THE 2001 STOCK OPTION PLAN
                          OF ELCOM INTERNATIONAL, INC.
                             AS AMENDED & RESTATED

                                 March 16, 2000



        Elcom  International,  Inc.  hereby  adopts a stock  option plan for the
benefit of certain  persons  and subject to the terms and  provisions  set forth
below.

     1. Definitions. The following terms shall have the meanings set forth below
whenever used in this instrument:

          (a)  The word  "Affiliate" shall mean any corporation  or other entity
               which controls, is controlled by, or is under common control with
               the Company including, without limitation, any Subsidiary.

          (b)  The word  "Board"  shall  mean  the  Board  of  Directors  of the
               Company.

          (c)  The word "Code"  shall mean the United  States  Internal  Revenue
               Code  (Title  26 of the  United  States  Code) as the same may be
               amended from time to time.

          (d)  The  word  "Committee"  shall  mean  the  Compensation  Committee
               appointed  by the  Board,  which  shall  consist  of at least two
               outside  directors  as such term is defined in Section  162(m) of
               the  Code,  or  if no  such  committee  is  appointed,  the  word
               Committee shall mean the Board.

          (e)  The words "Common  Stock" shall mean the common stock,  par value
               $.01 per share, of the Company.

          (f)  The word  "Company"  shall  mean  Elcom  International,  Inc.,  a
               Delaware  corporation,  and  any  successor  thereto  that  shall
               maintain this Plan.

          (g)  The words  "Incentive  Stock"  Option  shall mean any option that
               qualifies as an incentive stock option under the terms of Section
               422 of the Code.

          (h)  The words "Key Personnel" shall mean any person whose performance
               as an employee, or independent contractor, or outside

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               Director of the Company or an  Affiliate  is, in the  judgment of
               the  Committee,  important  to the  successful  operation  of the
               Company or an Affiliate.

          (i)  The word "Optionee"  shall mean any Key Personnel to whom a stock
               option has been granted pursuant to this Plan.

          (j)  The word  "Plan"  shall  mean  2001  Stock  Option  Plan of Elcom
               International, Inc., as it was originally adopted, as amended and
               restated and as it may be amended at a later date.

          (k)  The word  "Subsidiary"  shall have the same meaning as subsidiary
               corporation under Section 424(f) of the Code.

          (l)  The words "Substantial  Stockholder" shall mean any Key Personnel
               who owns more than 10% of the total combined  voting power of all
               classes of stock of the Company. Ownership shall be determined in
               accordance with Section 424(d) of the Code and lawful  applicable
               regulations.

     2. Purpose of the Plan. The purpose of the Plan is to provide Key Personnel
with greater incentive to serve and promote the interests of the Company and its
stockholders.  The premise of the Plan is that, if such Key Personnel  acquire a
proprietary interest in the business of the Company or increase such proprietary
interest as they may already  hold,  then the incentive of such Key Personnel to
work toward the Companys  continued  success will be  commensurately  increased.
Accordingly,  the Company will, from time to time during the effective period of
the Plan,  grant to such Key Personnel as may be selected to  participate in the
Plan,  options  to  purchase  Common  Stock  on the  terms  and  subject  to the
conditions set forth in the Plan.

     3.  Effective  Date of the Plan.  The Plan, as originally  adopted,  became
effective as of November 10, 2000, the date of the Boards  approval and adoption
of the Plan.

     4.  Administration  of the  Plan.  The Plan  shall be  administered  by the
Committee.  Each member of the Committee shall be a Non-Employee Director within
the meaning of Rule 16b-3 promulgated under the Securities  Exchange Act of 1934
or any  amendment

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of or  successor  to such  Rule as may be in  effect  from  time to time  and an
outside  director  within  the  meaning  of  Section  162(m)  of the Code or any
amendment  of or  successor  to such  provision as may be in effect from time to
time. A majority of the Committee shall  constitute a quorum,  and the acts of a
majority of the members present at any meeting at which a quorum is present,  or
acts approved in writing by all of the members,  shall be acts of the Committee.
The  Committee  may delegate any of its authority to any other person or persons
that it deems appropriate.  Subject to the terms and conditions of the Plan, and
in addition to the other authorizations granted to the Committee under the Plan,
the Committee shall have full and final authority in its absolute discretion:

          (a)  to select the Key Personnel to whom options will be granted;

          (b)  to determine  the number of shares of Common Stock subject to any
               option;

          (c)  to determine the time when options will be granted;

          (d)  to  determine  the  option  price of Common  Stock  subject to an
               option, including any repricing thereof;

          (e)  to determine the time when each option may be exercised,  and the
               duration of the exercise period;

          (f)  to determine whether and to what extent an option is an Incentive
               Stock Option; provided, however, that Incentive Stock Options may
               only be granted to employees of the Company or a Subsidiary;

          (g)  to  prescribe  the form of the option  agreements  governing  the
               options  which  are  granted  under  the  Plan  and  to  set  the
               provisions  of such option  agreements  as the Committee may deem
               necessary or desirable  provided such provisions are not contrary
               to the terms and  conditions  of  either  the Plan or,  where the
               option is an Incentive Stock Option, Section 422 of the Code;

          (h)  to adopt, amend and rescind such rules and regulations as, in the
               Committees opinion, may be advisable in the administration of the
               Plan; and

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          (i)  to construe and interpret the Plan, the rules and regulations and
               the instruments  evidencing options granted under the Plan and to
               make all other  determinations  deemed necessary or advisable for
               the administration of the Plan.

Any  decision  made or action  taken by the  Committee  in  connection  with the
administration,  interpretation, and implementation of the Plan and of its rules
and  regulations,  shall,  to the extent  permitted  by law, be  conclusive  and
binding upon all Optionees and upon any person claiming under or through such an
Optionee.  Neither the  Committee nor any of its members shall be liable for any
act taken by the  Committee  pursuant  to the Plan.  No member of the  Committee
shall be  liable  for the act of any  other  member.

     5.  Persons  Eligible  for  Options.  Subject  to the  restrictions  herein
contained,  options may be granted  from time to time in the  discretion  of the
Committee only to Key Personnel designated by the Committee;  provided, that any
Key  Personnel  who  renounces in writing any right he may have to receive stock
options  under the Plan shall not be eligible to receive any stock options under
the  Plan.  The  Committee  may  grant  more  than  one  option  to the same Key
Personnel.  Notwithstanding  the  foregoing,  no  options  may be granted to any
executive  officer of the Company who either was a CEO during the last completed
fiscal year or was one of the four most highly compensated executive officers of
the Company at the end of the last completed  fiscal year (as such positions are
defined  in  Item  402  of  Regulation  S-K  promulgated  by the  United  States
Securities  and  Exchange  Commission),  unless  and  until  such  time  as  the
stockholders of the Company have approved, adopted and ratified this Plan.

     6.  Shares  Subject  to the Plan.  Subject  to the  provisions  of the next
succeeding  provisions  of this  Section  6, the  aggregate  number of shares of
Common  Stock for  which  options  may be  granted  under the Plan  shall be two
million four hundred  thousand  (2,400,000)  shares of Common Stock. The maximum
number of shares of Common Stock for which options may be

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granted  under the Plan to any one Key  Personnel  in any one fiscal year of the
Company is 150,000,  subject to the other  provisions  of this Section 6. Either
treasury or authorized  and unissued  shares of Common  Stock,  or both, in such
numbers,  within the maximum limit of the Plan, as the Committee shall from time
to time  determine,  may be so issued.  All shares of Common  Stock that are the
subject of any lapsed,  expired or terminated  options may be made available for
reoffering  under the Plan to any Key  Personnel.  In  addition,  any  shares of
Common  Stock  that  are  retained  to  satisfy  an  Optionees  withholding  tax
obligations  or that are  transferred  to the  Company by an Optionee to satisfy
such  obligations or to pay all or any portion of the option price in accordance
with the terms of the Plan, may be made available for reoffering  under the Plan
to any Key  Personnel.  If an option  granted under this Plan is exercised,  any
shares of Common  Stock that are the subject  thereof  shall not  thereafter  be
available for reoffering under the Plan, except in accordance with the preceding
sentence.

     In the event that  subsequent  to the date of  adoption  of the Plan by the
Board, the outstanding shares of Common Stock are, as a result of a stock split,
stock  dividend,   combination  or  exchange  of  shares,   exchange  for  other
securities,    reclassification,    reorganization,    redesignation,    merger,
consolidation,   recapitalization  or  other  such  change,   including  without
limitation any transaction described in Section 424(a) of the Code, increased or
decreased or changed into or exchanged for a different  number or kind of shares
of stock or other securities of the Company,  then (i) there shall automatically
be substituted  for each share of Common Stock subject to an unexercised  option
granted under the Plan and each share of Common Stock  available for  additional
grants of options under the Plan the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall be divided or
exchanged, (ii) the option price per share of Common Stock or unit of securities
shall be increased or decreased proportionately so

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that the aggregate purchase price for the securities subject to the option shall
remain the same as  immediately  prior to such  event,  and (iii) the  Committee
shall make such other  adjustments  to the  securities  subject to options,  the
provisions of the Plan, and option  agreements as may be appropriate,  equitable
and in  compliance  with the  provisions  of  Section  424(a) of the Code to the
extent applicable and any such adjustment shall be final, binding and conclusive
as to each Optionee.  Any such  adjustment  shall provide for the elimination of
fractional shares.

     7. Option Provisions.

          (a) Option  Price.  The option price per share of Common Stock that is
the subject of an Incentive Stock Option shall be determined by the Committee at
the time of grant but shall not be less than one hundred  percent  (100%) of the
fair market  value of a share of Common Stock on the date the option is granted;
provided,  however,  that if any Key Personnel to whom an Incentive Stock Option
is granted is, at the time of the grant, a Substantial  Stockholder,  the option
price per share of Common Stock shall be  determined  by the Committee but shall
not be less than one hundred ten  percent  (110%) of the fair market  value of a
share of Common  Stock on the date the option is granted.  The option  price per
share of Common Stock under each option granted pursuant to the Plan that is not
an Incentive  Stock Option shall be  determined  by the Committee at the time of
grant.  Fair market value shall mean, as of any particular date, (i) the average
of the high and low sale prices per share of the Common Stock as reported on the
principal stock exchange on which the Common Stock is then trading,  if any, or,
if,  applicable,  The Nasdaq Stock Market, on such day, or if there are no sales
on such day, on the next preceding trading day during which a sale occurred,  or
(ii) if clause (i) does not apply  because the Common  Stock is not then trading
on a stock exchange or The Nasdaq Stock Market, the fair market value of a share
of Common Stock as determined by the  Committee.  The day on which the Committee
approves the

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granting of an option  shall be deemed for all  purposes  hereunder  the date on
which the option is granted,  unless  another  effective  date for such grant is
specified by the Committee.

          (b) Period of Option.  The Committee  shall determine when each option
is to expire  but no option  shall be  exercisable  after  ten (10)  years  have
elapsed from the date upon which the option is granted; provided,  however, that
no Incentive  Stock Option granted to a person who is a Substantial  Stockholder
at the time of the grant of such  option  shall be  exercisable  after  five (5)
years have elapsed from the date upon which the option is granted.

          (c) Transferability of Options.  Except as provided in this subsection
(c),  no option  granted  under this Plan shall be  transferable  by an Optionee
other than by will or the laws of descent and distribution, and options shall be
exercisable  during an Optionees  lifetime only by the Optionee or, in the event
of the  Optionees  legal  incapacity,  by his  guardian or legal  representative
acting in a fiduciary  capacity on behalf of the  grantee  under state law.  The
Committee may expressly  provide in an option agreement or other written form of
consent that an Optionee may transfer an option which is not an Incentive  Stock
Option to his spouse or lineal descendants (Family Members),  or a trust for the
exclusive  benefit of the Optionee  and/or Family  Members,  or a partnership or
other entity affiliated with the Optionee that may be approved by the Committee.
Subsequent transfers of any such option shall be prohibited except in accordance
with the  preceding  sentence.  All  terms  and  conditions  of any such  option
agreement,  including  provisions  relating to the  termination of the Optionees
employment  or service with the Company and its  Affiliates,  shall  continue to
apply following a transfer made in accordance with this subsection (c).

          (d) Conditions Governing Exercise of Option. The Committee may, in its
absolute  discretion,  either require that,  prior to the exercise of any option
granted  hereunder,  the

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Optionee shall have been an employee or  independent  contractor for a specified
period of time  after the date  such  option  was  granted,  or make any  option
granted hereunder immediately exercisable.  Each option shall be subject to such
additional or different  restrictions or conditions with respect to the time and
method of exercise as shall be prescribed by the Committee. Upon satisfaction of
any such conditions, the option may be exercised in whole or in part at any time
during the option period.  Options shall be exercised by the Optionee (i) giving
written  notice  to  the  Company  of  the  Optionees  exercise  of  the  option
accompanied  by full payment of the  purchase  price either in cash or, with the
consent of the  Committee  (which may be included in the option  agreement),  in
whole or in part in shares of Common Stock, by delivery to the Company of shares
of Common  Stock that have been  already  owned by the Optionee for at least six
months,  having a fair market value on the date the option is exercised equal to
that portion of the purchase  price for which  payment in cash is not made,  and
(ii) making  appropriate  arrangements  acceptable to the Company  (which may be
included in the option  agreement)  with respect to income tax  withholding,  as
required,  which  arrangements  may include,  at the absolute  discretion of the
Committee,  in  lieu  of  other  withholding   arrangements,   (a)  the  Company
withholding  from issuance to the Optionee such number of shares of Common Stock
otherwise  issuable  upon exercise of the option as the Company and the Optionee
may agree for the minimum required  withholdings,  or (b) the Optionees delivery
to the Company of shares of Common  Stock having a fair market value on the date
the option is exercised equal to that portion of the withholding  obligation for
which payment in cash is not made.  Certain  dissolutions or liquidations of the
Company or, unless the  provisions of the option  agreement  provide  otherwise,
mergers or consolidations in which the Company is not the surviving corporation,
may, but need not, cause each outstanding  option to terminate,  provided,  that
each  Optionee may have the right  during the period,  if and only to the extent
prescribed in the option

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agreement, prior to such dissolution or liquidation,  or merger or consolidation
in which the Company is not the  surviving  corporation,  to  exercise  the then
exercisable  portion of his or her option in whole or in part without  regard to
any other limitations contained in the Plan or the option agreement.  Additional
provisions with respect to acquisitions,  mergers,  liquidations or dissolutions
may be set forth in the option agreement.

          (e)  Termination  of Employment,  Etc. If an Optionee  ceases to be an
employee and/or outside  Director and/or  independent  contractor of the Company
and all  Affiliates,  then the  Committee  shall  have  absolute  discretion  to
establish,  in the  option  agreement  or  otherwise,  the  restrictions  on the
exercisability of options granted hereunder.  An Optionees  employment shall not
be deemed to have terminated while he is on a military,  sick or other bona fide
approved  leave of absence  from the Company or an  Affiliate as such a leave of
absence is described in Section 1.421-7(h) of the Federal Income Tax Regulations
or any lawful successor regulations thereto. If the stock option is an Incentive
Stock Option, no option agreement shall:

          (i)  permit any Optionee to exercise any  Incentive  Stock Option more
               than three (3) months  after the date the  Optionee  ceased to be
               employed by the Company  and all  Subsidiaries  if the reason for
               the Optionees cessation of employment was other than his death or
               his  disability  (as such term is defined by Section  22(c)(3) of
               the Code); or

          (ii) permit any Optionee to exercise any  Incentive  Stock Option more
               than  one (1) year  after  the date  the  Optionee  ceased  to be
               employed by the Company  and all  Subsidiaries  if the reason for
               the  Optionees   cessation  of   employment   was  the  Optionees
               disability  (as such term is defined by Section  22(c)(3)  of the
               Code); or

          (iii)permit any person to exercise  any  Incentive  Stock  Option more
               than  one (1) year  after  the date  the  Optionee  ceased  to be
               employed by the Company  and all  Subsidiaries  if either (A) the
               reason for the Optionees cessation of employment was his death or
               (B) the Optionee died within three (3) months after ceasing to be
               employed by the Company and all Subsidiaries;

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provided,  however,  unless the option agreement contains  differing  provisions
with respect to the vesting and  exercisability  of options  upon a  termination
without cause, which provisions shall supercede the provisions contained herein,
if an  Optionees  cessation  of  employment  (for  reason  other  than  death or
disability) was by reason of a termination  without cause, as such term shall be
defined in the option agreement,  then that portion of any option granted to the
Optionee  that  is  exercisable  on the  date of such  termination,  may  remain
exercisable for a one hundred eighty (180) day period  commencing on the date of
such  termination  without  cause and that portion of any option  granted to the
Optionee that is not exercisable on the date of such  termination,  shall become
immediately  exercisable  and may remain  exercisable  for a one-hundred  eighty
(180) day  period  commencing  on the date of such  termination;  and  provided,
however,  to the  extent  that  an  option  agreement  does  not  supercede  the
provisions  contained  in this  Section  7(e) and permits  exercise of an option
within  ninety (90) or more days  following  the  commencement  of a termination
without cause, any option that is an Incentive Stock Option must be exercised in
full within ninety (90) days after the  commencement of the termination  without
cause or such Option will no longer  qualify as an  Incentive  Stock  Option and
shall   thereafter   be,  and  receive  the  tax  treatment   applicable  to,  a
non-qualified  stock option.  If any option is by terms of the option  agreement
exercisable following the Optionees death, then such option shall be exercisable
by the Optionees estate, or the person designated in the Optionees Last Will and
Testament,  or the person to whom the option was  transferred  by the applicable
laws of descent and distribution or by approval of the Committee.


          (f)  Termination  of Stock Options Under  Certain  Circumstances.  The
Committee may cancel any unexpired  stock options at any time if the Optionee is
not in compliance with all applicable  provisions of this Plan or with any stock
option agreement entered into pursuant to this Plan, or if the Optionee, without
the prior  written  consent  of the  Company,  engages  in any of

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the following activities:  (i) renders services for an organization,  or engages
in a business,  that is, in the judgment of the Committee,  in competition  with
the Company or an Affiliate,  or (ii) discloses to anyone outside of the Company
and the  Affiliates,  or uses for any  purpose  other than the  business  of the
Company or an Affiliate,  any confidential  information or material  relating to
the Company or an Affiliate,  whether  acquired by the Optionee  during or after
employment with the Company or an Affiliate,  in a fashion or with a result that
the  Committee,  in its  judgment,  deems  is or may be  injurious  to the  best
interests of the Company or an Affiliate.  The Committee  may, in its discretion
and as a condition  to the  exercise of a stock  option,  require an Optionee to
acknowledge in writing that he is in compliance  with all applicable  provisions
of this Plan and any stock option agreement entered into in connection with this
Plan and has not engaged in any  activities  referred to in clauses (i) and (ii)
of this Section 7(f).

          (g) Limitations on Grant of Incentive  Stock Options.  In no event may
Incentive  Stock  Options  be  granted  hereunder  to any  person  other than an
employee of the Company or an Affiliate.  In respect of any individual Optionee,
the aggregate fair market value of the shares of Common Stock  (determined as of
the date the respective  Incentive  Stock Options were granted) that are subject
to Incentive Stock Options that first become  exercisable  during any particular
calendar  year  shall  not  exceed  the  sum of  One  Hundred  Thousand  Dollars
($100,000). Options that are not Incentive Stock Options shall not be subject to
the  limitations  described in the  preceding  sentence and shall not be counted
when applying such limitation.

          (h)  Prohibition  of  Alternative  Options.  It is  intended  that Key
Personnel who are employees may be granted, simultaneously or from time to time,
Incentive  Stock Options or other stock  options,  but no eligible Key Personnel
shall be granted  alternative  rights in Incentive

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Stock  Options  and other  stock  options  so as to prevent  options  granted as
Incentive  Stock  Options from  qualifying as such within the meaning of Section
422 of the Code.

          (i) Waiver by Committee of  Conditions  Governing  Exercise of Option.
The  Committee  may,  in  its  sole  discretion,   waive,  alter  or  amend  any
restrictions  or  conditions  set forth in an  option  agreement  concerning  an
Optionees right to exercise any option and/or the time and method of exercise.


     8.  Amendments  to the Plan.  The  Committee is authorized to interpret the
Plan and from time to time adopt any rules and  regulations for carrying out the
Plan that it may deem  advisable.  Subject to the  approval  of the  Board,  the
Committee  may at any time amend,  modify,  suspend or terminate the Plan. In no
event,  however,  without the approval of the Companys  stockholders,  shall any
action of the  Committee  or the Board  result in:

          (a)  amending,  modifying  or altering  the  eligibility  requirements
               provided in Section 5 hereof; or

          (b)  increasing or decreasing, except as provided in Section 6 hereof,
               the maximum number of shares for which options may be granted; or

          (c)  decreasing  the minimum  option price per share at which  options
               may be  granted  under the Plan,  as  provided  in  Section  7(a)
               hereof; or

          (d)  extending the date on which the Plan shall  terminate as provided
               in Section 11 hereof; or

          (e)  changing the requirements relating to the Committee;

except as necessary to conform the Plan and/or the option  agreements to changes
in the  Code or other  governing  law.  No  option  may be  granted  during  any
suspension  of this Plan or after  this Plan has  terminated  and no  amendment,
suspension or termination shall, without the Optionees consent,  alter or impair
any of the rights or  obligations  under an option  theretofore  granted to such
Optionee under this Plan.

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          9. Investment Representation, Approvals and Listing. The Committee may

condition  its grant of any option  hereunder  (or any  transfer  allowed in its
discretion)  upon receipt of an  investment  representation  from the  Optionee,
which shall be substantially similar to the following:

          Optionee   agrees   that  any   shares  of   Common   Stock  of  Elcom
          International,  Inc. that may be acquired by virtue of the exercise of
          this option shall be acquired  for  investment  purposes  only and not
          with a view to distribution or resale;  provided,  however,  that this
          restriction shall become inoperative in the event the shares of Common
          Stock of Elcom  International,  Inc.  that are  subject to this option
          shall be registered under the Securities Act of 1933, as amended,  for
          issuance to the  Optionee or in the event there is  presented to Elcom
          International, Inc. an opinion of counsel or other evidence, in either
          case, satisfactory to Elcom International,  Inc. and/or its counsel to
          the effect  that the offer and sale of the  shares of Common  Stock of
          Elcom International, Inc. that are subject to this option may lawfully
          be made without  registration  under the  Securities  Act of 1933,  as
          amended.

The Company shall not be required to issue any certificates for shares of Common
Stock  upon the  exercise  of an  option  granted  under  the Plan  prior to (i)
obtaining any approval from any  governmental  agency which the Committee shall,
in its  sole  discretion,  determine  to be  necessary  or  advisable,  (ii) the
admission of such shares to listing on any national  securities  exchange or The
Nasdaq  Stock  Market on which the shares of Common  Stock may be listed,  (iii)
completion of any  registration or other  qualification  of the shares of Common
Stock  under  any  state  or  federal  law  or  ruling  or  regulations  of  any
governmental  body which the Committee shall, in its sole discretion,  determine
to be necessary or advisable, or the determination by the Committee, in its sole
discretion, that any registration or other qualification of the shares of Common
Stock  is  not  necessary  or  advisable,   and  (iv)  obtaining  an  investment
representation  from the  Optionee  in the form set forth above or in such other
form as the Committee, in its sole discretion, shall determine to be adequate.

          10. General Provisions.

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          (a) Option Agreements Need Not Be Identical. The form and substance of
option  agreements,  whether granted at the same or different times, need not be
identical.

          (b) No Right To Be Employed, Etc. Nothing in the Plan or in any option
agreement  shall confer upon any Optionee any right to continue in the employ of
the  Company  or an  Affiliate,  or to serve as a member  of the  Board or as an
independent  contractor,  or to be  entitled  to  receive  any  remuneration  or
benefits  not set forth in the Plan or such option  agreement,  or to  interfere
with or limit either the right of the Company or an  Affiliate to terminate  the
employment of, or independent contractor relationship with, such Optionee at any
time or the right of the  stockholders  of the Company to remove him as a member
of the Board with or without cause.

          (c) Optionee Does Not Have Rights Of Stockholder. Nothing contained in
the Plan or in any option agreement shall be construed as entitling any Optionee
to any rights of a stockholder  as a result of the grant of an option until such
time as shares of Common Stock are actually issued to such Optionee  pursuant to
the exercise of an option.

          (d)  Successors  In  Interest.  The  Plan  shall be  binding  upon the
successors and assigns of the Company.

          (e) No Liability  Upon  Distribution  of Shares.  The liability of the
Company  under the Plan and any  distribution  of shares  of Common  Stock  made
hereunder  is limited to the  obligations  set forth herein with respect to such
distribution  and no term or  provision of the Plan shall be construed to impose
any  liability  on the  Company or the  Committee  in favor of any  person  with
respect to any loss,  cost or expense  which the person may incur in  connection
with or arising out of any transaction in connection  with the Plan,  including,
but not limited to, any  liability to any Federal,  state or local tax authority
and/or any securities regulatory authority.

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<PAGE>


          (f) Taxes. Appropriate provisions shall be made for all taxes required
to be  withheld  and/or  paid in  connection  with the  options or the  exercise
thereof, and the transfer of Common Stock pursuant thereto, under the applicable
laws or other regulations of any governmental authority,  whether Federal, state
or local and whether domestic or foreign.

          (g) Use of Proceeds.  The cash  proceeds  received by the Company from
the  issuance  of shares of Common  Stock  pursuant to the Plan will be used for
general  corporate  purposes,  or in  such  other  manner  as  the  Board  deems
appropriate.

          (h) Expenses. The expenses of administering the Plan shall be borne by
the Company.

          (i) Captions.  The captions and section numbers  appearing in the Plan
are  inserted  only as a  matter  of  convenience.  They do not  define,  limit,
construe or describe the scope or intent of the provisions of the Plan.

          (j)  Number.  The use of the  singular or plural  herein  shall not be
restrictive  as to number and shall be  interpreted  in all cases as the context
may require.

          (k) Gender. The use of the feminine, masculine or neuter pronoun shall
not be  restrictive  as to gender and shall be  interpreted  in all cases as the
context may require.

     11.  Termination  of the Plan.  The Plan  shall  terminate  at the close of
business on November 10, 2010,  and thereafter no options shall be granted under
the Plan.  All options  outstanding at the time of termination of the Plan shall
continue  in  full  force  and  effect  according  to the  terms  of the  option
agreements governing such options and the terms and conditions of the Plan.

     12.  Governing  Law.  The  Plan  shall  be  governed  by and  construed  in
accordance  with the laws of the State of Delaware  and any  applicable  federal
law.

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     13. Venue. The venue of any claim brought hereunder by an Optionee shall be
Boston, Massachusetts.

     14. Changes in Governing Rules and  Regulations.  All references  herein to
the Code or sections  thereof,  or to rules and regulations of the Department of
Treasury or of the  Securities and Exchange  Commission,  shall mean and include
the Code sections thereof and such rules and regulations as are now in effect or
as they may be subsequently amended, modified, substituted or superseded.

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