EXHIBIT 10.24

                             CPI INTERNATIONAL, INC.
                   2006 EQUITY AND PERFORMANCE INCENTIVE PLAN

     CPI INTERNATIONAL, INC. (formerly CPI Holdco, Inc.), a corporation existing
under the laws of the State of Delaware (the "COMPANY"), hereby establishes and
adopts the following 2006 Equity and Performance Incentive Plan (the "PLAN").
Certain capitalized terms used in the Plan are defined in Article II.

                                    RECITALS

     WHEREAS, the Company desires to encourage high levels of performance by
those individuals who are key to the success of the Company, to attract new
individuals who are highly motivated and who are expected to contribute to the
success of the Company and to encourage such individuals to remain as directors,
employees, consultants and/or advisors of the Company and its Affiliates by
increasing their proprietary interest in the Company's growth and success; and

     WHEREAS, to attain these ends, the Company has formulated the Plan embodied
herein to authorize the granting of Awards to Participants whose judgment,
initiative and efforts are or have been or are expected to be responsible for
the success of the Company.

     NOW, THEREFORE, the Company hereby constitutes, establishes and adopts the
following Plan and agrees to the following provisions:

                                    ARTICLE I
                               PURPOSE OF THE PLAN

     1.1 Purpose. The purpose of the Plan is to assist the Company and its
Affiliates in attracting and retaining selected individuals to serve as
directors, employees, consultants and/or advisors of the Company who are
expected to contribute to the Company's success and to achieve long-term
objectives which will inure to the benefit of all stockholders of the Company
through the additional incentives inherent in the Awards hereunder.

                                   ARTICLE II
                                   DEFINITIONS

     2.1 "AFFILIATE" shall mean (i) any person or entity that directly, or
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company (including any Parent or Subsidiary) or (ii)
any entity in which the Company has a significant equity interest, as determined
by the Committee.

     2.2 "APPLICABLE LAWS" means the legal requirements relating to the
administration of and issuance of securities under stock incentive plans,
including, without limitation, the requirements of state corporations law,
federal and state securities law, federal and state tax law, and the
requirements of any stock exchange or quotation system upon which the Shares may
then be listed or quoted. For all purposes of this Plan, references to statutes
and regulations shall be deemed to include any successor statutes and
regulations, to the extent reasonably appropriate as determined by the
Committee.


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     2.3 "AWARD" shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Award, Dividend Equivalent, Other Stock Unit Award or
any other right, interest or option relating to Shares or other property
(including cash) granted pursuant to the provisions of the Plan.

     2.4 "AWARD AGREEMENT" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted by the Committee hereunder.

     2.5 "BOARD" shall mean the board of directors of the Company.

     2.6 "CAUSE" shall have the meaning set forth in a Participant's employment
or consulting agreement with the Company (if any), or if not defined therein,
shall mean (i) acts or omissions by the Participant which constitute intentional
material misconduct or a knowing violation of a material policy of the Company
or any of its subsidiaries, (ii) the Participant personally receiving a benefit
in money, property or services from the Company or any of its subsidiaries or
from another person dealing with the Company or any of its subsidiaries, in
material violation of applicable law or Company policy, (iii) an act of fraud,
conversion, misappropriation, or embezzlement by the Participant or his
conviction of, or entering a guilty plea or plea of no contest with respect to,
a felony, or the equivalent thereof (other than DUI), or (iv) any deliberate and
material misuse or deliberate and material improper disclosure of confidential
or proprietary information of the Company.

     2.7 "CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:

          (i) The direct or indirect acquisition by an unrelated "Person" or
          "Group" of "Beneficial Ownership" (as such terms are defined below) of
          more than 50% of the voting power of the Company's issued and
          outstanding voting securities in a single transaction or a series of
          related transactions;

          (ii) The direct or indirect sale or transfer by the Company of
          substantially all of its assets to one or more unrelated Persons or
          Groups in a single transaction or a series of related transactions;

          (iii) The merger, consolidation or reorganization of the Company with
          or into another corporation or other entity in which the Beneficial
          Owners of more than 50% of the voting power of the Company's issued
          and outstanding voting securities immediately before such merger or
          consolidation do not own more than 50% of the voting power of the
          issued and outstanding voting securities of the surviving corporation
          or other entity immediately after such merger, consolidation or
          reorganization; or

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

For purposes of determining whether a Change of Control has occurred, the
following Persons and Groups shall not be deemed to be "unrelated": (A) such
Person or Group directly or indirectly has


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Beneficial Ownership of more than 50% of the issued and outstanding voting power
of the Company's voting securities immediately before the transaction in
question, (B) the Company has Beneficial Ownership of more than 50% of the
voting power of the issued and outstanding voting securities of such Person or
Group, (C) more than 50% of the voting power of the issued and outstanding
voting securities of such Person or Group are owned, directly or indirectly, by
Beneficial Owners of more than 50% of the issued and outstanding voting power of
the Company's voting securities immediately before the transaction in question
or (D) any investment fund(s) that are Affiliates of Cypress Associates II LLC.
The terms "Person," "Group," "Beneficial Owner," and "Beneficial Ownership"
shall have the meanings used in the Exchange Act.

     2.8 "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.

     2.9 "COMMITTEE" shall mean the Committee (or other body) constituted under
Section 4.2 to administer this Plan.

     2.10 "COMPANY" has the meaning set forth in introductory paragraph of the
Plan.

     2.11 "CONSULTANT" means any person, including an advisor, who (i) is a
natural person, (ii) provides bona fide services to the Company or a Parent or
Subsidiary, and (iii) provides services that are not in connection with the
offer or sale of securities in a capital-raising transaction, and that do not
directly or indirectly promote or maintain a market for the securities of the
Company; provided that the term 'Consultant' does not include (i) Employees or
(ii) Directors who are paid only a director's fee by the Company or who are not
compensated by the Company for their services as Directors.

     2.12 "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means that
the employment, director or consulting relationship is not interrupted or
terminated by the Company, any Parent or Subsidiary, or by the Employee,
Director or Consultant. Continuous Status as an Employee, Director or Consultant
will not be considered interrupted in the case of: (i) any leave of absence
approved by the Company (and, but only to the extent required by Applicable
Laws, the Committee), including sick leave, military leave, or any other
personal leave, provided, that for purposes of Incentive Stock Options, any such
leave may not exceed 90 days, unless reemployment upon the expiration of such
leave is guaranteed by contract (including certain Company policies) or statute;
(ii) transfers between locations of the Company or between the Company, its
Parent, its Subsidiaries or its successor; or (iii) in the case of an Award
other than an Incentive Stock Option, the ceasing of a person to be an Employee
while such person remains or becomes a Director or Consultant, the ceasing of a
person to be a Director while such person remains or becomes an Employee or
Consultant or the ceasing of a person to be a Consultant while such person
remains or becomes an Employee or Director.

     2.13 "COVERED EMPLOYEE" shall mean a "COVERED EMPLOYEE" within the meaning
of Section 162(m)(3) of the Code, or any successor provision thereto.

     2.14 "DIRECTOR" shall mean a non-employee member of the Board or a
non-employee member of the board of directors of a Parent or Subsidiary.

     2.15 "DISABILITY" shall mean total and permanent disability as defined in
Section 22(e)(3) of the Code.

     2.16 "DIVIDEND EQUIVALENTS" shall have the meaning set forth in Section
12.5.


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     2.17 "EMPLOYEE" shall mean any employee of the Company or any Parent or
Subsidiary.

     2.18 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 and the
rules promulgated thereunder, in each case as amended.

     2.19 "FAIR MARKET VALUE" shall mean, with respect to any property other
than Shares, the market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee. The Fair
Market Value of Shares as of any date shall be determined as follows:

          (i) If the Shares are listed on any established stock exchange or a
          national market system, including without limitation, the National
          Market System of NASDAQ, the Fair Market Value of a Share will be (i)
          the closing sales price for such Shares (or the closing bid, if no
          sales are reported) as quoted on that system or exchange (or the
          system or exchange with the greatest volume of trading in Shares) on
          the last market trading day prior to the day of determination or (ii)
          any sales price for such Shares (or the closing bid, if no sales are
          reported) as quoted on that system or exchange (or the system or
          exchange with the greatest volume of trading in Shares) on the day of
          determination, as the Committee may select, in each case as reported
          in the Wall Street Journal or any other source the Committee considers
          reliable.

          (ii) If the Shares are quoted on the NASDAQ System (but not on the
          NASDAQ National Market System) or are regularly quoted by recognized
          securities dealers but selling prices are not reported, the Fair
          Market Value of a Share will be the mean between the high bid and low
          asked prices for the Shares on (i) the last market trading day prior
          to the day of determination or (ii) the day of determination, as the
          Committee may select, in each case as reported in the Wall Street
          Journal or any other source the Committee considers reliable.

          (iii) If the Shares are not traded as set forth above, the Fair Market
          Value will be determined in good faith by the Committee with reference
          to the earnings history, book value and prospects of the Company in
          light of market conditions generally, and any other factors the
          Committee considers appropriate, such determination by the Committee
          to be made in a manner consistent with Proposed Regulation Section
          1.409A-1(b)(5)(iv) or successor IRS guidance, and to be final,
          conclusive and binding.

     2.20 "FAMILY MEMBER" means 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
Participant's household (other than a tenant or employee), a trust in which
these persons (or the Participant) control the management of assets, and any
other entity in which these persons (or the Participant) own more than 50
percent of the voting interests.

     2.21 "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     2.22 "LIMITATIONS" shall have the meaning set forth in Section 3.2.


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     2.23 "OPTION" shall mean any right granted to a Participant under the Plan
allowing such Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.

     2.24 "OTHER STOCK UNIT AWARD" shall have the meaning set forth in Section
8.1.

     2.25 "PARENT" means a "parent corporation" with respect to the Company,
whether now or later existing, as defined in Section 424(e) of the Code.

     2.26 "PARTICIPANT" shall mean an Employee, Director or Consultant who is
selected by the Committee to receive an Award under the Plan.

     2.27 "PAYEE" shall have the meaning set forth in Section 13.1.

     2.28 "PERFORMANCE AWARD" shall mean any Award of Performance Shares or
Performance Units granted pursuant to Article IX.

     2.29 "PERFORMANCE PERIOD" shall mean that period established by the
Committee at the time any Performance Award is granted or at any time thereafter
during which any performance goals specified by the Committee with respect to
such Award are to be measured.

     2.30 "PERFORMANCE SHARE" shall mean any grant pursuant to Article IX of a
unit valued by reference to a designated number of Shares, which value may be
paid to the Participant by delivery of such property as the Committee shall
determine, including cash, Shares, other property, or any combination thereof,
upon achievement of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.

     2.31 "PERFORMANCE UNIT" shall mean any grant pursuant to Article IX of a
unit valued by reference to a designated amount of property (including cash)
other than Shares, which value may be paid to the Participant by delivery of
such property as the Committee shall determine, including cash, Shares, other
property, or any combination thereof, upon achievement of such performance goals
during the Performance Period as the Committee shall establish at the time of
such grant or thereafter.

     2.32 "PRIOR PLAN" shall mean, collectively, the Company's 2000 Stock Option
Plan and 2004 Stock Incentive Plan, each as amended.

     2.33 "RESTRICTED STOCK" shall mean any Share issued with the restriction
that the holder may not sell, transfer, pledge or assign such Share and with
such other restrictions as the Committee, in its sole discretion, may impose
(including any restriction on the right to vote such Share and the right to
receive any dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.

     2.34 "RESTRICTED PERIOD" shall have the meaning set forth in Section 7.1.

     2.35 "RESTRICTED STOCK AWARD" shall have the meaning set forth in Section
7.1.

     2.36 "SHARES" shall mean the shares of common stock of the Company, par
value $0.01 per share.

     2.37 "STOCK APPRECIATION RIGHT" shall mean any right granted to a
Participant pursuant to Article VI.


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     2.38 "SUBSIDIARY" shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Award, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.

     2.39 "SUBSTITUTE AWARDS" shall mean Awards granted or Shares issued by the
Company in assumption of, or in substitution or exchange for, awards previously
granted, or the right or obligation to make future awards, by a company or other
entity acquired by the Company or any Subsidiary or with which the Company or
any Subsidiary combines.

                                   ARTICLE III
                           SHARES SUBJECT TO THE PLAN

     3.1 Number of Shares.

          (a) Subject to adjustment as provided in Section 12.2, a total of
1,400,000 Shares shall be authorized for grant under the Plan, plus any Shares
subject to awards granted under the Prior Plan, which such awards are forfeited,
expire or otherwise terminate without issuance of Shares, or are settled for
cash or otherwise do not result in the issuance of Shares, on or after the
effective date of this Plan.

          (b) If any Shares subject to an Award or to an award under the Prior
Plan are forfeited, expire or otherwise terminate without issuance of such
Shares, or any Award or award under the Prior Plan is settled for cash or
otherwise does not result in the issuance of all or a portion of the Shares
subject to such Award, the Shares shall, to the extent of such forfeiture,
expiration, termination, cash settlement or non-issuance, again be available for
Awards under the Plan.

          (c) In the event that (i) any Option or other Award granted under this
Plan or any option or award granted under the Prior Plan is exercised through
the tendering of Shares (either actually, by attestation, or by the giving of
instructions to a broker to remit to the Company that portion of the sales price
required to pay the exercise price) or by the withholding of Shares by the
Company, or (ii) withholding tax liabilities arising from such Options or Awards
under this Plan or options or awards under a Prior Plan are satisfied by the
tendering of Shares (either actually, by attestation, or by the giving of
instructions to a broker to remit to the Company that portion of the sales price
required to pay the exercise price) or by the withholding of Shares by the
Company, then the Shares so tendered or withheld shall again be available for
Awards under the Plan.

          (d) Substitute Awards shall not reduce the Shares authorized for
issuance under the Plan or authorized for grant to a Participant in any calendar
year. Additionally, in the event that a company or other entity acquired by the
Company or any Subsidiary, or with which the Company or any Subsidiary combines,
has shares or other equity interests available under a pre-existing plan
approved by shareholders or equityholders and not adopted in contemplation of
such acquisition or combination, the shares or equity interests available for
grant pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or valuation
ratio or formula used in such acquisition or combination to determine the
consideration payable to the holders of common stock of the entities party to
such acquisition or combination) may be used for Awards under the Plan and shall
not reduce the Shares authorized for issuance under the Plan; provided that
Awards using such available shares or equity interests shall not be made after
the date awards or grants could have been made under the terms of the
pre-existing plan, absent the acquisition or combination, and shall only be made
to individuals who were employees, directors or consultants of such acquired or
combined company or entity before such acquisition or combination.


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     3.2 Limitations on Grants to Individual Participant. Subject to adjustment
as provided in Section 12.2, no Participant may be granted (i) Options or Stock
Appreciation Rights during any fiscal year of the Company with respect to more
than 460,000 Shares, or (ii) Restricted Stock, Performance Awards and/or Other
Stock Unit Awards that are denominated in Shares in any fiscal year of the
Company with respect to more than 460,000 Shares (the "LIMITATIONS"). In
addition to the foregoing, the maximum dollar value payable to any Participant
in fiscal year of the Company with respect to Performance Awards and/or Other
Stock Unit Awards that are valued with reference to cash or property other than
Shares is $3,000,000. If an Award is cancelled, the cancelled Award shall
continue to be counted toward the applicable Limitations.

     3.3 Character of Shares. Any Shares issued hereunder may consist, in whole
or in part, of authorized and unissued shares, treasury shares or shares
purchased in the open market or otherwise.

                                   ARTICLE IV
                         ELIGIBILITY AND ADMINISTRATION

     4.1 Eligibility. Any Employee, Director or Consultant shall be eligible to
be selected as a Participant. Only Employees may receive awards of Incentive
Stock Options.

     4.2 Administration.

          (a) The Plan shall be administered by the Committee, constituted as
follows:

               (i) The Committee will consist of the Board, or a committee
          designated by the Board, which Committee will be constituted to
          satisfy Applicable Laws. Once appointed, a Committee will serve in its
          designated capacity until otherwise directed by the Board. The Board
          may increase the size of the Committee and appoint additional members,
          remove members (with or without cause) and substitute new members,
          fill vacancies (however caused), and remove all members of the
          Committee and thereafter directly administer the Plan.

               (ii) The Board (or a committee designated by the Board) may by
          resolution provide that the Plan may be administered by different
          bodies with respect to Directors, officers who are not Directors, and
          Employees and Consultants who are neither Directors nor officers, and
          Covered Employees. Any reference to a "Committee" herein shall, to the
          extent permitted by Applicable Laws, be a reference to any body
          appointed to administer the Plan pursuant to the foregoing sentence.

          (b) The Committee shall have full discretion, power and authority,
subject to the provisions of the Plan and subject to such orders or resolutions
not inconsistent with the provisions of the Plan as may from time to time be
adopted by the Board, to: (i) select the Employees, Consultants and Directors to
whom Awards may from time to time be granted hereunder; (ii) determine the type
or types of Awards, not inconsistent with the provisions of the Plan, to be
granted to each Participant hereunder; (iii) determine the number of Shares to
be covered by each Award granted hereunder; (iv) determine the terms and
conditions, not inconsistent with the provisions of the Plan, of any Award
granted hereunder and the form and content of any Award Agreement; (v) determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property, subject to the provisions of the Plan; (vi)
determine whether, to what extent and under what circumstances any Award shall
be modified, amended, canceled or suspended; (vii) interpret and administer the
Plan and any instrument or agreement


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entered into under or in connection with the Plan, including any Award
Agreement; (viii) correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent that the
Committee shall deem desirable to carry it into effect; (ix) establish such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; (x) determine whether any Award will have
Dividend Equivalents; (xi) determine whether, to what extent, and under what
circumstances cash, Shares, or other property payable with respect to an Award
shall be deferred either automatically or at the election of the Participant;
provided that the Committee shall take no action that would subject the
Participant to a penalty tax under Section 409A of the Code; and (xii) make any
other determination and take any other action that the Committee deems necessary
or desirable for administration of the Plan.

          (c) Decisions of the Committee shall be final, conclusive and binding
on all persons or entities, including the Company, any Participant, any
stockholder and any Employee or any Affiliate. A majority of the members of the
Committee may determine its actions and fix the time and place of its meetings.

          (d) The Committee may delegate to a committee of one or more Directors
of the Company or, to the extent permitted by Applicable Law, to one or more
officers or a committee of officers, the authority to grant Awards to Employees
and officers of the Company who are not Directors, Covered Employees, or
"officers," as such term is defined by Rule 16a-1(f) of the Exchange Act, and to
cancel or suspend Awards to Employees and officers of the Company who are not
Directors, Covered Employees, or "officers," as such term is defined by Rule
16a-1(f) of the Exchange Act.

                                    ARTICLE V
                                     OPTIONS

     5.1 Grant of Options. Options may be granted hereunder to Participants
either alone or in addition to other Awards granted under the Plan. Any Option
shall be subject to the terms and conditions of this Article V and to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable.

     5.2 Award Agreements. All Options granted pursuant to this Article V shall
be evidenced by a written Award Agreement in such form and containing such terms
and conditions as the Committee shall determine which are not inconsistent with
the provisions of the Plan. Granting of an Option pursuant to the Plan shall
impose no obligation on the recipient to exercise such Option. Any individual
who is granted an Option pursuant to this Article V may hold more than one
Option granted pursuant to the Plan at the same time.

     5.3 Option Price. Other than in connection with Substitute Awards, the
option price per each Share purchasable under any Option granted pursuant to
this Article V shall not be less than 100% of the Fair Market Value of such
Share on the date of grant of such Option. Other than pursuant to Section 12.2,
the Committee shall not be permitted to (a) lower the option price per Share of
an Option after it is granted, (b) cancel an Option when the option price per
Share exceeds the Fair Market Value of the underlying Shares in exchange for
another Award (other than in connection with Substitute Awards), and (c) take
any other action with respect to an Option that may be treated as a repricing
under the rules and regulations of the NASDAQ National Market or other exchange
or quotation system on which the Shares are principally traded.

     5.4 Option Period. The term of each Option shall be fixed by the Committee
in its sole discretion; provided that no Option shall be exercisable after the
expiration of ten years from the date the Option is granted.


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     5.5 Exercise of Options. Vested Options granted under the Plan shall be
exercised by the Participant or by the Participant's executors, administrators,
guardian, beneficiary, or legal representative, or Family Members, as may be
provided in an Award Agreement in accordance with Section 12.3 as to all or part
of the Shares covered thereby, by the giving of written notice of exercise to
the Company or its designated agent, specifying the number of Shares to be
purchased, accompanied by payment of the full purchase price for the Shares
being purchased. Unless otherwise provided in an Award Agreement, full payment
of such purchase price shall be made at the time of exercise and shall be made
(a) in cash or by certified check or bank check or wire transfer of immediately
available funds, (b) with the consent of the Committee, by tendering previously
acquired Shares (either actually or by attestation, valued at their then Fair
Market Value) that have been owned for a period of at least six months (or such
other period to avoid accounting charges against the Company's earnings), (c)
with the consent of the Committee, by delivery of other consideration
(including, where permitted by law and the Committee, other Awards) having a
Fair Market Value on the exercise date equal to the total purchase price, (d)
with the consent of the Committee, by withholding Shares otherwise issuable in
connection with the exercise of the Option, (e) with the consent of the
Committee, by delivery of a properly executed exercise notice together with any
other documentation as the Committee and the Participant's broker, if
applicable, require to effect an exercise of the Option and delivery to the
Company of the sale or other proceeds (as permitted by Applicable Law) required
to pay the exercise price, (f) through any other method specified in an Award
Agreement, or (g) any combination of any of the foregoing. In connection with a
tender of previously acquired Shares pursuant to clause (b) above, the
Committee, in its sole discretion, may permit the Participant to constructively
exchange Shares already owned by the Participant in lieu of actually tendering
such Shares to the Company, provided that adequate documentation concerning the
ownership of the Shares to be constructively tendered is furnished in form
satisfactory to the Committee. The notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Committee may from time to time direct, and shall be in
such form, containing such further provisions consistent with the provisions of
the Plan, as the Committee may from time to time prescribe. In no event may any
Option granted hereunder be exercised for a fraction of a Share. No adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date of such issuance.

     5.6 Form of Settlement. In its sole discretion, the Committee may provide,
at the time of grant, that the Shares to be issued upon an Option's exercise
shall be in the form of Restricted Stock or other similar securities, or may
reserve the right so to provide after the time of grant.

     5.7 Incentive Stock Options. With respect to the Options that may be
granted by the Committee under the Plan, the Committee may grant Options
intended to qualify as Incentive Stock Options to any Employee of the Company or
any Parent or Subsidiary, subject to the requirements of Section 422 of the
Code. The Award Agreement of an Option intended to qualify as an Incentive Stock
Option shall designate the Option as an Incentive Stock Option. Notwithstanding
anything in Section 3.1 to the contrary and solely for the purposes of
determining whether Shares are available for the grant of Incentive Stock
Options under the Plan, the maximum aggregate number of Shares with respect to
which Incentive Stock Options may be granted under the Plan shall be 1,400,000
Shares. Notwithstanding the provisions of Section 5.3, in the case of an
Incentive Stock Option granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent of the
voting power of all classes of capital stock of the Company or any Parent or
Subsidiary, the per Share exercise price will be no less than 110% of the Fair
Market Value per Share on the date of grant. Notwithstanding the provisions of
Section 5.4, in the case of an Incentive Stock Option granted to an Employee
who, at the time the Incentive Stock Option is granted, owns stock representing
more than ten percent of the voting power of all classes of capital stock of the
Company or any Parent or Subsidiary, the term of the Incentive Stock Option will
be five years from the date of grant or any shorter term specified in the Award
Agreement.


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Notwithstanding the foregoing, if the Shares subject to an Employee's Incentive
Stock Options (granted under all plans of the Company or any Parent or
Subsidiary), which become exercisable for the first time during any calendar
year, have a Fair Market Value in excess of $100,000, the Options accounting for
this excess will be not be treated as Incentive Stock Options. For purposes of
the preceding sentence, Incentive Stock Options will be taken into account in
the order in which they were granted, and the Fair Market Value of the Shares
will be determined as of the time of grant.

     5.8 Termination of Employment or Consulting Relationship or Directorship.
If a Participant holds exercisable Options on the date his or her Continuous
Status as an Employee, Director or Consultant terminates (other than because of
termination due to Cause, but including death or Disability), the Participant
may exercise the Options that were vested and exercisable as of the date of
termination until the end of the original term or for a period set forth in the
Award Agreement or determined by the Committee. If the Participant is not
entitled to exercise his or her entire Option at the date of such termination,
the Shares covered by the unexercisable portion of the Option will revert to the
Plan, unless otherwise set forth in the Award Agreement or determined by the
Committee. The Committee may determine in its sole discretion that such
unexercisable portion of the Option will become exercisable at such times and on
such terms as the Committee may determine in its sole discretion. If the
Participant does not exercise an Option within the time specified above after
termination, that Option will expire, and the Shares covered by it will revert
to the Plan, except as otherwise determined by the Committee.

                                   ARTICLE VI
                            STOCK APPRECIATION RIGHTS

     6.1 Grant and Exercise. The Committee may provide Stock Appreciation Rights
either alone or in addition to other Awards upon such terms and conditions as
the Committee may establish in its sole discretion.

     6.2 Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

          (a) Upon the exercise of a Stock Appreciation Right, the holder shall
have the right to receive the excess of (i) the Fair Market Value of one Share
on the date of exercise or such other amount as the Committee shall so determine
at any time during a specified period before the date of exercise over (ii) the
grant price of the right on the date of grant, which, except in the case of
Substitute Awards or in connection with an adjustment provided in Section 12.2,
shall not be less than the Fair Market Value of one Share on such date of grant
of the right.

          (b) Upon the exercise of a Stock Appreciation Right, payment shall be
made in whole Shares or cash as designated by the Committee.

          (c) The provisions of Stock Appreciation Rights need not be the same
with respect to each recipient.

          (d) The Committee may impose such other conditions or restrictions on
the terms of exercise and the exercise price of any Stock Appreciation Right, as
it shall deem appropriate. In connection with the foregoing, the Committee shall
consider the applicability and effect of Section 162(m) of the Code.
Notwithstanding the foregoing provisions of this Section 6.2, but subject to
Section 12.2, a Stock Appreciation Right shall not have (i) an exercise price
less than Fair Market Value on the date of grant, or (ii) a term of greater than
ten years. In addition to the


                                      -10-



foregoing, but subject to Section 12.2, the base amount of any Stock
Appreciation Right shall not be reduced after the date of grant.

     6.3 Termination of Employment or Consulting Relationship or Directorship.
If a Participant holds exercisable Stock Appreciation Rights on the date his or
her Continuous Status as an Employee, Director or Consultant terminates (other
than because of termination due to Cause, but including death or Disability),
the Participant may exercise the Stock Appreciation Rights that were vested and
exercisable as of the date of termination until the end of the original term or
for a period set forth in the Award Agreement or determined by the Committee. If
the Participant is not entitled to exercise his or her entire Stock Appreciation
Right at the date of such termination, the Shares covered by the unexercisable
portion of the Stock Appreciation Right will revert to the Plan, unless
otherwise set forth in the Award Agreement or determined by the Committee. The
Committee may determine in its sole discretion that such unexercisable portion
of the Stock Appreciation Right will become exercisable at such times and on
such terms as the Committee may determine in its sole discretion. If the
Participant does not exercise a Stock Appreciation Right within the time
specified above after termination, that Stock Appreciation Right will expire,
and the Shares covered by it will revert to the Plan, except as otherwise
determined by the Committee.

                                   ARTICLE VII
                             RESTRICTED STOCK AWARDS

     7.1 Grants. Awards of Restricted Stock may be issued hereunder to
Participants either alone or in addition to other Awards granted under the Plan
(a "RESTRICTED STOCK AWARD"). A Restricted Stock Award shall be subject to
restrictions imposed by the Committee covering a period of time specified by the
Committee (the "RESTRICTED PERIOD"). The provisions of Restricted Stock Awards
need not be the same with respect to each recipient. The Committee has absolute
discretion to determine whether any consideration (other than services) is to be
received by the Company or any Affiliate as a condition precedent to the
issuance of Restricted Stock.

     7.2 Award Agreements. The terms of any Restricted Stock Award granted under
the Plan shall be set forth in a written Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with the Plan.

     7.3 Rights of Holders of Restricted Stock. Except as otherwise provided in
the Award Agreement, beginning on the date of grant of the Restricted Stock
Award and subject to execution of the Award Agreement, the Participant shall
become a shareholder of the Company with respect to all Shares subject to the
Award Agreement and shall have all of the rights of a shareholder, including the
right to vote such Shares and the right to receive distributions made with
respect to such Shares; provided, however, the Award Agreement may provide that
any Shares or any other property (including cash) distributed as a dividend or
otherwise with respect to any Restricted Shares as to which the restrictions
have not yet lapsed may be subject to restrictions.

                                  ARTICLE VIII
                             OTHER STOCK UNIT AWARDS

     8.1 Other Stock Unit Awards. Other Awards of Shares and other Awards that
are valued in whole or in part by reference to, or are otherwise based on,
Shares or other property ("OTHER STOCK UNIT AWARDS") may be granted hereunder to
Participants, either alone or in addition to other Awards granted under the
Plan, and such Other Stock Unit Awards shall also be available as a form of
payment in the settlement of other Awards granted under the Plan. Other Stock
Unit Awards shall be paid in Shares or cash. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to determine the
Employees, Consultants and Directors to whom


                                      -11-



and the time or times at which such Other Stock Unit Awards shall be made, the
number of Shares to be granted pursuant to such Awards, and all other conditions
of the Awards. The provisions of Other Stock Unit Awards need not be the same
with respect to each recipient.

     8.2 Terms and Conditions. Shares (including securities convertible into
Shares) subject to Awards granted under this Article VIII may be issued for no
consideration or for such minimum consideration as may be required by Applicable
Law. Shares (including securities convertible into Shares) purchased pursuant to
a purchase right awarded under this Article VIII shall be purchased for such
consideration as the Committee shall determine in its sole discretion.

                                   ARTICLE IX
                               PERFORMANCE AWARDS

     9.1 Terms of Performance Awards. Performance Awards may be issued hereunder
to Participants, for no consideration or for such minimum consideration as may
be required by Applicable Law, either alone or in addition to other Awards
granted under the Plan. The performance criteria to be achieved during any
Performance Period and the length of the Performance Period shall be determined
by the Committee upon the grant of each Performance Award; provided, however,
that a Performance Period shall not be shorter than six months nor longer than
five years. Except as provided in Article XI or as may be provided in an Award
Agreement, Performance Awards will be distributed only after the end of the
relevant Performance Period. Performance Awards may be paid in cash, Shares,
other property, or any combination thereof, in the sole discretion of the
Committee at the time of payment. The performance goals to be achieved for each
Performance Period shall be conclusively determined by the Committee and may be
based upon the criteria set forth in Section 10.2. The amount of the Award to be
distributed shall be conclusively determined by the Committee. The terms of a
Performance Award may provide that the Performance Award will be paid in a lump
sum or in installments following the close of the Performance Period.

                                    ARTICLE X
                         CODE SECTION 162(M) PROVISIONS

     10.1 Covered Employees. Notwithstanding any other provision of the Plan, if
the Committee determines at the time Restricted Stock, a Performance Award or an
Other Stock Unit Award is granted to a Participant who is, or is likely to be,
as of the end of the tax year in which the Company would claim a tax deduction
in connection with such Award, a Covered Employee, and that the deduction limit
of Section 162(m) of the Code would apply to such Award, then the Committee may
provide that this Article X is applicable to such Award.

     10.2 Performance Criteria. If Restricted Stock, a Performance Award or an
Other Stock Unit Award is subject to this Article X, then the lapsing of
restrictions thereon and the distribution of cash, Shares or other property
pursuant thereto, as applicable, shall be subject to the achievement of one or
more objective performance goals established by the Committee, which shall be
based on the attainment of specified levels of or growth of one or any
combination of the following factors, or an objective formula determined at the
time of the Award that is based on modified or unmodified calculations of one or
any combination of the following factors: net sales; pretax income before or
after allocation of corporate overhead and bonus; earnings per share; net
income; division, group or corporate financial goals; return on stockholders'
equity; return on assets; attainment of strategic and operational initiatives;
appreciation in and/or maintenance of the price of the Shares or any other
publicly-traded securities of the Company; market share; gross profits; earnings
before taxes; earnings before interest and taxes; earnings before interest,
taxes, depreciation and amortization ("EBITDA"); an adjusted formula of EBITDA
determined by the Committee; economic value-added


                                      -12-



models; comparisons with various stock market indices; reductions in costs,
and/or return on invested capital of the Company or any Affiliate, division or
business unit of the Company for or within which the Participant is primarily
employed. Such performance goals also may be based solely by reference to the
Company's performance or the performance of an Affiliate, division or business
unit of the Company, or based upon the relative performance of other companies
or upon comparisons of any of the indicators of performance relative to other
companies. Unless the Committee specifies otherwise when it sets performance
goals for an Award, objective adjustments shall be made to any of the foregoing
measures for items that will not properly reflect the Company's financial
performance for these purposes, such as the write-off of debt issuance costs,
pre-opening and development costs, gain or loss from asset dispositions, asset
or other impairment charges, litigation settlement costs, and other non-routine
items that may occur during the Performance Period. Also, unless the Committee
determines otherwise in setting the performance goals for an Award, such
performance goals shall be applied by excluding the impact of (a)
restructurings, discontinued operations and charges for extraordinary items, (b)
an event either not directly related to the operations of the Company or not
within the reasonable control of the Company's management, or (c) a change in
accounting standards required by generally accepted accounting principles. Such
performance goals shall be set by the Committee within the time period
prescribed by, and shall otherwise comply with the requirements of, Section
162(m) of the Code, or any successor provision thereto, and the regulations
thereunder.

     10.3 Adjustments. Notwithstanding any provision of the Plan (other than
Article XI), with respect to any Restricted Stock, Performance Award or Other
Stock Unit Award that is subject to this Article X, the Committee may adjust
downward, but not upward, the amount payable pursuant to such Award, and the
Committee may not waive the achievement of the applicable performance goals,
except in the case of the death or Disability of the Participant or the
occurrence of a Change of Control.

     10.4 Determination of Performance. Prior to the vesting, payment,
settlement or lapsing of any restrictions with respect to any Restricted Stock,
Performance Award or Other Stock Unit Award that is subject to this Article X,
the Committee shall certify in writing that the applicable performance goals
have been achieved to the extent necessary for such Award to qualify as
"performance based compensation" within the meaning of Section 162(m)(4)(C) of
the Code.

     10.5 Restrictions. The Committee shall have the power to impose such other
restrictions on Awards subject to this Article X as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
"performance-based compensation" within the meaning of Section 162(m)(4)(C) of
the Code, or which are not inconsistent with such requirements.

                                   ARTICLE XI
                          CHANGE OF CONTROL PROVISIONS

     11.1 Impact of Change of Control. The terms of any Award may provide in the
Award Agreement evidencing the Award, or the Committee may determine in its
discretion, that, upon a Change of Control of the Company, (a) Options and Stock
Appreciation Rights outstanding as of the date of the Change of Control
immediately vest and become exercisable in full or in part, (b) restrictions and
deferral limitations on Restricted Stock lapse and the Restricted Stock becomes
free of some or all restrictions and limitations and becomes partially or fully
vested, (c) Performance Awards shall be considered to be earned and payable
(either in full or pro-rata based on the portion of Performance Period completed
as of the date of the Change of Control), and any deferral or other restriction
shall lapse and such Performance Awards shall be immediately settled or
distributed, (d) the restrictions and deferral limitations and other conditions
applicable to any Other Stock Unit Awards or any other Awards shall lapse in
full or in part, and such Other Stock Unit Awards or such


                                      -13-



other Awards shall become free of some or all restrictions, limitations or
conditions and become partially or fully vested and transferable, and (e) such
other additional benefits, changes or adjustments as the Committee deems
appropriate shall apply, subject in each case to any terms and conditions
contained in the Award Agreement evidencing such Award. Notwithstanding any
other provision of the Plan, the Committee, in its discretion, may determine
that, upon the occurrence of a Change of Control of the Company, (a) each Option
and Stock Appreciation Right shall remain exercisable for only a limited period
of time determined by the Committee (provided that they remain exercisable for
at least 30 days after notice of such action is given to the Participants), or
(b) each Option and Stock Appreciation Right outstanding shall terminate within
a period specified in a notice to the Participant, and such Participant shall
receive, with respect to each Share subject to such Option or Stock Appreciation
Right, an amount equal to the excess of the Fair Market Value of such Share
immediately prior to the occurrence of such Change of Control over the exercise
price per share of such Option and/or Stock Appreciation Right; such amount to
be payable in cash, in one or more kinds of stock or property (including the
stock or property, if any, payable in the transaction) or in a combination
thereof, as the Committee, in its discretion, shall determine. Notwithstanding
the foregoing and the provisions of Section 11.2, the Committee will take no
action that would subject any Participant to a penalty tax under Section 409A of
the Code.

     11.2 Assumption Upon Change of Control. The terms of any Award Agreement
may also provide that, if in the event of a Change of Control the successor
company assumes or substitutes for an Option, Stock Appreciation Right, Share of
Restricted Stock or Other Stock Unit Award, then each outstanding Option, Stock
Appreciation Right, Share of Restricted Stock or Other Stock Unit Award need not
be accelerated as described in Sections 11.1(a), (b) and (d). For the purposes
of this Section 11.2, an Option, Stock Appreciation Right, Share of Restricted
Stock or Other Stock Unit Award shall be considered assumed or substituted for
if following the Change of Control the award confers the right to purchase or
receive, for each Share subject to the Option, Stock Appreciation Right,
Restricted Stock Award or Other Stock Unit Award immediately prior to the Change
of Control, the consideration (whether stock, cash or other securities or
property) received in the transaction constituting a Change of Control by
holders of Shares for each Share held on the effective date of such transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the transaction
constituting a Change of Control is not solely common stock of the successor
company, the Committee may, with the consent of the successor company, provide
that the consideration to be received upon the exercise or vesting of an Option,
Stock Appreciation Right, Restricted Stock Award or Other Stock Unit Award, for
each Share subject thereto, will be solely common stock of the successor company
substantially equal in fair market value to the per share consideration received
by holders of Shares in the transaction constituting a Change of Control. The
determination of such substantial equality of value of consideration shall be
made by the Committee in its sole discretion and its determination shall be
conclusive and binding. Any assumption or substitution of an Incentive Stock
Option will be made in a manner that will not be considered a "modification"
under the provisions of Section 424(h)(3) of the Code. Notwithstanding the
foregoing, an Award Agreement may provide that in the event of a termination of
a Participant's employment in such successor company within a specified time
period following such Change of Control, all or part of any such Award held by
such Participant at the time of the Change of Control shall be accelerated as
described in Sections 11.1(a), (b) and (d) above.

                                   ARTICLE XII
                         GENERALLY APPLICABLE PROVISIONS

     12.1 Amendment and Modification of the Plan. The Board may, from time to
time, alter, amend, suspend or terminate the Plan as it shall deem advisable,
subject to any requirement for stockholder approval imposed by Applicable Law;
provided that the Board may not amend the Plan


                                      -14-



in any manner that would result in noncompliance with Rule 16b-3 of the Exchange
Act; and further provided that the Board may not, without the approval of the
Company's stockholders, amend the Plan to (a) increase the number of Shares that
may be the subject of Awards under the Plan (except for adjustments pursuant to
Section 12.2), (b) expand the types of awards available under the Plan, (c)
materially expand the class of persons eligible to participate in the Plan, (d)
amend any provision of Section 5.3, (e) increase the maximum permissible term of
any Option specified by Section 5.4, or (f) amend any provision of Section 3.2.
In addition, no amendments to, or termination of, the Plan (other than by reason
of the failure of stockholders to approve the Plan in the manner set forth in
Section 13.12) shall in any way impair the rights of a Participant under any
Award previously granted without such Participant's consent.

     12.2 Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, dividend or distribution (whether in cash,
shares or other property), stock split, reverse stock split, spin-off or similar
transaction or other change in corporate structure affecting the Shares or the
value thereof, such adjustments and other substitutions shall be made to the
Plan and to Awards as the Committee, in its sole discretion, deems equitable or
appropriate, including such adjustments in the aggregate number, class and kind
of securities that may be delivered under the Plan and, in the aggregate or to
any one Participant, in the number, class, kind and option or exercise price of
securities subject to outstanding Awards granted under the Plan (including, if
the Committee deems appropriate, the substitution of similar options to purchase
the shares of, or other awards denominated in the shares of, another company) as
the Committee may determine to be appropriate in its sole discretion; provided,
however, that the number of Shares subject to any Award shall always be a whole
number. Where an adjustment under this Section 12.2 is made to an Incentive
Stock Option, the adjustment will be made in a manner which will not be
considered a "modification" under the provisions of Sections 409A or 424(h)(3)
of the Code.

     12.3 Transferability of Awards. Except as provided below, and except as
otherwise authorized by the Committee in an Award Agreement, no Award, and no
Shares subject to Awards that have not been issued or as to which any applicable
restriction, performance or deferral period has not lapsed, may be sold,
assigned, transferred, pledged or otherwise encumbered, other than by will or
the laws of descent and distribution, and such Award may be exercised during the
life of the Participant only by the Participant or the Participant's guardian or
legal representative. Notwithstanding the foregoing, to the extent that the
Committee so authorizes in the Award Agreement or otherwise, an Award other than
an Incentive Stock Option may be assigned, in whole or in part, during the
Participant's lifetime to one or more Family Members of the Participant. Rights
under the assigned portion may be exercised by the Family Member(s) who acquire
a proprietary interest in such Award pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the
Award immediately before such assignment and shall be set forth in such
documents issued to the assignee as the Committee deems appropriate.

          (a) Designation of Beneficiary. A Participant may file a written
designation of a beneficiary who is to receive any Awards that remain
unexercised in the event of the Participant's death. If a Participant is married
and the designated beneficiary is not the spouse, spousal consent will be
required for the designation to be effective. The Participant may change such
designation of beneficiary at any time by written notice to the Committee,
subject to the above spousal consent requirement.

          (b) Effect of No Designation. If a Participant dies and there is no
beneficiary validly designated and living at the time of the Participant's
death, the Company will deliver such Participant's Awards to the executor or
administrator of his or her estate, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such Awards to the spouse or to any one or more
dependents or relatives of the


                                      -15-



Participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

          (c) Death of Spouse or Dissolution of Marriage. If a Participant
designates his or her spouse as beneficiary, that designation will be deemed
automatically revoked if the Participant's marriage is later dissolved.
Similarly, any designation of a beneficiary will be deemed automatically revoked
upon the death of the beneficiary if the beneficiary predeceases the
Participant. Without limiting the generality of the preceding sentence, the
interest in Awards of a spouse of a Participant who has predeceased the
Participant or whose marriage has been dissolved will automatically pass to the
Participant, and will not be transferable by such spouse in any manner,
including but not limited to such spouse's will, nor will any such interest pass
under the laws of intestate succession.

     12.4 Termination of Employment. The Committee shall determine and set forth
in each Award Agreement whether any Awards granted in such Award Agreement will
continue to be exercisable, and the terms of such exercise, on and after the
date that a Participant's Continuous Status as an Employee, Director or
Consultant ceases, whether by reason of death, disability, voluntary or
involuntary termination of employment or services, or otherwise. The date of
termination of a Participant's Continuous Status as an Employee, Director or
Consultant will be determined by the Committee, which determination will be
final.

     12.5 Dividend Equivalents. Subject to the provisions of the Plan and any
Award Agreement, the recipient of an Award (including any deferred Award) may,
if so determined by the Committee, be entitled to receive, currently or on a
deferred basis, cash, stock or other property dividends, or cash payments in
amounts equivalent to stock or other property dividends on Shares ("DIVIDEND
EQUIVALENTS") with respect to the number of Shares covered by the Award, as
determined by the Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have been reinvested in
additional Shares or otherwise reinvested.

                                  ARTICLE XIII
                                  MISCELLANEOUS

     13.1 Tax Withholding. The Company shall have the right to make all payments
or distributions pursuant to the Plan to a Participant (or to the Participant's
executors, administrators, guardian, beneficiary, or legal representative, or
Family Members) (any such person, a "PAYEE") net of any applicable Federal,
State and local taxes required to be paid or withheld as a result of (a) the
grant of any Award, (b) the exercise of an Option or Stock Appreciation Rights,
(c) the delivery of Shares or cash, (d) the lapse of any restrictions in
connection with any Award, or (e) any other event occurring pursuant to the
Plan. The Company or any Affiliate shall have the right to withhold from wages
or other amounts otherwise payable to such Payee such withholding taxes as may
be required by law, or to otherwise require the Payee to pay such withholding
taxes. If the Payee shall fail to make such tax payments as are required, the
Company or its Affiliates shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment of any kind otherwise due to such
Payee or to take such other action as may be necessary to satisfy such
withholding obligations. The Committee shall be authorized to establish
procedures for election by Participants to satisfy such obligation for the
payment of such taxes by tendering previously acquired Shares (either actually
or by attestation, valued at their then Fair Market Value) that have been owned
for a period of at least six months (or such other period to avoid accounting
charges against the Company's earnings), or by directing the Company to retain
Shares (up to the employee's minimum required tax withholding rate) otherwise
deliverable in connection with the Award. If Shares acquired upon exercise of
any Incentive Stock Option are disposed of in a disposition that, under Section
422 of the Code,


                                      -16-



disqualifies the holder from the application of Section 421(a) of the Code, the
holder of the Shares immediately before the disposition will comply with any
requirements imposed by the Company in order to enable the Company to secure the
related income tax deduction to which it is entitled in such event.

     13.2 Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor
the grant of an Award hereunder shall confer upon any Employee, Consultant or
Director the right to continue in the employment or service of the Company or
any Affiliate or affect any right that the Company or any Affiliate may have to
terminate the employment or service of (or to demote or to exclude from future
Awards under the Plan) any such Employee, Consultant or Director at any time for
any reason. The Company shall not be liable for the loss of existing or
potential profit from an Award granted in the event of termination of an
employment or other relationship. No Employee or Participant shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Employees or Participants under the Plan.

     13.3 Prospective Recipient. The prospective recipient of any Award under
the Plan shall not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such Award, until and unless
such recipient shall have executed an agreement or other instrument evidencing
the Award and delivered a copy thereof to the Company, and otherwise complied
with the then applicable terms and conditions.

     13.4 Cancellation of Award. Notwithstanding anything to the contrary
contained herein, all outstanding Awards granted to any Participant may be
canceled in the discretion of the Committee if the Participant's Continuous
Status as an Employee, Director or Consultant is terminated for Cause, or if,
after the termination of the Participant's Continuous Status as an Employee,
Director, or Consultant, the Committee determines that Cause existed before such
termination.

     13.5 Stop Transfer Orders. All certificates for Shares delivered under the
Plan pursuant to any Award shall be subject to such stop-transfer orders and
other restrictions as the Committee may deem advisable under the provisions of
this Plan, the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Shares are then listed,
and any applicable federal or state securities law, and the Committee may cause
a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

     13.6 Nature of Payments. All Awards made pursuant to the Plan are in
consideration of services performed or to be performed for the Company or any
Affiliate, division or business unit of the Company. Any income or gain realized
pursuant to Awards under the Plan and any Stock Appreciation Rights constitute a
special incentive payment to the Participant and shall not be taken into
account, to the extent permissible under Applicable Law, as compensation for
purposes of any of the employee benefit plans of the Company or any Affiliate
except as may be determined by the Committee or by the Board or board of
directors of the applicable Affiliate.

     13.7 Other Plans. Nothing contained in the Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

     13.8 Severability. If any provision of the Plan shall be held unlawful or
otherwise invalid or unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (a) be deemed limited to the extent that such
court of competent jurisdiction deems it lawful, valid and/or enforceable and as
so limited shall remain in full force and effect, and (b) not affect any other


                                      -17-



provision of the Plan or part thereof, each of which shall remain in full force
and effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or
unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the Plan.

     13.9 Construction. All references in the Plan to "SECTION," "SECTIONS," or
"ARTICLE" are intended to refer to the Section, Sections or Article, as the case
may be, of the Plan. As used in the Plan, the words "INCLUDE" and "INCLUDING,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "WITHOUT LIMITATION."

     13.10 Unfunded Status of the Plan. The Plan is intended to constitute an
"UNFUNDED" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant by the Company, nothing contained herein
shall give any such Participant any rights that are greater than those of a
general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver the Shares or payments in lieu of or with
respect to Awards hereunder; provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of the Plan.

     13.11 Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware and
construed accordingly.

     13.12 Effective Date of Plan; Termination of Plan. The Plan shall be
effective on the date of its adoption by the Board, subject to the approval of
the Plan, within 12 months thereafter, by affirmative votes representing a
majority of the votes cast under Applicable Laws at a duly constituted meeting
of the stockholders of the Company or by written consent of stockholders holding
a majority of the issued and outstanding Shares. After the adoption of this Plan
by the Board, Awards may be made, but all such Awards shall be subject to
stockholder approval of this Plan in accordance with the first sentence of this
Section 13.12, and no Options or Stock Appreciation Rights may be exercised
prior to such stockholder approval of the Plan. If the stockholders do not
approve this Plan in the manner set forth in the first sentence of this Section
13.12, this Plan, and all Awards granted hereunder, shall be null and void and
of no effect. Awards may be granted under the Plan at any time and from time to
time on or prior to the tenth anniversary of the effective date of the Plan
(unless the Board sooner suspends or terminates the Plan under Section 12.1), on
which date the Plan will expire except as to Awards then outstanding under the
Plan. Notwithstanding the foregoing, unless affirmative votes representing a
majority of the votes cast under Applicable Laws approve the continuation of
Article X at the first duly constituted meeting of the stockholders of the
Company that occurs in the fifth year following the effective date of this Plan,
no Awards other than Options or Stock Appreciation Rights shall be made to
Covered Employees following the date of such meeting. Except as set forth in the
third sentence of this Section 13.12, outstanding Awards shall remain in effect
until they have been exercised or terminated, or have expired.

     13.13 Foreign Employees. Awards may be granted to Participants who are
foreign nationals or employed outside the United States, or both, on such terms
and conditions different from those applicable to Awards to Employees employed
in the United States as may, in the judgment of


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the Committee, be necessary or desirable in order to recognize differences in
local law or tax policy. The Committee also may impose conditions on the
exercise or vesting of Awards in order to minimize the Company's obligation with
respect to tax equalization for Employees on assignments outside their home
country.

     13.14 Effect on Prior Plan. On the approval of this Plan by the
stockholders of the Company in the manner set forth in Section 13.12, the Prior
Plan shall be cancelled and no further grants or awards shall be made under the
Prior Plan. Grants and awards made under the Prior Plan before the date of such
cancellation, however, shall continue in effect in accordance with their terms.

     13.15 Section 409A of the Code. The Committee shall take no action under
this Plan that would subject a Participant to a penalty tax under Section 409A
of the Code.

     13.16 Other Company Compensation Plans. Shares available for Awards under
the Plan may be used by the Company as a form of payment of compensation under
other Company compensation plans, whether or not existing on the date hereof. To
the extent any Shares are used as such by the Company, such Shares will reduce
the then number of Shares available under Article III of the Plan for future
Awards.

     13.17 Captions. The captions in the Plan are for convenience of reference
only, and are not intended to narrow, limit or affect the substance or
interpretation of the provisions contained herein.


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