Exhibit
10.26


FIRST
CONSULTING GROUP, INC. 

2007 EQUITY INCENTIVE PLAN


(Adopted by Stockholders June 7, 2007; Amended and
Restated in its entirety July 30, 2007)


First
Consulting Group, Inc., a Delaware corporation (the “Company”), by
resolution of its Board of Directors, hereby adopts the First Consulting Group,
Inc. 2007 Equity Incentive Plan (the “Plan”).  The Plan will become effective upon the
approval of the Company’s stockholders (the “Effective Date”).


The
purpose of the Plan is to promote the success and enhance the value of the
Company by linking the personal interests of the members of the Board,
Employees, and Consultants to those of the Company’s stockholders and by
providing such individuals with an incentive for outstanding performance to
generate superior returns to the Company’s 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 I.


DEFINITIONS


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.


1.1.          “Administrator” shall mean the
entity that conducts the general administration of the Plan as provided in
Article X.  With reference to the duties
of the Committee under the Plan which have been delegated to one or more
persons pursuant to Section 10.5, the term “Administrator” shall refer to such
person(s) unless the Committee has revoked such delegation.


1.2.          “Award” shall mean an Option, a
Restricted Stock Award, a Restricted Stock Unit Award, a Performance Award, a
Dividend Equivalents Award, a Deferred Stock Award, a Stock Payment Award or a
Stock Appreciation Right, which may be awarded or granted under the Plan
(collectively, “Awards”).


1.3.          “Award Agreement” shall mean a
written agreement executed by an authorized officer of the Company and the
Holder which shall contain such terms and conditions with respect to an Award
as the Administrator shall determine, consistent with the Plan.


1.4.          “Award Limit” shall mean
750,000 shares of Common Stock, subject to adjustment pursuant to Section 11.3;
provided, however, that each share of
Common Stock subject to an Award shall be counted as one share against the
Award Limit.  Solely with respect to
Performance Awards granted pursuant to Section 8.2(b) and payable solely in
cash, “Award Limit” shall mean $750,000.


1.5.          “Board” shall mean the Board of
Directors of the Company.












1.6.          “Change in Control” shall mean
any of the following transactions or events occurring on or after the Effective
Date:


(a)           a dissolution, liquidation, or sale of
all or substantially all of the assets of the Company,


(b)           a merger or consolidation in which the
Company is not the surviving corporation;


(c)           a reverse merger in which the Company is
the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise; or


(d)           the individuals who, as of the
Effective Date, are members of the Board (the “Incumbent Board”), cease
for any reason to constitute at least 50% of the Board, provided, however,
that if the election, or nomination for election, by the Company’s stockholders
of any new director was approved by a vote of at least 50% of the Incumbent
Board, such new Director shall, for purposes of this definition, be considered
as a member of the Incumbent Board.


Notwithstanding the
foregoing, a merger, consolidation or reverse merger described in subsection
(b) or (c) shall not be a “Change in Control,” if such merger, consolidation or
reverse merger results in the Common Stock outstanding immediately before the
merger, consolidation or reverse merger continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
Company or the person that, as a result of the merger, consolidation or reverse
merger, controls, directly or indirectly, the Company or otherwise succeeds to
the business of the Company (the Company or such other person, hereinafter
referred to as the “Successor Entity”)), directly or indirectly, at
least 50% of the combined voting power of the Successor Entity’s outstanding
voting securities immediately after the merger, consolidation or reverse merger.


1.7.          “Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time.


1.8.          “Committee” shall mean the
Compensation Committee of the Board, or another committee or subcommittee of
the Board, appointed as provided in Section 10.1.


1.9.          “Common Stock” shall mean the
common stock of the Company, par value $0.001 per share.


1.10.        “Company” shall mean First
Consulting Group, Inc., a
Delaware corporation.


1.11.        “Consultant” shall mean any
consultant or adviser if:  (a) the
consultant or adviser is a natural person, (b) the consultant or adviser
renders bona fide services to the Company or any Subsidiary; and (c) the
services rendered by the consultant or adviser are not in



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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.


1.12.        “Covered Employee” shall mean any
Employee who is, or could be, a “covered employee” within the meaning of
Section 162(m) of the Code.


1.13.        “Deferred Stock” shall mean a
right to receive Common Stock awarded under Section 8.5 of the Plan.


1.14.        “Director” shall mean a member of
the Board.


1.15.        “Dividend  Equivalent”
shall mean a right to receive the equivalent value (in cash or Common Stock) of
dividends paid on Common Stock, awarded under Section 8.3 of the Plan.


1.16.        “DRO” shall mean a domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended from time to time, or the rules thereunder.


1.17.        “Effective  Date” shall
mean the date the Plan is approved by the Company’s stockholders.


1.18.        “Employee” shall mean any officer
or other employee (as defined in accordance with Section 3401(c) of the Code)
of the Company, or of any Subsidiary.


1.19.        “Exchange  Act” shall mean
the Securities Exchange Act of 1934, as amended from time to time.


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


(a)           If the Common Stock is listed on any
established stock exchange (such as the New York Stock Exchange, the NASDAQ
Global Market and the NASDAQ Global Select Market) or any national market
system, including without limitation any market system of The NASDAQ Stock
Market, the value of a share of Common Stock shall be the closing sales price
for a share of Common Stock as quoted on such exchange or system for such date,
or if there is no closing sales price for a share of Common Stock on the date
in question, the closing sales price for a share of Common Stock on the last
preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;


(b)           If the Common Stock is regularly
quoted by a recognized securities dealer but closing sales prices are not
reported, the value of a share of Common Stock shall be the mean of the high
bid and low asked prices for such date or, if there are no high bid and low
asked prices for a share of Common Stock on the date in question, the high bid
and low asked prices for a share of Common Stock on the last preceding date for
which such information exists, as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable; or



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(c)           If the Common Stock is neither listed
on an established stock exchange or a national market system nor regularly
quoted by a recognized securities dealer, the value of a share of Common Stock
shall be established by the Administrator in good faith.


1.21.        “Fiscal Year” means the fiscal
year of the Company.


1.22.        “Full Value Award” means any Award
other than an Option or Stock Appreciation Right.


1.23.        “Holder” shall mean a person who
has been granted an Award.


1.24.        “Incentive Stock Option” shall
mean an option which conforms to the applicable provisions of Section 422 of
the Code and which is designated as an Incentive Stock Option by the
Administrator.


1.25.        “Non-Employee Director” shall
mean a member of the Board who is not an Employee.


1.26.        “Non-Qualified Stock Option”
shall mean an Option which is not designated as an Incentive Stock Option by
the Administrator.


1.27.        “Option” shall mean a stock
option granted under Article IV of the Plan. 
An Option granted under the Plan shall, as determined by the
Administrator, be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however, that
Options granted to Non-Employee Directors and Consultants shall be
Non-Qualified Stock Options.


1.28.        “Performance Award” shall mean a
cash bonus, stock bonus or other performance or incentive award that is paid in
cash, Common Stock or a combination of both, awarded under Section 8.2 of the
Plan.


1.29.        “Performance Criteria” means the
criteria (and adjustments) that the Committee selects for an Award for purposes
of establishing the Performance Goal or Performance Goals for a Performance
Period, determined as follows:.


(a)           The Performance Criteria that shall
be used to establish Performance Goals are limited to the following:  (i) net earnings (either before or after (A)
interest, (B) taxes, (C) depreciation and (D) amortization), (ii) gross or net
sales or revenue, (iii) net income (either before or after taxes), (iv)
operating profit, (v) cash flow (including, but not limited to, operating cash
flow and free cash flow), (vi) return on assets, (vii) return on capital,
(viii) return on stockholders’ equity, (ix) return on sales, (x) days sales
outstanding, (xi) gross or net profit or operating margin, (xii) costs, (xiii)
funds from operations, (xiv) expense, (xv) working capital, (xvi) earnings per
share, and (xvii) price per share of Common Stock, any of which may be measured
either in absolute terms or as compared to any incremental increase or decrease
or as compared to results of a peer group.


(b)           The Committee may, in its discretion,
at the time of grant, specify in the Award that one or more objectively
determinable adjustments shall be made to one or more of the Performance
Goals.  Such adjustments may include one
or more of the following:



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 (i) items related to a change in
accounting principle; (ii) items relating to financing activities;
(iii) expenses for restructuring or productivity initiatives; (iv) other
non-operating items; (v) items related to acquisitions; (vi) items
attributable to the business operations of any entity acquired by the Company;
(vii) items related to the disposal of a business or segment of a business; or
(viii) items related to discontinued operations that do not qualify as a
segment of a business under United States generally accepted accounting
principles (“GAAP”).


(c)           The Committee 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 Award; provided,
however, that each Performance Criteria shall be determined in
accordance with GAAP to the extent applicable.


1.30.        “Performance Goals” means, for a
Performance Period, one or more goals established in writing by the Committee
for the Performance Period based upon one or more 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 division, business
unit, or an individual.  The achievement
of each Performance Goal shall be determined in accordance with generally
accepted accounting principles to the extent applicable.


1.31.        “Performance Period” means one or
more periods of time, which may be of varying and overlapping durations, as the
Committee may select, over which the attainment of one or more Performance
Goals will be measured for the purpose of determining a Holder’s right to, and
the payment of, a Performance Award.


1.32.        “Plan” shall mean the First
Consulting Group, Inc. 2007 Equity Incentive Plan, as amended from time to
time.


1.33.        “Prior Award” shall mean a stock
option, restricted stock or other stock award granted under the Prior Plan.


1.34.        “Prior Plan” shall mean the First
Consulting Group, Inc. 1997 Equity Incentive Plan, as amended from time to
time.


1.35.        “Restricted Stock” shall mean
Common Stock awarded under Article VII of the Plan that is subject to
repurchase or forfeiture.


1.36.        “Restricted Stock Units” shall
mean rights to receive Common Stock awarded under Section 8.6.


1.37.        “Rule 16b-3” shall mean Rule 16b-3
promulgated under the Exchange Act, as such Rule may be amended from time to
time.


1.38.        “Securities Act” shall mean the
Securities Act of 1933, as amended from time to time.



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1.39.        “Stock Appreciation Right” shall
mean a stock appreciation right granted under Article IX of the Plan.


1.40.        “Stock Payment” shall mean:  (a) a payment in the form of shares of Common
Stock, or (b) an option or other right to purchase shares of Common Stock, as
part of a deferred compensation arrangement, made in lieu of all or any portion
of the compensation, including without limitation, salary, bonuses, commissions
and directors’ fees, that would otherwise become payable to a Employee,
Consultant or Non-Employee Director in cash, awarded under Article VIII of the
Plan.


1.41.        “Subsidiary” means any entity
(other than the Company), whether domestic or foreign, in an unbroken chain of
entities beginning with the Company if each of the entities other than the last
entity in the unbroken chain beneficially owns, at the time of the
determination, securities or interests representing more than fifty percent
(50%) of the total combined voting power of all classes of securities or
interests in one of the other entities in such chain.


1.42.        “Subsidiary Corporation” shall
mean any corporation in an unbroken chain of corporations beginning with the
Company if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.


1.43.        “Substitute Award” shall mean an
Option granted under this Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by a company or other entity in
connection with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute
Award” be construed to refer to an award made in connection with the
cancellation and repricing of an Option.


1.44.        “Termination of Consultancy”
shall mean the time when the engagement of a Holder as a Consultant to the
Company or a Subsidiary is terminated for any reason, with or without cause,
including, without limitation, by resignation, discharge, death or retirement,
but excluding terminations where there is a simultaneous commencement of
employment or service with the Company or any Subsidiary.  The Administrator, in its discretion, shall
determine the effect of all matters and questions relating to Termination of
Consultancy, including, without limitation, the question of whether a
Termination of Consultancy resulted from a discharge for cause.  Notwithstanding any other provision of the
Plan, the Company or any 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.  For purposes of the Plan, the
engagement of a Holder as a Consultant to a Subsidiary shall be deemed to be
terminated in the event that the Subsidiary engaging such Holder ceases to
remain a Subsidiary following any merger, sale of stock or other corporate
transaction or event (including, without limitation, a spin-off).


1.45.        “Termination of Directorship”
shall mean the time when a Holder who is a Non-Employee Director ceases to be a
Director for any reason, including, without limitation, a termination by resignation,
failure to be elected, death or retirement. 
The Administrator, in its



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discretion, shall determine the effect of all
matters and questions relating to Termination of Directorship with respect to
Non-Employee Directors.


1.46.        “Termination of Employment” shall
mean the time when the employee-employer relationship between a Holder and the
Company or any Subsidiary is terminated for any reason, with or without cause,
including, without 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 Holder by the Company or any Subsidiary, and (b)
terminations which are followed by the simultaneous establishment of a consulting
relationship by the Company or a Subsidiary with the former employee.  The Administrator, in its discretion, shall
determine the effect of all matters and questions relating to Termination of
Employment, including, without limitation, the question of whether a
Termination of Employment resulted from a discharge for cause; provided, however, that, with respect to
Incentive Stock Options, unless the Administrator otherwise provides in the
terms of the Award Agreement or otherwise, 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.  For purposes of the Plan, a Holder’s employee-employer relationship
shall be deemed to be terminated in the event that the Subsidiary employing
such Holder ceases to remain a Subsidiary following any merger, sale of
stock or other corporate transaction or event (including, without limitation, a
spin-off).


ARTICLE II.


SHARES SUBJECT TO PLAN


2.1.          Shares Subject to Plan.


(a)           Subject to Section 11.3 and Section
2.1(b), the aggregate number of shares of Common Stock that may be issued or
transferred pursuant to Awards under the Plan initially shall be equal to the
1,600,000 shares (the “Initial Authorized Shares”).  In addition, in the event of any
cancellation, termination, expiration or forfeiture of any Prior Award on or
after the Effective Date and during the term of the Plan (including any
unvested shares of Common Stock that are forfeited by the holder or repurchased
by the Company pursuant to the terms of the applicable award agreement at a
price not greater than the original purchase price paid by the holder), the
number of shares of Common Stock that may be issued or transferred pursuant to
Awards under the Plan shall be automatically increased by one share for each
share subject to such Prior Award that is so cancelled, terminated, expired,
forfeited or repurchased (collectively, the “Cancelled Prior Award Shares”).  The aggregate number of shares of Common
Stock available for issuance under the Plan pursuant to this Section 2.1 shall
be reduced by 1.5 shares for each share of Common Stock delivered in settlement
of any Full Value Award.  In no event,
however, shall the aggregate number of Initial Authorized Shares and Cancelled
Prior Award Shares made available for issuance under the Plan exceed 2,000,000.


(b)           To the extent that an Award
terminates, expires, lapses or is forfeited for any reason, any shares of
Common Stock then subject to such Award shall again be



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available for the grant of an Award pursuant
to the Plan; provided, however, that the number of shares that shall again be
available for the grant of an Award pursuant to the Plan shall be increased by
1.5 shares for each share of Common Stock subject to a Full Value Award at the
time such Full Value Award terminates, expires, lapses or is forfeited for any
reason.  To the extent permitted by
applicable law or any exchange rule, shares of Common Stock issued in
assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by the Company or any Subsidiary shall not
be counted against shares of Common Stock available for grant pursuant to this
Plan.  If any shares of Restricted Stock
are surrendered by the Holder or repurchased by the Company pursuant to Section
7.4 or 7.5 hereof, such shares may again be granted or awarded hereunder,
subject to the limitations of Section 2.1(a). 
To the extent exercised, the full number of shares subject to an Option
or Stock Appreciation Right shall be counted for purposes of calculating the aggregate number of shares of Common Stock
available for issuance under the Plan as set forth in Section 2.1(a) and
for purposes of calculating the share limitation set forth in Section 2.3,
regardless of the actual number of shares issued or transferred upon any net
exercise of an Option (in which Common Stock is withheld to satisfy the
exercise price or taxes) or upon exercise of any Stock Appreciation Right for
Common Stock or cash.  The payment of
Dividend Equivalents in cash in conjunction with any outstanding Awards shall
not be counted against the shares available for issuance under the Plan.  Notwithstanding the provisions of this
Section 2.1(b), no shares of Common 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.


2.2.          Stock Distributed.  Any Common Stock distributed pursuant to an
Award shall consist, in whole or in part, of authorized and unissued Common
Stock, shares of Common Stock held in treasury or shares of Common Stock
purchased on the open market.


2.3.          Limitation on Number of Shares Subject to
Awards.  Notwithstanding any
provision in the Plan to the contrary, and subject to Article XI, the maximum
number of shares of Common Stock with respect to one or more Awards that may be
granted to any one Employee, Consultant or Non-Employee Director during any
calendar year shall not exceed the Award Limit. 
To the extent required by Section 162(m) of the Code, shares subject to
Awards which are canceled shall continue to be counted against the Award Limit.


ARTICLE III.


GRANTING OF AWARDS


3.1.          Award Agreement.  Each Award shall be evidenced by an Award
Agreement.  Award Agreements evidencing
Awards intended to qualify as performance-based compensation (as described in
Section 162(m)(4)(C) of the Code) shall contain such terms and conditions as
may be necessary to meet the applicable provisions of Section 162(m) of the
Code.  Award Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 422 of the Code.



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3.2.          Provisions Applicable to Covered
Employees.


(a)           The Committee, in its discretion, may
determine whether an Award is to qualify as performance-based compensation (as
described in Section 162(m)(4)(C) of the Code).


(b)           Notwithstanding anything in the Plan
to the contrary, the Committee may grant any Award to a Covered Employee,
including Restricted Stock the restrictions with respect to which lapse upon
the attainment of specified Performance Goals and any performance or incentive
award described in Article VIII that vests or becomes exercisable or payable
upon the attainment of one or more specified Performance Goals.


(c)           To the extent necessary to comply
with the performance-based compensation requirements of Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Articles VII and VIII 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 earlier time as may be
required under Section 162(m) of the Code), the Committee shall, in writing,
(i) designate one or more Covered Employees, (ii) select the Performance
Criteria applicable to the Fiscal Year or other designated fiscal period or
period of service (including any applicable adjustments), (iii) establish the
various performance targets, in terms of an objective formula or standard, and
amounts of such Awards, as applicable, which may be earned for such Fiscal Year
or other designated fiscal period or period of service, and (iv) specify the
relationship between Performance Criteria and the performance targets and the
amounts of such Awards, as applicable, to be earned by each Covered Employee
for such Fiscal Year or other designated fiscal period or period of
service.  Following the completion of
each Fiscal Year or other designated fiscal period or period of service, the
Committee shall certify in writing whether the applicable performance targets
have been achieved for such Fiscal Year or other designated fiscal period or
period of service.  In determining the
amount earned by a Covered Employee, the Committee shall have the right to
reduce (but not to increase) the amount payable at a given level of performance
to take into account additional factors that the Committee may deem relevant to
the assessment of individual or corporate performance for the Fiscal Year or
other designated fiscal period or period of service.


(d)           Furthermore, notwithstanding any
other provision of the Plan, any Award which is granted to a Covered Employee
and is intended to qualify as performance-based compensation (as described in
Section 162(m)(4)(C) of the Code) 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 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.


3.3.          Limitations Applicable to Section
16 Persons.  Notwithstanding any
other provision of the Plan, the Plan, and any Award granted or awarded to any
individual 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



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amendment to Rule 16b-3 of 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.


3.4.          Full Value Award Vesting
Limitations.


(a)           Full Value Awards made under the Plan
shall become vested over a period of not less than (i) three years from the
grant date of the Award for all Full Value Awards that vest based solely on
employment or service with the Company or one of its Subsidiaries, or (ii) one
year following the commencement of the Performance Period, for Full Value
Awards that vest based upon the attainment of Performance Goals or other
performance-based objectives; provided, however,
that, notwithstanding the foregoing, an aggregate number of shares of Common
Stock equal to 5% of the sum of the Initial Authorized Shares and the Cancelled
Prior Award Shares may be granted subject to Full Value Awards granted under
the Plan without respect to the minimum vesting provisions of this Section
3.4(a).


(b)           Following the grant of an Award, the
Administrator, in its discretion and on such terms and conditions it
determines, may provide that the period during which an Award vests or becomes
exercisable shall accelerate, in whole or in part, in connection with a change
in ownership or control of the Company or any Subsidiary (including without
limitation, a Change in Control) or a Holder’s Termination of Employment,
Termination of Directorship or Termination of Consultancy, as applicable, by
reason of the Holder’s retirement, death, disability or termination without
cause.  In addition, the Administrator
may accelerate the vesting or exercisability of Awards with respect to an
aggregate number of shares of Common Stock not exceeding five percent of the
sum of the Initial Authorized Shares and the Cancelled Prior Award Shares at
any time and for any reason.  Except as
permitted under this Section 3.4(b), the Administrator shall not accelerate the
vesting or exercisability of any Award after the grant date of such Award.


3.5.          At-Will Employment.  Nothing in the Plan or in any Award Agreement
hereunder shall confer upon any Holder any right to continue in the employ of,
or as a Consultant for, the Company or any Subsidiary, or as a Director of the
Company, or shall interfere with or restrict in any way the rights of the Company
and any Subsidiary, which rights are hereby expressly reserved, to discharge
any Holder at any time for any reason whatsoever, with or without cause, except
to the extent expressly provided otherwise in a written employment agreement
between the Holder and the Company and any Subsidiary.


ARTICLE IV.


GRANTING OF OPTIONS TO EMPLOYEES,

CONSULTANTS AND NON-EMPLOYEE DIRECTORS


4.1.          Eligibility.  Any Employee or Consultant selected by the
Administrator pursuant to Section 4.4(a)(i) shall be eligible to be
granted an Option.  Each Non-Employee
Director of the Company shall be eligible to be granted Options at the times
and in the manner set forth in Section 4.5 and as provided in Section 4.6.



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4.2.          Disqualification for Stock
Ownership.  No person may be granted
an Incentive Stock Option under the Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any then
existing Subsidiary Corporation or parent corporation (as defined in Section
424(e) of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.


4.3.          Qualification of Incentive Stock
Options.  No Incentive Stock Option
shall be granted to any person who is not an Employee of the Company or a
Subsidiary Corporation.


4.4.          Granting of Options to Employees
and Consultants.


(a)           The Administrator shall from time to
time, in its discretion, and, subject to applicable limitations of the Plan:


(i)            Select from among the Employees or
Consultants (including Employees or Consultants who have previously received
Awards under the Plan) such of them as in its opinion should be granted
Options;


(ii)           Subject to the Award Limit, determine
the number of shares to be subject to such Options granted to the selected
Employees or Consultants;


(iii)          Subject to Section 4.2 and Section
4.3, determine whether such Options are to be Incentive Stock Options or
Non-Qualified Stock Options and whether such Options are to qualify as
performance-based compensation (as described in Section 162(m)(4)(C) of the
Code); and


(iv)          Determine the terms and conditions of
such Options, consistent with the Plan; provided, however,
that the terms and conditions of Options intended to qualify as
performance-based compensation (as described in Section 162(m)(4)(C) of the
Code) shall include, but not be limited to, such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the Code.


(b)           Upon the selection of an Employee or
Consultant to be granted an Option, the Administrator shall instruct the
Secretary of the Company to issue the Option and may impose such conditions on
the grant of the Option as it deems appropriate.


(c)           Any Incentive Stock Option granted
under the Plan may be modified by the Administrator, with the consent of the
Holder, to disqualify such Option from treatment as an “incentive stock option”
under Section 422 of the Code.



 11
 








4.5.          Granting of Options to Non-Employee
Directors.  The Administrator shall
from time to time, in its discretion, and subject to applicable limitations of
the Plan:


(a)           Select from among the Non-Employee
Directors (including Non-Employee Directors who have previously received Awards
under the Plan) such of them as in its opinion should be granted Options;


(b)           Subject to the Award Limit, determine
the number of shares to be subject to such Options granted to the selected
Non-Employee Directors; and


(c)           Subject to the provisions of Article
V, determine the terms and conditions of such Options, consistent with the
Plan.


ARTICLE V.


TERMS OF OPTIONS


5.1.          Option Price.  The price per share of Common Stock subject
to each Option granted to Employees, Non-Employee Directors and Consultants
shall be set by the Administrator; provided, however,
that:


(a)           In the case of Incentive Stock
Options, such price shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date the Option is granted (or the date the Option
is modified, extended or renewed for purposes of Section 424(h) of the Code);


(b)           In the case of Incentive Stock
Options granted to an individual then owning (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary Corporation or parent
corporation thereof (as defined in Section 424(e) of the Code), such price
shall not be less than 110% of the Fair Market Value of a share of Common Stock
on the date the Option is granted (or the date the Option is modified, extended
or renewed for purposes of Section 424(h) of the Code); and


(c)           In the case of Non-Qualified Stock
Options, such price shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date the Option is granted.


5.2.          Option Term.  The term of an Option granted to an Employee,
Consultant or Non-Employee Director shall be set by the Administrator in its
discretion; provided, however, that the term shall
not be more than ten (10) years from the date the Option is granted, or five
(5) years from the date the Option is granted if the Option is an Incentive
Stock Option granted to an individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or any Subsidiary Corporation or parent
corporation thereof (as defined in Section 424(e) of the Code).  Except as limited by requirements of Section
409A or Section 422 of the Code and regulations and rulings thereunder, 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



 12
 








the Holder, or amend any other term or
condition of such Option relating to such a Termination of Employment,
Termination of Directorship or Termination of Consultancy.


5.3.          Option Vesting.


(a)           The period during which the right to
exercise, in whole or in part, an Option vests in the Holder shall be set by
the Administrator and the Administrator may determine that an Option may not be
exercised in whole or in part for a specified period after it is granted; provided, however, that, unless the Administrator otherwise
provides in the terms of the Award Agreement or otherwise, no Option granted to
a person subject to Section 16 of the Exchange Act shall be exercisable until
at least six months have elapsed following the date on which the Option was
granted.  At any time after grant of an
Option, the Administrator may, in its discretion and subject to whatever terms
and conditions it selects, accelerate the period during which an Option vests,
subject to Section 3.4(b).


(b)           No portion of an Option granted to an
Employee, Consultant or Non-Employee Director which is unexercisable at
Termination of Employment, Termination of Directorship or Termination of
Consultancy, as applicable, shall thereafter become exercisable, except as may
be otherwise provided by the Administrator either in the Award Agreement or by
action of the Administrator following the grant of the Option, subject to
Section 3.4(b).


(c)           To the extent that the aggregate fair
market value of stock with respect to which “incentive stock options” (within
the meaning of Section 422 of the Code, but without regard to Section 422(d) of
the Code) are exercisable for the first time by a Holder during any calendar
year under the Plan, and all other plans of the Company and any Subsidiary
Corporation or parent corporation thereof (as defined in Section 424(e) of the
Code), exceeds $100,000, the Options shall be treated as Non-Qualified Stock
Options to the extent required by Section 422 of the Code.  The rule set forth in the preceding sentence
shall be applied by taking Options and other “incentive stock options” into
account in the order in which they were granted.  For purposes of this Section 5.3(c), the fair
market value of stock shall be determined as of the time the Option or other “incentive
stock options” with respect to such stock is granted.


5.4.          Substitute Awards.  Notwithstanding the foregoing provisions of
this Article V to the contrary, in the case of an Option that is a Substitute
Award, the price per share of the shares subject to such Option may be less
than the Fair Market Value per share on the date of grant, provided,
that the excess of:  (a) the aggregate
Fair Market Value (as of the date such Substitute Award is granted) of the
shares subject to the Substitute Award, over (b) the aggregate exercise price
thereof does not exceed the excess of: 
(x) the aggregate fair market value (as of the time immediately
preceding the transaction giving rise to the Substitute Award, such fair market
value to be determined by the Administrator) of the shares of the predecessor
entity that were subject to the grant assumed or substituted for by the
Company, over (y) the aggregate exercise price of such shares.



 13















ARTICLE VI.


EXERCISE OF OPTIONS


6.1.                              Partial
Exercise.  An exercisable Option may
be exercised in whole or in part. 
However, an Option shall not be exercisable with respect to fractional
shares and the Administrator may require that, by the terms of the Option, a
partial exercise be with respect to a minimum number of shares.


6.2.                              Manner
of Exercise.  All or a portion of an
exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company, or such other person or entity
designated by the Administrator, or his, her or its office, as applicable:


(a)                                  A
written notice complying with the applicable rules established by the
Administrator stating that the Option, or a portion thereof, is exercised.  Such rules may provide that for
administrative convenience an Option may not be exercised during such period
(not exceeding 10 days) as is specified in advance by the Administrator.  The notice shall be signed by the Holder or
other person then entitled to exercise the Option or such portion of the
Option;


(b)                                 Such
representations and documents as the Administrator, in its discretion, deems
necessary or advisable to effect compliance with all applicable provisions of
the Securities Act and any other federal, state or foreign securities laws or
regulations.  The Administrator may, in
its discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer notices to agents and registrars;


(c)                                  In
the event that the Option shall be exercised pursuant to Section 11.1 by any
person or persons other than the Holder, appropriate proof of the right of such
person or persons to exercise the Option; and


(d)                                 Full
cash payment to the Secretary of the Company for the shares with respect to
which the Option, or portion thereof, is exercised.  However, the Administrator may, in its
discretion, (i)  allow payment, in whole or in part, through the delivery
of shares of Common Stock which have been owned by the Holder for at least six
months, duly endorsed for transfer to the Company with a Fair Market Value on
the date of delivery equal to the aggregate exercise price of the Option or
exercised portion thereof; (ii) allow payment, in whole or in part,
through the surrender of shares of Common Stock then issuable upon exercise of
the Option having a Fair Market Value on the date of Option exercise equal to
the aggregate exercise price of the Option or exercised portion thereof;
(iii) allow payment, in whole or in part, through the delivery of property
of any kind which constitutes good and valuable consideration; (iv) allow
payment, in whole or in part, through the delivery of a notice that the Holder
has placed a market sell order with a broker with respect to shares of Common
Stock then issuable upon exercise of the Option, and the broker timely pays a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or 



 14
 









(v) allow payment through any combination of the consideration
provided in the foregoing subparagraphs (i), (ii), (iii) and (iv); provided, however, that the payment in the manner prescribed
in the preceding paragraphs shall not be permitted to the extent that the
Administrator determines that payment in such manner shall result in an
extension or maintenance of credit, an arrangement for the extension of credit,
or a renewal or an extension of credit in the form of a personal loan to or for
any Director or executive officer of the Company that is prohibited by Section
13(k) of the Exchange Act or other applicable law.


6.3.                              Conditions
to Issuance of Stock Certificates. 
The Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:


(a)                                  The
admission of such shares to listing on all stock exchanges on which such class
of stock is then listed;


(b)                                 The
completion of any registration or other qualification of such shares under any
federal, state or foreign law, or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body
which the Administrator shall, in its discretion, deem necessary or advisable;


(c)                                  The
obtaining of any approval or other clearance from any federal, state or foreign
governmental agency which the Administrator shall, in its discretion, determine
to be necessary or advisable;


(d)                                 The
lapse of such reasonable period of time following the exercise of the Option as
the Administrator may establish from time to time for reasons of administrative
convenience; and


(e)                                  The
receipt by the Company of full payment for such shares, including payment of
any applicable withholding tax, which in the discretion of the Administrator
may be in the form of consideration used by the Holder to pay for such shares
under Section 6.2(d).


6.4.                              Rights
as Stockholders.  Holders shall not
be, nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such Holders.


6.5.                              Ownership
and Transfer Restrictions.  The
Administrator, in its discretion, may impose such restrictions on the ownership
and transferability of the shares purchasable upon the exercise of an Option as
it deems appropriate.  Any such
restriction shall be set forth in the respective Award Agreement and may be
referred to on the certificates evidencing such shares.  The Holder shall give the Company prompt
notice of any disposition of shares of Common Stock acquired by exercise of an
Incentive Stock Option within (a) two years from the date of granting
(including the date the Option is modified, extended or renewed for purposes of
Section 424(h) 



 15
 









of the Code) such Option to such Holder, or
(b) one year after the transfer of such shares to such Holder.


6.6.                              Additional
Limitations on Exercise of Options. 
Holders may be required to comply with any timing or other restrictions
with respect to the settlement or exercise of an Option, including a
window-period limitation, as may be imposed in the discretion of the Administrator.


ARTICLE VII.


AWARD OF RESTRICTED STOCK


7.1.                              Eligibility.  Subject to the Award Limit, Restricted Stock
may be awarded to any Employee, Consultant or Non-Employee Director who the
Administrator determines should receive such an Award.


7.2.                              Award
of Restricted Stock.


(a)                                  The
Administrator may from time to time, in its discretion:


(i)                                     Select
from among the Employees, Non-Employee Directors or Consultants (including
Employees, Non-Employee Directors or Consultants who have previously received
Awards under the Plan) such of them as in its opinion should be awarded
Restricted Stock; and


(ii)                                  Determine
the purchase price, if any, and other terms and conditions applicable to such
Restricted Stock, consistent with the Plan.


(b)                                 The
Administrator shall establish the purchase price, if any, and form of payment
for Restricted Stock; provided, however,
that such purchase price shall be no less than the par value of the Common
Stock to be purchased, unless otherwise permitted by applicable state law.  In all cases, legal consideration shall be
required for each issuance of Restricted Stock.


(c)                                  Upon
the selection of an Employee, Consultant or Non-Employee Director to be awarded
Restricted Stock, the Administrator shall instruct the Secretary of the Company
to issue such Restricted Stock and may impose such conditions on the issuance
of such Restricted Stock as it deems appropriate.


7.3.                              Rights
as Stockholders.  Subject to Section
7.4, upon delivery of the shares of Restricted Stock to the escrow holder
pursuant to Section 7.6, the Holder shall have, unless otherwise provided by
the Administrator, all the rights of a stockholder with respect to said shares,
subject to the restrictions in his or her Award Agreement, including the right
to receive all dividends and other distributions paid or made with respect to
the shares; provided, however,
that, in the discretion of the Administrator, any extraordinary distributions
with respect to the Common Stock shall be subject to the restrictions set forth
in Section 7.4.



 16
 









7.4.                              Restriction.  All shares of Restricted Stock issued under
the Plan (including any shares received by Holders thereof with respect to
shares of Restricted Stock as a result of stock dividends, stock splits or any
other form of recapitalization) shall, in the terms of each individual Award
Agreement, be subject to such restrictions as the Administrator shall provide,
which restrictions may include, without limitation, restrictions concerning
voting rights and transferability and restrictions based on duration of
employment, directorship or consultancy with the Company, Company performance
and individual performance; provided,
however, by action taken after the Restricted Stock is issued, the
Administrator may, on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by the terms of the
Award Agreement.  Restricted Stock may
not be sold or encumbered until all restrictions are terminated or expire.  If no consideration was paid by the Holder
upon issuance, a Holder’s rights in unvested Restricted Stock shall lapse, and
such Restricted Stock shall be surrendered to the Company without
consideration, upon Termination of Employment, Termination of Directorship, or
Termination of Consultancy, as applicable; provided,
however, that the Administrator in its discretion may provide that
such rights shall not lapse in the event of a Termination of Employment,
Termination of Directorship or Termination of Consultancy, as applicable,
following a Change in Control or because of the Holder’s retirement, death or
disability or termination without cause, or otherwise, subject to Section
3.4(b).


7.5.                              Repurchase
of Restricted Stock.  The
Administrator shall provide in the terms of each individual Award Agreement
that the Company shall have the right to repurchase from the Holder the
Restricted Stock then subject to restrictions under the Award Agreement
immediately upon a Termination of Employment, Termination of Directorship, or
Termination of Consultancy, as applicable, at a cash price per share equal to
the price paid by the Holder for such Restricted Stock; provided, however, that the Administrator
in its discretion may provide that such rights shall not lapse in the event of
a Termination of Employment, Termination of Directorship or Termination of
Consultancy, as applicable, following a Change in Control or because of the
Holder’s retirement, death or disability or termination without cause, or
otherwise, subject to Section 3.4(b).


7.6.                              Escrow.  The Secretary of the Company or such other
escrow holder as the Administrator may appoint shall retain physical custody of
each certificate representing Restricted Stock until all of the restrictions
imposed under the Award Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.


7.7.                              Legend.  In order to enforce the restrictions imposed
upon shares of Restricted Stock hereunder, the Administrator shall cause a
legend or legends to be placed on certificates representing all shares of
Restricted Stock that are still subject to restrictions under Award Agreements,
which legend or legends shall make appropriate reference to the conditions
imposed thereby.


7.8.                              Section
83(b) Election.  If a Holder makes an
election under Section 83(b) of the Code, or any successor section thereto, to
be taxed with respect to the Restricted Stock as of the date of transfer of the
Restricted Stock rather than as of the date or dates upon which the Holder
would otherwise be taxable under Section 83(a) of the Code, the Holder shall
deliver a copy of such election to the Company immediately after filing such
election with the Internal Revenue Service.



 17
 









ARTICLE VIII.


PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED
STOCK, STOCK PAYMENTS, RESTRICTED STOCK UNITS


8.1.                              Eligibility.  Subject to the Award Limit, one or more
Performance Awards, Dividend Equivalent Awards, Stock Payment Awards, Deferred
Stock Awards and/or Restricted Stock Unit Awards may be granted to any
Employee, Consultant or Non-Employee Director whom the Administrator determines
should receive such an Award.


8.2.                              Performance
Awards.


(a)                                  Any
Employee, Consultant or Non-Employee Director selected by the Administrator may
be granted one or more Performance Awards. 
The value of such Performance Awards may be linked to any one or more of
the Performance Criteria or other specific performance criteria determined
appropriate by the Administrator, in each case on a specified date or dates or
over any period or periods determined by the Administrator.  In making such determinations, the
Administrator shall consider (among such other factors as it deems relevant in
light of the specific type of award) the contributions, responsibilities and
other compensation of the particular Employee, Consultant or Non-Employee
Director.


(b)                                 Without
limiting Section 8.2(a), the Administrator may grant Performance Awards to any
Covered Employee in the form of a cash bonus payable upon the attainment of
objective Performance Goals which are established by the Administrator, in each
case on a specified date or dates or over any period or periods determined by
the Administrator.  Any such bonuses paid
to Covered Employees shall be based upon objectively determinable bonus
formulas established in accordance with the provisions of Section 3.2.  The maximum aggregate amount of all
Performance Awards granted to a Covered Employee under this Section 8.2(b)
during any calendar year  shall not
exceed the Award Limit.  Unless otherwise
specified by the Administrator at the time of grant, the Performance Criteria
with respect to a Performance Award payable to a Covered Employee shall be
determined on the basis of generally accepted accounting principles.


8.3.                              Dividend
Equivalents.  Any Employee,
Consultant or Non-Employee Director selected by the Administrator may be
granted Dividend Equivalents based on the dividends declared on Common Stock,
to be credited as of dividend payment dates, during the period between the date
a Full Value Award is granted and the date such Full Value Award vests, is
exercised, is distributed or expires, as determined by the Administrator.  Such Dividend Equivalents shall be converted
to cash or additional shares of Common Stock by such formula and at such time
and subject to such limitations as may be determined by the Administrator.


8.4.                              Stock
Payments.  Any Employee, Consultant
or Non-Employee Director selected by the Administrator may receive Stock
Payments in the manner determined from time to time by the Administrator.  The number of shares shall be determined by
the Administrator and may be based upon the Performance Criteria or other
specific performance criteria determined appropriate by the Administrator,
determined on the date such Stock Payment is made or on any date thereafter.



 18
 









8.5.                              Deferred
Stock.  Any Employee, Consultant or
Non-Employee Director selected by the Administrator may be granted an award of
Deferred Stock in the manner determined from time to time by the
Administrator.  The number of shares of
Deferred Stock shall be determined by the Administrator and may be linked 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 grant,
in each case on a specified date or dates or over any period or periods
determined by the Administrator.  Common
Stock underlying a Deferred Stock award will not be issued until the Deferred
Stock award has vested, pursuant to a vesting schedule or performance criteria
set by the Administrator.  Unless
otherwise provided by the Administrator, a Holder of Deferred Stock shall have
no rights as a Company stockholder with respect to such Deferred Stock until
such time as the Award has vested and the Common Stock underlying the Award has
been issued.


8.6.                              Restricted
Stock Units.  Any Employee, Consultant
or Non-Employee Director selected by the Administrator may be granted an award
of Restricted Stock Units in the manner determined from time to time by the
Administrator.  The Administrator is
authorized to make awards of Restricted Stock Units in such amounts and subject
to such terms and conditions as determined by the Administrator.  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, and may specify that such Restricted Stock Units 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, in each case on a
specified date or dates or over any period or periods determined by the
Administrator.  The Administrator shall
specify the distribution dates applicable to each award of Restricted Stock
Units which shall be no earlier than the vesting dates or events of the award
and may be determined at the election of the Employee, Consultant or
Non-Employee Director, subject to compliance with Section 409A of the
Code.  On the distribution dates, the
Company shall issue to the Holder one unrestricted, fully transferable share of
Common Stock for each Restricted Stock Unit distributed.


8.7.                              Term.  The term of a Performance Award, Dividend
Equivalent Award, Deferred Stock Award, Stock Payment Award and/or Restricted
Stock Unit Award shall be set by the Administrator in its discretion.


8.8.                              Exercise
or Purchase Price.  The Administrator
may establish the exercise or purchase price of a Performance Award, shares of
Deferred Stock, shares distributed as a Stock Payment Award or shares
distributed pursuant to a Restricted Stock Unit Award; provided, however, that such price shall
not be less than the par value of a share of Common Stock, unless otherwise
permitted by applicable state law.


8.9.                              Exercise
upon Termination of Employment, Termination of Consultancy or Termination of
Directorship.  A Performance Award,
Dividend Equivalent Award, Deferred Stock Award, Stock Payment Award and/or
Restricted Stock Unit Award is exercisable or distributable only while the
Holder is an Employee, Consultant or Non-Employee Director, as applicable; provided, however, that the Administrator
in its discretion may provide that the Performance Award, Dividend Equivalent
Award, Deferred Stock Award, Stock Payment Award and/or Restricted Stock Unit
Award may be exercised or distributed subsequent to a Termination 



 19
 









of Employment, Termination of Directorship or
Termination of Consultancy following a “change of control or ownership” (within
the meaning of Section 1.162-27(e)(2)(v) or any successor regulation thereto)
of the Company; and, provided, further,
that, except with respect to Performance Awards granted to Covered Employees,
the Administrator in its discretion may provide that Performance Awards may be
exercised or paid following a Termination of Employment, Termination of
Directorship or Termination of Consultancy, as applicable, following a Change
in Control, or because of the Holder’s retirement, death or disability or
termination without cause, or otherwise, subject to Section 3.4(b).


8.10.                        Form of
Payment.  Payment of the amount
determined under Section 8.2 or 8.3 above shall be in cash, in Common Stock or
a combination of both, as determined by the Administrator.  To the extent any payment under this Article
VIII is effected in Common Stock, it shall be made subject to satisfaction of
all provisions of Section 6.3.


ARTICLE IX.


STOCK APPRECIATION RIGHTS


9.1.                              Grant
of Stock Appreciation Rights.  A
Stock Appreciation Right may be granted to any Employee, Consultant or
Non-Employee Director selected by the Administrator.  A Stock Appreciation Right may be
granted:  (a) in connection and
simultaneously with the grant of an Option, or (b) independent of an
Option.  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.


9.2.                              Coupled
Stock Appreciation Rights.


(a)                                  A
Coupled Stock Appreciation Right (“CSAR”) shall be related to a
particular Option and shall be exercisable only when and to the extent the
related Option is exercisable.


(b)                                 A
CSAR may be granted to the Holder for no more than the number of shares subject
to the simultaneously granted Option to which it is coupled.


(c)                                  A
CSAR shall entitle the Holder (or other person entitled to exercise the Option
pursuant to the Plan) to surrender to the Company unexercised a portion of the
Option to which the CSAR relates (to the extent then exercisable pursuant to
its terms) and to receive from the Company in exchange therefor an amount
determined by multiplying (i) the difference obtained by subtracting the
exercise price per share of the CSAR from (ii) the Fair Market Value of a share
of Common Stock on the date of exercise of the CSAR by the number of shares of
Common Stock with respect to which the CSAR shall have been exercised, subject
to any limitations the Administrator may impose.


9.3.                              Independent
Stock Appreciation Rights.


(a)                                  An
Independent Stock Appreciation Right (“ISAR”) shall be unrelated to any
Option and shall have a term set by the Administrator in its discretion; provided,



 20
 









however, that the
term shall not be more than ten (10) years from the date the ISAR is
granted.  An ISAR shall be exercisable in
such installments as the Administrator may determine.  An ISAR shall cover such number of shares of
Common Stock as the Administrator may determine; provided,
however, that unless the Administrator otherwise provides in the
terms of the Award Agreement or otherwise, no ISAR granted to a person subject
to Section 16 of the Exchange Act shall be exercisable until at least six
months have elapsed following the date on which the ISAR was granted.  The exercise price per share of Common Stock
subject to each ISAR shall be set by the Administrator; provided,
that such exercise price per share shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date the ISAR is granted.  An ISAR is exercisable only while the Holder
is an Employee, Consultant or Non-Employee Director; provided,
that the Administrator may provide that ISARs may be exercised following a
Termination of Employment, Termination of Directorship or Termination of
Consultancy, as applicable, or following a Change in Control, or because of the
Holder’s retirement, death or disability or termination without cause, or
otherwise, subject to Section 3.4(b).


(b)                                 An
ISAR shall entitle the Holder (or other person entitled to exercise the ISAR
pursuant to the Plan) to exercise all or a specified portion of the ISAR (to
the extent then exercisable pursuant to its terms) and to receive from the
Company an amount determined by multiplying (i) the difference obtained by
subtracting the exercise price per share of the ISAR from the Fair Market Value
of a share of Common Stock on the date of exercise of the ISAR by (ii) the
number of shares of Common Stock with respect to which the ISAR shall have been
exercised, subject to any limitations the Administrator may impose.


9.4.                              Payment
and Limitations on Exercise.


(a)                                  Payment
of the amounts determined under Section 9.2(c) and 9.3(b) above shall be in
cash, shares of Common 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.  The Company shall
not be required to issue or deliver any certificate or certificates for shares
of stock issuable upon the exercise of any Stock Appreciation Right prior to
fulfillment of the conditions set forth in Section 6.3 above.


(b)                                 Holders
of Stock Appreciation Rights may be required to comply with any timing or other
restrictions with respect to the settlement or exercise of a Stock Appreciation
Right, including a window-period limitation, as may be imposed in the
discretion of the Administrator.


ARTICLE X.


ADMINISTRATION


10.1.                        Committee.  The Committee shall consist solely of two or
more Non-Employee Directors appointed by and holding office at the pleasure of
the Board.  To the extent Awards are
intended to comply with the qualified performance-based compensation requirements
of Section 162(m)(4)(C) of the Code and the requirements for the application of
Rule 16b-3, each member of the Committee shall qualify as both a “non-employee
director” as defined by Rule 16b-3 and an “outside director” for purposes of
Section 162(m) of the Code.  



 21
 









Appointment of Committee members shall be
effective upon acceptance of appointment. 
Committee members may resign at any time by delivering written notice to
the Board.  Vacancies in the Committee
may be filled by the Board.


10.2.                        Duties
and Powers of Committee.  It shall be
the duty of the Committee to conduct the general administration of the Plan in
accordance with its provisions.  The
Committee shall have the power to interpret the Plan and the Award Agreements,
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith, to interpret, amend or revoke any such
rules, to delegate authority in accordance with Section 10.5 and to amend any
Award Agreement provided that the rights or obligations of the Holder of the
Award that is the subject of any such Award Agreement are not affected
adversely.  Any such grant or award under
the Plan need not be the same with respect to each Holder.  Any such interpretations and rules with
respect to Incentive Stock Options shall be consistent with the provisions of
Section 422 of the Code.  In its
discretion, the Board may at any time and from time to time exercise any and
all rights and duties of the Committee under the Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any
regulations or rules issued thereunder, are required to be determined in the
discretion of the Committee.


10.3.                        Majority
Rule; Unanimous Written Consent.  The
Committee shall act by a majority of its members in attendance at a meeting at
which a quorum is present or by a memorandum or other written instrument signed
by all members of the Committee.


10.4.                        Compensation;
Professional Assistance; Good Faith Actions.  Members of the Committee shall receive such
compensation, if any, for their services as members as may be determined by the
Board.  All expenses and liabilities
which members of the Committee incur in connection with the administration of the
Plan shall be borne by the Company.  The
Committee may, with the approval of the Board, employ attorneys, consultants,
accountants, appraisers, brokers or other persons.  The Committee, the Company and the Company’s
officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons.  All
actions taken and all interpretations and determinations made by the Committee
or the Board in good faith shall be final and binding upon all Holders, the
Company and all other interested persons. 
No members of the Committee or Board shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan or Awards, and all members of the Committee and the Board shall be fully
protected by the Company in respect of any such action, determination or
interpretation.


10.5.                        Delegation
of Authority to Grant Awards.  To the
extent permitted by applicable law, the Committee may, but need not, delegate
from time to time some or all of its authority to grant Awards under the Plan
to a committee or committees consisting of one or more members of the Board
and/or one or more officers of the Company; provided,
however, that the authority to grant awards to the following
individuals may not be delegated:  (a)
individuals who are subject to the reporting rules under Section 16(a) of the
Exchange Act, (b) individuals who are Covered Employees, and (c) individuals
who are officers of the Company who are delegated authority by the Committee
hereunder.  Any delegation hereunder
shall be subject to the restrictions and limits that the Committee specifies at
the time of such delegation of authority and may be rescinded at any time by
the Committee.  At all times, any
committee appointed under this Section 10.5 shall serve in such capacity at the
pleasure of the Committee.



 22
 









ARTICLE XI.


MISCELLANEOUS PROVISIONS


11.1.                        Transferability
of Awards.


(a)                                  Except
as otherwise provided in Section 11.1(b):


(i)                                     No
Award under the Plan may be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent and distribution or, subject
to the consent of the Administrator, pursuant to a DRO, 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;


(ii)                                  No
Award or interest or right therein shall be liable for the debts, contracts or
engagements of the Holder or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except
to the extent that such disposition is permitted by the preceding sentence; and


(iii)                               During
the lifetime of the Holder, only the Holder may exercise an Option or other
Award (or any portion thereof) granted to him under the Plan, unless it has
been disposed of pursuant to a DRO; after the death of the Holder, any
exercisable portion of an Option or other Award may, prior to the time when
such portion becomes unexercisable under the Plan or the applicable Award
Agreement, be exercised by his personal representative or by any person
empowered to do so under the deceased Holder’s will or under the then
applicable laws of descent and distribution.


(b)                                 Notwithstanding Section 11.1(a), the
Administrator, in its discretion, may determine to permit a Holder to transfer
a Non-Qualified Stock Option to any one or more Permitted Transferees (as
defined below), subject to the following terms and conditions:  (i) a Non-Qualified Stock Option 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 Non-Qualified Stock Option which is transferred to a
Permitted Transferee shall continue to be subject to all the terms and
conditions of the Non-Qualified Stock Option as applicable to the original
Holder (other than the ability to further transfer the Non-Qualified Stock
Option); and (iii) the Holder 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, state and foreign securities laws and (C) evidence
the transfer.  For purposes of this
Section 11.1(b), “Permitted Transferee” shall mean, 



 23
 









with respect to a Holder, any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, 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 Holder’s
household (other than a tenant or employee), a trust in which these persons (or
the Holder) control the management of assets, and any other entity in which
these persons (or the Holder) own more than fifty percent of the voting
interests, or any other transferee specifically approved by the Administrator
after taking into account any federal, state, local and foreign tax and
securities laws applicable to transferable Non-Qualified Stock Options.


11.2.                        Amendment,
Suspension or Termination of the Plan. 
Except as otherwise provided in this Section 11.2, the Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Board, or the Compensation Committee of
the Board.  However, without approval of
the Company’s stockholders given within twelve (12) months before or after the
action by the Administrator, no action of the Administrator may, except as
provided in Section 11.3, (i) increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under the Plan, (ii) decrease,
directly or indirectly, the exercise price of any outstanding Option or Stock
Appreciation Right granted under the Plan (including any action having the same
effect, such as a cancellation of an underwater Option or Stock Appreciation
Right and regrant of a new Award at a lesser exercise price or the repurchase
of an Option or Stock Appreciation Right for an amount greater than the
intrinsic value of the Option or Stock Appreciation Right), or (iii) result in
a material change in eligibility requirements. 
Except as provided in Section 11.12, no amendment, suspension or
termination of the Plan shall, without the consent of the Holder, alter or
impair any rights or obligations under any Award theretofore granted or
awarded, unless the Award itself otherwise expressly so provides.  No Awards may be granted or awarded during
any period of suspension or after termination of the Plan, and in no event may
any Award be granted under the Plan after the first to occur of the following
events:


(a)                                  The
expiration of ten (10) years from the date the Plan is adopted by the Board; or


(b)                                 The
expiration of ten (10) years from the date the Plan is first approved by the
Company’s stockholders.


11.3.                        Changes
in Common Stock or Assets of the Company, Acquisition or Liquidation of the
Company and Other Corporate Events.


(a)                                  Subject
to Section 11.3(e), in the event of any dividend or other distribution (whether
in the form of cash, Common Stock, other securities or other property),
recapitalization, reclassification, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase,
liquidation, dissolution, or sale, transfer, exchange or other disposition of
all or substantially all of the assets of the Company, or exchange of Common
Stock or other securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event that affects the Common Stock, then the
Administrator shall equitably adjust any or all of the following in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan or with respect to an Award:



 24
 









(i)                                     The
number and kind of shares of Common Stock (or other securities or property) with
respect to which Awards may be granted or awarded (including, without
limitation, adjustments of the limitations in Section 2.1 on the maximum number
and kind of shares which may be issued under the Plan, adjustments of the Award
Limit, and adjustments of the manner in which shares subject to Full Value
Awards will be counted);


(ii)                                  The
number and kind of shares of Common Stock (or other securities or property)
subject to outstanding Awards; and


(iii)                               The
grant or exercise price with respect to any Award.


(b)                                 Subject
to Sections 11.3(c) and 11.3(e), in the event of any transaction or event
described in Section 11.3(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, or of changes in applicable laws,
regulations or accounting principles, the Administrator, in its 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 Holder’s request, is hereby
authorized to take any one or more of the following actions whenever the
Administrator determines that such action is appropriate in order to prevent
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:


(i)                                     To
provide for the purchase of any such Award for an amount of cash equal to the
amount that could have been attained upon the exercise of such Award or
realization of the Holder’s rights had such Award been currently exercisable or
payable or fully vested;


(ii)                                  To
provide for the replacement of such Award with other rights or property
selected by the Administrator in its discretion having an aggregate value not
exceeding the amount that could have been attained upon the exercise of such
Award or realization of the Holder’s rights had such Award been currently
exercisable or payable or fully vested;


(iii)                               To
provide that the Award cannot vest, be exercised or become payable after such
event;


(iv)                              To
provide that such Award shall be exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in Section 5.3 or the provisions of
such Award;


(v)                                 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 



 25
 









successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices;


(vi)                              To
make adjustments in the number and type of shares of Common Stock (or other
securities or property) subject to outstanding Awards, and/or in the terms and
conditions of (including the grant, exercise or purchase price), and the
criteria included in, outstanding options, rights and awards and options,
rights and awards which may be granted in the future; and


(vii)                           To
provide that, for a specified period of time prior to such event, the
restrictions imposed under an Award Agreement upon some or all shares of
Restricted Stock, Restricted Stock Units or Deferred Stock may be terminated,
and, in the case of Restricted Stock, some or all shares of such Restricted
Stock may cease to be subject to repurchase under Section 7.5 or
forfeiture under Section 7.4 after such event.


(c)                                  In
the event of a Change in Control, then: (i) any surviving or acquiring
corporation shall assume the Awards outstanding under the Plan or shall
substitute similar Awards (including an option to acquire the same
consideration paid to the stockholders of the Company in the Change in Control
transaction) for those outstanding under the Plan, (ii) in the event that any
surviving or acquiring corporation does assume such Awards or substitute
similar Awards for those outstanding under the Plan, then, with respect to a
Holder’s Award, upon such Holder’s Voluntary Termination with Good Reason (as
defined below) or such Holder’s Involuntary Termination without Cause (as
defined below), the vesting of such Award and the time during which such Award
may be exercised shall be accelerated upon the occurrence of such event, or
(iii) in the event any surviving or acquiring corporation refuses to assume
such Awards or to substitute similar Awards for those outstanding under the
Plan, then, with respect to Awards held by persons then performing services as
Employees, Directors or Consultants, the vesting of such Awards and the time
during which such Awards may be exercised shall be accelerated prior to such
event and the Awards terminated if not exercised after such acceleration and at
or prior to such event, and  with respect
to any other Awards outstanding under the Plan, such Awards shall be terminated
if not exercised prior to such event. 
The term “Voluntary Termination with Good Reason” shall mean a
Termination of Employment, Termination of Directorship or Termination of
Consultancy by resignation, with Good Reason, as an Employee, Director or
Consultant of the Company within one month prior to the Change in Control, or a
Termination of Employment, Termination of Directorship or Termination of
Consultancy by resignation, with Good Reason, as an Employee, Director or
Consultant, or as an employee, director or consultant, of the surviving or
acquiring corporation which assumed the Holder’s Award or substituted a similar
Award for the Holder’s Award within thirteen (13) months after a Change in
Control.  The term “Good Reason”
means with respect to the Holder of an Award, any of the following:  the reduction of the Holder’s rate of
compensation as in effect immediately prior to the Change in Control; the
failure to provide a package of welfare benefit plans which, taken as a whole,
provide substantially similar benefits to those in which the Holder was
entitled to participate immediately prior to the Change in Control (except that
employee contributions may be raised to the extent of any cost increases
imposed by third parties); a change in the Holder’s responsibilities,
authority, title or office resulting in diminution of position, excluding for
this purpose an isolated, insubstantial and inadvertent action not taken in 



 26
 









bad faith which is remedied by the Company
promptly after notice thereof is given by the Holder; a request that the Holder
relocate to a worksite that is more than thirty-five (35) miles from the Holder’s
prior worksite, unless the Holder accepts such relocation opportunity; the
failure or refusal of a successor to the Company to assume the Company’s
obligations under the Award Agreement; or the material breach by the Company or
any successor to the Company of any of the material provisions of the Holder’s
Award.  The term “Involuntary
Termination without Cause” means the Termination of Employment, Termination
of Directorship or Termination of Consultancy by involuntary termination,
without Cause, as an Employee, Director or Consultant within one month prior to
a Change in Control or (ii) the Termination of Employment, Termination of
Directorship or Termination of Consultancy by involuntary termination, without
Cause, as an Employee, Director or Consultant, or as an employee, director or
consultant of the surviving or acquiring corporation which assumed the Holder’s
Award or substituted a similar Award for the Holder’s Award, within thirteen
(13) months after a Change in Control. 
The term “Cause” means with respect to the Holder of an Award,
any of the following: the Holder’s theft, dishonesty, or falsification of
documents or records; the Holder’s improper use or disclosure of the Company’s
confidential or proprietary information; any action by the Holder which has a detrimental
effect on the Company’s reputation or business; the Holder’s failure or
inability to perform any reasonable assigned duties after written notice from
the Company of, and a reasonable opportunity to cure, such failure or
inability; any material breach by the Holder of any employment or service
agreement between the Holder and the Company which breach is not cured pursuant
to the terms of such agreement; or the Holder’s conviction (including any plea
of guilty or nolo contendere) of any criminal act which impairs the Holder’s
ability to perform his or her duties with the Company.


(d)                                 Subject
to Sections 11.3(e) and 3.2, the Administrator may, in its discretion, include
such further provisions and limitations in any Award, agreement or certificate,
as it may deem equitable and in the best interests of the Company.


(e)                                  With
respect to Awards which are granted to Covered Employees and are intended to
qualify as performance-based compensation under Section 162(m)(4)(C), no
adjustment or action described in this Section 11.3 or in any other provision
of the Plan shall be authorized to the extent that such adjustment or action
would cause such Award to fail to so qualify under Section 162(m)(4)(C), or any
successor provisions thereto.  No
adjustment or action described in this Section 11.3 or in any other provision
of the Plan shall be authorized to the extent that such adjustment or action
would cause the Plan to violate Section 422(b)(1) of the Code.  Furthermore, no such adjustment or action
shall be authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Administrator determines that the Award is
not to comply with such exemptive conditions. 
The number of shares of Common Stock subject to any Award shall always
be rounded down to the next whole number.


(f)                                    The
existence of the Plan, the Award Agreement and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Company or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to
or 



 27
 









affect the Common Stock or the rights thereof
or which are convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.


(g)                                 No
action shall be taken under this Section 11.3 which shall cause an Award to
fail to comply with Section 409A of the Code or the Treasury Regulations
thereunder, to the extent applicable to such Award.


11.4.                        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.  No Awards may be granted or awarded prior to
such stockholder approval.  In addition,
if the Board determines that Awards other than Options or Stock Appreciation
Rights which may be granted to Covered Employees 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.


11.5.                        Tax
Withholding.  The Company or any
Subsidiary shall have the authority and the right to deduct or withhold, or
require a Holder to remit to the Company, an amount sufficient to satisfy
federal, state, local and foreign taxes (including the Holder’s FICA
obligation) required by law to be withheld with respect to any taxable event concerning
a Holder arising as a result of this Plan. 
The Administrator may in its discretion and in satisfaction of the
foregoing requirement allow a Holder to elect to have the Company withhold
shares of Common Stock otherwise issuable under an Award (or allow the return
of shares of Common 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 Common Stock which may
be withheld with respect to the issuance, vesting, exercise or payment of any
Award (or which may be repurchased from the Holder of such Award within six
months (or such other period as may be determined by the Administrator) after
such shares of Common Stock were acquired by the Holder from the Company) in
order to satisfy the Holder’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.


11.6.                        Prohibition
on Repricing.  Subject to Section
11.3, the Administrator shall not, without the approval of the stockholders of
the Company, authorize the amendment of any outstanding Award to reduce its
price per share.  Furthermore, no Award
shall be canceled and replaced with the grant of an Award having a lesser price
per share without the further approval of stockholders of the Company.  Subject to Section 11.2, the Administrator
shall have the authority, without the approval of the stockholders of the
Company, to amend any outstanding award to increase the price per share or to
cancel and replace an Award with the grant of an Award having a price per share
that is greater than or equal to the price per share of the original Award.



 28
 









11.7.                        Forfeiture
Provisions.  Pursuant to its general
authority to determine the terms and conditions applicable to Awards under the
Plan, the Administrator shall have the right to provide, in the terms of Awards
made under the Plan, or to require a Holder to agree by separate written
instrument, that:  (a)(i) any proceeds,
gains or other economic benefit actually or constructively received by the
Holder upon any receipt or exercise of the Award, or upon the receipt or resale
of any Common Stock underlying the Award, must be paid to the Company, and (ii)
the Award shall terminate and any unexercised portion of the Award (whether or
not vested) shall be forfeited, if (b)(i) a Termination of Employment,
Termination of Directorship or Termination of Consultancy occurs prior to a
specified date, or within a specified time period following receipt or exercise
of the Award, or (ii) the Holder at any time, or during a specified time
period, engages in any activity in competition with the Company, or which is
inimical, contrary or harmful to the interests of the Company, as further
defined by the Administrator or (iii) the Holder incurs a Termination of
Employment, Termination of Directorship or Termination of Consultancy for “cause”
(as such term is defined in the discretion of the Administrator, or as set
forth in a written agreement relating to such Award between the Company and the
Holder).


11.8.                        Effect
of Plan upon Other Compensation Plans. 
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary.  Nothing in the Plan shall be construed to
limit the right of the Company or any Subsidiary:  (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the Company
or any Subsidiary, or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including without limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm or association.


11.9.                        Compliance
with Laws.  The Plan, the granting
and vesting of Awards under the Plan and the issuance and delivery of shares of
Common Stock and the payment of money under the Plan or under Awards granted or
awarded hereunder are subject to compliance with all applicable federal, state,
local and foreign laws, rules and regulations (including but not limited to
federal, state and foreign securities law and margin requirements) and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith.  Any securities delivered
under the Plan shall be subject to such restrictions, and the person acquiring
such securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable
to assure compliance with all applicable legal requirements.  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 laws, rules and regulations.


11.10.                  Titles.  Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan.


11.11.                  Governing Law.  The Plan and any agreements hereunder shall
be administered, interpreted and enforced under the internal laws of the State
of Delaware without regard to conflicts of laws thereof.



 29
 









11.12.                  Section
409A.  To the extent that the
Administrator determines that any Award granted under the Plan is subject to
Section 409A of the Code, the Award Agreement evidencing such Award shall
incorporate the terms and conditions required by Section 409A of the Code.  To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the Effective Date. 
Notwithstanding any provision of the Plan to the contrary, in the event
that following the Effective Date the Administrator determines that any Award
may be subject to Section 409A of the Code and related Department of Treasury
guidance (including such Department of Treasury guidance as may be issued after
the Effective Date), the Administrator may adopt such amendments to the Plan
and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or
take any other actions, that the Administrator determines are necessary or
appropriate to (a) exempt the Award from Section 409A of the Code and/or
preserve the intended tax treatment of the benefits provided with respect to
the Award, or (b) comply with the requirements of Section 409A of the Code and
related Department of Treasury guidance.


*  *  * 
*  *


I hereby certify that the
foregoing First Consulting Group, Inc. 2007 Equity Incentive Plan was duly
adopted by the Board of Directors of First Consulting Group, Inc. on                        ,
2007.


Executed on this             
day of                    ,
2007. 


	
  

  	
   

  
	
   

  	
  Corporate Secretary

  



 


*  *  * 
*  *


I hereby certify that the
foregoing First Consulting Group, Inc. 2007 Equity Incentive Plan was approved
by the stockholders of First Consulting Group, Inc. on                               ,
2007.


Executed on this              
day of                       ,
2007.


	
  

  	
   

  
	
   

  	
  Corporate Secretary

  



 



 30