<PAGE>

                                                                    EXHIBIT 4.08

                           1998 GLOBAL CROSSING LTD.
                             STOCK INCENTIVE PLAN
                 Amended and Restated As of September 22, 1999

1.   Purpose of the Plan

     The purpose of the Plan is to aid the Company and its Subsidiaries in
recruiting and retaining key individuals of outstanding ability and to motivate
such individuals to exert their best efforts on behalf of the Company and its
Subsidiaries by providing incentives through the granting of Awards. The Company
expects that it will benefit from the added interest which such key individuals
will have in the welfare of the Company as a result of their proprietary
interest in the Company's success.

2.   Definitions

     The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:

(a)  Act:  The Securities Exchange Act of 1934, as amended, or any successor
     ---
     thereto.

(b)  Award:  An Option, Stock Appreciation Right or Other Stock-Based Award
     -----
     granted pursuant to the Plan.

(c)  Beneficial Owner:  A "beneficial owner", as such term is defined in Rule
     ----------------
     13d-3 under the Act (or any successor rule thereto).

(d)  Board:  The Board of Directors of the Company.
     -----

(e)  Change in Control:  The occurrence of any of the following events:
     -----------------

     (i)    any Person (other than a Person holding securities representing 10%
            or more of the combined voting power of the Company's outstanding
            securities as of the Effective Date, the Company, any trustee or
            other fiduciary holding securities under an employee benefit plan of
            the Company, or any company owned, directly or indirectly, by the
            shareholders of the Company in substantially the same proportions as
            their ownership of stock of the Company), becomes the Beneficial
            Owner, directly or indirectly, of securities of the Company, (a) in
            excess of the interest in the Company held by the shareholders of
            the Company as of the Effective Date (or their heirs or distributors
            by will or the laws of descent and distribution) and (b)
            representing 30% or more of the combined voting power of the
            Company's then-outstanding securities;

     (ii)   during any period of twenty-four months (not including any period
            prior to the Effective Date), individuals who at the beginning of
            such period constitute the Board, and any new director (other than
            (A) a director nominated by a Person who has entered into an
            agreement with the Company to effect a transaction described in
            Sections 2(e)(i), (iii) or (iv) of the Plan, (B) a director
            nominated by any Person (including the Company) who publicly
            announces an intention to take or to

                                       1
<PAGE>

            consider taking actions (including, but not limited to, an actual or
            threatened proxy contest) which if consummated would constitute a
            Change in Control or (C) a director nominated by any Person who is
            the Beneficial Owner, directly or indirectly, of securities of the
            Company representing 10% or more of the combined voting power of the
            Company's securities) whose election by the Board or nomination for
            election by the Company's shareholders was approved in advance by a
            vote of at least two-thirds (2/3) of the directors then still in
            office who either were directors at the beginning of the period or
            whose election or nomination for election was previously so
            approved, cease for any reason to constitute at least a majority
            thereof;

     (iii)  the shareholders of the Company approve any transaction or series of
            transactions under which the Company is merged or consolidated with
            any other company, other than a merger or consolidation which would
            result in the shareholders of the Company immediately prior thereto
            continuing to own (either by remaining outstanding or by being
            converted into voting securities of the surviving entity) more than
            65% of the combined voting power of the voting securities of the
            Company or such surviving entity outstanding immediately after such
            merger or consolidation; or

     (iv)   the shareholders of the Company approve a plan of complete
            liquidation of the Company or an agreement for the sale or
            disposition by the Company of all or substantially all of the
            Company's assets, other than a liquidation of the Company into a
            wholly-owned subsidiary.

(f)  Code: The Internal Revenue Code of 1986, as amended, or any successor
     ----
     thereto.

(g)  Committee: The Board.
     ---------

(h)  Company: Global Crossing Ltd.
     -------

(i)  Disability:  Inability to engage in any substantial gainful activity by
     ----------
     reason of a medically determinable physical or mental impairment which
     constitutes a permanent and total disability, as defined in Section
     22(e)(3) of the Code (or any successor section thereto). The determination
     whether a Participant has suffered a Disability shall be made by the
     Committee based upon such evidence as it deems necessary and appropriate. A
     Participant shall not be considered disabled unless he or she furnishes
     such medical or other evidence of the existence of the Disability as the
     Committee, in its sole discretion, may require.

(j)  Effective Date: July 1, 1998.
     --------------

(k)  Fair Market Value: On a given date, the arithmetic mean of the high and
     -----------------
     low prices of the Shares as reported on such date on the Composite Tape of
     the principal national securities exchange on which such Shares are listed
     or admitted to trading, or, if no Composite Tape exists for such national
     securities exchange on such date, then on the principal national securities
     exchange on which such Shares are listed or admitted to trading, or, if the
     Shares are not listed or admitted on a national securities exchange, the

                                       2
<PAGE>

     arithmetic mean of the per Share closing bid price and per Share closing
     asked price on such date as quoted on the National Association of
     Securities Dealers Automated Quotation System (or such market in which such
     prices are regularly quoted), or, if there is no market on which the Shares
     are regularly quoted, the Fair Market Value shall be the value established
     by the Committee in good faith. If no sale of Shares shall have been
     reported on such Composite Tape or such national securities exchange on
     such date or quoted on the National Association of Securities Dealer
     Automated Quotation System on such date, then the immediately preceding
     date on which sales of the Shares have been so reported or quoted shall be
     used.

(l)  ISO: An Option that is also an incentive stock option granted pursuant to
     ---
     Section 6(d) of the Plan.

(m)  LSAR: A limited stock appreciation right granted pursuant to Section 7(d)
     ----
     of the Plan.

(n)  Other Stock-Based Awards:  Awards granted pursuant to Section 8 of the
     ------------------------
     Plan.

(o)  Option: A stock option granted pursuant to Section 6 of the Plan.
     ------

(p)  Option Price: The purchase price per Share of an Option, as determined
     ------------
     pursuant to Section 6(a) of the Plan.

(q)  Participant: An individual who is selected by the Committee to participate
     -----------
     in the Plan.

(r)  Performance-Based Awards: Certain Other Stock-Based Awards granted
     ------------------------
     pursuant to Section 8(b) of the Plan.

(s)  Person: A "person", as such term is used for purposes of Section 13(d) or
     ------
     14(d) of the Act (or any successor section thereto).

(t)  Plan: The 1998 Global Crossing Ltd. Stock Incentive Plan.
     ----

(u)  Public Offering: A sale of shares of the Company's common stock to the
     ---------------
     public pursuant to a registration statement under the Securities Act of
     1933, as amended, that has been declared effective by the Securities and
     Exchange Commission (other than a registration statement on Form S-4 or
     Form S-8, or any other successor or other forms promulgated for similar
     purposes, or a registration statement in connection with an offering to
     employees of the Company and its Subsidiaries) that results in an active
     trading market in the Company's common stock; provided, that there shall be
                                                   --------
     deemed to be an "active trading market" if the Company's common stock is
     listed or quoted on a national stock exchange or the NASDAQ National
     Market.

(v)  Shares: Common Shares of the Company, par value $0.01 per Share.
     ------

(w)  Stock Appreciation Right:  A stock appreciation right granted pursuant to
     ------------------------
     Section 7 of the Plan.

                                       3
<PAGE>

(x)  Subsidiary: A subsidiary corporation, as defined in Section 424(f) of the
     ----------
     Code (or any successor section thereto).

3.   Shares Subject to the Plan

     The total number of Shares which may be issued under the Plan is
90,000,000. The maximum number of Shares for which Awards may be granted during
a calendar year to any Participant shall be as determined by the Committee from
time to time. The Shares may consist, in whole or in part, of unissued Shares or
Shares that were issued and subsequently cancelled. The issuance of Shares or
the payment of cash upon the exercise of an Award shall reduce the total number
of Shares available under the Plan, as applicable. Shares which are subject to
Awards which terminate or lapse may be granted again under the Plan.

4.   Administration

     The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two individuals who are each "non-employee directors" within
the meaning of Rule 16b-3 under the Act (or any successor rule thereto) and
"outside directors" within the meaning of Section 162(m) of the Code (or any
successor section thereto). The Committee is authorized to interpret the Plan,
to establish, amend and rescind any rules and regulations relating to the Plan,
and to make any other determinations that it deems necessary or desirable for
the administration of the Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan in the manner and to the
extent the Committee deems necessary or desirable. Any decision of the Committee
in the interpretation and administration of the Plan, as described herein, shall
lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors). The Committee shall require payment of
any amount it may determine to be necessary to withhold for federal, state,
local or other taxes as a result of the exercise of an Award. Unless the
Committee specifies otherwise, the Participant may elect to pay a portion or all
of such withholding taxes by (a) delivery in Shares or (b) having Shares
withheld by the Company from any Shares that would have otherwise been received
by the Participant.

5.   Limitations

     No Award may be granted under the Plan after the tenth anniversary of the
Effective Date, but Awards theretofore granted may extend beyond that date.

6.   Terms and Conditions of Options

     Options granted under the Plan shall be, as determined by the Committee,
nonqualified or incentive stock options for federal income tax purposes, as
evidenced by the related Award agreements, and shall be subject to the foregoing
and the following terms and conditions and to such other terms and conditions,
not inconsistent therewith, as the Committee shall determine:

     (a) Option Price.  The Option Price per Share shall be determined by the
         ------------
Committee.

                                       4
<PAGE>

     (b) Exercisability.  Options granted under the Plan shall be exercisable at
         --------------
such time and upon such terms and conditions as may be determined by the
Committee, but in no event shall an Option be exercisable more than ten years
after the date it is granted.

     (c) Exercise of Options.  Except as otherwise provided in the Plan or in an
         -------------------
Award agreement, an Option may be exercised for all, or from time to time any
part, of the Shares for which it is then exercisable. For purposes of Section 6
of the Plan, the exercise date of an Option shall be the later of the date a
notice of exercise is received by the Company and, if applicable, the date
payment is received by the Company pursuant to clauses (i), (ii) or (iii) in the
following sentence. The purchase price for the Shares as to which an Option is
exercised shall be paid to the Company in full at the time of exercise at the
election of the Participant (i) in cash, (ii) in Shares having a Fair Market
Value equal to the aggregate Option Price for the Shares being purchased and
satisfying such other requirements as may be imposed by the Committee; provided,
                                                                       --------
that such Shares have been held by the Participant for no less than six months,
(iii) partly in cash and partly in such Shares, (iv) through the withholding of
Shares (which would otherwise be delivered to the Participant) with an aggregate
Fair Market Value on the exercise date equal to the aggregate Option Price or
(v) through the delivery of irrevocable instruments to a broker to deliver
promptly to the Company an amount equal to the aggregate option price for the
shares being purchased. No Participant shall have any rights to dividends or
other rights of a stockholder with respect to Shares subject to an Option until
the Participant has given written notice of exercise of the Option, paid in full
for such Shares and, if applicable, has satisfied any other conditions imposed
by the Committee pursuant to the Plan.

     (d) ISOs.  The Committee may grant Options under the Plan that are intended
         ----
to be ISOs. Such ISOs shall comply with the requirements of Section 422 of the
Code (or any successor section thereto). No ISO may be granted to any
Participant who at the time of such grant, owns more than ten percent of the
total combined voting power of all classes of stock of the Company or of any
Subsidiary, unless (i) the Option Price for such ISO is at least 110% of the
Fair Market Value of a Share on the date the ISO is granted and (ii) the date on
which such ISO terminates is a date not later than the day preceding the fifth
anniversary of the date on which the ISO is granted. Any Participant who
disposes of Shares acquired upon the exercise of an ISO either (i) within two
years after the date of grant of such ISO or (ii) within one year after the
transfer of such Shares to the Participant, shall notify the Company of such
disposition and of the amount realized upon such disposition.

7.   Terms and Conditions of Stock Appreciation Rights

     (a) Grants.  The Committee also may grant (i) a Stock Appreciation Right
         ------
independent of an Option or (ii) a Stock Appreciation Right in connection with
an Option, or a portion thereof. A Stock Appreciation Right granted pursuant to
clause (ii) of the preceding sentence (A) may be granted at the time the related
Option is granted or at any time prior to the exercise or cancellation of the
related Option, (B) shall cover the same Shares covered by an Option (or such
lesser number of Shares as the Committee may determine) and (C) shall be subject
to the same terms and conditions as such Option except for such additional
limitations as are contemplated by this Section 8 (or such additional
limitations as may be included in an Award agreement).

                                       5
<PAGE>

     (b) Terms.  The exercise price per Share of a Stock Appreciation Right
         -----
shall be an amount determined by the Committee but in no event shall such amount
be less than the greater of (i) the Fair Market Value of a Share on the date the
Stock Appreciation Right is granted or, in the case of a Stock Appreciation
Right granted in conjunction with an Option, or a portion thereof, the Option
Price of the related Option and (ii) an amount permitted by applicable laws,
rules, by-laws or policies of regulatory authorities or stock exchanges. Each
Stock Appreciation Right granted independent of an Option shall entitle a
Participant upon exercise to an amount equal to (i) the excess of (A) the Fair
Market Value on the exercise date of one Share over (B) the exercise price per
Share, times (ii) the number of Shares covered by the Stock Appreciation Right.
Each Stock Appreciation Right granted in conjunction with an Option, or a
portion thereof, shall entitle a Participant to surrender to the Company the
unexercised Option, or any portion thereof, and to receive from the Company in
exchange therefor an amount equal to (i) the excess of (A) the Fair Market Value
on the exercise date of one Share over (B) the Option Price per Share, times
(ii) the number of Shares covered by the Option, or portion thereof, which is
surrendered. The date a notice of exercise is received by the Company shall be
the exercise date. Payment shall be made in Shares or in cash, or partly in
Shares and partly in cash (any such Shares valued at such Fair Market Value),
all as shall be determined by the Committee. Stock Appreciation Rights may be
exercised from time to time upon actual receipt by the Company of written notice
of exercise stating the number of Shares with respect to which the Stock
Appreciation Right is being exercised. No fractional Shares will be issued in
payment for Stock Appreciation Rights, but instead cash will be paid for a
fraction or, if the Committee should so determine, the number of Shares will be
rounded downward to the next whole Share.

     (c) Limitations.  The Committee may impose, in its discretion, such
         -----------
conditions upon the exercisability or transferability of Stock Appreciation
Rights as it may deem fit.

     (d) Limited Stock Appreciation Rights.  The Committee may grant LSARs that
         ---------------------------------
are exercisable upon the occurrence of specified contingent events. Such LSARs
may provide for a different method of determining appreciation, may specify that
payment will be made only in cash and may provide that any related Awards are
not exercisable while such LSARs are exercisable. Unless the context otherwise
requires, whenever the term "Stock Appreciation Right" is used in the Plan, such
term shall include LSARs.

8.   Other Stock-Based Awards

     (a) Generally.  The Committee, in its sole discretion, may grant Awards of
         ---------
Shares, Awards of restricted Shares and Awards that are valued in whole or in
part by reference to, or are otherwise based on the Fair Market Value of, Shares
("Other Stock-Based Awards"). Such Other Stock-Based Awards shall be in such
form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive one or more Shares (or the
equivalent cash value of such Shares) upon the completion of a specified period
of service, the occurrence of an event and/or the attainment of performance
objectives. Other Stock-Based Awards may be granted alone or in addition to any
other Awards granted under the Plan. Subject to the provisions of the Plan, the
Committee shall determine to whom and when Other Stock-Based Awards will be
made, the number of Shares to be awarded under (or otherwise related to) such
Other Stock-Based Awards; whether such Other Stock-Based Awards shall be settled
in cash, Shares or a combination of cash and Shares; and all other terms and
conditions of such

                                       6
<PAGE>

Awards (including, without limitation, the vesting provisions thereof and
provisions ensuring that all Shares so awarded and issued shall be fully, paid
and non-assessable).

     (b) Performance-Based Awards.  Notwithstanding anything to the contrary
         ------------------------
herein, certain Other Stock-Based Awards granted under this Section 8 may be
granted in a manner which is deductible by the Company under Section 162(m) of
the Code (or any successor section thereto) ("Performance-Based Awards"). A
Participant's Performance-Based Award shall be determined based on the
attainment of written performance goals approved by the Committee for a
performance period established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no more than 90 days
after the commencement of the performance period to which the performance goal
relates or, if less, the number of days which is equal to 25 percent of the
relevant performance period. The performance goals, which must be objective,
shall be based upon one or more of the following criteria: (i) consolidated
earnings before or after taxes (including earnings before interest, taxes,
depreciation and amortization); (ii) net income; (iii) operating income; (iv)
earnings per Share; (v) book value per Share; (vi) return on shareholders'
equity; (vii) expense management; (viii) return on investment; (ix) improvements
in capital structure; (x) profitability of an identifiable business unit or
product; (xi) maintenance or improvement of profit margins; (xii) stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow;
(xvii) working capital and (xviii) return on assets. The foregoing criteria may
relate to the Company, one or more of its Subsidiaries or one or more of its
divisions or units, or any combination of the foregoing, and may be applied on
an absolute basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall determine. In
addition, to the degree consistent with Section 162(m) of the Code (or any
successor section thereto), the performance goals may be calculated without
regard to extraordinary items. The maximum amount of a Performance-Based Award
during a calendar year to any Participant shall be 500,000 Shares. The Committee
shall determine whether, with respect to a performance period, the applicable
performance goals have been met with respect to a given Participant and, if they
have, to so certify and ascertain the amount of the applicable Performance-Based
Award. No Performance-Based Awards will be paid for such performance period
until such certification is made by the Committee. The amount of the
Performance-Based Award actually paid to a given Participant may be less than
the amount determined by the applicable performance goal formula, at the
discretion of the Committee. The amount of the Performance-Based Award
determined by the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however, that a Participant
                                          --------  -------
may, if and to the extent permitted by the Committee and consistent with the
provisions of Section 162(m) of the Code, elect to defer payment of a
Performance-Based Award.

9.   Adjustments Upon Certain Events

     Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:

     (a) Generally.  In the event of any change in the outstanding Shares after
         ---------
the Effective Date by reason of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or exchange of
Shares or other corporate exchange, or any

                                       7
<PAGE>

distribution to shareholders of Shares other than regular cash dividends, the
Committee in its sole discretion and without liability to any person may make
such substitution or adjustment, if any, as it deems to be equitable, as to (i)
the number or kind of Shares or other securities issued or reserved for issuance
pursuant to the Plan or pursuant to outstanding Awards, (ii) the Option Price
and/or (iii) any other affected terms of such Awards.

     (b) Change in Control.  Except as otherwise provided in an Award agreement,
         -----------------
in the event of a Change in Control, the Committee in its sole discretion and
without liability to any person may take such actions, if any, as it deems
necessary or desirable with respect to any Award (including, without limitation,
(i) the acceleration of an Award, (ii) the payment of a cash amount in exchange
for the cancellation of an Award and/or (iii) the requiring of the issuance of
substitute Awards that will substantially preserve the value, rights and
benefits of any affected Awards previously granted hereunder) as of the date of
the consummation of the Change in Control.

10.  No Right to Employment

     The granting of an Award under the Plan shall impose no obligation on the
Company or any Subsidiary to continue the employment of a Participant and shall
not lessen or affect the Company's or Subsidiary's right to terminate the
employment of such Participant.

11.  Successors and Assigns

     The Plan shall be binding on all successors and assigns of the Company and
a Participant, including without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.

12.  Nontransferability of Awards

     Unless otherwise determined by the Committee, an Award shall not be
transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. An Award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.

13.  Amendments or Termination

     The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which, (a) without the approval of
the shareholders of the Company, would (except as is provided in Section 10 of
the Plan), increase the total number of Shares reserved for the purposes of the
Plan or change the maximum number of Shares for which Awards may be granted to
any Participant or (b) without the consent of a Participant, would impair any of
the rights or obligations under any Award theretofore granted to such
Participant under the Plan; provided, however, that the Committee may amend the
                            --------  -------
Plan in such manner as it deems necessary to permit the granting of Awards
meeting the requirements of the Code or other applicable laws. Notwithstanding
anything to the contrary herein, the Board may not amend, alter or discontinue
the provisions relating to Section 9(b) of the Plan after the occurrence of a
Change in Control.

                                       8
<PAGE>

14.  International Participants

     With respect to Participants who reside or work outside the United States
of America and who are not (and who are not expected to be) "covered employees"
within the meaning of Section 162(m) of the Code, the Committee may, in its sole
discretion, amend the terms of the Plan or Awards with respect to such
Participants in order to conform such terms with the requirements of local law.

15.  Choice of Law

     The Plan shall be governed by and construed in accordance with the laws of
the State of New York.

16.  Effectiveness of the Plan

     The Plan shall be effective as of the Effective Date. If the Plan is not
approved by the shareholders of the Company prior to the first anniversary of
the Effective Date, no Awards may be granted thereafter.

                                       9
<PAGE>

                     NON-QUALIFIED STOCK OPTION AGREEMENT
                     ------------------------------------

     THIS AGREEMENT, dated as of ____________, 2000, is made by and between
Global Crossing Ltd., hereinafter referred to as the "Company", and
____________, an employee of the Company or a Subsidiary (as defined below) of
the Company, hereinafter referred to as "Optionee".

                                   ARTICLE I

              INCORPORATION OF THE PLAN BY REFERENCE; DEFINITIONS
              ---------------------------------------------------

The terms of the 1998 Global Crossing Ltd. Stock Incentive Plan, as amended from
time to time (the "Plan"), are hereby incorporated by reference.  Except as
otherwise defined in this Agreement, capitalized terms used herein shall have
the meanings assigned in the Plan.  In the event of any conflict between this
Agreement and the Plan, the terms of the Plan shall control.  The masculine
pronoun shall include the feminine and neuter, and the singular the plural,
where the context so indicates.

Section 1.1  Common Stock
-----------  ------------

     "Common Stock" shall mean the Company's Common Shares, par value of $0.1
per share.

Section 1.2  Grant Date
-----------  ----------

     "Grant Date" shall mean the date on which the Options provided for in this
Agreement were grated, _____________, 2000.

Section 1.3  Vesting Date
-----------  ------------

     "Vesting Date" shall mean _____________, 2000.

Section 1.4  Options
-----------  -------

     "Options" shall mean the non-qualified options to purchase Common Stock
granted under this Agreement totaling ___________ shares.

Section 1.5  Exercise Price
-----------  --------------

     The exercise price of the shares of stock covered by the Options granted
hereunder shall be $______________ per share.
<PAGE>

                                   ARTICLE II

                                GRANT OF OPTIONS
                                ----------------

Section 2.1  Grant of Options
-----------  ----------------

     The Company grants to the Optionee Options representing the right to
acquire shares of Common Stock.

Section 2.2  Adjustments in Options Pursuant to Merger, Consolidation, etc.
-----------  -------------------------------------------------------------

     Subject to Section 9 of the Plan, in the event that the outstanding shares
of the stock subject to an Option are, from time to time, 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 merger, consolidation,
recapitalization, Change of Control, reclassification, stock split, stock
dividend, combination of shares, or otherwise, the Committee may make such
appropriate and equitable adjustment as it deems necessary in the number and
kind of shares and/or the amount of consideration as to which or for which, as
the case may be, such Option, or portions thereof then unexercised, shall be
exercisable.  Any such adjustment made by the Committee shall be final and
binding upon the Optionee, the Company and all other interested persons.

                                  ARTICLE III

                            PERIOD OF EXERCISABILITY
                            ------------------------

Section 3.1  Options
-----------  -------

             (a) The Options will become exercisable with respect to one-third
of the shares subject thereto on the first anniversary of the Vesting Date.

             (b) The Options will become exercisable with respect to an
additional one-third of the shares subject thereto on the third anniversary of
the Vesting Date.

             (c) The Options will become exercisable with respect to the
remaining one-third of the shares subject thereto on the third anniversary of
the Vesting Date.

             (d) All outstanding Options shall immediately become exercisable in
the event of a Change of Control.

Section 3.2  Expiration Options
-----------  ------------------

     The Options may not be exercised to any extent by the Optionee after the
first to occur of the following events:

             (a) The tenth anniversary of the Grant Date; or

             (b) Six months after the date of the Optionee's termination of
employment, consultation or Board membership for any reason; or

                                       2
<PAGE>

             (c)  If the Committee so determines pursuant to Section 9 of the
Plan, on the effective date of either the merger or consolidation of the Company
into another Person, a Change in Control, or the recapitalization,
reclassification, liquidation or dissolution of the Company. At least thirty
(30) days prior to the effective date of such merger, consolidation, exchange,
acquisition, recapitalization, reclassification, liquidation or dissolution, the
Committee shall give the Optionee notice of such event and an opportunity to
exercise the Option, if the Option has then neither been fully exercised nor
become unexercisable under this Section 3.2

Section 3.3  Effect of Termination of Employment, Consultation or Board
-----------  ----------------------------------------------------------
Membership
----------

     All unexercisable Options granted hereunder shall terminate upon the
Optionee's termination of employment, consultation or Board membership for any
reason.

Section 3.4  No Right to Employment, Consultation or Board Membership
-----------  --------------------------------------------------------

     Nothing in this Agreement or in the Plan shall confer upon the Optionee any
right to continued employment, consultation or Board membership for the Company
or any Subsidiary or shall interfere with or restrict in any way the rights of
the Company and its Subsidiaries, which are hereby expressly reserved, to
terminate any such affiliation of the Optionee at any time for any reason
whatsoever.

                                   ARTICLE IV

                              EXERCISE OF OPTIONS
                              -------------------

Section 4.1  Person Eligible to Exercise
-----------  ---------------------------

     During the lifetime of the Optionee, only he or she may exercise an Option
or any portion thereof.  After the death of the Optionee, any exercisable
portion of an Option may, prior to the time when an Option becomes unexercisable
under Section 3.2, be exercised by the executor or administrator of the
Optionee's estate or by any person or persons empowered to do so under the
Optionee's will or under the then applicable laws of descent and distribution.

Section 4.2  Partial Exercise and Period of Unexercisability
-----------  -----------------------------------------------

     Any exercisable portion of an Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.2;
provided, however, that any partial exercise shall be for whole shares of Common
--------  -------
Stock only.

Section 4.3  Manner of Exercise
-----------  ------------------

     An Option, or any exercisable portion thereof, may be exercised solely by
delivering to the Secretary or his office all of the following prior to the time
when the Option or such portion becomes unexercisable under Section 3.2:

                                       3