2000 STOCK OPTION AND INCENTIVE PLAN, AS AMENDED

         RateXchange Corporation,  a Delaware corporation (the "Company"),  sets
forth herein the terms of its 2000 Stock Option and Incentive  Plan (the "Plan")
as follows:

     1. PURPOSE

         The Plan is intended to enhance the Company's and its subsidiaries' (as
defined  herein)  ability  to  attract  and retain  highly  qualified  officers,
directors,  key  employees,  and other  persons,  and to motivate such officers,
directors,  key  employees,  and  other  persons  to serve the  Company  and its
affiliates  and to expend  maximum  effort to improve the  business  results and
earnings of the Company, by providing to such officers,  key employees and other
persons an opportunity to acquire or increase a direct  proprietary  interest in
the operations and future success of the Company. To this end, the Plan provides
for the grant of stock options,  restricted  stock and restricted stock units in
accordance  with the terms hereof.  Stock options  granted under the Plan may be
non-qualified stock options or incentive stock options, as provided herein.

     2. DEFINITIONS

         For purposes of interpreting the Plan and related documents  (including
Award Agreements), the following definitions shall apply:

         2.1  "Affiliate"  of, or person  "affiliated"  with, a person means any
              company or other trade or business that controls, is controlled by
              or is under common  control with such person within the meaning of
              Rule 405 of  Regulation  C under the  Securities  Act,  including,
              without limitation, any Subsidiary.

         2.2  "Award  Agreement"  means the stock option  agreement,  restricted
              stock agreement,  restricted stock unit agreement or other written
              agreement  between the Company and a Grantee  that  evidences  and
              sets out the terms and conditions of a Grant.

         2.3  "Benefit  Arrangement" shall have the meaning set forth in Section
              14 hereof.

         2.4  "Board" means the Board of Directors of the Company.

         2.5  "Change of Control"  means (i) the  dissolution  or liquidation of
              the Company or a merger,  consolidation,  or reorganization of the
              Company  with one or more other  entities  in which the Company is
              not the surviving entity,  (ii) a sale of substantially all of the
              assets of the Company to another entity,  or (iii) any transaction
              (including  without limitation a merger or reorganization in which
              the Company is the  surviving  entity) which results in any person
              or entity (other than persons who are  shareholders  or affiliates
              of the Company at the time the Plan is  approved by the  Company's
              shareholders)  owning 80% or more of the combined  voting power of
              all classes of stock of the Company.

         2.6  "Code" means the Internal  Revenue Code of 1986,  as now in effect
              or as hereafter amended.

         2.7  "Committee" means a committee of, and designated from time to time
              by resolution of, the Board.

         2.8  "Company" means RateXchange Corporation.

         2.9  "Effective  Date" means  February 28, 2000,  the date the Plan was
              approved by the Board.

         2.10 "Exchange Act" means the  Securities  Exchange Act of 1934, as now
              in effect or as hereafter amended.

         2.11 "Fair Market  Value"  means the closing  price of the Stock on the
              OTC  Bulletin  Board,  the American  Stock  Exchange or the Nasdaq
              Stock  Market on the Grant Date or such other  determination  date
              (or if there is no such reported  closing  price,  the Fair Market
              Value shall be the mean  between the highest bid and lowest  asked
              prices or  between  the high and low sale  prices on such  trading
              day) or, if no sale of Stock is reported  for such trading day, on
              the next preceding day on which any sale shall have been reported.

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         2.12 "Family Member" means a person who is a spouse, child,  stepchild,
              grandchild,  parent,  stepparent,   grandparent,  sibling,  niece,
              nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
              brother-in-law,     or    sister-in-law,     including    adoptive
              relationships,  of the Grantee,  any person  sharing the Grantee's
              household  (other  than a tenant  or  employee),  a trust in which
              these  persons  have more than  fifty  percent  of the  beneficial
              interest,  a  foundation  in which these  persons (or the Grantee)
              control the  management  of assets,  and any other entity in which
              these  persons (or the Grantee) own more than fifty percent of the
              voting interests.

         2.13 "Grant"  means  an  award  of  an  Option,   Restricted  Stock  or
              Restricted Stock Unit under the Plan.

         2.14 "Grant  Date"  means,  as  determined  by the Board or  authorized
              Committee,  (i) the date as of which the  Board or such  Committee
              approves a Grant,  (ii) the date on which the recipient of a Grant
              first becomes  eligible to receive a Grant under Section 6 hereof,
              or (iii) such other date as may be  specified by the Board or such
              Committee.

         2.15 "Grantee"  means  a  person  who  receives  or  holds  an  Option,
              Restricted Stock or Restricted Stock Unit under the Plan.

         2.16 "Incentive  Stock Option" means an "incentive stock option" within
              the  meaning  of  Section  422 of the Code,  or the  corresponding
              provision of any subsequently enacted tax statute, as amended from
              time to time.

         2.17 "Option"  means an option to purchase  one or more shares of Stock
              pursuant to the Plan.

         2.18 "Option  Period"  means the period  during  which  Options  may be
              exercised as set forth in Section 10 hereof.

         2.19 "Option  Price" means the  purchase  price for each share of Stock
              subject to an Option.

         2.20 "Other  Agreement"  shall have the meaning set forth in Section 14
              hereof.

         2.21 "Plan" means this 2000 Stock Option and Incentive Plan.

         2.22 "Reporting  Person" means a person who is required to file reports
              under Section 16(a) of the Exchange Act.

         2.23 "Restricted Period" means the period during which Restricted Stock
              or  Restricted   Stock  Units  are  subject  to   restrictions  or
              conditions pursuant to Section 12.2 hereof.

         2.24 "Restricted  Stock"  means  shares of Stock,  awarded to a Grantee
              pursuant to Section 12 hereof,  that are  subject to  restrictions
              and to a risk of forfeiture.

         2.25 "Restricted Stock Unit" means a unit awarded to a Grantee pursuant
              to Section 12 hereof,  which  represents  a  conditional  right to
              receive a share of Stock in the  future,  and which is  subject to
              restrictions and to a risk of forfeiture.

         2.26 "Securities  Act"  means  the  Securities  Act of 1933,  as now in
              effect or as hereafter amended.

         2.27 "Stock" means the common stock of the Company.


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<PAGE>

         2.28 "Subsidiary"  means any  "subsidiary  corporation"  of the Company
              within the meaning of Section 424(f) of the Code.

         2.29 "Termination  Date"  means  the date upon  which an  Option  shall
              terminate or expire, as set forth in Section 10.2 hereof.

     3. ADMINISTRATION OF THE PLAN

         3.1 Board.

         The Board  shall  have  such  powers  and  authorities  related  to the
administration  of the Plan as are consistent with the Company's  certificate of
incorporation  and by-laws and  applicable  law. The Board shall have full power
and  authority  to take all actions and to make all  determinations  required or
provided for under the Plan,  any Grant or any Award  Agreement,  and shall have
full power and  authority to take all such other actions and make all such other
determinations  not  inconsistent  with the specific terms and provisions of the
Plan that the Board deems to be necessary or appropriate  to the  administration
of  the  Plan,  any  Grant  or  any  Award  Agreement.   All  such  actions  and
determinations  shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous  consent of the Board executed in
writing in  accordance  with the  Company's  certificate  of  incorporation  and
by-laws and applicable law. The  interpretation and construction by the Board of
any provision of the Plan, any Grant or any Award  Agreement  shall be final and
conclusive.

         3.2 Committee.

         The Board from time to time may delegate to a Committee such powers and
authorities related to the administration and implementation of the Plan, as set
forth in  Section  3.1 above and in other  applicable  provisions,  as the Board
shall determine, consistent with the certificate of incorporation and by-laws of
the Company  and  applicable  law. In the event that the Plan,  any Grant or any
Award Agreement entered into hereunder provides for any action to be taken by or
determination  to be made by the  Board,  such  action  may be  taken by or such
determination  may be made by the  Committee if the power and authority to do so
has  been  delegated  to the  Committee  by the  Board as  provided  for in this
Section.  Unless otherwise expressly determined by the Board, any such action or
determination by the Committee shall be final, binding and conclusive.

         3.3 Grants.

         Subject to the other terms and  conditions of the Plan, the Board shall
have full and final authority (i) to designate  Grantees,  (ii) to determine the
type or types of Grant to be made to a Grantee, (iii) to determine the number of
shares  of Stock to be  subject  to a Grant,  (iv) to  establish  the  terms and
conditions of each Grant  (including,  but not limited to, the exercise price of
any  Option,  the  nature and  duration  of any  restriction  or  condition  (or
provision for lapse thereof)  relating to the vesting,  exercise,  transfer,  or
forfeiture of a Grant or the shares of Stock subject  thereto,  and any terms or
conditions that may be necessary to qualify Options as Incentive Stock Options),
(v) to prescribe the form of each Award Agreement  evidencing a Grant,  and (vi)
to amend,  modify,  or  supplement  the  terms of any  outstanding  Grant.  Such
authority  specifically  includes  the  authority,  in order to  effectuate  the
purposes of the Plan but without amending the Plan, to modify Grants to eligible
individuals  who are  foreign  nationals  or are  individuals  who are  employed
outside the United States to recognize  differences in local law, tax policy, or
custom.  As a condition  to any Grant,  the Board  shall have the right,  at its
discretion,  to require  Grantees  to return to the  Company  Grants  previously
awarded under the Plan.  Subject to the terms and  conditions  of the Plan,  any
such  subsequent  Grant shall be upon such terms and conditions as are specified
by the Board at the time the new Grant is made. The Company may retain the right
in an Award Agreement to cause a forfeiture of the gain realized by a Grantee on
account of actions taken by the Grantee in violation or breach of or in conflict
with any non-competition  agreement,  any agreement prohibiting  solicitation of
employees  or  clients  of  the  Company  or  any   affiliate   thereof  or  any
confidentiality  obligation with respect to the Company or any affiliate thereof
or otherwise in competition  with the Company,  to the extent  specified in such
Award Agreement applicable to the Grantee.  Furthermore, the Company may annul a
Grant if the Grantee is an employee of the Company or an  affiliate  thereof and
is terminated  "for cause" as defined in the  applicable  Award  Agreement.  The
Board may permit or require the deferral of any award  payment,  subject to such
rules and procedures as it may establish,  which may include  provisions for the
payment or crediting of interest or dividend  equivalents,  including converting
such credits into deferred Stock equivalents.


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<PAGE>

         3.4 No Liability.

         No  member  of the Board or of the  Committee  shall be liable  for any
action or determination made in good faith with respect to the Plan or any Grant
or Award Agreement.

     4. STOCK SUBJECT TO THE PLAN

         Subject to adjustment  as provided in Section 17 hereof,  the number of
shares of Stock  available  for  issuance  under the Plan shall be five  million
(5,000,000). Stock issued or to be issued under the Plan shall be authorized but
unissued  shares.  If any  shares  covered by a Grant are not  purchased  or are
forfeited,  or if a Grant  otherwise  terminates  without  delivery of any Stock
subject  thereto,  then the  number  of  shares  of Stock  counted  against  the
aggregate  number of shares  available under the Plan with respect to such Grant
shall, to the extent of any such  forfeiture or termination,  again be available
for making Grants under the Plan.

     5. EFFECTIVE DATE AND TERM OF THE PLAN

         5.1 Effective Date.

        The  Plan  shall be  effective  as of the  Effective  Date,  subject  to
approval of the Plan within one year of the Effective Date, by a majority of the
votes cast on the proposal at a meeting of shareholders,  provided that a quorum
is  present or by the  written  consent  of the  holders  of a  majority  of the
Company's  shares of Stock  entitled to vote.  Upon  approval of the Plan by the
shareholders  of the Company as set forth above,  all Grants made under the Plan
on or after the Effective Date shall be fully  effective as if the  shareholders
of the Company had approved the Plan on the Effective Date. If the  shareholders
fail to approve the Plan within one year after the  Effective  Date,  any Grants
made hereunder shall be null and void and of no effect.

         5.2 Term.

        The Plan has no termination date; however, no Incentive Stock Option may
be granted  under the Plan on or after the tenth  anniversary  of the  Effective
Date.

     6. OPTION GRANTS

         6.1 Employees or Consultants.

        Grants (including Grants of Incentive Stock Options,  subject to Section
7.1) may be made under the Plan to any employee,  officer or director of, or any
consultant  or advisor  to, the  Company or any  Subsidiary,  as the Board shall
determine and designate from time to time.

         6.2 Successive Grants.

        An  eligible  person may  receive  more than one Grant,  subject to such
restrictions as are provided herein.

     7. LIMITATIONS ON GRANTS

         7.1 Limitations on Incentive Stock Options.

         An Option shall  constitute  an Incentive  Stock Option only (i) if the
Grantee of such Option is an employee  of the Company or any  Subsidiary  of the
Company;  (ii)  to  the  extent  specifically  provided  in  the  related  Award
Agreement;  and  (iii)  to the  extent  that the  aggregate  Fair  Market  Value
(determined  at the time the  Option is  granted)  of the  shares of Stock  with
respect  to which  all  Incentive  Stock  Options  held by such  Grantee  become
exercisable  for the first time during any calendar year (under the Plan and all
other  plans of the  Grantee's  employer  and its  affiliates)  does not  exceed
$100,000. This limitation shall be applied by taking Options into account in the
order in which they were granted.


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<PAGE>

         7.2 Limitation on Shares of Stock Subject to Grants.

         Effective  beginning  with the first  annual  meeting of the  Company's
stockholders  at which  directors  are elected that occurs in the calendar  year
after  the year in which  the  Company  first  has a class  of  equity  security
registered under Section 12 of the Exchange Act, the maximum number of shares of
Stock  subject  to  Options  that can be  awarded  under the Plan to any  person
eligible for a Grant under Section 6 hereof is one million (1,000,000) per year.

     8. AWARD AGREEMENT

         Each  Grant  pursuant  to the  Plan  shall  be  evidenced  by an  Award
Agreement, in such form or forms as the Board shall from time to time determine.
Award Agreements  granted from time to time or at the same time need not contain
similar  provisions  but shall be  consistent  with the terms of the Plan.  Each
Award Agreement evidencing a Grant of Options shall specify whether such Options
are intended to be non-qualified  stock options or Incentive Stock Options,  and
in the absence of such specification such options shall be deemed  non-qualified
stock options.

     9. OPTION PRICE

         The Option  Price of each Option shall be fixed by the Board and stated
in the Award Agreement evidencing such Option. In the case of an Incentive Stock
Option the Option  Price shall be the Fair  Market  Value on the Grant Date of a
share of  Stock;  provided,  however,  that in the event  that a  Grantee  would
otherwise be  ineligible  to receive an Incentive  Stock Option by reason of the
provisions of Sections  422(b)(6) and 424(d) of the Code  (relating to ownership
of more than ten  percent of the  Company's  outstanding  shares of Stock),  the
Option  Price of an Option  granted to such  Grantee  that is  intended to be an
Incentive  Stock  Option  shall be not less than the greater of the par value or
110 percent of the Fair Market  Value of a share of Stock on the Grant Date.  In
no case  shall the  Option  Price of any  Option be less than the par value of a
share of Stock.

     10. VESTING, TERM AND EXERCISE OF OPTIONS

         10.1 Vesting and Option Period.

         Subject to Sections 10.2 and 17.3 hereof, each Option granted under the
Plan shall become  exercisable at such times and under such  conditions as shall
be  determined by the Board and stated in the Award  Agreement.  For purposes of
this Section  10.1,  fractional  numbers of shares of Stock subject to an Option
shall be rounded down to the next nearest whole number.  The period during which
any Option  shall be  exercisable  shall  constitute  the "Option  Period"  with
respect to such Option.

         10.2 Term.

         Each Option granted under the Plan shall  terminate,  and all rights to
purchase  shares of Stock  thereunder  shall cease,  upon the  expiration of ten
years from the date such Option is granted,  or under such  circumstances and on
such date  prior  thereto  as is set forth in the Plan or as may be fixed by the
Board and  stated in the Award  Agreement  relating  to such  Option;  provided,
however,  that in the event that the Grantee  would  otherwise be  ineligible to
receive  an  Incentive  Stock  Option by reason of the  provisions  of  Sections
422(b)(6) and 424(d) of the Code (relating to ownership of more than ten percent
of the outstanding  shares of Stock),  an Option granted to such Grantee that is
intended to be an  Incentive  Stock Option  shall not be  exercisable  after the
expiration of five years from its Grant Date.


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<PAGE>

         10.3 Acceleration.

         Any  limitation  on the  exercise of an Option  contained  in any Award
Agreement  may be  rescinded,  modified  or  waived  by the  Board,  in its sole
discretion,  at any time and from  time to time  after  the  Grant  Date of such
Option,  so as to  accelerate  the time at which the  Option  may be  exercised.
Notwithstanding  any other provision of the Plan, no Option shall be exercisable
in whole or in part prior to the date the Plan is approved  by the  shareholders
of the Company as provided in Section 5.1 hereof.

         10.4 Termination of Employment or Other Relationship.

         Unless  otherwise  provided  by the Board,  upon the  termination  of a
Grantee's  employment or other  relationship  with the Company or any Subsidiary
other than by reason of death or "permanent  and total  disability"  (within the
meaning of Section  22(e)(3) of the Code), any Option or portion thereof held by
such Grantee that has not vested in  accordance  with the  provisions of Section
10.1 hereof shall terminate immediately,  and any Option or portion thereof that
has vested in accordance  with the provisions of Section 10.1 hereof but has not
been  exercised  shall  terminate  at the  close  of  business  on the  90th day
following the Grantee's  termination of employment or other relationship (or, if
such 90th day is a Saturday,  Sunday or holiday, at the close of business on the
next preceding day that is not a Saturday,  Sunday or holiday). Upon termination
of an Option or portion  thereof,  the  Grantee  shall have no further  right to
purchase shares of Stock pursuant to such Option or portion  thereof.  Whether a
termination of employment or other relationship shall have occurred for purposes
of the Plan shall be determined by the Board, which determination shall be final
and conclusive.  For purposes of the Plan, a termination of employment,  service
or other relationship shall not be deemed to occur if the Grantee is immediately
thereafter a director of the Company or an affiliate.

         10.5 Rights in the Event of Death.

        Unless otherwise provided by the Board, if a Grantee dies while employed
by or providing  services to the Company or Subsidiary,  all Options  granted to
such  Grantee  shall  fully  vest on the date of  death,  and the  executors  or
administrators  or legatees or distributees of such Grantee's  estate shall have
the right,  at any time within one year after the date of such  Grantee's  death
and prior to  termination  of the Option  pursuant  to Section  10.2  above,  to
exercise any Option held by such Grantee at the date of such Grantee's death.

         10.6 Rights in the Event of Disability.

        Unless  otherwise  provided by the Board,  if a Grantee's  employment or
other relationship with the Company or Subsidiary is terminated by reason of the
"permanent and total disability"  (within the meaning of Section 22(e)(3) of the
Code) of such Grantee,  all Options  granted to such Grantee shall fully vest on
the date of  permanent  and total  disability,  and the  Grantee  shall have the
right,  at any time within one year after the date of such  Grantee's  permanent
and total  disability and prior to termination of the Option pursuant to Section
10.2 above,  to exercise any Option held by such Grantee.  Whether a termination
of employment  or service is to be considered by reason of "permanent  and total
disability"  for purposes of the Plan shall be  determined  by the Board,  which
determination shall be final and conclusive.

         10.7 Limitations on Exercise of Option.

        Notwithstanding  any other  provision  of the Plan,  in no event may any
Option be exercised, in whole or in part, prior to the date the Plan is approved
by the  shareholders  of the  Company  as  provided  herein,  or after ten years
following the date upon which the Option is granted,  or after the occurrence of
an event  referred to in Section 17 hereof which results in  termination  of the
Option.


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<PAGE>

         10.8 Method of Exercise.

         An  Option  that  is  exercisable  may be  exercised  by the  Grantee's
delivery to the Company of written  notice of exercise on any  business  day, at
the Company's  principal  office,  addressed to the attention of the Board. Such
notice  shall  specify  the number of shares of Stock with  respect to which the
Option is being  exercised  and shall be  accompanied  by payment in full of the
Option Price of the shares for which the Option is being exercised.  The minimum
number of shares of Stock with respect to which an Option may be  exercised,  in
whole or in part,  at any time  shall be the  lesser  of (i) 100  shares or such
lesser number set forth in the applicable  Award  Agreement and (ii) the maximum
number  of  shares  available  for  purchase  under  the  Option  at the time of
exercise.  Payment of the Option Price for the shares purchased  pursuant to the
exercise  of an  Option  shall  be  made  (i) in  cash  or in  cash  equivalents
acceptable  to the  Company;  (ii)  to the  extent  permitted  by law and at the
Board's discretion,  through the tender to the Company of shares of Stock, which
shares,  if  acquired  from the  Company,  shall have been held for at least six
months  at the time of  tender  and  which  shall be  valued,  for  purposes  of
determining the extent to which the Option Price has been paid thereby, at their
Fair Market Value on the date of exercise;  or (iii) to the extent  permitted by
law and at the Board's discretion,  by a combination of the methods described in
(i) and (ii). In addition and unless the Board  provides  otherwise in the Award
Agreement,  payment in full of the Option Price need not  accompany  the written
notice of  exercise  provided  that the  notice  of  exercise  directs  that the
certificate  or  certificates  for the  shares of Stock for which the  Option is
exercised  be delivered to a licensed  broker  acceptable  to the Company as the
agent for the individual exercising the Option and, at the time such certificate
or certificates  are delivered,  the broker tenders to the Company cash (or cash
equivalents  acceptable to the Company) equal to the Option Price for the shares
of Stock  purchased  pursuant to the  exercise of the Option plus the amount (if
any) of federal  and/or  other taxes which the Company may in its  judgment,  be
required to withhold  with respect to the exercise of the Option.  An attempt to
exercise  any Option  granted  hereunder  other than as set forth above shall be
invalid and of no force and effect.  Unless  otherwise  stated in the applicable
Award Agreement,  an individual  holding or exercising an Option shall have none
of the  rights of a  shareholder  (for  example,  the right to  receive  cash or
dividend  payments or distributions  attributable to the subject shares of Stock
or to direct  the  voting of the  subject  shares of Stock)  until the shares of
Stock covered  thereby are fully paid and issued to such  individual.  Except as
provided  in Section  17  hereof,  no  adjustment  shall be made for  dividends,
distributions  or other rights for which the record date is prior to the date of
such issuance.

         10.9 Delivery of Stock Certificates.

         Promptly  after the  exercise of an Option by a Grantee and the payment
in full of the Option Price, such Grantee shall be entitled to the issuance of a
stock  certificate or certificates  evidencing  such Grantee's  ownership of the
shares of Stock subject to the Option.


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<PAGE>

     11. TRANSFERABILITY OF OPTIONS

         11.1 Transferability of Options

         Except as provided in Section  11.2,  during the lifetime of a Grantee,
only the Grantee  (or, in the event of legal  incapacity  or  incompetency,  the
Grantee's guardian or legal  representative)  may exercise an Option.  Except as
provided in Section 11.2, no Option shall be assignable or  transferable  by the
Grantee to whom it is  granted,  other  than by will or the laws of descent  and
distribution.

         11.2 Transfers.

                  A.       Family Transfers

         If  authorized  in  the  applicable  Award  Agreement,  a  Grantee  may
transfer,  not for  value,  all or part of an Option  which is not an  Incentive
Stock Option to any Family Member.  For the purpose of this Section 11.2, a "not
for value"  transfer is a transfer which is (i) a gift,  (ii) a transfer under a
domestic  relations order in settlement of marital property  rights;  or (iii) a
transfer to an entity in which more than fifty  percent of the voting  interests
are owned by Family Members (or the Grantee) in exchange for an interest in that
entity.  Following a transfer  under this  Section  11.2,  any such Option shall
continue  to be  subject  to the same terms and  conditions  as were  applicable
immediately prior to transfer.  Subsequent  transfers of transferred Options are
prohibited  except to Family Members of the original  Grantee in accordance with
this Section 11.2 or by will or the laws of descent and distribution. The events
of termination of employment or other  relationship of Section 10.4 hereof shall
continue to be applied with respect to the original Grantee, following which the
Option shall be exercisable by the  transferee  only to the extent,  and for the
periods specified in Sections 10.4, 10.5, or 10.6.

                  B.       Company Approved Transfers

         If authorized in the applicable Award Agreement, a Grantee may transfer
all or part of an option which is not an Incentive  Stock Option to any employee
or co-worker of such Grantee after written approval of the Board.

     12. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

         12.1 Grant of Restricted Stock or Restricted Stock Units.

         The Board may from time to time grant  Restricted  Stock or  Restricted
Stock  Units to persons  eligible  to  receive  Grants  under  Section 6 hereof,
subject  to such  restrictions,  conditions  and  other  terms as the  Board may
determine.

         12.2 Restrictions.

         At the time a Grant of Restricted  Stock or  Restricted  Stock Units is
made,  the Board  shall  establish  a period of time (the  "Restricted  Period")
applicable to such  Restricted  Stock or Restricted  Stock Units.  Each Grant of
Restricted  Stock or  Restricted  Stock  Units  may be  subject  to a  different
Restricted Period. The Board may, in its sole discretion, at the time a Grant of
Restricted  Stock or Restricted Stock Units is made,  prescribe  restrictions in
addition to or other than the expiration of the Restricted Period, including the


<PAGE>

satisfaction  of corporate or individual  performance  objectives,  which may be
applicable to all or any portion of the  Restricted  Stock or  Restricted  Stock
Units. Such performance  objectives shall be established in writing by the Board
prior to the  ninetieth day of the year in which the Grant is made and while the
outcome is substantially  uncertain.  Performance objectives shall be based on a
number of factors  including,  but not limited to,  Stock price,  market  share,
sales, earnings per share, return on equity or costs. Performance objectives may
include  positive  results,  maintaining  the  status quo or  limiting  economic
losses. Subject to the fourth sentence of this Section 12.2, the Board also may,
in its sole discretion,  shorten or terminate the Restricted Period or waive any
other  restrictions  applicable to all or a portion of the  Restricted  Stock or
Restricted Stock Units.  Neither Restricted Stock nor Restricted Stock Units may
be sold, transferred,  assigned,  pledged or otherwise encumbered or disposed of
during  the  Restricted  Period  or  prior  to the  satisfaction  of  any  other
restrictions  prescribed by the Board with respect to such  Restricted  Stock or
Restricted Stock Units.

         12.3 Restricted Stock Certificates.

        The Company shall issue,  in the name of each Grantee to whom Restricted
Stock has been  granted,  stock  certificates  representing  the total number of
shares  of  Restricted  Stock  granted  to the  Grantee,  as soon as  reasonably
practicable  after the Grant Date.  The Board may provide in an Award  Agreement
that either (i) the  Secretary of the Company shall hold such  certificates  for
the Grantees'  benefit until such time as the  Restricted  Stock is forfeited to
the Company,  or the  restrictions  lapse,  or (ii) such  certificates  shall be
delivered to the Grantee, provided, however, that such certificates shall bear a
legend  or  legends  that  complies  with  the  applicable  securities  laws and
regulations and makes  appropriate  reference to the restrictions  imposed under
the Plan and the Award Agreement.

         12.4 Rights of Holders of Restricted Stock.

        Unless the Board otherwise  provides in an Award  Agreement,  holders of
Restricted  Stock  shall  have the  right to vote  such  Stock  and the right to
receive any dividends declared or paid with respect to such Stock. The Board may
provide that any dividends paid on Restricted Stock must be reinvested in shares
of Stock,  which may or may not be subject to the same  vesting  conditions  and
restrictions  applicable to such Restricted  Stock. All  distributions,  if any,
received by a Grantee with respect to Restricted  Stock as a result of any stock
split, stock dividend,  combination of shares or other similar transaction shall
be subject to the restrictions applicable to the original Grant.

         12.5 Rights of Holders of Restricted Stock Units.

        Unless the Board otherwise  provides in an Award  Agreement,  holders of
Restricted Stock Units shall have no rights as stockholders of the Company.  The
Board may provide in an Award Agreement  evidencing a Grant of Restricted  Stock
Units  that the holder of such  Restricted  Stock  Units  shall be  entitled  to
receive, upon the Company's payment of a cash dividend on its outstanding Stock,
a cash  payment  for each  Restricted  Stock  Unit held  equal to the  per-share
dividend paid on the Stock. Such Award Agreement may also provide that such cash
payment will be deemed  reinvested  in  additional  Restricted  Stock Units at a
price per unit  equal to the Fair  Market  Value of a share of Stock on the date
that such dividend is paid.


                                       8
<PAGE>

         12.6 Termination of Employment or Other Relationship.

        Unless  otherwise  provided  by the  Board,  upon the  termination  of a
Grantee's  employment or other relationship with the Company or Subsidiary other
than by reason of death or "permanent and total disability"  (within the meaning
of Section  22(e)(3) of the Code),  any shares of Restricted Stock or Restricted
Stock Units held by such Grantee that have not vested,  or with respect to which
all applicable restrictions and conditions have not lapsed, shall immediately be
deemed forfeited. Upon forfeiture of Restricted Stock or Restricted Stock Units,
the Grantee shall have no further  rights with respect to such Grant,  including
but not  limited to any right to vote  Restricted  Stock or any right to receive
dividends with respect to shares of Restricted  Stock or Restricted Stock Units.
Whether a termination  of employment or other  relationship  shall have occurred
for purposes of the Plan shall be determined by the Board,  which  determination
shall be final and  conclusive.  For  purposes  of the Plan,  a  termination  of
employment,  service or other  relationship  shall not be deemed to occur if the
Grantee is immediately thereafter a director of the Company or an affiliate.

         12.7 Rights in the Event of Death.

        Unless otherwise provided by the Board, if a Grantee dies while employed
by the Company or  Subsidiary,  all Restricted  Stock or Restricted  Stock Units
granted to such Grantee shall fully vest on the date of death, and the shares of
Stock  represented  thereby shall be deliverable in accordance with the terms of
the Plan to the  executors,  administrators,  legatees  or  distributees  of the
Grantee's estate.

         12.8 Rights in the Event of Disability.

        Unless  otherwise  provided by the Board,  if a Grantee's  employment or
other relationship with the Company or Subsidiary is terminated by reason of the
"permanent and total disability"  (within the meaning of Section 22(e)(3) of the
Code) of such Grantee, such Grantee's Restricted Stock or Restricted Stock Units
shall continue to vest in accordance  with the applicable  Award Agreement for a
period of one year after such  termination of employment or service,  subject to
the earlier  forfeiture of such  Restricted  Stock or Restricted  Stock Units in
accordance  with  the  terms  of  the  applicable  Award  Agreement.  Whether  a
termination of employment or service is to be considered by reason of "permanent
and total disability" for purposes of the Plan shall be determined by the Board,
which determination shall be final and conclusive.

         12.9 Delivery of Stock and Payment Therefor.

         Upon the expiration or  termination  of the  Restricted  Period and the
satisfaction of any other  conditions  prescribed by the Board, the restrictions
applicable to shares of Restricted  Stock or Restricted Stock Units shall lapse,
and,  unless  otherwise  provided in the Award  Agreement,  upon  payment by the
Grantee to the Company, in cash or by check, of the greater of (i) the aggregate
par  value  of the  shares  of Stock  represented  by such  Restricted  Stock or
Restricted  Stock Units or (ii) the  purchase  price,  if any,  specified in the
Award agreement  relating to such Restricted  Stock or Restricted Stock Units, a
stock  certificate  for  such  shares  shall  be  delivered,  free  of all  such
restrictions, to the Grantee or the Grantee's beneficiary or estate, as the case
may be.

     13. CERTAIN PROVISIONS APPLICABLE TO AWARDS

         13.1 Stand-Alone, Additional, Tandem, and Substitute Grants

         Grants under the Plan may, in the  discretion of the Board,  be granted
either  alone or in addition to, in tandem with or in  substitution  or exchange
for, any other Grant or any award granted under another plan of the Company, any
affiliate or any business  entity to be acquired by the Company or an affiliate,
or any other  right of a Grantee  to  receive  payment  from the  Company or any
affiliate.  Such  additional,  tandem and  substitute or exchange  Grants may be
awarded at any time.  If a Grant is  awarded in  substitution  or  exchange  for
another  Grant,  the Board shall  require the  surrender  of such other Grant in
consideration for the new Grant. In addition, Grants may be made in lieu of cash


                                       9
<PAGE>

compensation, including in lieu of cash amounts payable under other plans of the
Company or any  affiliate,  in which the value of Stock  subject to the Grant is
equivalent in value to the cash compensation (for example, Restricted Stock), or
in which the exercise  price,  grant price or purchase price of the Grant in the
nature of a right that may be exercised is equal to the Fair Market Value of the
underlying  Stock  minus the  value of the cash  compensation  surrendered  (for
example,  Options  granted with an exercise price  "discounted" by the amount of
the cash compensation surrendered).

         13.2 Term of Grant.

         The term of each Grant shall be for such period as may be determined by
the  Board;  provided  that in no event  shall the term of any  Option  exceed a
period of ten years (or such  shorter  term as may be  required in respect of an
Incentive Stock Option under Section 422 of the Code).

         13.3 Form and Timing of Payment Under Grants; Deferrals.

         Subject to the terms of the Plan and any  applicable  Award  Agreement,
payments  to be made by the  Company or an  affiliate  upon the  exercise  of an
Option or other  Grant may be made in such forms as the Board  shall  determine,
including,  without limitation, cash, Stock, other Grants or other property, and
may be made in a single payment or transfer,  in installments,  or on a deferred
basis. The settlement of any Grant may be accelerated,  and cash paid in lieu of
Stock in connection with such settlement, in the discretion of the Board or upon
occurrence of one or more specified events. Installment or deferred payments may
be required by the Board or  permitted  at the  election of the Grantee on terms
and  conditions  established  by  the  Board.  Payments  may  include,   without
limitation,  provisions  for the payment or crediting  of a reasonable  interest
rate on installment  or deferred  payments or the grant or crediting of dividend
equivalents  or other  amounts in respect of  installment  or deferred  payments
denominated in Stock.

     14. PARACHUTE LIMITATIONS

         Notwithstanding  any  other  provision  of this  Plan  or of any  other
agreement,  contract, or understanding heretofore or hereafter entered into by a
Grantee with the Company or any  affiliate,  except an agreement,  contract,  or
understanding  hereafter  entered  into  that  expressly  modifies  or  excludes
application of this paragraph (an "Other  Agreement"),  and  notwithstanding any
formal  or  informal  plan or  other  arrangement  for the  direct  or  indirect
provision  of  compensation  to the  Grantee  (including  groups or  classes  of
participants or beneficiaries of which the Grantee is a member),  whether or not
such  compensation is deferred,  is in cash or is in the form of a benefit to or
for the Grantee (a  "Benefit  Arrangement"),  if the Grantee is a  "disqualified
individual," as defined in Section  280G(c) of the Code, any Option,  Restricted
Stock or Restricted Stock Unit held by that Grantee and any right to receive any
payment or other benefit under this Plan shall not become  exercisable or vested
(i) to the extent  that such right to  exercise,  vesting,  payment or  benefit,
taking  into  account  all other  rights,  payments,  or  benefits to or for the
Grantee  under this Plan,  all Other  Agreements  and all Benefit  Arrangements,
would  cause  any  payment  or  benefit  to the  Grantee  under  this Plan to be
considered a "parachute payment" within the meaning of Section 280G(b)(2) of the
Code as then in  effect  (a  "Parachute  Payment")  and (ii) if,  as a result of
receiving a Parachute Payment,  the aggregate  after-tax amounts received by the
Grantee from the Company under this Plan,  all Other  Agreements and all Benefit
Arrangements  would be less than the  maximum  after-tax  amount  that  could be
received  by the  Grantee  without  causing  any such  payment  or benefit to be
considered a Parachute Payment.  In the event that the receipt of any such right
to exercise,  vesting,  payment or benefit under this Plan, in conjunction  with
all other  rights,  payments or  benefits to or for the Grantee  under any Other
Agreement or any Benefit Arrangement would cause the Grantee to be considered to
have received a Parachute  Payment under this Plan that would have the effect of
decreasing the after-tax  amount  received by the Grantee as described in clause
(ii) of the preceding  sentence,  then the Grantee shall have the right,  in the
Grantee's sole discretion, to designate those rights, payments or benefits under
this Plan,  any Other  Agreements  and any Benefit  Arrangements  that should be
reduced  or  eliminated  so as to avoid  having  the  payment  or benefit to the
Grantee under this Plan be deemed to be a Parachute Payment.


                                       10
<PAGE>

     15. REQUIREMENTS OF LAW

         15.1 General.

         The Company  shall not be required to sell or issue any shares of Stock
under  any Grant if the sale or  issuance  of such  shares  would  constitute  a
violation by the Grantee, any other individual exercising a right emanating from
such Grant,  or the Company of any  provision  of any law or  regulation  of any
governmental  authority,  including  without  limitation  any  federal  or state
securities laws or regulations.  If at any time the Company shall determine,  in
its discretion,  that the listing,  registration or  qualification of any shares
subject  to a Grant  upon any  securities  exchange  or under  any  governmental
regulatory  body is necessary or desirable as a condition  of, or in  connection
with,  the issuance or purchase of shares  hereunder,  no shares of Stock may be
issued or sold to the  Grantee  or any  other  individual  exercising  an Option
pursuant to such Grant unless such listing, registration, qualification, consent
or approval  shall have been  effected or obtained  free of any  conditions  not
acceptable to the Company,  and any delay caused  thereby shall in no way affect
the date of  termination  of the Grant.  Specifically,  in  connection  with the
Securities  Act, upon the exercise of any right emanating from such Grant or the
delivery of any shares of Restricted Stock or Stock underlying  Restricted Stock
Units, unless a registration  statement under such Act is in effect with respect
to the shares of Stock covered by such Grant,  the Company shall not be required
to sell or issue such shares unless the Board has received evidence satisfactory
to it that the Grantee or any other individual  exercising an Option may acquire
such shares pursuant to an exemption from registration under the Securities Act.
Any  determination  in this connection by the Board shall be final,  binding and
conclusive. The Company may, but shall in no event be obligated to, register any
securities  covered hereby pursuant to the Securities Act. The Company shall not
be obligated to take any affirmative action in order to cause the exercise of an
Option or the  issuance  of shares of Stock  pursuant to the Plan to comply with
any law or regulation of any governmental authority. As to any jurisdiction that
expressly  imposes the requirement that an Option shall not be exercisable until
the shares of Stock  covered by such  Option are  registered  or are exempt from
registration, the exercise of such Option (under circumstances in which the laws
of such jurisdiction  apply) shall be deemed  conditioned upon the effectiveness
of such registration or the availability of such an exemption.

         15.2 Rule 16b-3.

        During  any  time  when  the  Company  has a class  of  equity  security
registered under Section 12 of the Exchange Act, it is the intent of the Company
that Grants pursuant to the Plan and the exercise of Options  granted  hereunder
will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To
the extent that any provision of the Plan or action by the Board does not comply
with the  requirements  of Rule  16b-3,  it shall be deemed  inoperative  to the
extent  permitted by law and deemed advisable by the Board, and shall not affect
the  validity of the Plan.  In the event that Rule 16b-3 is revised or replaced,
the  Board may  exercise  its  discretion  to  modify  this Plan in any  respect
necessary to satisfy the  requirements  of, or to take advantage of any features
of, the revised exemption or its replacement.

     16. AMENDMENT AND TERMINATION OF THE PLAN

         The Board  may,  at any time and from time to time,  amend,  suspend or
terminate  the Plan as to any shares of Stock as to which  Grants  have not been
made;  provided,  however,  that the Board  shall not,  without  approval of the
Company's  shareholders,  amend the Plan such that it does not  comply  with the
Code.  Except as  permitted  under this  Section  16 or  Section  17 hereof,  no
amendment,  suspension or termination of the Plan shall,  without the consent of
the Grantee,  alter or impair rights or obligations  under any Grant theretofore
awarded under the Plan.


                                       11
<PAGE>

     17. EFFECT OF CHANGES IN CAPITALIZATION

         17.1 Changes in Stock.

         If the number of outstanding  shares of Stock is increased or decreased
or the shares of Stock are changed into or exchanged  for a different  number or
kind  of  shares  or  other   securities  of  the  Company  on  account  of  any
recapitalization,  reclassification,  stock split, reverse split, combination of
shares,  exchange of shares,  stock  dividend or other  distribution  payable in
capital  stock,  or other increase or decrease in such shares  effected  without
receipt of consideration by the Company  occurring after the Effective Date, the
number and kinds of shares for which  Grants of  Options,  Restricted  Stock and
Restricted   Stock   Units  may  be  made  under  the  Plan  shall  be  adjusted
proportionately and accordingly by the Company. In addition, the number and kind
of shares for which Grants are outstanding shall be adjusted proportionately and
accordingly  so that  the  proportionate  interest  of the  Grantee  immediately
following  such  event  shall  be,  to  the  extent  practicable,  the  same  as
immediately before such event. Any such adjustment in outstanding  Options shall
not change the  aggregate  Option Price  payable with respect to shares that are
subject to the unexercised  portion of an Option outstanding but shall include a
corresponding  proportionate  adjustment  in the  Option  Price per  share.  The
conversion of any convertible  securities of the Company shall not be treated as
an increase in shares effected without receipt of consideration.

         17.2 Reorganization in Which the Company Is the Surviving Entity and in
              Which No Change of Control Occurs.

         Subject to Section 17.3 hereof,  if the Company  shall be the surviving
entity in any reorganization, merger or consolidation of the Company with one or
more  other  entities  and in which no  Change of  Control  occurs,  any  Option
theretofore  granted  pursuant  to the Plan  shall  pertain  to and apply to the
securities  to which a holder of the  number of shares of Stock  subject to such
Option  would have been  entitled  immediately  following  such  reorganization,
merger or consolidation,  with a corresponding  proportionate  adjustment of the
Option Price per share so that the aggregate  Option Price  thereafter  shall be
the same as the aggregate  Option Price of the shares  remaining  subject to the
Option  immediately  prior  to such  reorganization,  merger  or  consolidation.
Subject to any  contrary  language in an Award  Agreement  evidencing a Grant of
Restricted  Stock,  any  restrictions  applicable to such Restricted Stock shall
apply as well to any  replacement  shares received by the Grantee as a result of
the reorganization, merger or consolidation.
<PAGE>

         17.3 Reorganization, Sale of  Assets or Sale of  Stock Which Involves a
              Change of Control.

         Subject  to the  exceptions  set  forth  in the last  sentence  of this
Section 17.3,  (i) upon the occurrence of a Change of Control,  all  outstanding
shares of Restricted  Stock and  Restricted  Stock Units shall be deemed to have
vested,  and all  restrictions  and  conditions  applicable  to such  shares  of
Restricted  Stock and  Restricted  Stock Units  shall be deemed to have  lapsed,
immediately prior to the occurrence of such Change of Control,  and (ii) fifteen
days prior to the  scheduled  consummation  of a Change of Control,  all Options
outstanding  hereunder  shall become  immediately  exercisable  and shall remain
exercisable  for a period of fifteen days. Any exercise of an Option during such
fifteen-day  period shall be conditioned  upon the consummation of the event and
shall be effective only immediately  before the consummation of the event.  Upon
consummation  of any  Change  of  Control,  the  Plan  and all  outstanding  but
unexercised  Options shall terminate.  The Board shall send written notice of an
event that will result in such a termination to all individuals who hold Options
not  later  than the time at which  the  Company  gives  notice  thereof  to its
shareholders.  This Section 17.3 shall not apply to any Change of Control to the
extent that (A) provision is made in writing in  connection  with such Change of
Control for the assumption of the Options, Restricted Stock and Restricted Stock
Units theretofore granted, or for the substitution for such Options,  Restricted
Stock and Restricted Stock Units of new options, restricted stock and restricted
stock units covering the stock of a successor  entity, or a parent or subsidiary
thereof,  with  appropriate  adjustments as to the number and kinds of shares or
units and exercise prices, in which event the Plan and Options, Restricted Stock
and Restricted Stock Units theretofore  granted shall continue in the manner and
under the terms so provided or (B) a majority of the full Board  determines that
such Change of Control shall not trigger  application  of the provisions of this
Section 17.3.

         17.4 Adjustments.

         Adjustments  under  this  Section  17  related  to  shares  of Stock or
securities of the Company  shall be made by the Board,  whose  determination  in
that respect shall be final,  binding and  conclusive.  No fractional  shares or
other  securities  shall be  issued  pursuant  to any such  adjustment,  and any
fractions resulting from any such adjustment shall be eliminated in each case by
rounding downward to the nearest whole share.

         17.5 No Limitations on Company.

         The making of Grants  pursuant to the Plan shall not affect or limit in
any  way  the   right   or   power   of  the   Company   to  make   adjustments,
reclassifications,  reorganizations  or  changes  of  its  capital  or  business
structure  or to  merge,  consolidate,  dissolve  or  liquidate,  or to  sell or
transfer all or any part of its business or assets.

     18. DISCLAIMER OF RIGHTS

         No  provision in the Plan or in any Grant or Award  Agreement  shall be
construed  to confer  upon any  individual  the right to remain in the employ or
service of the Company or any  affiliate,  or to  interfere  in any way with any
contractual  or other right or  authority  of the Company  either to increase or
decrease the compensation or other payments to any individual at any time, or to
terminate any  employment or other  relationship  between any individual and the
Company.  In  addition,  notwithstanding  anything  contained in the Plan to the
contrary,  unless otherwise  stated in the applicable Award Agreement,  no Grant
awarded  under the Plan shall be affected by any change of duties or position of
the  Grantee,  so long as such  Grantee  continues  to be a  director,  officer,
consultant or employee of the Company or any  affiliate.  The  obligation of the
Company to pay any  benefits  pursuant  to this Plan shall be  interpreted  as a
contractual obligation to pay only those amounts described herein, in the manner
and  under  the  conditions  prescribed  herein.  The  Plan  shall  in no way be
interpreted  to require  the  Company to  transfer  any amounts to a third party
trustee or  otherwise  hold any  amounts  in trust or escrow for  payment to any
participant  or  beneficiary  under the terms of the Plan. No Grantee shall have
any of the rights of a  shareholder  with respect to the shares of Stock subject
to an Option  except to the extent  the  certificates  for such  shares of Stock
shall have been issued upon the exercise of the Option.


                                       12
<PAGE>

     19. NONEXCLUSIVITY OF THE PLAN

         Neither the adoption of the Plan nor the  submission of the Plan to the
shareholders  of the Company for  approval  shall be  construed  as creating any
limitations  upon the  right and  authority  of the  Board to adopt  such  other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or  specifically  to a particular
individual or particular  individuals) as the Board in its discretion determines
desirable,   including,  without  limitation,  the  granting  of  stock  options
otherwise than under the Plan.

     20. WITHHOLDING TAXES

         The Company or any affiliate,  as the case may be, shall have the right
to deduct from  payments  of any kind  otherwise  due to a Grantee any  Federal,
state or local taxes of any kind  required by law to be withheld with respect to
the vesting of or other lapse of restrictions  applicable to Restricted Stock or
Restricted  Stock  Units or upon the  issuance  of any  shares of Stock upon the
exercise  of an Option.  At the time of such  vesting,  lapse or  exercise,  the
Grantee  shall pay to the Company or  affiliate,  as the case may be, any amount
that the Company or  affiliate  may  reasonably  determine  to be  necessary  to
satisfy  such  withholding  obligation.  Subject  to the prior  approval  of the
Company or the affiliate, which may be withheld by the Company or the affiliate,
as the case may be, in its sole  discretion,  the  Grantee  may elect to satisfy
such  obligations,  in whole or in  part,  (i) by  causing  the  Company  or the
affiliate to withhold  shares of Stock  otherwise  issuable to the Grantee in an
amount equal to the  statutory  withholding  amount or (ii) by delivering to the
Company or the  affiliate  shares of Stock  already  owned by the  Grantee.  The
shares of Stock so  delivered or withheld  shall have an  aggregate  Fair Market
Value equal to such withholding obligations. The Fair Market Value of the shares
of Stock used to satisfy such withholding  obligation shall be determined by the
Company or the affiliate as of the date that the amount of tax to be withheld is
to be determined. A Grantee who has made an election pursuant to this Section 20
may satisfy his or her withholding obligation only with shares of Stock that are
not subject to any repurchase,  forfeiture, unfulfilled vesting or other similar
requirements.

     21. CAPTIONS

        The use of  captions  in this  Plan or any  Award  Agreement  is for the
convenience  of reference only and shall not affect the meaning of any provision
of the Plan or such Award Agreement.

     22. OTHER PROVISIONS

        Each Grant  awarded  under the Plan may  contain  such  other  terms and
conditions not inconsistent  with the Plan as may be determined by the Board, in
its sole discretion.

     23. NUMBER AND GENDER

        With respect to words used in this Plan, the singular form shall include
the plural form, the masculine gender shall include the feminine  gender,  etc.,
as the context requires.


                                       13
<PAGE>

     24. SEVERABILITY

        If any provision of the Plan or any Award  Agreement shall be determined
to be  illegal or  unenforceable  by any court of law in any  jurisdiction,  the
remaining  provisions  hereof and thereof shall be severable and  enforceable in
accordance with their terms, and all provisions shall remain  enforceable in any
other jurisdiction.

     25. POOLING

        In the event any  provision  of the Plan or the  Award  Agreement  would
prevent the use of pooling of interests  accounting  in a corporate  transaction
involving  the  Company  and such  transaction  is  contingent  upon  pooling of
interests accounting,  then that provision shall be deemed amended or revoked to
the extent  required  to preserve  such  pooling of  interests.  The Company may
require in an Award Agreement that a Grantee who receives a Grant under the Plan
shall,  upon  advice  from  the  Company,  take  (or  refrain  from  taking,  as
appropriate)  all actions  necessary  or  desirable  to ensure  that  pooling of
interests accounting is available.

     26. GOVERNING LAW

         The  validity  and  construction  of  this  Plan  and  the  instruments
evidencing  the Grants  awarded  hereunder  shall be governed by the laws of the
State of Delaware (excluding the choice of law rules thereof).

     27. NONTRANSFERABILITY OF SHARES

         A Grantee shall not sell, pledge,  assign, gift, transfer, or otherwise
dispose of any shares of stock acquired pursuant to a Grant.

     28. BLUE SKY PROVISIONS REQUIRED TO BE SET FORTH IN THE PLAN

         28.1 California Provisions

         Notwithstanding the foregoing  sections,  any Grant made under the Plan
to a Grantee  who is a  resident  of the State of  California  on the Grant Date
shall be subject to the following additional terms and conditions:

         A.       For the  purpose  of  Grants  which  are not  Incentive  Stock
                  Options, Fair Market Value shall be determined in a manner not
                  inconsistent with Section 260.140.50 of the California Code of
                  Regulations or any successor  statute,  and the exercise price
                  of any  non-incentive  stock option shall not be less than 85%
                  of Fair Market Value on the date of grant.

         B.       Grants  may not be made under the Plan to  Grantees  ten years
                  after the earlier of: (i) the date the Plan was adopted by the
                  Board  or  (ii)  the  date  the  Plan  was   approved  by  the
                  shareholders of the Company.

         C.       An Option  granted under the Plan to a Grantee who is a person
                  who  owns  stock  possessing  more  than  ten  percent  of the
                  combined  voting  power of all classes of stock of the Company
                  or its  parent or its  Subsidiary  corporations  shall have an
                  Option  Price of at least 110% of the Fair  Market  Value of a
                  share of Stock on the Grant Date.


                                       14
<PAGE>

         D.       Any Option  granted  under the Plan to a Grantee who is not an
                  officer,  director,  or  consultant  of  the  Company  or  its
                  affiliates  shall  become  exercisable  at a rate of at  least
                  twenty  percent  (20%) of the shares of Stock  subject to such
                  Grant per year for a period of five years from the Grant Date;
                  provided,   that,   such  Option  shall  be  subject  to  such
                  reasonable  forfeiture  conditions  as the Board may choose to
                  impose and which are not inconsistent with Section  260.140.41
                  of  the  California  Code  of  Regulations  or  any  successor
                  statute.

         E.       The Company shall deliver to the Grantee financial  statements
                  on an  annual  basis  regarding  the  Company.  The  financial
                  statements so provided shall comply with Section 260.140.46 of
                  the California  Code of Regulations or any successor  statute,
                  but need not comply  with  Section  260.613 of the  California
                  Code of Regulations or any successor statute.

         F.       Any transfer of an Option granted under the Plan authorized by
                  the  Board in an Award  Agreement  must  comply  with  Section
                  260.140.41(d)  of the  California  Code of  Regulations or any
                  successor statute.

         G.       A grant which authorizes a Grantee to purchase Stock under the
                  Plan (other than a  non-qualified  stock  option) shall not be
                  transferable  other  than by will or the laws of  descent  and
                  distribution.

         H.       Unless a  Grantee's  employment  is  terminated  for  cause as
                  defined by applicable law, the Grantee shall have the right to
                  exercise an Option,  prior to the termination of the Option in
                  accordance  with  Section 10 and only to the  extent  that the
                  Grantee  was  entitled  to  exercise  such  Option on the date
                  employment terminates, as follows: (i) at least six (6) months
                  from the date of termination if the  termination was caused by
                  the  Grantee's  death  or  "permanent  and  total  disability"
                  (within the meaning of Section 22(e)(3) of the Code), and (ii)
                  at least  thirty  (30)  days from the date of  termination  if
                  termination  was caused by other than death or "permanent  and
                  total  disability"  (within the meaning of Section 22(e)(3) of
                  the Code) of the Grantee.

         I.       The  purchase  price  for  a  grant  of  Restricted  Stock  or
                  Restricted  Stock  Units  shall  be at  least  85% of the Fair
                  Market  Value of the Stock on the Grant Date and at least 100%
                  of the Fair  Market  Value of Stock on the  Grant  Date in the
                  case of a  person  who owns  stock  possessing  more  than ten
                  percent of the  combined  voting power of all classes of stock
                  of the Company or its parent or its Subsidiary corporations.

         J.       At no time shall the total number of shares of Stock  issuable
                  upon exercise of all outstanding  Options and the total number
                  of shares  provided for under all stock bonus or similar plans
                  of the Company exceed the applicable  percentage as calculated
                  in accordance  with the  conditions  and exclusions of Section
                  260.140.45  of  the  California  Code  of  Regulations  or any
                  successor statute.


                                       15
<PAGE>

         K.       Grants  may  be  made  only  to  persons  who  are  employees,
                  directors, or consultants of the Company or its affiliates.

         If the Stock is listed on an  established  national or  regional  stock
exchange or is admitted to quotation on the National  Association  of Securities
Dealers  Automated  Quotation  System,  or is publicly  traded in an established
securities  market,  the restrictions of this Section 28.1 shall terminate as of
the first date that the Stock is so listed, quoted or publicly traded.

         28.2 Florida, Virginia and Missouri Provisions.

         Notwithstanding Section 6:

                  (a) a resident of Florida or  Virginia  who is not an employee
or director of the Company or an employee of any wholly-owned  subsidiary of the
Company shall not be eligible to receive a Grant under the Plan; and

                  (b) a  resident  of  Missouri  who is not an  employee  of the
Company or an employee of any  wholly-owned  subsidiary of the Company shall not
be eligible to receive a Grant under the Plan.

                                      * * *