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                                  STAPLES, INC.


                 AMENDED AND RESTATED 1992 EQUITY INCENTIVE PLAN

1.   PURPOSE.

     The purpose of this plan (the "Plan") is to secure for Staples, Inc. (the
"Company") and its shareholders the benefits arising from capital stock
ownership by employees or officers of, and consultants to, the Company and its
parent and subsidiary corporations who are expected to contribute to the
Company's future growth and success. Except where the context otherwise
requires, the term "Company" shall include the parent and all present and future
subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time (the
"Code"). Those provisions of the Plan which make express reference to Section
422 shall apply only to Incentive Stock Options (as that term is defined
herein).

2.   TYPES OF OPTIONS AND AWARDS; ADMINISTRATION.

          a. TYPES OF OPTIONS AND AWARDS. Options granted pursuant to the Plan
     shall be authorized by action of the Board of Directors of the Company (or
     a Committee designated by the Board of Directors) and may be either
     incentive stock options ("Incentive Stock Options") meeting the
     requirements of Section 422 of the Code or non-statutory options which are
     not intended to meet the requirements of Section 422 of the Code. Awards of
     restricted stock made pursuant to Section 13 of the Plan shall be
     authorized by action of the Board of Directors of the Company (or a
     Committee designated by the Board of Directors) and shall meet the
     requirements of Section 13 of the Plan.

          b. Administration.

               i. The Plan will be administered by the Board of Directors of the
          Company, whose construction and interpretation of the terms and
          provisions of the Plan shall be final and conclusive. The Board of
          Directors may in its sole discretion (x) grant options to purchase
          shares of Staples Retail and Delivery common stock or Staples.com
          common stock (collectively, "Common Stock") and issue shares upon
          exercise of such options as provided in the Plan and (y) make
          restricted stock awards pursuant to Section 13 of the Plan. The Board
          shall have authority, subject to the express provisions of the Plan,
          to construe the respective option agreements, awards and the Plan, to
          prescribe, amend and rescind rules and regulations relating to the
          Plan, to determine the terms and provisions of the respective option
          agreements and restricted stock awards, which need not be identical,
          and to make all other determinations in the judgment of the Board of
          Directors necessary or desirable for the administration of the Plan.
          The Board of Directors may correct any defect or supply any omission
          or reconcile any inconsistency in the Plan or in any option agreement
          or restricted stock award in the manner and to the extent it shall
          deem expedient to carry the Plan into effect and it shall be the sole
          and final judge of such expediency. No director or person acting
          pursuant to authority delegated by the Board of Directors shall be
          liable for any action or determination under the Plan made in good
          faith.

               ii. The Board of Directors may, to the full extent permitted by
          or consistent with applicable laws or regulations and Section 3(b) of
          this Plan, delegate any or all of its powers under the Plan to a
          committee (the "Committee") appointed by the Board of Directors, and
          if the Committee is so appointed all references to the Board of
          Directors in the Plan shall mean and relate to such Committee. Unless
          all members of the Board of Directors are "outside directors" within
          the meaning of Section 162(m) of the Code, as such term is interpreted
          from time to time, the Board shall appoint such a Committee of two or
          more directors, all of whom are outside directors, and shall delegate
          to such Committee all of its powers under the Plan, except that the
          Board's concurrent approval shall be required for any amendment to the
          Plan which may be adopted by


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          the Committee; and provided, that any failure of any director or
          Committee member to satisfy the definition of outside director shall
          not invalidate any action taken by the Board or Committee with respect
          to any participant in the Plan, whether or not such person is a
          "covered employee" within the meaning of Section 162(m) of the Code,
          as such term is interpreted from time to time.

          c. APPLICABILITY OF RULE 16b-3. Those provisions of the Plan
     which make express reference to Rule 16b-3 promulgated under the Securities
     and Exchange Act of 1934 (the "Exchange Act") or, any successor rules
     ("Rule 16b-3") or which are required in order for certain option
     transactions to qualify for exemption under Rule 16b-3 shall apply only to
     such persons as are required to file reports under Section 16(a) of the
     Exchange Act (a "Reporting Person").

3.   ELIGIBILITY.

     Options and restricted stock awards may be granted or made to persons
who are, at the time of grant, employees or officers of the Company (including
any persons who have entered into an agreement with the Company under which they
will be employed by the Company in the future) or consultants to the Company;
PROVIDED, that the class of employees to whom Incentive Stock Options may be
granted shall be limited to employees of the Company. A person who has been
granted an option or award may, if he or she is otherwise eligible, be granted
additional options or awards if the Board of Directors shall so determine;
PROVIDED, that the maximum number of shares for which options or restricted
stock awards may be granted to any one employee during any fiscal year shall be
3,037,500* shares, subject to adjustment as provided in Section 15 below.

4.   STOCK SUBJECT TO PLAN.

     Subject to adjustment as provided in Section 15 below, the maximum
number of shares of Common Stock of the Company which may be issued and sold
under the Plan is 122,850,000 shares* of Common Stock (regardless of series).
Except as prohibited by Rule 16b-3, (i) if an option granted under the Plan
shall expire or terminate for any reason without having been exercised in full,
the unpurchased shares subject to such option shall again be available for
subsequent option grants or awards under the Plan and (ii) if restricted stock
awarded under the Plan shall be repurchased by the Company, the repurchased
shares subject to such award shall again be available for subsequent option
grants or awards under the Plan.

5.   FORMS OF OPTION AGREEMENTS.

     As a condition to the grant of an option under the Plan, each recipient
of an option shall execute an option agreement in such form not inconsistent
with the Plan as may be approved by the Board of Directors. Such option
agreements may differ among recipients.

6.   PURCHASE PRICE UPON EXERCISE OF OPTIONS.

          a. GENERAL. Subject to Section 3(b), the purchase price per share of
     stock deliverable upon the exercise of an option shall be determined by the
     Board of Directors but shall in no event be less than 100% of the fair
     market value of such stock, as determined by the Board of Directors, at the
     time of grant of such option, or, in the case of an Incentive Stock Option
     described in Section 11(b), be less than 110% of such fair market value.

 *  Adjusted for stock splits through September 14, 1999

          b. PAYMENT OF PURCHASE PRICE. Options granted under the Plan may
     provide for the payment of the exercise price by delivery of cash or a
     check to the order of the Company in an amount equal to the exercise price
     of such options, or, to the extent provided in the applicable option
     agreement, (i) by delivery to the Company of shares of Common Stock of the
     Company already owned by the optionee having a fair market value equal in
     amount to the exercise price of the options being exercised, (ii) by any
     other means (including, without limitation, by delivery of a promissory
     note of the optionee


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<PAGE>


     payable on such terms as are specified by the Board of Directors) which the
     Board of Directors determines are consistent with the purpose of the Plan
     and with applicable laws and regulations (including, without limitation,
     the provisions of Rule 16b-3 and Regulation T promulgated by the Federal
     Reserve Board) or (iii) by any combination of such methods of payment. The
     fair market value of any shares of Common Stock or other non-cash
     consideration which may be delivered upon exercise of an option shall be
     determined in such manner as may be prescribed by the Board of Directors.

7.   OPTION PERIOD.

     Each option and all rights thereunder shall expire on such date as
shall be set forth in the applicable option agreement, except that, in the case
of an Incentive Stock Option, such date shall not be later than ten years after
the date on which the option is granted (or five years in the case of options
described in Section 11(b)), and, in the case of non-statutory options, in no
event after the expiration of ten years plus 30 days from the date on which the
option is granted, and, in either case, options shall be subject to earlier
termination as provided in the Plan.

8.   EXERCISE OF OPTIONS.

     Each option granted under the Plan shall be exercisable either in full
or in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option, subject to the provisions of the
Plan.

9.   NONTRANSFERABILITY OF OPTIONS.

     No option granted under the Plan shall be assignable or transferable by
the person to whom it is granted, either voluntarily or by operation of law,
except by will or the laws of descent and distribution. During the life of the
optionee, the options shall be exercisable only by the optionee. Notwithstanding
the foregoing, non-statutory options may be transferred pursuant to a qualified
domestic relations order (as defined in Rule 16b-3).

10.  EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP.

     Except as provided in Section 11(d) with respect to Incentive Stock
Options, and subject to the provisions of the Plan, the Board of Directors shall
determine the period of time during which an optionee may exercise an option
following (i) the termination of the optionee's employment or other relationship
with the Company or (ii) the death or disability of the optionee. Such periods
shall be set forth in the agreement evidencing such option.

11.  INCENTIVE STOCK OPTIONS.

     Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:

          a. EXPRESS DESIGNATION. All Incentive Stock Options granted under the
     Plan shall, at the time of grant, be specifically designated as such in the
     option agreement covering such Incentive Stock Options.

          b. 10% SHAREHOLDER. If any employee to whom an Incentive Stock Option
     is to be granted under the Plan is, at the time of the grant of such
     option, the owner of stock possessing more than 10% of the total combined
     voting power of all classes of stock of the Company (after taking into
     account the attribution of stock ownership rules of Section 424(d) of the
     Code), then the following special provisions shall be applicable to the
     Incentive Stock Option granted to such individual:


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               i. The purchase price per share of the Common Stock subject to
          such Incentive Stock Option shall not be less than 110% of the fair
          market value of one share of such series of Common Stock at the time
          of grant; and

               ii. The option exercise period shall not exceed five years from
          the date of grant.

          c. DOLLAR LIMITATION. For so long as the Code shall so provide,
     options granted to any employee under the Plan (and any other incentive
     stock option plans of the Company) which are intended to constitute
     Incentive Stock Options shall not constitute Incentive Stock Options to the
     extent that such options, in the aggregate, become exercisable for the
     first time in any one calendar year for shares of Common Stock with an
     aggregate fair market value (determined as of the respective date or dates
     of grant) of more than $100,000.

         d. DETERMINATION OF EMPLOYMENT, DEATH OR DISABILITY. No Incentive
     Stock Option may be exercised unless, at the time of such exercise, the
     optionee is, and has been continuously since the date of grant of his or
     her option, employed by the Company, except that:

               i. an Incentive Stock Option may be exercised within the period
          of three months after the date the optionee ceases to be an employee
          of the Company (or within such lesser period as may be specified in
          the applicable option agreement), PROVIDED, that the agreement with
          respect to such option may designate a longer exercise period and that
          the exercise after such three-month period shall be treated as the
          exercise of a non-statutory option under the Plan;

               ii. if the optionee dies while in the employ of the Company, or
          within three months after the optionee ceases to be such an employee,
          the Incentive Stock Option may be exercised by the person to whom it
          is transferred by will or the laws of descent and distribution within
          the period of one year after the date of death (or within such lesser
          period as may be specified in the applicable option agreement); and

               iii. if the optionee becomes disabled (within the meaning of
          Section 22(e)(3) of the Code or any successor provision thereto) while
          in the employ of the Company, the Incentive Stock Option may be
          exercised within the period of one year after the date the optionee
          ceases to be such an employee because of such disability (or within
          such lesser period as may be specified in the applicable option
          agreement).

     For all purposes of the Plan and any option or restricted stock award
granted hereunder, "employment" shall be defined in accordance with the
provisions of Section 1.421-7(h) of the Income Tax Regulations (or any successor
regulations). Notwithstanding the foregoing provisions, no stock option may be
exercised after its expiration date.

12.  ADDITIONAL PROVISIONS.

          a. ADDITIONAL OPTION PROVISIONS. The Board of Directors may, in its
     sole discretion, include additional provisions in option agreements
     covering options granted under the Plan, including without limitation
     restrictions on transfer, repurchase rights, commitments to pay cash
     bonuses, to make, arrange for or guaranty loans or to transfer other
     property to optionees upon exercise of options, or such other provisions as
     shall be determined by the Board of Directors; PROVIDED THAT such
     additional provisions shall not be inconsistent with any other term or
     condition of the Plan and such additional provisions shall not cause any
     Incentive Stock Option granted under the Plan to fail to qualify as an
     Incentive Stock Option within the meaning of Section 422 of the Code.

          b. ACCELERATION, EXTENSION, ETC. The Board of Directors may, in its
     sole discretion, (i) accelerate the date or dates on which all or any
     particular option or options granted under the Plan may be exercised or
     (ii) extend the dates during which all, or any particular, option or
     options granted under


                                       4
<PAGE>


     the Plan may be exercised; PROVIDED, HOWEVER, that no such extension
     shall be permitted if it would cause the Plan to fail to comply with
     Section 422 of the Code or with Rule 16b-3.

13.  AWARDS.

     A restricted stock award ("award") shall consist of the issuance by the
Company of shares of Common Stock (of either series), and purchase by the
recipient of such shares, subject to the terms, conditions and restrictions
described in the document evidencing the award and in this Section 13 and
elsewhere in the Plan.

          a. EXECUTION OF RESTRICTED STOCK AWARD AGREEMENT. As a condition to an
     award under the Plan, each recipient of an award shall execute an agreement
     in such form, which may differ among recipients, as shall be specified by
     the Board of Directors at the time of such award.

          b. PRICE. The Board of Directors shall determine the price at which
     shares of Common Stock shall be sold to recipients of awards under the
     Plan. The Board of Directors may, in its discretion, issue shares pursuant
     to awards without the payment of any cash purchase price by the recipients
     (in which case the "price per share originally paid" for purposes of
     Section 13(d)(3) below shall be zero) or issue shares pursuant to awards at
     a purchase price below the then fair market value of such series of Common
     Stock. If a purchase price is required to be paid, it shall be paid in cash
     or by check payable to the order of the Company at the time that the award
     is accepted by the recipient, or by such other means as may be approved by
     the Board of Directors.

          c. NUMBER OF SHARES. The award shall specify the number of shares and
     series of Common Stock issued thereunder.

          d. RESTRICTIONS ON TRANSFER. In addition to such other terms,
     conditions and restrictions upon awards as shall be imposed by the Board of
     Directors, all shares issued pursuant to an award shall be subject to the
     following restrictions:

               i. All shares of Common Stock subject to an award (including any
          shares issued pursuant to paragraph (e) of this Section) shall be
          subject to certain restrictions on disposition and obligations of
          resale to the Company as provided in subparagraph (2) below for the
          period specified in the document evidencing the award, and shall not
          be sold, assigned, transferred, pledged, hypothecated or otherwise
          disposed of until such restrictions lapse. The period during which
          such restrictions are applicable is referred to as the "Restricted
          Period." Notwithstanding the foregoing, the Restricted Period on (i)
          stock awards that vest based on performance shall not vest earlier
          than the first anniversary of the date of grant and (ii) stock awards
          that vest based on the passage of time alone will vest no earlier than
          the third anniversary of the date of grant.

               ii. In the event that a recipient's employment with the Company
          is terminated within the Restricted Period, whether such termination
          is voluntary or involuntary, with or without cause, or because of the
          death or disability of the recipient, the Company shall have the right
          and option for a period of three months following such termination to
          buy for cash that number of the shares of Common Stock purchased under
          the award as to which the restrictions on transfer and the forfeiture
          provisions contained in the award have not then lapsed, at a price
          equal to the price per share originally paid by the recipient. If such
          termination occurs within the last three months of the applicable
          restrictions, the restrictions and repurchase rights of the Company
          shall continue to apply until the expiration of the Company's three
          month option period.

               iii. Notwithstanding subparagraphs (1) and (2) above, the Board
          of Directors may, in its discretion, either at the time that an award
          is made or at any time thereafter, waive its right to repurchase
          shares of Common Stock upon the occurrence of any of the events
          described in this paragraph (d) or remove or modify any part or all of
          the restrictions provided that the Board may only exercise such rights
          in extraordinary circumstances which shall include, without
          limitation,


                                       5
<PAGE>


          death or disability of the employee; a merger, consolidation, sale,
          reorganization, recapitalization, or change in control of the Company
          or any other nonrecurring significant event affecting the Company, an
          employee or the Plan. In addition, the Board of Directors may, in its
          discretion, impose upon the recipient of an award at the time of such
          award such other restrictions on any shares of Common Stock issued
          pursuant to such award as the Board of Directors may deem advisable.

          e. ADDITIONAL SHARES. Any shares received by a recipient of an award
     as a stock dividend on, or as a result of stock splits, combinations,
     exchanges of shares, reorganizations, mergers, consolidations or otherwise
     with respect to, shares of Common Stock received pursuant to such award
     shall have the same status and shall bear the same restrictions, all on a
     proportionate basis, as the shares initially purchased pursuant to such
     award.

          f. TRANSFERS IN BREACH OF AWARD. If any transfer of shares purchased
     pursuant to an award is made or attempted contrary to the terms of the Plan
     and of such award, the Board of Directors shall have the right to purchase
     for the account of the Company those shares from the owner thereof or his
     or her transferee at any time before or after the transfer at the price
     paid for such shares by the person to whom they were awarded under the
     Plan. In addition to any other legal or equitable remedies which it may
     have, the Company may enforce its rights by specific performance to the
     extent permitted by law. The Company may refuse for any purpose to
     recognize as a shareholder of the Company any transferee who receives any
     shares contrary to the provisions of the Plan and the applicable award or
     any recipient of an award who breaches his or her obligation to resell
     shares as required by the provisions of the Plan and the applicable award,
     and the Company may retain and/or recover all dividends on such shares
     which were paid or payable subsequent to the date on which the prohibited
     transfer or breach was made or attempted.

          g. ADDITIONAL AWARD PROVISIONS. The Board of Directors may, in its
     sole discretion, include additional provisions in any award granted under
     the Plan as shall be determined by the Board of Directors.

14.  RIGHTS AS A SHAREHOLDER.

     The holder of an option or recipient of an award shall have no rights
as a shareholder with respect to any shares covered by the option or award
(including, without limitation, any rights to receive dividends or non-cash
distributions with respect to such shares) until the date of issue of a stock
certificate to him or her for such shares. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued. Notwithstanding the foregoing, in the event the
Company effects a split of either class of Common Stock by means of a stock
dividend and the exercise price of and the number of shares subject to such
Option are adjusted as of the date of the distribution of the dividend (rather
than as of the record date for such dividend), then an optionee who exercises an
Option between the record date and the distribution date for such stock dividend
shall be entitled to receive, on the distribution date, the stock dividend with
respect to the shares of such class of Common Stock acquired upon such Option
exercise, notwithstanding the fact that such shares were not outstanding as of
the close of business on the record date for such stock dividend.

15.  ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS AND RELATED TRANSACTIONS.

          a. GENERAL. If, through or as a result of any merger, consolidation,
     sale of all or substantially all of the assets of the Company,
     reorganization, recapitalization, reclassification, stock dividend, stock
     split, reverse stock split or other similar transaction, (i) the
     outstanding shares of one or both series of Common Stock are increased or
     decreased or are exchanged for a different number or kind of shares or
     other securities of the Company, or (ii) additional shares or new or
     different shares or other securities of the Company or other non-cash
     assets are distributed with respect to such shares of one or both series of
     Common Stock or other securities, an appropriate and proportionate
     adjustment shall be made in (w) the maximum number of shares for which
     awards may be granted to any one employee during any fiscal year, as set
     forth in the last sentence of Section 3, (x) the maximum number and kind of


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     shares reserved for issuance under the Plan, (y) the number and kind of
     shares or other securities subject to any then outstanding options under
     the Plan for such series of Common Stock, and (z) the price for each share
     subject to any then outstanding options under the Plan or repurchase rights
     of the Company for such series of Common Stock, without changing the
     aggregate purchase price as to which such options or repurchase rights
     remain exercisable. Notwithstanding the foregoing, no adjustment shall be
     made pursuant to this Section 15 if such adjustment would cause the Plan to
     fail to comply with Section 422 of the Code or with Rule 16b-3.

          b. BOARD AUTHORITY TO MAKE ADJUSTMENTS. Any adjustments under this
     Section 15 will be made by the Board of Directors, whose determination as
     to what adjustments, if any, will be made and the extent thereof will be
     final, binding and conclusive. No fractional shares will be issued under
     the Plan on account of any such adjustments.

16.  MERGER, CONSOLIDATION, ASSET SALE, LIQUIDATION, ETC.

          a. GENERAL. In the event of a consolidation or merger or sale of all
     or substantially all of the assets of the Company in which outstanding
     shares of one or both series of Common Stock are exchanged for securities,
     cash or other property of any other corporation or business entity or in
     the event of a liquidation of the Company, the Board of Directors of the
     Company, or the board of directors of any corporation assuming the
     obligations of the Company, may, in its discretion, take any one or more of
     the following actions, as to outstanding options for such series of Common
     Stock: (i) provide that such options shall be assumed, or equivalent
     options shall be substituted, by the acquiring or succeeding corporation
     (or an affiliate thereof), PROVIDED that any such options substituted for
     Incentive Stock Options shall meet the requirements of Section 424(a) of
     the Code, (ii) upon written notice to the optionees, provide that all
     unexercised options will terminate immediately prior to the consummation of
     such transaction unless exercised by the optionee within a specified period
     following the date of such notice, (iii) in the event of a merger under the
     terms of which holders of one or both series of Common Stock of the Company
     will receive upon consummation thereof a cash payment for each share
     surrendered in the merger (the "Merger Price"), make or provide for a cash
     payment to such optionees equal to the difference between (A) the Merger
     Price times the number of shares of Common Stock subject to such
     outstanding options (to the extent then exercisable at prices not in excess
     of the Merger Price) and (B) the aggregate exercise price of all such
     outstanding options in exchange for the termination of such options, and
     (iv) provide that all or any such outstanding options shall become
     exercisable in full immediately prior to such event.

          b. SUBSTITUTE OPTIONS. The Company may grant options under the Plan in
     substitution for options held by employees of another corporation who
     become employees of the Company, or a subsidiary of the Company, as the
     result of a merger or consolidation of the employing corporation with the
     Company or a subsidiary of the Company, or as a result of the acquisition
     by the Company, or one of its subsidiaries, of property or stock of the
     employing corporation. The Company may direct that substitute options be
     granted on such terms and conditions as the Board of Directors considers
     appropriate in the circumstances so long as the ratio of the option
     exercise price to the fair market value of the stock for the substitute
     option is no more favorable to the optionee than the ratio of the option
     exercise price to the fair market value of the original option immediately
     before such substitution.

17.  NO SPECIAL EMPLOYMENT RIGHTS.

     Nothing contained in the Plan or in any option or award shall confer
upon any optionee or any recipient of an award any right with respect to the
continuation of his or her employment by the Company or consulting relationship
with the Company or interfere in any way with the right of the Company at any
time to terminate such employment or consulting relationship or to increase or
decrease the compensation of the optionee.


                                       7
<PAGE>


18.  OTHER EMPLOYEE BENEFITS.

     Except as to plans which by their terms include such amounts as
compensation, neither the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise nor the value of an award granted to an employee will
constitute compensation with respect to which any other employee benefits of
such employee are determined, including, without limitation, benefits under any
bonus, pension, profit-sharing, life insurance or salary continuation plan,
except as otherwise specifically determined by the Board of Directors.

19.  AMENDMENT OF THE PLAN.

          a. The Board of Directors may at any time, and from time to time,
     modify or amend the Plan in any respect, provided, however, that without
     approval of the stockholders of the Company, no amendment may (i) increase
     the number of shares covered by the Plan, (ii) materially increase the
     benefits provided under the Plan or (iii) add a class of participants to
     the Plan. In addition, if at any time the approval of the shareholders of
     the Company is required as to any other modification or amendment under
     Section 422 of the Code or any successor provision with respect to
     Incentive Stock Options, or under Rule 16b-3, the Board of Directors may
     not effect such modification or amendment without such approval.

          b. The termination or any modification or amendment of the Plan shall
     not, without the consent of an optionee or recipient of an award, affect
     his or her rights under an option or award previously granted to him or
     her. With the consent of the optionee or recipient of an award affected,
     the Board of Directors may amend outstanding option agreements or awards in
     a manner not inconsistent with the Plan. The Board of Directors shall have
     the right to amend or modify (i) the terms and provisions of the Plan and
     of any outstanding Incentive Stock Options granted under the Plan to the
     extent necessary to qualify any or all such options for such favorable
     federal income tax treatment (including deferral of taxation upon exercise)
     as may be afforded incentive stock options under Section 422 of the Code
     and (ii) the terms and provisions of the Plan and of any outstanding option
     or award to the extent necessary to ensure the qualification of the Plan
     under Rule 16b-3 or is required to ensure that any compensation
     attributable to any option under the Plan is deductible by the Company for
     federal income tax purposes under Section 162(m), or any successor rule.

20.  WITHHOLDING.

          a. The Company shall have the right to deduct from payments of any
     kind otherwise due to the optionee or recipient of an award any federal,
     state or local taxes of any kind required by law to be withheld with
     respect to any shares issued upon exercise of options under the Plan or
     upon the expiration or termination of the Restricted Period relating to
     shares subject to the award. Subject to the prior approval of the Company,
     which may be withheld by the Company in its sole discretion, the optionee
     or recipient of an award may elect to satisfy such obligations, in whole or
     in part, (i) by causing the Company to withhold shares of Common Stock
     otherwise issuable pursuant to the exercise of an option or upon the
     expiration or termination of the Restricted Period relating to shares
     subject to the award or (ii) by delivering to the Company shares of Common
     Stock already owned by the optionee or award recipient. The shares so
     delivered or withheld shall have a fair market value equal to such
     withholding obligation. The fair market value of the shares used to satisfy
     such withholding obligation shall be determined by the Company as of the
     date that the amount of tax to be withheld is to be determined. An optionee
     or award recipient who has made an election pursuant to this Section 20(a)
     may only satisfy his or her withholding obligation with shares of Common
     Stock which are not subject to any repurchase, forfeiture, unfulfilled
     vesting or other similar requirements.

          b. Notwithstanding the foregoing, in the case of a Reporting Person,
     no election to use shares for the payment of withholding taxes shall be
     effective unless made in compliance with any applicable requirements of
     Rule 16b-3 (unless it is intended that the transaction not qualify for
     exemption under Rule 16b-3).


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<PAGE>


          c. If the recipient of an award under the Plan elects, in accordance
     with Section 83(b) of the Code, to recognize ordinary income in the year of
     acquisition of any shares awarded under the Plan, the Company will require
     at the time of such election an additional payment for withholding tax
     purposes based on the difference, if any, between the purchase price of
     such shares and the fair market value of such shares as of the date
     immediately preceding the date of the award.

21.  CANCELLATION AND NEW GRANT OF OPTIONS, ETC.

     Subject to the approval of the stockholders of the Company, the Board
of Directors shall have the authority to effect, with the consent of the
affected optionees, (i) the cancellation of any or all outstanding options under
the Plan and the grant in substitution therefor of new options under the Plan
covering the same or different numbers of shares of Common Stock (of either
series) and having an option exercise price per share which may be lower or
higher than the exercise price per share of the cancelled options or (ii) the
amendment of the terms of any and all outstanding options under the Plan to
provide an option exercise price per share which is higher or lower than the
then-current exercise price per share of such outstanding options.

22.  EFFECTIVE DATE AND DURATION OF THE PLAN.

          a. EFFECTIVE DATE. The Plan shall become effective when adopted by the
     Board of Directors, but no Incentive Stock Option granted under the Plan
     shall become exercisable unless and until the Plan shall have been approved
     by the Company's shareholders. If such shareholder approval is not obtained
     within twelve months after the date of the Board's adoption of the Plan, no
     options previously granted under the Plan shall be deemed to be Incentive
     Stock Options and no Incentive Stock Options shall be granted thereafter.
     Amendments to the Plan not requiring shareholder approval shall become
     effective when adopted by the Board of Directors; amendments requiring
     shareholder approval (as provided in Section 19) shall become effective
     when adopted by the Board of Directors, but no Incentive Stock Option
     granted after the date of such amendment shall become exercisable (to the
     extent that such amendment to the Plan was required to enable the Company
     to grant such Incentive Stock Option to a particular optionee) unless and
     until such amendment shall have been approved by the Company's
     shareholders. If such shareholder approval is not obtained within twelve
     months of the Board's adoption of such amendment, any Incentive Stock
     Options granted on or after the date of such amendment shall terminate to
     the extent that such amendment to the Plan was required to enable the
     Company to grant such option to a particular optionee. Subject to this
     limitation, options may be granted under the Plan at any time after the
     effective date and before the date fixed for termination of the Plan.

          b. TERMINATION. Unless sooner terminated in accordance with Section
     16, the Plan shall terminate, with respect to Incentive Stock Options, upon
     the earlier of (i) the close of business on the day next preceding the
     tenth anniversary of the date of its adoption by the Board of Directors, or
     (ii) the date on which all shares available for issuance under the Plan
     shall have been issued pursuant to the exercise or cancellation of options
     granted under the Plan or the grant of awards. Unless sooner terminated in
     accordance with Section 16, the Plan shall terminate with respect to awards
     and options which are not Incentive Stock Options on the date specified in
     (ii) above. If the date of termination is determined under (i) above, then
     options outstanding on such date shall continue to have force and effect in
     accordance with the provisions of the instruments evidencing such options.

23.  PROVISION FOR FOREIGN PARTICIPANTS.

     The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.


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<PAGE>


                                        ADOPTED BY THE BOARD OF DIRECTORS ON
                                        APRIL 16, 1992 AND APPROVED BY THE
                                        STOCKHOLDERS ON JUNE 18, 1992; AMENDED
                                        BY THE BOARD OF DIRECTORS ON MARCH 25,
                                        1993 AND APPROVED BY THE STOCKHOLDERS ON
                                        JUNE 25, 1993; AS FURTHER AMENDED BY THE
                                        BOARD OF DIRECTORS ON JUNE 25, 1993,
                                        WHICH AMENDMENT DID NOT REQUIRE
                                        STOCKHOLDER APPROVAL; AS FURTHER
                                        AMENDED, RESTATED AND RENAMED BY THE
                                        BOARD OF DIRECTORS ON APRIL 27, 1994,
                                        AND APPROVED BY THE STOCKHOLDERS ON JUNE
                                        30, 1994; AS FURTHER AMENDED ON
                                        SEPTEMBER 3, 1996, AND APPROVED BY THE
                                        STOCKHOLDERS ON JUNE 18, 1997; AS
                                        FURTHER AMENDED ON SEPTEMBER 14, 1999,
                                        AND APPROVED BY STOCKHOLDERS ON NOVEMBER
                                        9, 1999; AND AS FURTHER AMENDED BY THE
                                        COMPENSATION COMMITTEE OF THE BOARD OF
                                        DIRECTORS ON NOVEMBER 30, 1999; AND AS
                                        FURTHER AMENDED BY THE BOARD OF
                                        DIRECTORS ON MARCH 7, 2000.




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