISTRATION.  THE PLAN SHALL BE ADMINISTERED BY THE BOARD
OF DIRECTORS OF THE COMPANY (THE “BOARD”) OR, SUBJECT TO PARAGRAPH 0(D)
(RELATING TO COMPLIANCE WITH SECTION 162(M) OF THE CODE), BY A COMMITTEE
APPOINTED BY THE BOARD (THE “COMMITTEE”).  HEREINAFTER, ALL REFERENCES IN THIS
PLAN TO THE “COMMITTEE” SHALL MEAN THE BOARD IF NO COMMITTEE HAS BEEN
APPOINTED.  SUBJECT TO RATIFICATION OF THE GRANT OR AUTHORIZATION OF EACH STOCK
RIGHT BY THE BOARD (IF SO REQUIRED BY APPLICABLE STATE LAW), AND SUBJECT TO THE
TERMS OF THE PLAN, THE COMMITTEE SHALL HAVE THE AUTHORITY TO (I) DETERMINE TO
WHOM (FROM AMONG THE CLASS OF EMPLOYEES ELIGIBLE UNDER PARAGRAPH 0 TO RECEIVE
ISOS) ISOS SHALL BE GRANTED, AND TO WHOM (FROM AMONG THE CLASS OF INDIVIDUALS
AND ENTITIES ELIGIBLE UNDER PARAGRAPH 0 TO RECEIVE NON-QUALIFIED OPTIONS, SARS
AND AWARDS AND TO MAKE PURCHASES) NON-QUALIFIED OPTIONS, SARS, AWARDS AND
AUTHORIZATIONS TO MAKE PURCHASES MAY BE GRANTED; (II) DETERMINE THE TIME OR
TIMES AT WHICH OPTIONS, SARS OR AWARDS SHALL BE GRANTED OR PURCHASES MADE; (III)
DETERMINE THE PURCHASE PRICE OF SHARES SUBJECT TO EACH OPTION OR PURCHASE, WHICH
PRICES SHALL NOT BE LESS THAN THE MINIMUM PRICE SPECIFIED IN PARAGRAPH 0; (IV)
DETERMINE THE GRANT PRICE OF SARS; (V) DETERMINE WHETHER EACH OPTION GRANTED
SHALL BE AN ISO OR A NON-QUALIFIED OPTION; (VI) DETERMINE (SUBJECT TO PARAGRAPH
0) THE TIME OR TIMES WHEN EACH OPTION OR SAR SHALL BECOME EXERCISABLE AND THE
DURATION OF THE EXERCISE PERIOD; (VII) EXTEND THE PERIOD DURING WHICH
OUTSTANDING OPTIONS OR SARS MAY BE EXERCISED; (VIII) DETERMINE WHETHER
RESTRICTIONS SUCH AS REPURCHASE OPTIONS ARE TO BE

 

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IMPOSED ON SHARES SUBJECT TO OPTIONS, SARS, AWARDS AND PURCHASES AND THE NATURE
OF SUCH RESTRICTIONS, IF ANY, AND (IX) INTERPRET THE PLAN AND PRESCRIBE AND
RESCIND RULES AND REGULATIONS RELATING TO IT.  IF THE COMMITTEE DETERMINES TO
ISSUE A NON-QUALIFIED OPTION, IT SHALL TAKE WHATEVER ACTIONS IT DEEMS NECESSARY,
UNDER SECTION 422 OF THE CODE AND THE REGULATIONS PROMULGATED THEREUNDER, TO
ENSURE THAT SUCH OPTION IS NOT TREATED AS AN ISO.  THE INTERPRETATION AND
CONSTRUCTION BY THE COMMITTEE OF ANY PROVISIONS OF THE PLAN OR OF ANY STOCK
RIGHT GRANTED UNDER IT SHALL BE FINAL UNLESS OTHERWISE DETERMINED BY THE BOARD. 
THE COMMITTEE MAY FROM TIME TO TIME ADOPT SUCH RULES AND REGULATIONS FOR
CARRYING OUT THE PLAN AS IT MAY DEEM ADVISABLE.  NO MEMBER OF THE BOARD OR THE
COMMITTEE SHALL BE LIABLE FOR ANY ACTION OR DETERMINATION MADE IN GOOD FAITH
WITH RESPECT TO THE PLAN OR ANY STOCK RIGHT GRANTED UNDER IT.

 

COMMITTEE ACTIONS.  THE COMMITTEE MAY SELECT ONE OF ITS MEMBERS AS ITS CHAIRMAN,
AND SHALL HOLD MEETINGS AT SUCH TIME AND PLACES AS IT MAY DETERMINE.  A MAJORITY
OF THE COMMITTEE SHALL CONSTITUTE A QUORUM AND ACTS OF A MAJORITY OF THE MEMBERS
OF THE COMMITTEE AT A MEETING AT WHICH A QUORUM IS PRESENT, OR ACTS REDUCED TO
OR APPROVED IN WRITING BY ALL THE MEMBERS OF THE COMMITTEE (IF CONSISTENT WITH
APPLICABLE STATE LAW), SHALL BE THE VALID ACTS OF THE COMMITTEE.  FROM TIME TO
TIME THE BOARD MAY INCREASE THE SIZE OF THE COMMITTEE AND APPOINT ADDITIONAL
MEMBERS THEREOF, REMOVE MEMBERS (WITH OR WITHOUT CAUSE) AND APPOINT NEW MEMBERS
IN SUBSTITUTION THEREFOR, FILL VACANCIES HOWEVER CAUSED, OR REMOVE ALL MEMBERS
OF THE COMMITTEE AND THEREAFTER DIRECTLY ADMINISTER THE PLAN.

 

GRANT OF STOCK RIGHTS TO BOARD MEMBERS.  STOCK RIGHTS MAY BE GRANTED TO MEMBERS
OF THE BOARD.  ALL GRANTS OF STOCK RIGHTS TO MEMBERS OF THE BOARD SHALL IN ALL
RESPECTS BE MADE IN ACCORDANCE WITH THE PROVISIONS OF THIS PLAN APPLICABLE TO
OTHER ELIGIBLE PERSONS.  MEMBERS OF THE BOARD WHO EITHER (I) ARE ELIGIBLE TO
RECEIVE GRANTS OF STOCK RIGHTS PURSUANT TO THE PLAN OR (II) HAVE BEEN GRANTED
STOCK RIGHTS MAY VOTE ON ANY MATTERS AFFECTING THE ADMINISTRATION OF THE PLAN OR
THE GRANT OF ANY STOCK RIGHTS PURSUANT TO THE PLAN, EXCEPT THAT NO SUCH MEMBER
SHALL ACT UPON THE GRANTING TO HIMSELF OR HERSELF OF STOCK RIGHTS, BUT ANY SUCH
MEMBER MAY BE COUNTED IN DETERMINING THE EXISTENCE OF A QUORUM AT ANY MEETING OF
THE BOARD DURING WHICH ACTION IS TAKEN WITH RESPECT TO THE GRANTING TO SUCH
MEMBER OF STOCK RIGHTS.

 

PERFORMANCE-BASED COMPENSATION.  THE BOARD, IN ITS DISCRETION, MAY TAKE SUCH
ACTION AS MAY BE NECESSARY TO ENSURE THAT STOCK RIGHTS GRANTED UNDER THE PLAN
QUALIFY AS “QUALIFIED PERFORMANCE-BASED COMPENSATION” WITHIN THE MEANING OF
SECTION 162(M) OF THE CODE AND APPLICABLE REGULATIONS PROMULGATED THEREUNDER
(“PERFORMANCE-BASED COMPENSATION”).  SUCH ACTION MAY INCLUDE, IN THE BOARD’S
DISCRETION, SOME OR ALL OF THE FOLLOWING: (I) IF THE BOARD DETERMINES THAT STOCK
RIGHTS GRANTED UNDER THE PLAN GENERALLY SHALL CONSTITUTE PERFORMANCE- BASED
COMPENSATION, THE PLAN SHALL BE ADMINISTERED, TO THE EXTENT REQUIRED FOR SUCH
STOCK RIGHTS TO CONSTITUTE PERFORMANCE-BASED COMPENSATION, BY A COMMITTEE
CONSISTING SOLELY OF TWO OR MORE “OUTSIDE DIRECTORS” (AS DEFINED IN APPLICABLE
REGULATIONS PROMULGATED UNDER SECTION 162(M) OF THE CODE), (II) IF ANY
NON-QUALIFIED OPTIONS WITH AN EXERCISE PRICE LESS THAN THE FAIR MARKET VALUE PER
SHARE OF THE COMPANY’S COMMON STOCK, $0.01 PAR VALUE PER SHARE (THE “COMMON
STOCK”), ARE GRANTED UNDER THE PLAN AND THE BOARD DETERMINES THAT SUCH OPTIONS
SHOULD CONSTITUTE PERFORMANCE-BASED

 

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COMPENSATION, SUCH OPTIONS SHALL BE MADE EXERCISABLE ONLY UPON THE ATTAINMENT OF
A PRE-ESTABLISHED, OBJECTIVE PERFORMANCE GOAL ESTABLISHED BY THE COMMITTEE, AND
SUCH GRANT SHALL BE SUBMITTED FOR, AND SHALL BE CONTINGENT UPON SHAREHOLDER
APPROVAL, AND (III) STOCK RIGHTS GRANTED UNDER THE PLAN MAY BE SUBJECT TO SUCH
OTHER TERMS AND CONDITIONS AS ARE NECESSARY FOR COMPENSATION RECOGNIZED IN
CONNECTION WITH THE EXERCISE OR DISPOSITION OF SUCH STOCK RIGHT OR THE
DISPOSITION OF COMMON STOCK ACQUIRED PURSUANT TO SUCH STOCK RIGHT, TO CONSTITUTE
PERFORMANCE-BASED COMPENSATION.

 

ELIGIBLE EMPLOYEES AND OTHERS.  ISOs may be granted only to employees of the
Company or any Related Corporation.  Non-Qualified Options, Awards, SARs and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation.  The Committee may take into consideration a recipient’s
individual circumstances in determining whether to grant a Stock Right.  The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify such individual or entity from,
participation in any other grant of Stock Rights.

 

STOCK.  The stock subject to Stock Rights shall be authorized but unissued
shares of Common Stock or shares of Common Stock reacquired by the Company in
any manner.  The aggregate number of shares which may be issued pursuant to the
Plan is 5,300,000, subject to adjustment as provided in paragraph 0.  If any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part or shall be repurchased by the Company, the unpurchased shares
of Common Stock subject to such Option shall again be available for grants of
Stock Rights under the Plan.  Where payment upon exercise of a SAR is made in
shares of Common Stock, only the net number of shares of Common Stock issued in
connection with such exercise shall be deemed “issued” for purposes of this
paragraph 0.

 

No employee of the Company or any Related Corporation may be granted Options
and/or SARs to acquire, in the aggregate, more than 700,000 shares of Common
Stock under the Plan during any fiscal year of the Company, subject to
adjustment as provided in paragraph 0.  If any Option granted under the Plan
shall expire or terminate for any reason without having been exercised in full
or shall cease for any reason to be exercisable in whole or in part or shall be
repurchased by the Company, the shares subject to such Option shall be included
in the determination of the aggregate number of shares of Common Stock deemed to
have been granted to such employee under the Plan.

 

GRANTING OF STOCK RIGHTS.  Stock Rights may be granted under the Plan at any
time on or after September 19, 1998 and prior to September 18, 2008.  The date
of grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant.  SARs may be granted in tandem with an Option (“Tandem SARs”), or may be
granted on a freestanding basis, not related to any Option (“Freestanding
SARs”), or any combination of these forms of SARs.

 

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MINIMUM PRICE; ISO LIMITATIONS; FAIR MARKET VALUE.

 

PRICE FOR OPTIONS, SARS, AWARDS AND PURCHASES.  SUBJECT TO PARAGRAPH 0(D)
(RELATING TO COMPLIANCE WITH SECTION 162(M) OF THE CODE), THE EXERCISE PRICE PER
SHARE SPECIFIED IN THE AGREEMENT RELATING TO EACH NON-QUALIFIED OPTION GRANTED,
AND THE PURCHASE PRICE PER SHARE OF STOCK GRANTED IN ANY AWARD OR AUTHORIZED AS
A PURCHASE, UNDER THE PLAN MAY BE LESS THAN THE FAIR MARKET VALUE OF THE COMMON
STOCK OF THE COMPANY ON THE DATE OF GRANT; PROVIDED THAT, IN NO EVENT SHALL SUCH
EXERCISE PRICE OR SUCH PURCHASE PRICE BE LESS THAN THE MINIMUM LEGAL
CONSIDERATION REQUIRED THEREFOR UNDER THE LAWS OF ANY JURISDICTION IN WHICH THE
COMPANY OR ITS SUCCESSORS IN INTEREST MAY BE ORGANIZED.  THE GRANT PRICE OF A
FREESTANDING SAR SHALL EQUAL THE FAIR MARKET VALUE OF A SHARE OF COMMON STOCK ON
THE DATE OF GRANT OF THE SAR.  THE GRANT PRICE OF A TANDEM SAR SHALL EQUAL THE
EXERCISE PRICE OF THE RELATED OPTION.

 

PRICE FOR ISOS.  THE EXERCISE PRICE PER SHARE SPECIFIED IN THE AGREEMENT
RELATING TO EACH ISO GRANTED UNDER THE PLAN SHALL NOT BE LESS THAN THE FAIR
MARKET VALUE PER SHARE OF COMMON STOCK ON THE DATE OF SUCH GRANT.  IN THE CASE
OF AN ISO TO BE GRANTED TO AN EMPLOYEE OWNING STOCK POSSESSING MORE THAN TEN
PERCENT (10%) OF THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF STOCK OF THE
COMPANY OR ANY RELATED CORPORATION, THE PRICE PER SHARE SPECIFIED IN THE
AGREEMENT RELATING TO SUCH ISO SHALL NOT BE LESS THAN ONE HUNDRED TEN PERCENT
(110%) OF THE FAIR MARKET VALUE PER SHARE OF COMMON STOCK ON THE DATE OF GRANT. 
FOR PURPOSES OF DETERMINING STOCK OWNERSHIP UNDER THIS PARAGRAPH, THE RULES OF
SECTION 424(D) OF THE CODE SHALL APPLY.

 

$100,000 ANNUAL LIMITATION ON ISO VESTING.  EACH ELIGIBLE EMPLOYEE MAY BE
GRANTED OPTIONS TREATED AS ISOS ONLY TO THE EXTENT THAT, IN THE AGGREGATE UNDER
THIS PLAN AND ALL INCENTIVE STOCK OPTION PLANS OF THE COMPANY AND ANY RELATED
CORPORATION, ISOS DO NOT BECOME EXERCISABLE FOR THE FIRST TIME BY SUCH EMPLOYEE
DURING ANY CALENDAR YEAR WITH RESPECT TO STOCK HAVING A FAIR MARKET VALUE
(DETERMINED AT THE TIME THE ISOS WERE GRANTED) IN EXCESS OF $100,000.  THE
COMPANY INTENDS TO DESIGNATE ANY OPTIONS GRANTED IN EXCESS OF SUCH LIMITATION AS
NON-QUALIFIED OPTIONS, AND THE COMPANY SHALL ISSUE SEPARATE CERTIFICATES TO THE
OPTIONEE WITH RESPECT TO OPTIONS THAT ARE NON-QUALIFIED OPTIONS AND OPTIONS THAT
ARE ISOS.

 

DETERMINATION OF FAIR MARKET VALUE.  IF, AT THE TIME AN OPTION OR SAR IS GRANTED
UNDER THE PLAN, THE COMPANY’S COMMON STOCK IS PUBLICLY TRADED, “FAIR MARKET
VALUE” SHALL BE DETERMINED AS OF THE DATE OF GRANT OR, IF THE PRICES OR QUOTES
DISCUSSED IN THIS SENTENCE ARE UNAVAILABLE FOR SUCH DATE, THE LAST BUSINESS DAY
FOR WHICH SUCH PRICES OR QUOTES ARE AVAILABLE PRIOR TO THE DATE OF GRANT AND
SHALL MEAN (I) THE AVERAGE (ON THAT DATE) OF THE HIGH AND LOW PRICES OF THE
COMMON STOCK ON THE PRINCIPAL NATIONAL SECURITIES EXCHANGE ON WHICH THE COMMON
STOCK IS TRADED, IF THE COMMON STOCK IS THEN TRADED ON A NATIONAL SECURITIES
EXCHANGE; OR (II) THE LAST REPORTED SALE PRICE (ON THAT DATE) OF THE COMMON
STOCK ON THE NASDAQ NATIONAL MARKET, IF THE COMMON STOCK IS NOT THEN TRADED ON A
NATIONAL SECURITIES EXCHANGE; OR (III) THE CLOSING BID PRICE (OR AVERAGE OF BID
PRICES) LAST QUOTED (ON THAT DATE) BY AN ESTABLISHED QUOTATION SERVICE FOR
OVER-THE-COUNTER SECURITIES, IF THE COMMON STOCK IS NOT REPORTED ON THE NASDAQ
NATIONAL MARKET. IF THE COMMON STOCK IS NOT PUBLICLY

 

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TRADED AT THE TIME AN OPTION OR SAR IS GRANTED UNDER THE PLAN, “FAIR MARKET
VALUE” SHALL MEAN THE FAIR VALUE OF THE COMMON STOCK AS DETERMINED BY THE
COMMITTEE AFTER TAKING INTO CONSIDERATION ALL FACTORS WHICH IT DEEMS
APPROPRIATE, INCLUDING, WITHOUT LIMITATION, RECENT SALE AND OFFER PRICES OF THE
COMMON STOCK IN PRIVATE TRANSACTIONS NEGOTIATED AT ARM’S LENGTH.

 

OPTION AND SAR DURATION.  Subject to earlier termination as provided in
paragraphs 0 and 0 or in the agreement relating to such Option or SAR, each
Option and SAR shall expire on the date specified by the Committee, but not more
than (i) ten years from the date of grant in the case of Options and SARs
generally and (ii) five years from the date of grant in the case of ISOs granted
to an employee owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Related
Corporation, as determined under paragraph 0(B).  Subject to earlier termination
as provided in paragraphs 0and 0, the term of each ISO shall be the term set
forth in the original instrument granting such ISO, except with respect to any
part of such ISO that is converted into a Non-Qualified Option pursuant to
paragraph 0.

 

EXERCISE OF OPTION AND SARS.  Subject to the provisions of paragraphs 0 through
0, each Option or SAR granted under the Plan shall be exercisable as follows:

 

VESTING.  THE OPTION OR SAR SHALL EITHER BE FULLY EXERCISABLE ON THE DATE OF
GRANT OR SHALL BECOME EXERCISABLE THEREAFTER IN SUCH INSTALLMENTS AS THE
COMMITTEE MAY SPECIFY.

 

FULL VESTING OF INSTALLMENTS.  ONCE AN INSTALLMENT BECOMES EXERCISABLE, IT SHALL
REMAIN EXERCISABLE UNTIL EXPIRATION OR TERMINATION OF THE OPTION OR SAR, UNLESS
OTHERWISE SPECIFIED BY THE COMMITTEE.

 

PARTIAL EXERCISE.  EACH OPTION OR, SUBJECT TO SUBPARAGRAPH 0(B), EACH SAR OR
INSTALLMENT THEREOF, MAY BE EXERCISED AT ANY TIME OR FROM TIME TO TIME, IN WHOLE
OR IN PART, FOR UP TO THE TOTAL NUMBER OF SHARES WITH RESPECT TO WHICH IT IS
THEN EXERCISABLE

 

ACCELERATION OF VESTING.  THE COMMITTEE SHALL HAVE THE RIGHT TO ACCELERATE THE
DATE THAT ANY INSTALLMENT OF ANY OPTION OR SAR BECOMES EXERCISABLE; PROVIDED
THAT THE COMMITTEE SHALL NOT, WITHOUT THE CONSENT OF AN OPTIONEE, ACCELERATE THE
PERMITTED EXERCISE DATE OF ANY INSTALLMENT OF ANY OPTION GRANTED PURSUANT TO
PARAGRAPH 0 IF SUCH ACCELERATION WOULD VIOLATE THE ANNUAL VESTING LIMITATION
CONTAINED IN SECTION 422(D) OF THE CODE, AS DESCRIBED IN PARAGRAPH 0(C).

 

TERMINATION OF EMPLOYMENT.  Unless otherwise specified in the agreement relating
to such ISO, if an ISO optionee ceases to be employed by the Company and all
Related Corporations other than by reason of death or disability as defined in
paragraph 0, no further installments of his or her ISOs shall become
exercisable, and his or her ISOs shall terminate on the earlier of (a) three
months after the date of termination of his or her employment, or (b) their
specified expiration dates, except to the extent that such ISOs (or unexercised
installments thereof) have been converted into Non-Qualified Options pursuant to
paragraph 0.

 

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For purposes of this paragraph 0, employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the
period of such leave does not exceed 90 days or, if longer, any period during
which such optionee’s right to re-employment is guaranteed by statute or by
contract.  A bona fide leave of absence with the written approval of the
Committee shall not be considered an interruption of employment under this
paragraph 0, provided that such written approval contractually obligates the
Company or any Related Corporation to continue the employment of the optionee
after the approved period of absence.  ISOs granted under the Plan shall not be
affected by any change of employment within or among the Company and Related
Corporations, so long as the optionee continues to be an employee of the Company
or any Related Corporation.  Nothing in the Plan shall be deemed to give any
grantee of any Stock Right the right to be retained in employment or other
service by the Company or any Related Corporation for any period of time.

 

DEATH; DISABILITY.

 

DEATH.  IF AN ISO OPTIONEE CEASES TO BE EMPLOYED BY THE COMPANY AND ALL RELATED
CORPORATIONS BY REASON OF HIS OR HER DEATH, ANY ISO OWNED BY SUCH OPTIONEE MAY
BE EXERCISED, TO THE EXTENT OTHERWISE EXERCISABLE ON THE DATE OF DEATH, BY THE
ESTATE, PERSONAL REPRESENTATIVE OR BENEFICIARY WHO HAS ACQUIRED THE ISO BY WILL
OR BY THE LAWS OF DESCENT AND DISTRIBUTION, UNTIL THE EARLIER OF (I) THE
SPECIFIED EXPIRATION DATE OF THE ISO OR (II) 180 DAYS FROM THE DATE OF THE
OPTIONEE’S DEATH.

 

DISABILITY.  IF AN ISO OPTIONEE CEASES TO BE EMPLOYED BY THE COMPANY AND ALL
RELATED CORPORATIONS BY REASON OF HIS OR HER DISABILITY, SUCH OPTIONEE SHALL
HAVE THE RIGHT TO EXERCISE ANY ISO HELD BY HIM OR HER ON THE DATE OF TERMINATION
OF EMPLOYMENT, FOR THE NUMBER OF SHARES FOR WHICH HE OR SHE COULD HAVE EXERCISED
IT ON THAT DATE, UNTIL THE EARLIER OF (I) THE SPECIFIED EXPIRATION DATE OF THE
ISO OR (II) 180 DAYS FROM THE DATE OF THE TERMINATION OF THE OPTIONEE’S
EMPLOYMENT.  FOR THE PURPOSES OF THE PLAN, THE TERM “DISABILITY” SHALL MEAN
“PERMANENT AND TOTAL DISABILITY” AS DEFINED IN SECTION 22(E)(3) OF THE CODE OR
ANY SUCCESSOR STATUTE.

 

TRANSFERABILITY OF OPTIONS AND SARS.  Except as otherwise provided in
subparagraphs 00 and 00 below, an Option or SAR may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent and distribution and may be exercised, during the
lifetime of the optionee or grantee, only by the optionee or grantee. 
Notwithstanding the foregoing, with the consent of the Board or the Compensation
Committee thereof, in either case in its sole discretion, an optionee or grantee
may transfer all or a portion of his or her vested Non-Qualified Options or SARs
to:

 

A TRUST FOR THE EXCLUSIVE BENEFIT OF THE OPTIONEE OR GRANTEE AND/OR ONE OR MORE
IMMEDIATE FAMILY MEMBERS OR SPOUSES OF IMMEDIATE FAMILY MEMBERS.  FOR THE
PURPOSES OF THIS SUBPARAGRAPH 00, “IMMEDIATE FAMILY MEMBERS” SHALL MEAN THE
OPTIONEE’S OR GRANTEE’S SPOUSE, FORMER SPOUSE, CHILDREN OR GRANDCHILDREN,
WHETHER NATURAL OR ADOPTED; AND

 

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AN ORGANIZATION WHICH QUALIFIES AS A TAX EXEMPT ORGANIZATION UNDER SECTION
501(A) AND 501(C)(3) OF THE CODE.

 

As a condition to any transfer pursuant to subparagraphs 00 and 00 each such
transferee shall agree in writing (in a form satisfactory to the Committee) to
be bound by the terms and conditions of the Option or SAR agreement evidencing
such transferred Option or SAR, as well as any additional restrictions or
conditions as the Committee may require.  Following the transfer of an Option or
SAR in accordance with this paragraph 0, the term “optionee” and “grantee” shall
refer to the transferee, except that, with respect to any requirements of
continued service or employment or provision of the Company’s tax withholding
obligations, such terms shall refer to the optionee or grantee.  The Committee
shall have no obligation to notify any transferee of any termination of the
transferred Option or SAR, including an early termination resulting from the
termination of employment or service of the original optionee or grantee.  No
transferee shall make a subsequent transfer of a transferred Option or SAR
except to the original optionee or grantee or as otherwise provided in this
paragraph 0.

 

TERMS AND CONDITIONS OF OPTIONS AND SARS.  Options or SARs shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve.  Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options or SARs.  The Committee may specify that any
Non-Qualified Option or SARs shall be subject to the restrictions set forth
herein with respect to ISOs, or to such other termination and cancellation
provisions as the Committee may determine.  The Committee may from time to time
confer authority and responsibility on one or more of its own members and/or one
or more officers of the Company to execute and deliver such instruments.  The
proper officers of the Company are authorized and directed to take any and all
action necessary or advisable from time to time to carry out the terms of such
instruments.

 

ADJUSTMENTS.  Upon the occurrence of any of the following events, an optionee’s
or grantee’s rights with respect to Options or SARs granted to such optionee or
grantee hereunder shall be adjusted as hereinafter provided, unless otherwise
specifically provided in the written agreement between the optionee or grantee
and the Company relating to such Option or SAR:

 

STOCK DIVIDENDS AND STOCK SPLITS.  IF THE SHARES OF COMMON STOCK SHALL BE
SUBDIVIDED OR COMBINED INTO A GREATER OR SMALLER NUMBER OF SHARES OR IF THE
COMPANY SHALL ISSUE ANY SHARES OF COMMON STOCK AS A STOCK DIVIDEND ON ITS
OUTSTANDING COMMON STOCK, THE NUMBER OF SHARES OF COMMON STOCK DELIVERABLE UPON
THE EXERCISE OF OPTIONS OR SARS SHALL BE APPROPRIATELY INCREASED OR DECREASED
PROPORTIONATELY, AND APPROPRIATE ADJUSTMENTS SHALL BE MADE IN THE PURCHASE PRICE
PER SHARE TO REFLECT SUCH SUBDIVISION, COMBINATION OR STOCK DIVIDEND.

 

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CONSOLIDATIONS OR MERGERS.  IF THE COMPANY IS TO BE CONSOLIDATED WITH OR
ACQUIRED BY ANOTHER ENTITY IN A MERGER OR OTHER REORGANIZATION IN WHICH THE
HOLDERS OF THE OUTSTANDING VOTING STOCK OF THE COMPANY IMMEDIATELY PRECEDING THE
CONSUMMATION OF SUCH EVENT, SHALL, IMMEDIATELY FOLLOWING SUCH EVENT, HOLD, AS A
GROUP, LESS THAN A MAJORITY OF THE VOTING SECURITIES OF THE SURVIVING OR
SUCCESSOR ENTITY, OR IN THE EVENT OF A SALE OF ALL OR SUBSTANTIALLY ALL OF THE
COMPANY’S ASSETS OR OTHERWISE (EACH, AN “ACQUISITION”), THE COMMITTEE OR THE
BOARD OF DIRECTORS OF ANY ENTITY ASSUMING THE OBLIGATIONS OF THE COMPANY
HEREUNDER (THE “SUCCESSOR BOARD”), SHALL, AS TO OUTSTANDING OPTIONS AND SARS,
EITHER (I) MAKE APPROPRIATE PROVISION FOR THE CONTINUATION OF SUCH OPTIONS OR
SARS BY SUBSTITUTING ON AN EQUITABLE BASIS FOR THE SHARES THEN SUBJECT TO SUCH
OPTIONS OR SARS EITHER (A) THE CONSIDERATION PAYABLE WITH RESPECT TO THE
OUTSTANDING SHARES OF COMMON STOCK IN CONNECTION WITH THE ACQUISITION, (B)
SHARES OF STOCK OF THE SURVIVING OR SUCCESSOR CORPORATION, OR (C) SUCH OTHER
SECURITIES AS THE SUCCESSOR BOARD DEEMS APPROPRIATE, THE FAIR MARKET VALUE OF
WHICH SHALL NOT MATERIALLY EXCEED THE FAIR MARKET VALUE OF THE SHARES OF COMMON
STOCK SUBJECT TO SUCH OPTIONS OR SARS IMMEDIATELY PRECEDING THE ACQUISITION; OR
(II) UPON WRITTEN NOTICE TO THE OPTIONEES AND GRANTEES, PROVIDE THAT ALL OPTIONS
AND SARS MUST BE EXERCISED, TO THE EXTENT THEN EXERCISABLE OR TO BE EXERCISABLE
AS A RESULT OF THE ACQUISITION, WITHIN A SPECIFIED NUMBER OF DAYS OF THE DATE OF
SUCH NOTICE, AT THE END OF WHICH PERIOD THE OPTIONS AND SARS SHALL TERMINATE; OR
(III) TERMINATE ALL OPTIONS AND SARS IN EXCHANGE FOR A CASH PAYMENT EQUAL TO THE
EXCESS OF THE FAIR MARKET VALUE OF THE SHARES SUBJECT TO SUCH OPTIONS OR SARS
(TO THE EXTENT THEN EXERCISABLE OR TO BE EXERCISABLE AS A RESULT OF THE
ACQUISITION) OVER THE EXERCISE PRICE THEREOF.

 

RECAPITALIZATION OR REORGANIZATION.  IN THE EVENT OF A RECAPITALIZATION OR
REORGANIZATION OF THE COMPANY (OTHER THAN A TRANSACTION DESCRIBED IN
SUBPARAGRAPH 0(B) ABOVE) PURSUANT TO WHICH SECURITIES OF THE COMPANY OR OF
ANOTHER CORPORATION ARE ISSUED WITH RESPECT TO THE OUTSTANDING SHARES OF COMMON
STOCK, AN OPTIONEE OR GRANTEE UPON EXERCISING AN OPTION OR SAR SHALL BE ENTITLED
TO RECEIVE FOR THE PURCHASE PRICE PAID UPON SUCH EXERCISE THE SECURITIES HE OR
SHE WOULD HAVE RECEIVED IF HE OR SHE HAD EXERCISED SUCH OPTION OR SAR PRIOR TO
SUCH RECAPITALIZATION OR REORGANIZATION.

 

MODIFICATION OF ISOS.  NOTWITHSTANDING THE FOREGOING, ANY ADJUSTMENTS MADE
PURSUANT TO SUBPARAGRAPHS 0(A), (B) OR (C) WITH RESPECT TO ISOS SHALL BE MADE
ONLY AFTER THE COMMITTEE, AFTER CONSULTING WITH COUNSEL FOR THE COMPANY,
DETERMINES WHETHER SUCH ADJUSTMENTS WOULD CONSTITUTE A “MODIFICATION” OF SUCH
ISOS (AS THAT TERM IS DEFINED IN SECTION 424 OF THE CODE) OR WOULD CAUSE ANY
ADVERSE TAX CONSEQUENCES FOR THE HOLDERS OF SUCH ISOS.  IF THE COMMITTEE
DETERMINES THAT SUCH ADJUSTMENTS MADE WITH RESPECT TO ISOS WOULD CONSTITUTE A
MODIFICATION OF SUCH ISOS OR WOULD CAUSE ADVERSE TAX CONSEQUENCES TO THE
HOLDERS, IT MAY REFRAIN FROM MAKING SUCH ADJUSTMENTS.

 

DISSOLUTION OR LIQUIDATION.  IN THE EVENT OF THE PROPOSED DISSOLUTION OR
LIQUIDATION OF THE COMPANY, EACH OPTION AND SAR WILL TERMINATE IMMEDIATELY PRIOR
TO THE CONSUMMATION OF SUCH PROPOSED ACTION OR AT SUCH OTHER TIME AND SUBJECT TO
SUCH OTHER CONDITIONS AS SHALL BE DETERMINED BY THE COMMITTEE.

 

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ISSUANCES OF SECURITIES.  EXCEPT AS EXPRESSLY PROVIDED HEREIN, 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 OR PRICE OF SHARES SUBJECT TO OPTIONS
AND SARS.  NO ADJUSTMENTS SHALL BE MADE FOR DIVIDENDS PAID IN CASH OR IN
PROPERTY OTHER THAN SECURITIES OF THE COMPANY.

 

FRACTIONAL SHARES.  NO FRACTIONAL SHARES SHALL BE ISSUED UNDER THE PLAN AND THE
OPTIONEE AND GRANTEE SHALL RECEIVE FROM THE COMPANY CASH IN LIEU OF SUCH
FRACTIONAL SHARES.

 

ADJUSTMENTS.  UPON THE HAPPENING OF ANY OF THE EVENTS DESCRIBED IN SUBPARAGRAPHS
0(A), (B) OR (C) ABOVE, THE CLASS AND AGGREGATE NUMBER OF SHARES SET FORTH IN
PARAGRAPH 4 HEREOF THAT ARE SUBJECT TO STOCK RIGHTS WHICH PREVIOUSLY HAVE BEEN
OR SUBSEQUENTLY MAY BE GRANTED UNDER THE PLAN SHALL ALSO BE APPROPRIATELY
ADJUSTED TO REFLECT THE EVENTS DESCRIBED IN SUCH SUBPARAGRAPHS.  THE COMMITTEE
OR THE SUCCESSOR BOARD SHALL DETERMINE THE SPECIFIC ADJUSTMENTS TO BE MADE UNDER
THIS PARAGRAPH 0 AND, SUBJECT TO PARAGRAPH 0, ITS DETERMINATION SHALL BE
CONCLUSIVE.

 

MEANS OF EXERCISING OPTIONS AND SARS.

 

OPTIONS.  AN OPTION (OR ANY PART OR INSTALLMENT THEREOF) SHALL BE EXERCISED BY
GIVING WRITTEN NOTICE TO THE COMPANY AT ITS PRINCIPAL OFFICE ADDRESS, OR TO SUCH
TRANSFER AGENT AS THE COMPANY SHALL DESIGNATE.  SUCH NOTICE SHALL IDENTIFY THE
OPTION BEING EXERCISED AND SPECIFY THE NUMBER OF SHARES AS TO WHICH SUCH OPTION
IS BEING EXERCISED, ACCOMPANIED BY FULL PAYMENT OF THE PURCHASE PRICE THEREFOR
EITHER (A) IN UNITED STATES DOLLARS IN CASH OR BY CHECK, (B) AT THE DISCRETION
OF THE COMMITTEE, THROUGH DELIVERY OF SHARES OF COMMON STOCK HAVING A FAIR
MARKET VALUE EQUAL AS OF THE DATE OF THE EXERCISE TO THE CASH EXERCISE PRICE OF
THE OPTION, (C) AT THE DISCRETION OF THE COMMITTEE, BY DELIVERY OF THE
OPTIONEE’S PERSONAL RECOURSE NOTE BEARING INTEREST PAYABLE NOT LESS THAN
ANNUALLY AT NO LESS THAN 100% OF THE LOWEST APPLICABLE FEDERAL RATE, AS DEFINED
IN SECTION 1274(D) OF THE CODE, (D) AT THE DISCRETION OF THE COMMITTEE AND
CONSISTENT WITH APPLICABLE LAW, THROUGH THE DELIVERY OF AN ASSIGNMENT TO THE
COMPANY OF A SUFFICIENT AMOUNT OF THE PROCEEDS FROM THE SALE OF THE COMMON STOCK
ACQUIRED UPON EXERCISE OF THE OPTION AND AN AUTHORIZATION TO THE BROKER OR
SELLING AGENT TO PAY THAT AMOUNT TO THE COMPANY, WHICH SALE SHALL BE AT THE
OPTIONEE’S DIRECTION AT THE TIME OF EXERCISE, OR (E) AT THE DISCRETION OF THE
COMMITTEE, BY ANY COMBINATION OF (A), (B), (C) AND (D) ABOVE. IF THE COMMITTEE
EXERCISES ITS DISCRETION TO PERMIT PAYMENT OF THE EXERCISE PRICE OF AN ISO BY
MEANS OF THE METHODS SET FORTH IN CLAUSES (B), (C), (D) OR (E) OF THE PRECEDING
SENTENCE, SUCH DISCRETION SHALL BE EXERCISED IN WRITING AT THE TIME OF THE GRANT
OF THE ISO IN QUESTION.  THE HOLDER OF AN OPTION SHALL NOT HAVE THE RIGHTS OF A
SHAREHOLDER WITH RESPECT TO THE SHARES COVERED BY SUCH OPTION UNTIL THE DATE OF
ISSUANCE OF A STOCK CERTIFICATE TO SUCH HOLDER FOR SUCH SHARES.  EXCEPT AS
EXPRESSLY PROVIDED ABOVE IN PARAGRAPH 0 WITH RESPECT TO CHANGES IN
CAPITALIZATION AND STOCK DIVIDENDS, NO ADJUSTMENT SHALL BE MADE FOR DIVIDENDS OR
SIMILAR RIGHTS FOR WHICH THE RECORD DATE IS BEFORE THE DATE SUCH STOCK
CERTIFICATE IS ISSUED.

 

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SARS.  TANDEM SARS MAY BE EXERCISED FOR ALL OR PART OF THE SHARES OF COMMON
STOCK SUBJECT TO THE RELATED OPTION UPON THE SURRENDER OF THE RIGHT TO EXERCISE
THE EQUIVALENT PORTION OF THE RELATED OPTION.  A TANDEM SAR MAY BE EXERCISED
ONLY WITH RESPECT TO THE SHARES OF COMMON STOCK FOR WHICH ITS RELATED OPTION IS
THEN EXERCISABLE.  NOTWITHSTANDING ANY OTHER PROVISION OF THE PLAN TO THE
CONTRARY, WITH RESPECT TO A TANDEM SAR GRANTED IN CONNECTION WITH AN ISO: (I)
THE TANDEM SAR WILL EXPIRE NO LATER THAN THE EXPIRATION OF THE UNDERLYING ISO;
(II) THE VALUE OF THE PAYOUT WITH RESPECT TO THE TANDEM SAR MAY BE FOR NO MORE
THAN ONE HUNDRED PERCENT (100%) OF THE DIFFERENCE BETWEEN THE EXERCISE PRICE OF
THE UNDERLYING ISO AND THE FAIR MARKET VALUE OF THE SHARES OF COMMON STOCK
SUBJECT TO THE UNDERLYING ISO AT THE TIME THE TANDEM SAR IS EXERCISED; AND
(III) THE TANDEM SAR MAY BE EXERCISED ONLY WHEN THE FAIR MARKET VALUE OF THE
SHARES OF COMMON STOCK SUBJECT TO THE ISO EXCEEDS THE EXERCISE PRICE OF THE
ISO.  FREESTANDING SARS MAY BE EXERCISED UPON WHATEVER TERMS AND CONDITIONS THE
COMMITTEE, IN ITS SOLE DISCRETION, IMPOSES UPON THEM AND SETS FORTH IN THE AWARD
AGREEMENT.  UPON EXERCISE OF A SAR, A GRANTEE SHALL BE ENTITLED TO RECEIVE
PAYMENT FROM THE COMPANY IN AN AMOUNT DETERMINED BY MULTIPLYING: (I) THE
DIFFERENCE BETWEEN THE FAIR MARKET VALUE OF A SHARE OF COMMON STOCK ON THE DATE
OF EXERCISE OVER THE GRANT PRICE; BY (II) THE NUMBER OF SHARES OF COMMON STOCK
WITH RESPECT TO WHICH THE SAR IS EXERCISED.  AT THE DISCRETION OF THE COMMITTEE,
THE PAYMENT UPON SAR EXERCISE MAY BE IN CASH, IN SHARES OF COMMON STOCK OF
EQUIVALENT VALUE, OR IN SOME COMBINATION THEREOF.

 

TERM AND AMENDMENT OF PLAN.  This Plan was adopted by the Board on September 19,
1998, subject, with respect to the validation of ISOs granted under the Plan, to
approval of the Plan by the stockholders of the Company at the next Meeting of
Stockholders or, in lieu thereof, by written consent.  If the approval of
stockholders is not obtained prior to September 19, 1999, any grants of ISOs
under the Plan made prior to that date will be rescinded.  The Plan shall expire
at the end of the day on September 18, 2008 (except as to Options outstanding on
that date).  Subject to the provisions of paragraph 0 above, Options may be
granted under the Plan prior to the date of stockholder approval of the Plan. 
The Board may terminate or amend the Plan in any respect at any time, except
that, without the approval of the stockholders obtained within 12 months before
or after the Board adopts a resolution authorizing any of the following actions:
(a) the total number of shares that may be issued under the Plan may not be
increased (except by adjustment pursuant to paragraph 0); (b) the provisions of
paragraph 0regarding eligibility for grants of ISOs may not be modified; (c) the
provisions of paragraph 0(B) regarding the exercise price at which shares may be
offered pursuant to ISOs may not be modified (except by adjustment pursuant to
paragraph 0); and (d) the expiration date of the Plan may not be extended.
Except as otherwise provided in this paragraph 0, in no event may action of the
Board or stockholders alter or impair the rights of a grantee or optionee,
without such grantee’s or optionee’s consent, under any Stock Right previously
granted to such grantee or optionee.

 

MODIFICATIONS OF ISOS; CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS.  Subject
to paragraph 0(D), without the prior written consent of the holder of an ISO,
the Committee shall not alter the terms of such ISO (including the means of
exercising such ISO) if such alteration would constitute a

 

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modification (within the meaning of Section 424(h)(3) of the Code).  The
Committee, at the written request or with the written consent of any optionee,
may in its discretion take such actions as may be necessary to convert such
optionee’s ISOs (or any installments or portions of installments thereof) that
have not been exercised on the date of conversion into Non-Qualified Options at
any time prior to the expiration of such ISOs, regardless of whether the
optionee is an employee of the Company or a Related Corporation at the time of
such conversion.  Such actions may include, but shall not be limited to,
extending the exercise period or reducing the exercise price of the appropriate
installments of such ISOs.  At the time of such conversion, the Committee (with
the consent of the optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Committee in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan.  Nothing in the Plan shall be deemed to give any optionee the right to
have such optionee’s ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee takes appropriate action. 
Upon the taking of such action, the Company shall issue separate certificates to
the optionee with respect to Options that are Non-Qualified Options and Options
that are ISOs.

 

APPLICATION OF FUNDS.  The proceeds received by the Company from the sale of
shares pursuant to Options granted and Purchases authorized under the Plan shall
be used for general corporate purposes.

 

NOTICE TO COMPANY OF A DISQUALIFYING DISPOSITION.  By accepting an ISO granted
under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan.  A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted, or
(b) the date one year following the date the ISO was exercised.

 

WITHHOLDING OF ADDITIONAL INCOME TAXES.  Upon the exercise of a Non-Qualified
Option, the transfer of a Non-Qualified Option pursuant to an arm’s-length
transaction, the grant of an Award, the exercise of a SAR, the making of a
Purchase of Common Stock for less than its fair market value, the making of a
Disqualifying Disposition (as defined in paragraph 0), the vesting or transfer
of restricted stock or securities acquired on the exercise of an Option or SAR
hereunder, or the making of a distribution or other payment with respect to such
stock or securities, the Company may withhold taxes in respect of amounts that
constitute compensation includible in gross income. The Committee in its
discretion may condition (i) the exercise of an Option, (ii) the transfer of a
Non-Qualified Option, (iii) the grant of an Award, (iv) the exercise of a SAR,
(v) the making of a Purchase of Common Stock for less than its fair market
value, or (vi) the vesting or transferability of restricted stock or securities
acquired by exercising an Option or SAR, on the optionee’s or grantee’s making
satisfactory arrangements for such withholding.  Such arrangements may include
payment by the optionee or grantee in cash or by check of the amount of the
withholding taxes or, at the discretion of the Committee, by the optionee’s or
grantee’s delivery of previously held shares of Common

 

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Stock or the withholding from the shares of Common Stock otherwise deliverable
upon exercise of a Option or SAR shares having an aggregate fair market value
equal to the amount of such withholding taxes.

 

GOVERNMENTAL REGULATION.  The Company’s obligation to sell and deliver shares of
the Common Stock under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance or sale of
such shares.

 

Government regulations may impose reporting or other obligations on the Company
with respect to the Plan.  For example, the Company may be required to send tax
information statements to employees and former employees that exercise ISOs
under the Plan, and the Company may be required to file tax information returns
reporting the income received by optionees of Options in connection with the
Plan.

 

GOVERNING LAW.  The validity and construction of the Plan and the instruments
evidencing Stock Rights shall be governed by the laws of Delaware, or the laws
of any jurisdiction in which the Company or its successors in interest may be
organized.

 

CODE SECTION 409A.  To the extent applicable, it is intended that this Plan and
any Options, SARs and Awards granted and Purchases made hereunder comply with
the requirements of Section 409A of the Code, and any related regulations or
other guidance promulgated with respect to such Section by the U.S. Department
of the Treasury or the Internal Revenue Service (“Section 409A”).  Any provision
that would cause the Plan or any Options, SARs and Awards granted or Purchases
made hereunder to fail to satisfy Section 409A shall have no force or effect
until amended to comply with Section 409A, which amendment may be retroactive to
the extent permitted by Section 409A.

 

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Register of Amendments to 1998 Stock Plan

 

Date

 

Section
Affected

 

Change

February 29, 2000

 

4

 

Adjusted to reflect 3-for-2 stock split.

January 30, 2003

 

 

 

Stockholders voted to increase the number of shares available for grant under
the Plan from 1,250,000 to 1,650,000 and amended and restated the Plan (as the
Amended and Restated 1998 Stock Plan) to accomplish same.

January 29, 2004

 

4

 

Stockholders voted to increase the number of shares available for grant under
the Plan from 1,650,000 to 2,650,000.

October 17, 2004

 

4

 

Adjusted to reflect 2-for-1 stock split.

October 5, 2005

 

All

 

Completely amended and restated the Plan (as the Second Amended and Restated
1998 Stock Plan) to add SARs.

 

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