Exhibit 10.4

                           THIRD AMENDED AND RESTATED
                            PLAYBOY ENTERPRISES, INC.
                            1995 STOCK INCENTIVE PLAN

                As Amended and Restated as of September 17, 2008

      Playboy Enterprises,  Inc., a corporation  organized under the laws of the
State of Delaware (the "Company"), hereby adopts this Third Amended and Restated
Playboy Enterprises, Inc. 1995 Stock Incentive Plan.

      The purposes of this Plan are as follows:

      (1)   To further the  growth,  development  and  financial  success of the
Company by  providing  additional  incentives  to  certain of its key  employees
through the  ownership of Company  stock  and/or  rights  which  recognize  such
growth, development and financial success.

      (2)   To enable the Company  to obtain  and  retain  the  services  of key
employees  considered  essential  to the  long-range  success of the  Company by
providing and offering them an  opportunity  to own stock in the Company  and/or
rights which will reflect the growth,  development and financial  success of the
Company.

                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

      Whenever  the  following  terms are used in this Plan they  shall have the
meaning specified below, unless the context clearly indicates otherwise.

      Section 1.1    Board.  "Board" shall  mean the Board of  Directors  of the
Company.

      Section 1.2    Change of  Control.  "Change  of  Control"  shall  mean the
occurrence of any of the following events: (i) except in a transaction described
in clause (iii) below, Hugh M. Hefner,  Christie Hefner, the Hugh M. Hefner 1991
Trust (for so long as Hugh M. Hefner and Christie  Hefner are joint  trustees or
one of them is sole trustee) and the Hugh M. Hefner  Foundation  (for so long as
Hugh M.  Hefner and  Christie  Hefner are joint  trustees or one of them is sole
trustee) cease  collectively to own a majority of the total number of votes that
may be cast for the  election of  directors  of the  Company;  or (ii) a sale of
Playboy magazine by the Company;  or (iii) the liquidation or dissolution of the
Company,  or any merger,  consolidation  or other  reorganization  involving the
Company  unless  (x)  the  merger,  consolidation  or  other  reorganization  is
initiated  by the  Company,  and (y) is one in  which  the  stockholders  of the
Company   immediately   prior  to  such   reorganization   become  the  majority
stockholders  of a  successor  or  ultimate  parent  corporation  of the Company
resulting  from such  reorganization  and (z) in  connection  with  such  event,
provision  is made for an  assumption  of  outstanding  Options  and rights or a
substitution  thereof of a new  Option or right in such  successor  or  ultimate
parent of substantially equivalent value.

      Section 1.3    Code. "Code"  shall mean the Internal Revenue Code of 1986,
as amended.

      Section 1.4    Committee. "Committee"  shall mean a committee of the Board
of Directors   comprised of persons who are both  non-employee  directors within
the meaning of Rule

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16b-3 which has been adopted by the Securities and Exchange Commission under the
Securities  Exchange Act of 1934, as amended,  as such rule or its equivalent is
then in effect  ("Rule  16b-3") and  "outside  directors"  within the meaning of
Section 162(m) of the Code.

      Section 1.5    Common Stock.  "Common Stock"  shall mean  Class  B  Common
Stock, par value $.01 per share, of the Company.

      Section 1.6    Company. "Company" shall mean Playboy  Enterprises, Inc., a
Delaware corporation.

      Section 1.7    Deferred  Stock. "Deferred Stock"  shall mean Common  Stock
awarded under Article VIII of the Plan.

      Section 1.8    Director. "Director" shall mean a member of the Board.

      Section 1.9    Employee.  "Employee"  shall   mean  any  officer  or other
employee  (as   defined   in   accordance   with  the  Regulations  and  Revenue
Rulings  then  applicable  under  Section 3401(c) of the Code) of the Company or
any Subsidiary.

      Section 1.10   ERISA. "ERISA"  shall mean the Employee  Retirement  Income
Security Act of 1974, as amended.

      Section 1.11   Exchange  Act.  "Exchange  Act" shall  mean the  Securities
Exchange Act of 1934, as amended.

      Section 1.12   Grantee.   "Grantee"  shall  mean  an  Employee  granted  a
Performance  Award, Stock Payment,  Section 162(m)  Performance  Award,  Section
162(m) Stock Payment,  or an award of Deferred Stock or Section 162(m)  Deferred
Stock, under this Plan.

      Section 1.13   Incentive Stock Option. "Incentive Stock Option' shall mean
an Option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.

      Section 1.14   Non-Qualified  Option. "Non-Qualified Option" shall mean an
Option which is not designated as an Incentive Stock Option by the Committee.

      Section 1.15   Officer. "Officer" shall mean an officer of the Company.

      Section 1.16   Option. "Option" shall mean a stock  option  granted  under
Article III of this Plan. An Option granted under this Plan shall, as determined
by the Committee,  be either a Non-Qualified  Stock Option or an Incentive Stock
Option.

      Section 1.17   Optionee.  "Optionee"  shall  mean  an  Employee to whom an
Option is granted under the Plan.

      Section 1.18   Performance  Award.  "Performance  Award" shall mean a cash
bonus, stock bonus or other performance or incentive award that is paid in cash,
Common Stock or a combination of both, awarded under Article VIII of this Flan.

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      Section  1.19  Performance  Criteria.  "Performance  Criteria"  shall mean
objective performance criteria established pursuant to this Plan with respect to
awards of Section 162(m) Restricted Stock,  Section 162(m)  Performance  Awards,
Section  162(m) Stock Payments and Section 162(m)  Deferred  Stock.  Performance
Criteria shall be measured in terms of one or more of the following  objectives,
described as such objectives relate to corporation-wide objectives or objectives
that  are  related  to the  performance  of the  individual  Employee  or of the
Subsidiary,  division,  department or function with the Company or Subsidiary in
which the participant is employed:

                     (i)    market value;

                     (ii)   book value;

                     (iii)  earnings per share;

                     (iv)   market share;

                     (v)    operating profit;

                     (vi)   net income;

                     (vii)  cash flow;

                     (viii) return on capital;

                     (ix)   return on assets;

                     (x)    return on equity;

                     (xi)   margins;

                     (xii)  shareholder return;

                     (xiii) sales or product volume growth;

                     (xiv)  productivity improvement; or

                     (xv)   costs or expenses.

      Each grant of Section 162(m) Restricted Stock,  Section 162(m) Performance
Awards,  Section 162(m) Stock Payments,  and Section 162(m) Deferred Stock shall
specify the Performance  Criteria to be achieved,  a minimum acceptable level of
achievement  below  which no payment or award  will be made,  and a formula  for
determining  the amount of any payment or award to be made if  performance is at
or above the minimum  acceptable level but fall short of full achievement of the
specified Performance Criteria.

      If the Committee  determines  that a change in the  business,  operations,
corporate  structure or capital structure of the Company, or the manner in which
it  conducts  its  business,   or  other  events  or  circumstances  render  the
Performance Criteria to be unsuitable, the Committee may modify such Performance
Criteria or the related minimum acceptable level of achievement,  in whole or in
part, as the Committee deems appropriate and equitable;  provided, however, that
no such

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modification  shall be made if the effect would be to cause the award to fail to
qualify for the  performance-based  compensation  exception to Section 162(m) of
the Code. In addition,  at the time the award subject to Performance Criteria is
made and performance goals established, the Committee is authorized to determine
the manner in which the  Performance  Criteria will be calculated or measured to
take into account  certain  factors over which the Employees  have no or limited
control including market related changes in inventory value, changes in industry
margins, changes in accounting principles, and extraordinary changes to income.

      Section 1.20   Plan. "Plan" shall  mean  the Third  Amended  and  Restated
Playboy Enterprises, Inc. 1995 Stock Incentive Plan.

      Section 1.21   Restricted Stock.  "Restricted  Stock"  shall  mean  Common
Stock awarded under Article VI of this Plan.

      Section 1.22   Restricted  Stockholder.  "Restricted   Stockholder"  shall
mean an Employee  granted an  award of Restricted Stock under Article VI of this
Plan.

      Section 1.23   Secretary.  "Secretary"  shall  mean the  Secretary  of the
Company.

      Section 1.24   Section 162(m) Deferred  Stock.  "Section  162(m)  Deferred
Stock" shall mean Common Stock awarded under Article IX of this Plan.

      Section 1.25   Section    162(m)  Performance    Award.  "Section   162(m)
Performance Award"  shall mean a cash bonus,  stock bonus, or other  performance
or incentive award  that is paid in cash, Common Stock or a combination of both,
awarded under Article IX of this Plan.

      Section 1.26   Section 162(m) Restricted Stock. "Section 162(m) Restricted
Stock" shall mean Common Stock awarded under Section VII of this Plan.

      Section 1.27   Section  162(m)  Restricted  Stockholder.  "Section  162(m)
Restricted  Stockholder"  shall  mean an  Employee  granted  an award of Section
162(m) Restricted Stock under Article VII of this Plan.

      Section 1.28   Section   162(m)   Stock   Payment.   "Section 162(m) Stock
Payment" shall mean (i) a payment in the form of Commons  Stock,  (ii) an option
or other  right to  purchase  shares  of  Common  Stock,  as part of a  deferred
compensation   arrangement,   made  in  lieu  of  all  or  any  portion  of  the
compensation,  including without  limitation,  salary,  bonuses and commissions,
that would  otherwise  become  payable to a Key  Employee (as defined in Section
3.3(i)) in cash, awarded under Article IX of this Plan.

      Section 1.29   Securities Act. "Securities  Act" shall mean the Securities
Act of 1933, as amended.

      Section 1.30   Stock  Payment.  "Stock   Payment" shall mean (i) a payment
in the form of  shares  of Common  Stock,  or (ii) an  option or other  right to
purchase shares of Common Stock, as part of a deferred compensation arrangement,
made  in lieu  of all or any  portion  of the  compensation,  including  without
limitation, salary, bonuses and commissions, that would otherwise become payable
to a Key Employee (as defined in Section 3.3(i)) in cash,  awarded under Article
VIII of this Plan.

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      Section 1.31   Subsidiary.  "Subsidiary" shall mean any  corporation in an
unbroken  chain  of  corporations  beginning  with  the  Company  if each of the
corporations  other than the last  corporation  in the unbroken  chain then owns
stock  possessing 50% or more of the total combined  voting power of all classes
of stock in one of the other corporations in such chain.

      Section 1.32   Termination  of  Employment.  "Termination  of  Employment"
shall  mean  the  time  when  the  employee-employer  relationship  between  the
Optionee,   Grantee,   Restricted  Stockholder,  or  Section  162(m)  Restricted
Stockholder  and the Company or any  Subsidiary is  terminated,  voluntarily  or
involuntarily,  for any  reason,  with or  without  Cause  (as  defined  below),
including,  but  not  by  way  of  limitation,  a  termination  by  resignation,
discharge,  death, disability or retirement, but excluding any termination where
there  is a  simultaneous  reemployment  by the  Company  or a  Subsidiary.  The
Committee,  subject to the definition of Cause below, shall determine the effect
of all other  matters and  questions  relating  to  Termination  of  Employment,
including,  but not by way of  limitation,  the  question of whether  particular
leaves of absence  constitute  Terminations  of Employment;  provided,  however,
that,  with  respect  to  Incentive  Stock  Options,  a leave of  absence  shall
constitute a Termination of Employment if, and to the extent that, such leave of
absence interrupts  employment for the purposes of Section 422(a)(2) of the Code
and the then applicable  regulations and revenue rulings under said Section. For
purposes of the Plan,  "Cause" shall mean an Employee's (a) gross  negligence in
the performance of the  responsibilities  of such Employee's office or position;
(b) any act of dishonesty or moral turpitude  materially adversely affecting the
Company or the  Company's  reputation;  (c)  commission  of any other willful or
intentional  act that could  reasonably  be  expected to injure  materially  the
reputation, business or business relationships of the Company or any Subsidiary;
or (d) conviction of a felony or of any crime involving moral  turpitude,  fraud
or misrepresentation.

                                   ARTICLE II
                             SHARES SUBJECT TO PLAN
                             ----------------------

      Section 2.1    Shares   Subject to Plan.  (a) The shares of stock  subject
to Options,  or awards of Restricted  Stock,  Section 162(m)  Restricted  Stock,
Performance Awards,  Section 162(m) Performance Awards,  Deferred Stock, Section
162(m) Deferred Stock, Stock Payments, or Section 162(m) Stock Payments shall be
Common Stock.  The aggregate  number of shares which may be issued upon exercise
of such  Options  or rights  or upon any such  awards  under the Plan  shall not
exceed 7,703,000 shares of Common Stock.

            (b)    The  maximum  number  of shares  of  Common  Stock  which may
be subject to  Options,  rights or other  awards  granted  under the Plan to any
Employee  in any  calendar  year  shall not  exceed  650,000,  and the method of
counting   such  shores  shall  conform  to  any   requirements   applicable  to
performance-based  compensation  under Section 162(m) of the Code. The shares of
Common Stock  issuable  upon exercise of such Options or rights or upon any such
awards may be either  previously  authorized  but  unissued  shares or  treasury
shares.

            (c)    With regard  to Section  162(m)  Performance  Awards that are
cash bonuses or other  performance or incentive  awards expressed as cash awards
(without  regard to whether  such bonuses or awards are  ultimately  paid in the
form of cash,  stock,  or a combination of both as described in Section 9.7), an
Employee  may not be  granted  during  any  calendar  year such  Section  162(m)
Performance Awards in an amount in excess of $1,000,000.

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      Section 2.2    Unexercised  Options and  Awards.  If any Option,  or other
right to acquire  shares of Common  Stock under any other award under this Plan,
expires  or  is  cancelled  without  having  been  fully  exercised   (including
Restricted  Stock,  Section 162(m)  Restricted  Stock or any other award that is
forfeited   before   applicable   vesting   requirements  are  met  or  transfer
restrictions have lapsed),  the number of shares subject to such Option or other
right but as to which such Option or other right was not exercised (or vested or
delivered  without  restriction,  as the case may be) prior to its expiration or
cancellation may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1.

      Section  2.3   Adjustments in  Outstanding  Options or Rights.  Subject to
Section  4.2(c),  in the event that the  outstanding  shares of the Common Stock
subject to Options or other rights are changed into or exchanged for a different
number or kind of shares of the  Company or other  securities  of the Company by
reason of a recapitalization,  reclassification,  stock split, stock dividend or
combination  of shares or  similar  transaction,  the  Committee  shall  make an
appropriate  and  equitable  adjustment  in the  number and kind of shares as to
which all outstanding  Options or rights,  or portions thereof then unexercised,
shall  be   exercisable,   so  that  the   Optionee's,   Grantee's,   Restricted
Stockholder's or Section 162(m) Restricted Stockholder's  proportionate interest
shall be maintained.  Such adjustment  shall be made without change in the total
price  applicable to the unexercised  portion of the Option or right (except for
any  change  in  the  aggregate  price  resulting  from  rounding-off  of  share
quantities or prices) and with any necessary  corresponding  adjustment in price
per share;  provided,  however,  that,  pursuant to Treasury  Regulation Section
1.409A-1(b)(5)(v)(D),  no such  adjustment  shall cause an existing Option to be
treated as a new Option, and, in the case of Incentive Stock Options,  each such
adjustment  shall be made in such manner as not to  constitute a  'modification'
within the meaning of Code Section  424(h)(3).  Any such  adjustment made by the
Committee  shall be final and binding upon all Optionees,  Grantees,  Restricted
Stockholders,  Section  162(m)  Restricted  Stockholders,  the  Company  or  any
Subsidiary,  their  representatives  and  all  other  interested  persons.  Such
adjustments will also be made in determining  Section 2.1 limitations on maximum
number and kind of shares which may be issued on exercise of Options, Restricted
Stock,  Section 162(m)  Restricted Stock or other awards.  The shares of Class B
Common  Stock  reserved  under this Plan will be reduced as Options,  Restricted
Stock,  Section 162(m) Restricted Stock or other awards are granted or issued so
that the  aggregate  number of any single  Class of Stock will never  exceed the
total amount of shares authorized under the Plan.

                                  ARTICLE III
                               GRANTING OF OPTIONS
                               -------------------

      Section 3.1    Eligibility.  Any Key   Employee  (as  defined  in  Section
3.3(i)) of the Company or a  Subsidiary  except Hugh M. Hefner shall be eligible
to be granted Options.

      Section 3.2    Qualification of  Incentive  Stock  Options.  No  Incentive
Stock Option shall be granted unless such Option, when granted,  qualifies as an
"incentive  stock option" under Section 422 of the Code.  Without  limitation of
the foregoing,  no person shall be granted an Incentive  Stock Option under this
Plan if such person,  at the time the  Incentive  Stock Option is granted,  owns
stock  possessing more than ten percent (10%) of the total combined voting power
of all  classes of stock of the  Company  unless  such  Incentive  Stock  Option
conforms to the applicable provisions of Section 422 of the Code.

      Section 3.3    Granting of Options.  (a)  The Committee shall from time to
time, in its absolute discretion:

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                  (i)   Determine which Employees are "Key Employees" and select
      from  among the key  employees  (including  those to whom  Options  and/or
      rights  have been  previously  granted  under the Plan or any other  stock
      option or other plan of the Company) such of them as in its opinion should
      be granted Options; and

                  (ii)  Determine  for each  Employee the number of shares to be
      subject to such Options; and

                  (iii) Determine whether such Options are to be Incentive Stock
      Options or Non-Qualified Options; and

                  (iv)  Determine  the terms  and  conditions  of such  Options,
      consistent with the Plan.

            (b)   Upon the  selection  of a Key  Employee (as defined in Section
3.3(i)) to be granted an Option,  the Committee  shall instruct the Secretary or
other authorized  officer to execute and deliver a Stock Option  Agreement,  and
may impose such conditions on the grant of such Option as deems appropriate, not
inconsistent  with this Plan.  Without  limiting the generality of the preceding
sentence,  the Committee  may, in its  discretion  and on such terms as it deems
appropriate,  require as a  condition  on the grant of an Option to an  Employee
that the Employee  surrender  for  cancellation  some or all of the  unexercised
Options,  awards of Restricted Stock-, Section 162(m) Restricted Stock, Deferred
Stock or Section  162(m)  Deferred  Stock,  Performance  Awards,  Section 162(m)
Performance  Awards,  Stock  Payments or Section  162(m) Stock Payments or other
rights which have been previously  granted to him. An Option, the grant of which
is conditioned  upon such surrender,  may have an Option price lower (or higher)
than the Option price of the surrendered Option, may cover the same (or a lesser
or greater) number of shares as the surrendered  Option,  may contain such other
terms as the Committee deems appropriate and be exercised in accordance with its
terms, without regard to the number of shares, price, option period or any other
term or condition of such surrendered Option or award.

            (c)   Stock Option  Agreements  evidencing  Incentive  Stock Options
shall  contain  such  terms  and  conditions  as may be  necessary  to meet  the
applicable  provisions of Section 422 of the Code.  Any  Incentive  Stock Option
granted  under this Plan may be modified by the  Committee  to  disqualify  such
option from  treatment as an  "incentive  stock option" under Section 422 of the
Code.

            (d)   Options  granted  hereunder  shall  be  consideration  for the
future  performance  of services by the Optionee to the Company or a Subsidiary,
as applicable.

                                   ARTICLE IV
                                TERMS OF OPTIONS
                                ----------------

      Section  4.1   Option  Price.  (a)  The  price  of the  shares  subject to
each  Non-Qualified  Option shall not be less than 100% of the fair market value
of such shares at the end of the business day upon which such Option is granted.

            (b)   For purposes of the Plan,  the fair market value ("Fair Market
Value") of a share of the  Company's  Common  Stock as of a given date shall be:
(i) the closing price of a share of such class of the Company's  Common Stock on
the principal exchange on which shares of

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the Company's Common Stock are then trading, if any, on such date, or, if shares
were not traded on such date,  then on the next  subsequent  trading  day during
which a sale  occurs;  or (ii) if such Common shock is not traded on an exchange
but is quoted on NASDAQ or a  successor  quotation  system,  (1) the last  sales
price (if the Company's  Common Stock is then listed as a National  Market Issue
under the NASD  National  Market  System) or (2) the mean  between  the  closing
representative  bid and asked  prices  (in all other  cases)  for the  Company's
Common  Stock on such date as  reported  by NASDAQ or such  successor  quotation
system;  or (iii) if such Common Stock is not publicly traded on an exchange and
not quoted on NASDAQ or a  successor  quotation  system,  the mean  between  the
closing bid and asked prices for the Company's  Common  Stock,  on such date, as
determined in good faith by the Committee; or (iv) if the Company's Common Stock
is not publicly  traded,  the fair market  value  established  by the  Committee
acting in good faith and,  in all  instances,  established  pursuant to Treasury
Regulation Section 1.409A-1(b)(5)(iv)(B).

            (c)   The price of the shares  subject to  Incentive  Stock  Options
shall not be less than the  greater  of (i) 100% of the Fair  Market  Value of a
share of Common Stock on the date the Incentive Stock Option is granted, or (ii)
110% of the  Fair  Market  Value  of a share of  Common  Stock on the date  such
Incentive  Stock  Option is granted  in the case of an  individual  then  owning
(within  the  meaning of Section  424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary.

      Section  4.2   Commencement  of  Exercisability;  Chance  of  Control. (a)
Subject to the  provisions  of Sections  4.2(b) and 11.3,  Options  shall become
exercisable at such times and in such installments  (which may be cumulative) as
the Committee  shall provide in the terms of each individual  Option;  provided,
however,  that by a resolution  adopted after an Option is granted the Committee
may, on such terms and  conditions  as it may  determine to be  appropriate  and
subject to Sections  4.2 and 11.3,  accelerate  the time at which such Option or
any portion  thereof  may be  exercised;  provided  further,  however,  that all
outstanding  Options shall become fully vested and exercisable as of immediately
prior to a Change of Control.

            (b)   No portion of an Option which is  unexercisable at Termination
of Employment shall thereafter  become  exercisable,  except as may be otherwise
provided  by  the  Committee  either  in  the  Stock  Option  Agreement  or in a
resolution  adopted  following  the grant of the  Option.  Except as  limited by
requirements of Section 422 of the Code and  regulations and rulings  thereunder
applicable to Incentive Stock Options,  the Committee may extend the term of any
outstanding  Option in  connection  with any  Termination  of  Employment of the
Optionee, or amend any other term or condition of such Option relating to such a
termination.

            (c)   To the extent that the  aggregate  Fair Market  Value of stock
with respect to which  "incentive  stock options" (within the meaning of Section
422 of the  Code,  but  without  regard  to  Section  422(d)  of the  Code)  are
exercisable  for the first time by an Optionee  during any calendar  year (under
the Plan and all other  incentive  stock  option  plans of the  Company  and any
subsidiary)  exceeds  $100,000,  such Options shall be treated as  Non-Qualified
Options to the extent required by Section 422 of the Code. The rule set forth in
the preceding  sentence  shall be applied by taking  Options into account in the
order in which they were granted.  For purposes of this Section 4.2(c), the Fair
Market Value of stock shall be determined as of the time the Option with respect
to such stock is granted.

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      Section 4.3    Expiration of Options. (a) Unless an Option expires earlier
or later pursuant to the terms of a Stock Option  Agreement,  each Option may be
exercised  any time until the first of the  following  events,  after which such
Option will become unexercisable:

                  (i)   The  expiration  of ten  (10)  years  from  the date the
      Option was granted if the Employee is still employed by the Company or any
      Subsidiary; or

                  (ii)  The  expiration of three (3) months from the  Employee's
      Termination of Employment if such  Termination of Employment  results from
      such  Employee's  retirement or such Employee's  being  discharged not for
      Cause, unless the Employee dies within said three-month period; or

                  (iii) The effective  date of (i) a  Termination  of Employment
      for Cause, (ii) the Employee's  resignation,  or (iii) a Change of Control
      specified in clause (iii) of the definition of such term; or

                  (iv)  In the case of an Optionee  who is disabled  (within the
      meaning of Section  22(e)(3) of the Code),  the expiration of one (1) year
      from the  date of the  Optionee's  Termination  of  Employment;  provided,
      however,  that subsection (iv) shall not apply if the Optionee dies within
      said one-year period; or

                  (v)   One (1) year from the date of the Optionee's death.

            (b)   Subject to the  provisions  of Section  4.3(a),  the Committee
shall provide,  in the terms of each individual Option, when such Option expires
and  becomes  unexercisable;   and  (without  limiting  the  generality  of  the
foregoing)  the Committee  may provide in the terms of  individual  Options that
said Options expire immediately upon a Termination of Employment for any reason.

            (c)   The term of any Incentive  Stock Option shall not be more than
five (5) years  from such date if the  Incentive  Stock  Option is granted to an
individual  then owning  (within the meaning of Section 424(d) of the Code) more
than 10% of the total  combined  voting power of all classes of capital stock of
the Company or any Subsidiary.

      Section  4.4   No Right to  Continued  Employment.  Nothing in  this  Plan
or in any Stock Option  Agreement  hereunder  shall confer upon any Optionee any
right to  continue  in the  employ  of the  Company  or any  Subsidiary  or as a
director  of the  Company,  or shall  interfere  with or restrict in any way the
rights of the Company and any of its  Subsidiaries,  which are hereby  expressly
reserved, to discharge any Optionee at any time for any reason whatsoever,  with
or without Cause.

      Section 4.5    Reload Options.  Options  may, in  the  discretion  of  the
Committee,  be granted  under the Plan to permit a  participant  to reaquire any
shares such  participant  delivered  to the  Company as payment of the  exercise
price (as described in Section 5.3) in connection with the exercise of an Option
hereunder  or to  reaquire  any shares  retained  by the  Company to satisfy the
participant's  withholding  obligation  in  connection  with the  exercise of an
Option  hereunder  (a "Reload  Option").  The terms of a Reload  Option shall be
identical in all  material  respects to the terms of the Option as to which such
Reload Option was granted,  provided,  however, that the

                                        9

<PAGE>

exercise  price for each share granted under the Reload Option shall be the Fair
Market Value of a share at the time such Reload Option is granted.

                                    ARTICLE V
                               EXERCISE OF OPTIONS
                               -------------------

      Section 5.1    Person  Eligible   to   Exercise.  (a)  Subject to 5.1 (b),
during the  lifetime of an Optionee,  only such  Optionee may exercise an Option
(or any  portion  thereof)  granted  to such  Optionee.  After  the death of the
Optionee,  any  exercisable  portion  of an Option  may,  within  the time frame
allowed, be exercised by his personal  representative or by any person empowered
to do so under the deceased Optionee's will or under the then applicable laws of
descent and  distribution.  To the extent  Rule 16b-3 as then in effect  permits
transfers  of  Options,   the  Committee  may  approve  such  transfers  in  its
discretion.

            (b)   Should the Optionee be determined under applicable law to have
become a disabled person or the equivalent  thereof,  the then-vested portion of
the  Option  may,  prior to the time  when  such  Option  becomes  unexercisable
pursuant to the Plan or the applicable Stock Option  Agreement,  be exercised by
the Optionee's guardian or by any other person empowered to do so under the then
applicable laws of guardianship.  For purposes of this section 5.1(b), "disabled
person" shall mean a person who (i) because of mental  deterioration or physical
incapacity is not fully able to manage such person's person or estate or (ii) is
mentally ill and who because of such person's  mental  illness is not fully able
to manage such person's person or estate.

      Section 5.2    Partial Exercise. An exercisable Option may be exercised in
whole or in part.  However,  an Option shall not be exercisable  with respect to
fractional  shares and the Committee may require that, by terms of the Option, a
partial exercise be with respect to a number of shares.

      Section 5.3    Manner of Exercise.  All or a  portion  of  an  exercisable
Option shall be deemed  exercised  upon  delivery of all of the following to the
Secretary of the Company or the Secretary's office:

            (a)   A written  notice signed by the Optionee (or other person then
entitled  to  exercise  such  Option or  portion),  stating  that such Option or
portion  thereof is being exercised and such notice complies with all applicable
rules established by the Committee; and

            (b)   Payment in full for the exercised shares:

                  (i)   In cash or by certified or cashier's check; or

                  (ii)  In  shares  of the same  class of the  Company's  Common
      Stock owned by the Optionee;  provided, however, that the Optionee may use
      Common Stock in payment of the  exercise  price only if the shares so used
      are  considered  "mature" for purposes of  generally  accepted  accounting
      principles,  i.e.,  (x) they have been held by the Optionee free and clear
      for at least six months  prior to the use thereof to pay part of an Option
      exercise price, (y) they have been purchased by the Optionee in other than
      a compensatory  transaction,  or (z) they meet any other

                                       10

<PAGE>
      requirements  for  "mature"  shares  as may  exist  on the date of the use
      thereof to pay part of an Option  exercise  price,  as  determined  by the
      Committee;  further  provided,  however,  that the  Company may use Common
      Stock in payment of the exercise  price by means of attestation to Company
      of his ownership of sufficient shares in a manner reasonably acceptable to
      the Committee.  Shares actually delivered to the Company (i.e., shares for
      which the  attestation  mechanism  is not used) must be duly  endorsed for
      transfer  to the  Company.  Shares  used to pay all or part of the  Option
      exercise  price  pursuant to this provision will be credited at their Fair
      Market Value on the date of delivery; or

                        (iii)  With the consent of the Committee and at the sole
      discretion  of the Company,  by a full  recourse  promissory  note bearing
      interest (at no less than such rate as shall then preclude the  imputation
      of interest  under the Code or successor  provision) and payable upon such
      terms  as may be  prescribed  by the  Committee.  The  Committee  may also
      prescribe  the form of such  note and the  security  to be given  for such
      note.  No Option may,  however,  be  exercised by delivery of a promissory
      note or by a loan  from  the  Company  when or  where  such  loan or other
      extension of credit is prohibited by law; or

                        (iv)   With the consent of the Committee and at the sole
      discretion of the Company,  by a "net  exercise" via the forfeiture to the
      Company  of a portion  of the  Option  pertaining  to shares  with a value
      (based on the Fair Market Value of such  underlying  Option  shares on the
      date of  forfeiture)  equal to the  exercise  price of the  portion of the
      Option being exercised plus the applicable tax withholding amount; or

                        (v)    Any combination of the consideration  provided in
      the foregoing subsections (i), (ii), (iii) and (iv); or

                        (vi)   To the extent permitted  by law  (including  then
      existing  interpretations of Rule 16b-3) a "cashless  exercise  procedure"
      satisfactory  to the  Committee  which  permits the Optionee to deliver an
      exercise  notice to a  broker-dealer,  who then sells the  Option  shares,
      delivers  the  exercise  price and  withholding  taxes to the  Company and
      delivers the excess funds less  commission  and  withholding  taxes to the
      Optionee; and

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

                  (d)   Appropriate proof of the right of such person or persons
to  exercise  the  option or  portion  thereof  in the event  that the Option or
portion  thereof  shall be  exercised  pursuant  to Section 5.1 by any person or
persons other than the Optionee; and

                  (e)   Full payment of all amounts which, under federal,  state
or local law, it is required to withhold upon  exercise of the Option.  With the
consent of the  Committee,  shares of

                                       11

<PAGE>

the  Company's  Common Stock owned by the Employee duly endorsed for transfer or
shares of the Company's  Common Stock  issuable to the Employee upon exercise of
the Option,  valued in accordance with Section 4.1(b) of the Plan at the date of
Option exercise, may be used to make all or part of such payment.

      Section 5.4    [RESERVED]

      Section 5.5    Additional Conditions to Issuance  of  Stock  Certificates.
The shares of Common Stock  deliverable  upon the exercise of an Option shall be
fully paid and  non-assessable.  In addition to  satisfaction  of the conditions
specified in Section 5.3, the Company  shall not be required to issue or deliver
any certificate or certificates  for shares of stock purchased upon the exercise
of any Option or portion  thereof prior to  fulfillment  of all of the following
conditions:

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

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

                  (c)   The lapse of such  reasonable  period of time  following
the exercise of the Option as the Committee or Board may establish  from time to
time for reasons of administrative convenience.

      Section 5.6    Rights as  Stockholders.  The holders of  Options shall not
be, nor have any of the rights or privileges of,  stockholders of the Company in
respect of any shares  purchasable  upon the  exercise  of any part of an Option
unless and until  certificates  representing such shares have been issued by the
Company to such holders or the Company's stock record books reflect the Optionee
as a stockholder pursuant to any book entry procedure approved by the Secretary.

      The  Committee,  in  its  absolute  discretion,   may  impose  such  other
restrictions on the  transferability of the shares purchasable upon the exercise
of an Option as it deems  appropriate.  Any such other  restriction shall be set
forth in the  respective  Stock Option  Agreement  and may be referred to on the
certificates  evidencing such shares.  The Committee may require the Employee to
give the Company  prompt  notice of any  disposition  of shares of Common Stock,
acquired by exercise of an Incentive Stock Option, within (i) two years from the
date of granting  such Option or (ii) one year after the transfer of such shares
to such  Employee.  The  Committee may direct that the  certificates  evidencing
shares  acquired  by  exercise of an Option  refer to such  requirement  to give
prompt notice of disposition.

                                   ARTICLE VI
                            AWARD OF RESTRICTED STOCK
                            -------------------------

      Section 6.1    Award of Restricted  Stock.  (a) The  Committee shall from
time to time, in its absolute discretion:

                                       12

<PAGE>

                        (i)    Select from among the Key  Employees (as  defined
      in Section 3.3(i)) (including Employees who have previously received other
      awards under this Plan or any other stock option plan of the Company) such
      of them as in its opinion should be awarded Restricted Stock; and

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

                  (b)   In  all   cases,   legal   consideration   meeting   the
requirements  of Delaware law shall be required for each  issuance of Restricted
Stock.

                  (c)   Upon the  selection  of a Key  Employee  (as  defined in
Section 3.3(i)) to be awarded Restricted Stock, the Committee shall instruct the
Secretary  of the  Company to issue such  Restricted  Stock and may impose  such
conditions on the issuance of such Restricted Stock as it deems appropriate.

      Section 6.2    Restricted Stock Agreement. Restricted  Stock all be issued
only pursuant to a written  Restricted Stock Agreement,  which shall be executed
by the selected Key  Employee (as defined in Section  3.3(i)) and an  authorized
officer of the Company and which shall contain such terms and  conditions as the
Committee shall determine, consistent with this Plan.

      Section 6.3    No Right to Continued  Employment.  Nothing in this Plan or
in any  Restricted  Stock  Agreement  hereunder  shall confer on any  Restricted
Stockholder any right to continue in the employ of the Company or any Subsidiary
or shall interfere with or restrict in any way the rights of the Company and any
Subsidiary,  which are hereby  expressly  reserved,  to discharge any Restricted
Stockholder at any time for any reason whatsoever, with or without good cause.

      Section  6.4   Rights as  Stockholders.  Upon  delivery  of any  shares of
Restricted  Stock that are certificated to the escrow holder pursuant to Section
6.7, and upon issuance thereof,  if uncertificated,  the Restricted  Stockholder
shall have,  unless  otherwise  provided by the  Committee,  all the rights of a
stockholder  with respect to said  shares,  subject to the  restrictions  in the
Restricted  Stock  Agreement,  including  the right to receive all dividends and
other distributions paid or made with respect to the shares; provided,  however,
that in the discretion of the Committee,  any  extraordinary  distribution  with
respect to the Common  Stock shall be subject to the  restrictions  set forth in
Section 6.5.

      Section 6.5    Restrictions. All  shares  of Restricted Stock issued under
this Plan  (including  any shares  received by holders  thereof  with respect to
shares of Restricted Stock as a result of stock  dividends,  stock splits or any
other  form  of  recapitalization)  shall,  in  the  terms  of  each  individual
Restricted  Stock  Agreement,  be subject to such  restrictions as the Committee
shall provide, which restrictions may include, without limitation,  restrictions
concerning voting rights and  transferability and restrictions based on duration
of employment with the Company or a Subsidiary, Company performance,  individual
performance,  or a change of control;  provided,  however,  that by a resolution
adopted after the Restricted  Stock is issued,  the Committee may, on such terms
and conditions as it may determine to be  appropriate,  remove any or all of the
restrictions imposed by the terms of the Restricted Stock Agreement.  Restricted
Stock may not be sold or encumbered  until all  restrictions  are  terminated or
expire.  Unless provided otherwise by the Committee,  if no consideration (other
than  services)  was  paid  by  the  Restricted  Stockholder  upon  issuance,  a

                                       13

<PAGE>

Restricted  Stockholder's  rights in unvested  Restricted Stock shall lapse upon
Termination  of  Employment  for any reason at any time or prior to any date the
Committee may establish.

      Section 6.6    Repurchase of Restricted  Stock. If  consideration  (other
than services) was paid for Restricted Stock, the Committee shall provide in the
terms of each individual  Restricted Stock Agreement that the Company shall have
the right to repurchase  from the Restricted  Stockholder  the Restricted  Stock
then subject to restrictions  under the Restricted  Stock Agreement  immediately
upon a  Termination  of  Employment at a cash price per share equal to the price
paid by the Restricted Stockholder for such Restricted Stock or such other price
as may be specified in the Restricted Stock Agreement;  provided,  however, that
provision  may be made in the  Restricted  Stock  Agreement  in the  Committee's
discretion  that no such  right of  repurchase  shall  exist  in the  event of a
Termination of Employment without Cause, or following a Change in Control of the
Company  or  because  of  the  Restricted  Stockholder's  retirement,  death  or
disability, or otherwise.

      Section  6.7   Escrow. The Secretary  of the Company or such other  escrow
holder as the  Committee  may  appoint  shall  retain  physical  custody of each
certificate  representing Restricted Stock until all of the restrictions imposed
under the Restricted  Stock  Agreement  with respect to the shares  evidenced by
such  certificate  expire or shall have been  removed  (or the  Secretary  shall
establish book entry procedures sufficient to prevent unauthorized  transfers of
the Restricted Stock).

      Section 6.8    Legend. In order to enforce the  restrictions imposed  upon
shares of Restricted  Stock  hereunder,  the  Committee  shall cause a legend or
legends to be placed on certificates  representing  all  certificated  shares of
Restricted  Stock that are still subject to restrictions  under Restricted Stock
Agreements, or stop transfer instructions with respect to book entry procedures,
which legend,  legends or instructions  shall make appropriate  reference to the
conditions imposed hereby.

                                   ARTICLE VII
                    AWARD OF SECTION 162(m) RESTRICTED STOCK
                    ----------------------------------------

      Section 7.1    Award of Section 162(m) Restricted Stock. (a) The Committee
shall from time to time, in its absolute discretion:

                        (i)    Select from among the Key  Employees  (as defined
      in Section 3.3(i)) (including Employees who have previously received other
      awards under this Plan or any other stock option plan of the Company) such
      of them as in its  opinion  should be awarded  Section  162(m)  Restricted
      Stock; and

                        (ii)   Determine  the purchase  price, if any, and other
      terms and conditions  applicable to such Section 162(m)  Restricted Stock,
      consistent with this Plan.

                  (b)   In  all   cases,   legal   consideration   meeting   the
requirements  of  Delaware  law shall be required  for each  issuance of Section
162(m) Restricted Stock.

                  (c)   Upon the  selection  of a Key  Employee  (as  defined in
Section 3.3(i)) to be awarded  Section 162(m)  Restricted  Stock,  the Committee
shall  instruct  the  Secretary  of the

                                       14

<PAGE>

Company to issue  such  Section  162(m)  Restricted  Stock and may  impose  such
conditions on the issuance of such Section 162(m)  Restricted  Stock as it deems
appropriate.

      Section 7.2    Section   162(m)   Restricted   Agreement.  Section  162(m)
Restricted  Stock shall be issued  only  pursuant  to a written  Section  162(m)
Restricted Stock Agreement, which shall be executed by the selected Key Employee
(as  defined in Section  3.3(i))  and an  authorized  officer of the Company and
which shall contain such terms and conditions as the Committee shall  determine,
consistent with this Plan.

      Section 7.3    No Right to Continued  Employment. Nothing in this  Plan or
in any Section 162(m)  Restricted Stock Agreement  hereunder shall confer on any
Section 162(m) Restricted Stockholder any right to continue in the employ of the
Company or any  Subsidiary  or shall  interfere  with or restrict in any way the
rights of the Company and any Subsidiary,  which are hereby expressly  reserved,
to  discharge  any Section  162(m)  Restricted  Stockholder  at any time for any
reason whatsoever, with or without good cause.

      Section 7.4    Rights  as  Stockholders. Upon  delivery of  any  shares of
Section  162(m)  Restricted  Stock that are  certificated  to the escrow  holder
pursuant to Section 7.7,  and upon  issuance  thereof,  if  uncertificated,  the
Section 162(m) Restricted  Stockholder shall have, unless otherwise  provided by
the  Committee,  all the rights of a  stockholder  with  respect to said shares,
subject to the  restrictions in the Section 162(m)  Restricted  Stock Agreement,
including  the right to receive all dividends  and other  distributions  paid or
made with respect to the shares;  provided,  however,  that in the discretion of
the Committee,  any extraordinary  distribution with respect to the Common Stock
shall be subject to the restrictions set forth in Section 7.5.

      Section 7.5    Restrictions. All shares of Section 162(m) Restricted Stock
issued under this Plan  (including any shares  received by holders  thereof with
respect  to  shares  of  Section  162(m)  Restricted  Stock as a result of stock
dividends,  stock splits or any other form of  recapitalization)  shall,  in the
terms of each individual  Section 162(m) Restricted Stock Agreement,  be subject
to such  restrictions as the Committee  shall provide,  which  restrictions  may
include,   without  limitation,   restrictions   concerning  voting  rights  and
transferability.  The Section 162(m)  Restricted  Stock  Agreement shall provide
that  a  Section  162(m)  Restricted  Stockholder's  rights  in  Section  162(m)
Restricted  Stock  shall  not  vest  unless  one or more  specified  Performance
Criteria  established by the Committee shall have been achieved.  Section 162(m)
Restricted  Stock  may not be sold or  encumbered  until  all  restrictions  are
terminated  or  expire.  Unless  provided  otherwise  by  the  Committee,  if no
consideration  (other than services) was paid by the Section  162(m)  Restricted
Stockholder upon issuance,  a Section 162(m) Restricted  Stockholder's rights in
unvested  Section  162(m)  Restricted  Stock  shall  lapse upon  Termination  of
Employment  for any  reason at any time or prior to any date the  Committee  may
establish.

      Section  7.6   Repurchase  of  Section   162(m)   Restricted   Stock.   If
consideration  (other than  services))  was paid for Section  162(m)  Restricted
Stock,  the  Committee  shall  provide in the terms of each  individual  Section
162(m)  Restricted  Stock  Agreement  that the  Company  shall have the right to
repurchase  from the Section 162(m)  Restricted  Stockholder  the Section 162(m)
Restricted  Stock  then  subject  to  restrictions   under  the  Section  162(m)
Restricted  Stock  Agreement  immediately  upon a Termination of Employment at a
cash price per share  equal to the price paid by the Section  162(m)  Restricted
Stockholder for such Section 162(m)  Restricted Stock or such other price as may
be  specified  in the  Section  162(m)  Restricted  Stock  Agreement;  provided,
however,  that  provision  may be made in the Section  162(m)  Restricted  Stock
Agreement in the Committee's

                                       15

<PAGE>

discretion  that no such  right of  repurchase  shall  exist  in the  event of a
Termination of Employment without Cause, or following a Change in Control of the
Company or because of the Section 162(m)  Restricted  Stockholder's  retirement,
death or disability, or otherwise.

      Section  7.7   Escrow. The Secretary  of the Company or such other  escrow
holder as the  Committee  may  appoint  shall  retain  physical  custody of each
certificate  representing  Section  162(m)  Restricted  Stock  until  all of the
restrictions  imposed under the Section 162(m)  Restricted  Stock Agreement with
respect to the shares  evidenced by such  certificate  expire or shall have been
removed (or the Secretary  shall establish book entry  procedures  sufficient to
prevent unauthorized transfers of the Section 162(m) Restricted Stock).

      Section 7.8    Legend. In order to enforce the  restrictions  imposed upon
shares of Section 162(m) Restricted Stock hereunder, the Committee shall cause a
legend or legends to be placed on  certificates  representing  all  certificated
shares of Section 162(m) Restricted Stock that are still subject to restrictions
under Section 162(m) Restricted Stock Agreements,  or stop transfer instructions
with respect to book entry  procedures,  which legend,  legends or  instructions
shall make appropriate reference to the conditions imposed hereby.

                                  ARTICLE VIII
               PERFORMANCE AWARDS, DEFERRED STOCK, STOCK PAYMENTS
               --------------------------------------------------

      Section 8.1    Performance  Award. Any Key Employee (as defined in Section
3.3(i)) selected by the Committee may be granted one or more Performance Awards.
The value of such  Performance  Awards may be linked to the market  value,  book
value,  net  profits  or other  measure  of the value of  Common  Stock or other
specific Performance Criteria determined to be appropriate by the Committee,  in
each case on a specified date or dates or over any period or periods  determined
by the  Committee,  or may be based upon the  appreciation  in the market value,
book value,  net profits or other measure of the value of a specified  number of
shares  of  Common  Stock  over a fixed  period  or  periods  determined  by the
Committee.  In making such  determinations,  the Committee shall consider (among
such other factors as it deems  relevant in light of the specific type of award)
the contributions, responsibilities and other compensation of the particular Key
Employee (as defined in Section 3.3(i)).

      Section  8.2   Stock Payments. Any Key  Employee  (as  defined  in Section
3.3(i))  selected  by the  Committee  may receive  Stock  Payments in the manner
determined  from  time to time  by the  Committee.  In  particular,  any  person
designated  by the  Committee as a  participant  in the  Company's Key Executive
Incentive  Bonus Plan (the  "Bonus  Plan") or under the  Company  Service  Award
Program (the "Service Award Program") in accordance with the terms thereof,  and
whose bonus or service  award  thereunder  is  comprised  wholly or partially in
shares of Common Stock,  shall be deemed to have been selected to participate in
this Plan,  and shall  receive  such Common Stock  denominated  bonus as a Stock
Payment in  accordance  with and under the  provisions  of this Section 8.2. The
number of shares shall be  determined by the Committee and may be based upon the
Fair  Market  Value,  book value,  net profits or other  measure of the value of
Common Stock or other specific  Performance  Criteria determined  appropriate by
the Committee,  determined on the date such Stack Payment is made or on any date
thereafter.

      Section  8.3   Deferred  Stock. Any Key  Employee  (as  defined in Section
3.3(i))  selected by the Committee may be granted an award of Deferred  Stock in
the manner  determined from time to time by the Committee.  The number of shares
of Deferred  Stock shall be determined by

                                       16

<PAGE>

the Committee and may be linked to the market value,  book value, net profits or
other  measure  of the  value of  Common  Stock or  other  specific  Performance
Criteria,  in each  case on a  specified  date or dates or over  any  period  or
periods  determined by the Committee.  Common Stock  underlying a Deferred Stock
award will not be issued until the Deferred Stock award has vested,  pursuant to
a  vesting  schedule  or  Performance  Criteria  set  by the  Committee.  Unless
otherwise  provided by the Committee,  a Grantee of Deferred Stock shall have no
rights as a Company  stockholder  with respect to such Deferred Stock until such
time as the award has vested and the Common Stock  underlying the award has been
issued.

      Section  8.4   Performance  Award  Agreement,  Deferred  Stock  Agreement,
Stock Payment  Agreement.  Each Performance  Award,  Deferred Stock Award and/or
Stock Payment shall be evidenced by a written agreement, which shall be executed
by the Grantee and an authorized  Officer of the Company and which shall contain
such terms and conditions as the Committee shall determine, consistent with this
Plan.

      Section  8.5   Term. The term of a Performance Award  Agreement,  Deferred
Stock  Award  and/or  Stock  Payment  shall  be  set  by  the  Committee  in its
discretion.

      Section  8.6   Exercise  Upon  Termination  of  Employment.  A Performance
Award,  Deferred  Stock Award  and/or  Stock  Payment is payable  only while the
Grantee is an Employee;  provided  that the  Committee  may  determine  that the
Performance  Award,   Deferred  Stock  Award  and/or  Stock  Payment  will  vest
immediately upon a Termination of Employment without cause, Change of Control of
the  Company,  or  the  Grantee's  death  or  disability.  In all  instances,  a
Performance  Award,  Deferred  Stock Award and/or Stock Payment shall be paid to
the Employee in a lump sum (whether in cash or Common Stock) no later than March
15 of the calendar year following the calendar year in which such award vests.

      Section  8.7   Payment. Payment of the amount determined under Section 8.1
above shall be in cash, in Common Stock or a combination  of both, as determined
by the Committee.  To the extent any payment under this Article VIII is effected
in Common Stock,  it shall he made subject to  satisfaction of all provisions of
Section 5.5.

      Section  8.8   No Right to Continued Employment. Nothing  in  this Plan or
in any agreement  hereunder shall confer on any Grantee any right to continue in
the employ of the Company or any Subsidiary or shall  interfere with or restrict
in any way the  rights of the  Company  and any  Subsidiary,  which  are  hereby
expressly  reserved,  to  discharge  any  Grantee  at any  time  for any  reason
whatsoever, with or without good cause.

                                   ARTICLE IX
                SECTION 162(m) PERFORMANCE AWARDS, SECTION 162(m)
                  DEFERRED STOCK, SECTION 162(m) STOCK PAYMENTS
                  ---------------------------------------------

      Section  9.1   Section 162(m) Performance  Awards.  Any Key  Employee  (as
defined in Section 3.3(i))  selected by the Committee may be granted one or more
Section 162(m)  Performance  Awards.  The right to a Section 162(m)  Performance
Award  shall  not  vest  unless  one  or  more  specified  Performance  Criteria
established by the Committee shall have been achieved.

      Section  9.2   Section 162(m) Stock Payments. Any Key Employee (as defined
in Section 3.3(i))  selected by the Committee may be granted one or more Section
162(m) Stock

                                       17

<PAGE>

Payments.  The right to a Section 162(m) Stock Payment shall not vest unless one
or more specified  Performance  Criteria established by the Committee shall have
been achieved.

      Section  9.3   Section 162(m) Deferred Stock. Any Key Employee (as defined
in Section 3.3(i))  selected by the Committee may be granted an award of Section
162(m)  Deferred Stock. An award of Section 162(m) Deferred Stock shall not vest
unless one or more specified  Performance  Criteria established by the Committee
shall have been  achieved.  Common Stock  underlying a Section  162(m)  Deferred
Stock award will not be issued until the Section 162(m) Deferred Stock award has
vested. Unless otherwise provided by the Committee,  a Grantee of Section 162(m)
Deferred  Stock shall have no rights as a Company  stockholder  with  respect to
such Section  162(m)  Deferred Stock until such time as the award has vested and
the Common Stock underlying the award has been issued.

      Section  9.4   Section   162(m)   Performance   Award  Agreement,  Section
162(m) Deferred Stock  Agreement  Section 162(m) Stock Payment  Agreement.  Each
Section 162(m)  Performance  Award,  Section 162(m)  Deferred Stock Award and/or
Section  162(m) Stock Payment shall be evidenced by a written  agreement,  which
shall be executed by the  Grantee and an  authorized  Officer of the Company and
which shall contain such terms and conditions as the Committee shall  determine,
consistent with this Plan.

      Section  9.5   Term. The  term  of  a  Section  162(m)  Performance  Award
Agreement,  Section  162(m)  Deferred  Stock Award and/or  Section  162(m) Stock
Payment shall be set by the Committee in its discretion.

      Section  9.6   Exercise Upon Termination of Employment.  A Section  162(m)
Performance  Award,  Section  162(m)  Deferred Stock Award and/or Section 162(m)
Stock  Payment is payable only while the Grantee is an Employee;  provided  that
the Committee may determine that the Section 162(m) Performance  Award,  Section
162(m)  Deferred  Stock Award  and/or  Section  162(m)  Stock  Payment will vest
immediately  upon a Change of Control of the Company,  or the Grantee's death or
disability. In all instances, a Section 162(m) Performance Award, Section 162(m)
Deferred  Stock Award and/or  Section  162(m) Stock Payment shall be paid to the
Employee in a lump sum (whether in cash or Common  Stock) no later than March 15
of the calendar year following the calendar year in which such award vests.

      Section  9.7   Payment. Payment of the amount determined under Section 9.1
above shall be in cash, in Common Stock or a combination  of both, as determined
by the Committee. To the extent any payment under this Article IX is effected in
Common  Stock,  it shall be made subject to  satisfaction  of all  provisions of
Section 5.5.

      Section  9.8   No Right to Continued  Employment. Nothing in this Plan or
in any agreement  hereunder shall confer on any Grantee any right to continue in
the employ of' the Company or any Subsidiary or shall interfere with or restrict
in any way the  rights of the  Company  and any  Subsidiary,  which  are  hereby
expressly  reserved,  to  discharge  any  Grantee  at any  time  for any  reason
whatsoever, with or without good cause.

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                                    ARTICLE X
                                 ADMINISTRATION
                                 --------------

      Section 10.1   Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general  administration  of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and the
agreements  pursuant to which  Options,  awards of  Restricted  Stock,  Deferred
Stock,  Section  162(m)  Restricted  Stock or  Section  162(m)  Deferred  Stock,
Performance  Awards,  Stock  Payments,  Section 162(m)  Performance  Awards,  or
Section  162(m)  Stock  Payments are granted and awarded and to adopt such rules
for  the  administration,  interpretation  and  application  of the  Plan as are
consistent herewith and to interpret,  amend or revoke any such rules.  Options,
awards of Section  162(m)  Restricted  Stock,  Section  162(m)  Deferred  Stock,
Section 162(m) Performance Awards and Section 162(m) Stock Payments are intended
to qualify as  performance-based  compensation under Section 162(m) of the Code,
and the Committee shall grant or award such Options, rights or other awards in a
manner consistent with the rules governing performance-based  compensation under
Section  162(m) of the  Code.  Any such  interpretations  and rules in regard to
Incentive  Stock Options shall be consistent  with the basic purpose of the Plan
to grant  "incentive  stock  options"  within the  meaning of Section 422 of the
Code.  In its  absolute  discretion,  the Board may at any time and from time to
time  exercise  any and all rights and duties of the  Committee  under this Plan
except with respect to matters  which under Rule 16b-3 or Section  162(m) of the
Code,  or any  regulations  or  rules  issued  thereunder,  are  required  to be
determined in the sole discretion of the Committee.

      Section 10.2   Majority Rule. The Committee shall act by a majority of its
members  in  attendance  at a  meeting  at which a  quorum  is  present  or by a
memorandum or other written instrument signed by all members of the Committee.

      Section 10.3   Compensation;  Professional Assistance;  Good Faith Action.
Members of the Committee shall receive such  compensation  for their services as
members as may be determined by the Board. All expenses and liabilities incurred
by members of the Committee in connection  with the  administration  of the Plan
shall be borne by the Company. The Committee may employ attorneys,  consultants,
accountants,  appraisers,  brokers or other persons. The Committee,  the Company
and its  officers  and  directors  shall he  entitled  to rely upon the  advice,
opinions  or  valuations  of  any  such  persons.  All  actions  taken  and  all
interpretations  and determinations made by the Committee in good faith shall be
final  and  binding,  upon all  Optionees,  Grantees,  Restricted  Stockholders,
Section 162(m)  Restricted  Stockholders,  the Company and all other  interested
persons.  No member of the Committee shall be personally  liable for any action,
determination,  or interpretation made in good faith with respect to the Plan or
the Options or other  awards,  and all members of the  Committee  shall be fully
protected  by the  Company  in  respect  to any such  action,  determination  or
interpretation.

                                   ARTICLE XI
                                OTHER PROVISIONS
                                ----------------

      Section 11.1   Period for Making Award Grants. Awards are  permitted to be
granted  under  this  Plan  for a  period  ending  ten  years  from  the date of
stockholder approval which was secured on May 23, 2007.

      Section 11.2   Options and Other Rights Are Not Transferable.  No Options,
Performance Awards, Stock Payments,  Section 162(m) Performance Awards,  Section
162(m) Stock

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<PAGE>

Payments,  Restricted Stock,  Section 162(m)  Restricted  Stock,  Deferred Stock
Awards or Section  162(m)  Deferred  Stock Awards or interest under this Plan or
part  thereof  shall be liable for the debts,  contracts or  engagements  of any
Optionee,  Grantee,  Restricted  Stockholder or their  respective  successors in
interest  or  shall  be  subject  to   disposition   by  transfer,   alienation,
anticipation,  pledge,  encumbrance,  assignment or any other means whether such
disposition  be  voluntary  or  involuntary  or by operation of law by judgment,
levy,  attachment,  garnishment  or any  other  legal or  equitable  proceedings
(including bankruptcy),  and any attempted disposition thereof shall be null and
void and of no effect;  provided,  however,  that  nothing in this  Section 11.2
shall  prevent  transfers  by  will,  by the  applicable  laws  of  descent  and
distribution  or by the approval of the Committee as described in Section 5.1(a)
of the Plan.

      Section 11.3   Amendment,   Suspension  or   Termination   of   the  Plan;
Modification of Options.  The Board may at any time terminate the Plan. With the
express written consent of an individual participant, the Board or the Committee
may cancel or reduce or otherwise alter outstanding Options or other awards. The
Board or the Committee may, at any time, or from time to time,  amend or suspend
and, if suspended,  reinstate,  the Plan in whole or in part;  provided that any
such amendment shall be contingent on obtaining the approval of the shareholders
of the Company if the  Committee  determines  that such approval is necessary to
comply with any  requirement  of law or any rule of any stock  exchange on which
the Company's  equity  securities  are traded,  or in order for Options or other
awards to  qualify  for an  exception  from  Section  162(m) of the Code (to the
extent  they would so qualify  but for the  absence  of  shareholder  approval).
Neither the amendment, suspension nor termination of the Plan shall, without the
consent of the holder of an Option,  Restricted Stock, Section 162(m) Restricted
Stock or award, alter or impair any rights or obligations under any such Option,
Restricted  Stock,   Section  162(m)  Restricted  Stock  or  award.  No  Option,
Restricted Stock, Section 162(m) Restricted Stock or award may be granted during
any period suspension nor after termination of the Plan, and in no event may any
Option  be  granted  under  this  date the  Plan is  approved  by the  Company's
stockholders  under Section 11.4. An Option,  Restricted  Stock,  Section 162(m)
Restricted  Stock or award shall be subject in all events to the condition that,
if at any time the Board shall determine,  in its discretion,  that the listing,
registration  or  qualification  of any of the  Company's  securities  upon  any
securities  exchange or under any law,  regulation or other  requirement  of any
governmental  authority  is  necessary  or  desirable,  or that any  consent  or
approval from any  governmental  authority is necessary or  desirable,  then the
Board may modify  the terms of any  Option,  Restricted  Stock,  Section  162(m)
Restricted  Stock or other award granted under the Plan,  without the consent of
the Optionee,  Grantee,  Restricted  Stockholder  or Section  162(m)  Restricted
Stockholder in any manner which the Board deems  necessary or desirable in order
to  improve  the  Company's  ability  to  obtain  such  listing,   registration,
qualifications, consent or approval.

      Section 11.4   Approval  of Plan by  Stockholders.  The Plan shall  become
effective as of the date of Board approval (the  "Effective  Date"),  subject to
the approval of the Company's  stockholders within 12 months after the Effective
Date; provided,  however,  that notwithstanding  anything herein or in any award
agreement to the contrary, all Section 162(m) Performance Awards, Section 162(m)
Stock Payments,  Section 162(m)  Restricted  Stock,  and Section 162(m) Deferred
Stock awarded prior to such stockholder  approval shall be void if such approval
has not been obtained at the end of said 12-month period.

      Section 11.5   Effect  of  Plan Upon Other Option and Compensation  Plans.
The adoption of this Plan shall not affect any other  compensation  or incentive
plans in effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right the Company

                                       20

<PAGE>

or any Subsidiary (a) to establish any other forms of incentives or compensation
for employees of the Company or any Subsidiary or (b) to grant or assume options
otherwise than under this Plan in connection with any proper corporate  purpose,
including,  but not by way of limitation,  the grant or assumption of options in
connection with the acquisition by purchase,  lease,  merger,  consolidation  or
otherwise,  of the  business,  stock  or  assets  of any  corporation,  firm  or
association.

      Section 11.6   No Obligation to Register. The Company shall not be deemed,
by reason of the  granting of any Option or any other award  hereunder,  to have
any  obligation to register the shares of Common Stock subject to such Option or
award under the Securities Act or to maintain in effect any registration of such
shares  which may be made at any time under the  Securities  Act subject to such
Option  or  award  under  the  Securities  Act  or to  maintain  in  effect  any
registration  of such shares which may be made at any time under the  Securities
Act.

      Section 11.7   Tax Withholding. The  Company  shall be entitled to require
payment in cash or deduction from other  compensation  payable to each Optionee,
Grantee,  Restricted Stockholder or Section 162(m) Restricted Stockholder of any
sums required by federal,  state or local tax law to be withheld with respect to
the  issuance,  vesting or exercise of any Option,  Restricted  Stock,  Deferred
Stock,  Performance  Award,  Stock  Payment,  Section 162(m)  Restricted  Stock,
Section 162(m)  Deferred  Stock,  Section 162(m)  Performance  Award, or Section
162(m) Stock Payment.

      Section 11.8   Limitations   Applicable   to   Section  16   Persons   and
Performance-Based  Compensation.  Notwithstanding  any other  provision  of this
Plan, any Option,  Performance Award, Stock Payment,  Section 162(m) Performance
Award, or Section 162(m) Stock Payment granted,  or Restricted  Stock,  Deferred
Stock,  Section  162(m)  Restricted  Stock,  or Section  162(m)  Deferred  Stock
awarded, to a Key Employee (as defined in Section 3.3(i)) who is then subject to
Section 16 of the Exchange Act, shall be subject to any  additional  limitations
set forth in any applicable  exemptive rule under Section 16 of the Exchange Act
(including   any  amendment  to  Rule  16b-3  of  the  Exchange  Act)  that  are
requirements  for the application of such exemptive rule, and this Plan shall be
deemed  amended  to  the  extent  necessary  to  conform  to  such  limitations.
Furthermore, notwithstanding any other provision of this Plan, any Option, right
or award intended to qualify as  performance-based  compensation as described in
Section 162(m)(4)(C) of the Code shall be subject to any additional  limitations
set forth in Section  162(m) of the Code  (including  any  amendment  to Section
162(m) of the Code) or any  regulations  or rulings issued  thereunder  that ale
requirements for qualification as performance-based compensation as described in
Section  162(m)(4)(C)  of the Code, and this Plan shall be deemed amended to the
extern necessary to conform to such requirements.

      Section 11.9   Compliance  with  Laws. This Plan, the granting and vesting
of Options,  Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Payments,  Section 162(m) Restricted Stock awards, Section 162(m) Deferred
Stock  awards,  Section  162(m)  Performance  Awards,  or Section  162(m)  Stock
Payments under this Plan and the issuance and delivery of shares of Common Stock
and the payment of money under this Plan or under Options,  Performance  Awards,
Stock  Payments,  Section  162(m)  Performance  Awards,  or Section 162(m) Stock
Payments granted or Restricted Stock,  Deferred Stock, Section 162(m) Restricted
Stock,  or Section  162(m)  Deferred  Stock  awarded  hereunder  are  subject to
compliance  with all applicable  federal and state laws,  rules and  regulations
(including  but not  limited to state and  federal  securities  laws and federal
requirements)  and to such approvals by any listing,  regulatory or governmental
authority  as may, in the opinion of counsel for the  Company,  be  necessary or
advisable connection  therewith.  Any securities delivered under this Plan shall
be subject to such restrictions, and the

                                       21

<PAGE>

person  acquiring such securities  shall,  if requested by the Company,  provide
such  assurances  and  representations  to the  Company as the  Company may deem
necessary  or  desirable  to  assure   compliance  with  all  applicable   legal
requirements.  To the extent  permitted by  applicable  law, the Plan,  Options,
Restricted  Stock awards,  Deferred  Stock  awards,  Performance  Awards,  Stock
Payments,  Section 162(m) Restricted Stock awards, Section 162(m) Deferred Stock
awards,  Section  162(m)  Performance  Awards,  or Section 162(m) Stock Payments
granted or awarded  hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

      Section 11.10  Noncompetition Provisions. The Committee, as a condition of
issuing any award under the Plan, may include in any agreement  evidencing  such
award such noncompetition  and/or  nonsolicitation  shall not be effective until
and unless the  grantee  thereof  acknowledges  by  written  consent  his or her
obligation to be bound thereby.

      Section 11.11  Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of the Plan.

      Section 11.12  Governing  Law. The  laws of  the State of  Delaware  shall
govern the interpretation, validity, administration, enforcement and performance
of the terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.

                                       22