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                                                                    EXHIBIT 10.1



                       THE 200_ EQUITY PARTICIPATION PLAN
                                       OF
                             AMBASSADORS GROUP, INC.

        Ambassadors Group, Inc., a Delaware corporation (the "Company"), has
adopted The 200_ Equity Participation Plan of Ambassadors Education Group, Inc.
(the "Plan"), effective as of ____________, 200_, for the benefit of its
eligible employees, consultants and directors. The Plan consists of two plans,
one for the benefit of key Employees (as such term is defined below) and
consultants and one for the benefit of Independent Directors (as such term is
defined below).

        As of the date of adoption of this Plan, all of the outstanding common
stock of the Company is held by Ambassadors International, Inc., a Delaware
corporation ("Ambassadors"), but the Company and Ambassadors have entered into a
Master Separation and Distribution Agreement dated _____________, 200_ (the
"Separation Agreement"), pursuant to which the businesses of the parties are to
be separated (the "Separation") and all of the shares of common stock of the
Company is to be distributed pro rata to the holders of Ambassadors common stock
(the "Distribution"). Pursuant to the Separation Agreement, the Company and
Ambassadors have also entered into an Employee Matters Agreement dated
___________, 200_. The Company has adopted this Plan pursuant to Section 5 of
the Employee Matters Agreement, and pursuant to Section 5 of the Employee
Matters Agreement, the Company is required to grant replacement stock options
under this Plan to all persons holding Ambassadors stock options (the
"Ambassadors Options") issued under the Ambassadors Equity Participation Plan
(as defined in the Separation Agreement) who are employees of the Company.
Options in the Company will be issued in exchange for the Ambassadors Options.

        The purposes of this Plan are as follows:

                (1) To provide an additional incentive for directors, key
        Employees and consultants to further the growth, development and
        financial success of the Company by personally benefitting through the
        ownership of Company stock and/or rights which recognize such growth,
        development and financial success.

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

                (3) To offset the loss of value of the Ambassadors Options due
        to the Distribution, to grant Options to the persons holding Ambassadors
        Options at the Date of Distribution (as defined in the Separation
        Agreement) pursuant to Section 5.3 of the Employee Matters Agreement.

                                    ARTICLE I
                                   DEFINITIONS

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

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        1.2 AFFILIATED COMPANY. "Affiliated Company" shall mean any corporation
which is a Parent of the Company or a Subsidiary of the Company or of any Parent
of the Company.

        1.3 BOARD. "Board" shall mean the Board of Directors of the Company.

        1.4 CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.

        1.5 COMMITTEE. "Committee" shall mean the Compensation Committee of the
Board, or a subcommittee of the Board, appointed as provided in Section 9.1.

        1.6 COMMON STOCK. "Common Stock" shall mean the common stock of the
Company, par value $0.01 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any warrants,
options or other rights to purchase Common Stock. Debt securities of the Company
convertible into Common Stock shall be deemed equity securities of the Company.

        1.7 COMPANY. "Company" shall mean Ambassadors Group, Inc.

        1.8 DEFERRED STOCK. "Deferred Stock" shall mean Common Stock awarded
under Article VII of this Plan.

        1.9 DIRECTOR. "Director" shall mean a member of the Board.

        1.10 DIVIDEND EQUIVALENT. "Dividend Equivalent" shall mean a right to
receive the equivalent value (in cash or Common Stock) of dividends paid on
Common Stock awarded under Article VII of this Plan.

        1.11 EMPLOYEE. "Employee" shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company or of any
corporation which is a Parent of the Company, or of any corporation which is a
Subsidiary of the Company or of any Parent of the Company.

        1.12 EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.

        1.13 FAIR MARKET VALUE. "Fair Market Value" of a share of Common Stock
as of a given date shall be (i) the mean between the highest and lowest selling
price of a share of Common Stock on the principal exchange on which shares of
Common Stock are then trading, if any, on such date, or if shares were not
traded on such date, then on the closest preceding date on which a trade
occurred, or (ii) if Common Stock is not traded on an exchange, the mean between
the closing representative bid and asked prices for the Common Stock on such
date as reported by NASDAQ or, if NASDAQ is not then in existence, by its
successor quotation system; or (iii) if Common Stock is not publicly traded, the
Fair Market Value of a share of Common Stock as established by the Committee (or
the Board, in the case of Independent Directors) acting in good faith.


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        1.14 GRANTEE. "Grantee" shall mean an Employee or consultant granted a
Performance Award, Dividend Equivalent, Stock Payment or Stock Appreciation
Right, or an award of Deferred Stock, under this Plan.

        1.15 INCENTIVE STOCK OPTION. "Incentive Stock Option" shall mean an
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.

        1.16 INDEPENDENT DIRECTOR. "Independent Director" shall mean a member of
the Board who is not an Employee of the Company or its Subsidiaries.

        1.17 NON-QUALIFIED STOCK OPTION. "Non-Qualified Stock Option" shall mean
an Option which is not designated as an Incentive Stock Option by the Committee.

        1.18 OPTION. "Option" shall mean a stock option granted under Article
III of this Plan. An Option granted under this Plan shall, as determined by the
Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option;
provided, however, that Options granted to Independent Directors and consultants
shall be Non-Qualified Stock Options.

        1.19 OPTIONEE. "Optionee" shall mean an Employee, consultant or
Independent Director granted an Option under this Plan.

        1.20 PARENT. "Parent" shall mean shall mean any corporation of which the
Company is a Subsidiary.

        1.21 PERFORMANCE AWARD. "Performance Award" shall mean a cash bonus,
stock bonus or other performance or incentive award that is paid in cash, Common
Stock or a combination of both, awarded under Article VII of this Plan.

        1.22 PLAN. "Plan" shall mean The 2001 Equity Participation Plan of
Ambassadors Education Group, Inc.

        1.23 RESTRICTED STOCK. "Restricted Stock" shall mean Common Stock
awarded under Article VI of this Plan.

        1.24 RESTRICTED STOCKHOLDER. "Restricted Stockholder" shall mean an
Employee or consultant granted an award of Restricted Stock under Article VI of
this Plan.

        1.25 RULE 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3 under
the Exchange Act, as such Rule may be amended from time to time.

        1.26 STOCK APPRECIATION RIGHT. "Stock Appreciation Right" shall mean a
stock appreciation right granted under Article VIII of this Plan.

        1.27 STOCK PAYMENT. "Stock Payment" shall mean (i) a payment in the form
of shares of Common Stock, or (ii) an option or other right to purchase shares
of Common Stock, as part of a


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deferred compensation arrangement, made in lieu of all or any portion of the
compensation, including without limitation, salary, bonuses and commissions,
that would otherwise become payable to a key Employee or consultant in cash,
awarded under Article VII of this Plan.

        1.28 SUBSIDIARY. "Subsidiary" of a referenced corporation shall mean any
corporation owned by the referenced corporation through an unbroken chain of
corporations if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing 50 percent or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

        1.29 TERMINATION OF CONSULTANCY. "Termination of Consultancy" shall mean
the time when the engagement of an Optionee, Grantee or Restricted Stockholder
as a consultant to the Company, or to any corporation which is a Parent of the
Company, or to any corporation which is a Subsidiary of the Company or of any
Parent of the Company, is terminated for any reason, with or without cause,
including without limitation, resignation, discharge, death or retirement; but
excluding terminations where there is a simultaneous commencement of employment
with the Company, or with any corporation which is a Parent of the Company, or
with any corporation which is a Subsidiary of the Company or of any Parent of
the Company. The Committee, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Consultancy,
including, but not by way of limitation, the question of whether a Termination
of Consultancy resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment.
Notwithstanding any other provision of this Plan, the Company, or any
corporation which is a Parent of the Company, or any corporation which is a
Subsidiary of the Company or of any Parent of the Company, has an absolute and
unrestricted right to terminate a consultant's service at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.

        1.30 TERMINATION OF DIRECTORSHIP. "Termination of Directorship" shall
mean the time when an Optionee who is an Independent Director ceases to be a
Director for any reason, including, but not by way of limitation, a termination
by resignation, failure to be elected, death or retirement. The Board, in its
sole and absolute discretion, shall determine the effect of all matters and
questions relating to Termination of Directorship. With respect to any person
who has received an award due to being a Director of Ambassadors, this section
shall be deemed to relate to termination of his or her directorship of
Ambassadors.

        1.31 TERMINATION OF EMPLOYMENT. "Termination of Employment " shall mean
the time when the employee-employer relationship between the Optionee, Grantee
or Restricted Stockholder and the Company, any Parent of the Company, or any
Subsidiary of either the Company or any Parent of the Company is terminated for
any reason, including, but not by way of limitation, a termination by
resignation, discharge, death, disability or retirement; but excluding (i)
terminations where there is a simultaneous reemployment, continuing employment
of an Optionee, Grantee or Restricted Stockholder by the Company, any Parent of
the Company, or any Subsidiary of either the Company or any Parent of the
Company, (ii) at the discretion of the Committee, terminations which result in a
temporary severance of the employee-employer relationship, and (iii) at the
discretion of the Committee, terminations which are followed by the simultaneous
establishment of a consulting relationship by the Company, any Parent of the
Company, or any Subsidiary of either the Company


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or any Parent of the Company with the former employee. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; provided, however, that, with respect to
Incentive Stock Options, a leave of absence, change in status from an employee
to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section. Notwithstanding
any other provision of this Plan, the Company, any Parent of the Company, or any
Subsidiary of either the Company or any Parent of the Company has an absolute
and unrestricted right to terminate an Employee's employment at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.

                                   ARTICLE II
                             SHARES SUBJECT TO PLAN

        2.1 SHARES SUBJECT TO PLAN.

                (a) The shares of stock subject to Options, awards of Restricted
        Stock, Performance Awards, Dividend Equivalents, awards of Deferred
        Stock, Stock Payments or Stock Appreciation Rights shall be Common
        Stock, initially shares of the Company's Common Stock, par value $0.01
        per share. The aggregate number of such shares which may be issued upon
        exercise of such options or rights or upon any such awards under the
        Plan shall not exceed One Million Eight Hundred Thousand (1,800,000).
        The shares of Common Stock issuable upon exercise of such options or
        rights or upon any such awards may be either previously authorized but
        unissued shares or treasury shares.

                (b) To the extent required by Section 162(m) of the Code, shares
        subject to Options which are cancelled continue to be counted against
        the Award Limit and if, after grant of an Option, the price of shares
        subject to such Option is reduced, the transaction is treated as a
        cancellation of the Option and a grant of a new Option and both the
        Option deemed to be canceled and the Option deemed to be granted are
        counted against the Award Limit. Furthermore, to the extent required by
        Section 162(m) of the Code, if, after grant of a Stock Appreciation
        Right, the base amount on which stock appreciation is calculated is
        reduced to reflect a reduction in the Fair Market Value of the Company's
        Common Stock, the transaction is treated as a cancellation of the Stock
        Appreciation Right and a grant of a new Stock Appreciation Right and
        both the Stock Appreciation Right deemed to be canceled and the Stock
        Appreciation Right deemed to be granted are counted against the Award
        Limit.

        2.2 UNEXERCISED OPTIONS AND OTHER RIGHTS. If any Option, or other right
to acquire shares of Common Stock under any other award under this Plan, expires
or is cancelled without having been fully exercised, the number of shares
subject to such Option or other right but as to which such Option or other right
was not exercised prior to its expiration or cancellation may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1.


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                                   ARTICLE III
                               GRANTING OF OPTIONS

        3.1 ELIGIBILITY. Subject to the Award Limit, any Employee or consultant
selected by the Committee pursuant to Section 3.4(a)(i) shall be eligible to be
granted an Option. Each Independent Director of the Company shall be eligible to
be granted Options at the times and in the manner set forth in Section 3.4(d).

        3.2 DISQUALIFICATION FOR STOCK OWNERSHIP. No person may be granted an
Incentive Stock Option under this Plan if such person, at the time the Incentive
Stock Option is granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company, any
Parent of the Company, or any Subsidiary of either the Company or any Parent of
the Company unless such Incentive Stock Option conforms to the applicable
provisions of Section 422 of the Code.

        3.3 QUALIFICATION OF INCENTIVE STOCK OPTIONS. No Incentive Stock Option
shall be granted unless such Option, when granted, qualifies as an "incentive
stock option" under Section 422 of the Code. No Incentive Stock Option shall be
granted to any person who is not an Employee.

        3.4 GRANTING OF OPTIONS.

                (a) The Committee shall from time to time, in its absolute
        discretion, and subject to the applicable limitations of this Plan:

                        (i) Determine which Employees are key Employees and
                select from among the key Employees or consultants (including
                Employees or consultants who have previously received Options or
                other awards under this Plan) such of them as in its opinion
                should be granted Options;

                        (ii) Subject to the Award Limit, determine the number of
                shares to be subject to such Options granted to the selected key
                Employees or consultants;

                        (iii) Determine whether such Options are to be Incentive
                Stock Options or Non-Qualified Stock Options and whether such
                Options are to qualify as performance-based compensation as
                described in Section 162(m)(4)(C) of the Code; and

                        (iv) Determine the terms and conditions of such Options,
                consistent with this Plan; provided, however, that the terms and
                conditions of Options intended to qualify as performance-based
                compensation as described in Section 162(m)(4)(C) of the Code
                shall include, but not be limited to, such terms and conditions
                as may be necessary to meet the applicable provisions of Section
                162(m) of the Code.

                (b) Upon the selection of a key Employee or consultant to be
        granted an Option, the Committee shall instruct the Secretary of the
        Company to issue the Option and may impose such conditions on the grant
        of the Option as it deems appropriate. Without limiting the generality
        of the preceding sentence, the Committee may, in its discretion and on
        such terms as it deems


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appropriate, require as a condition on the grant of an Option to an Employee or
consultant that the Employee or consultant surrender for cancellation some or
all of the unexercised Options, awards of Restricted Stock or Deferred Stock,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments or other rights which have been previously granted to him under this
Plan or otherwise. An Option, the grant of which is conditioned upon such
surrender, may have an option price lower (or higher) than the exercise price of
such surrendered Option or other award, may cover the same (or a lesser or
greater) number of shares as such surrendered Option or other award, may contain
such other terms as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of shares, price,
exercise period or any other term or condition of such surrendered Option or
other award.

                (c) Any Incentive Stock Option granted under this Plan may be
        modified by the Committee to disqualify such option from treatment as an
        "incentive stock option" under Section 422 of the Code.

                (d) When a person is initially elected to the Board and is then
        an Independent Director, each such new Independent Director
        automatically shall be granted an Option to purchase ten thousand
        (10,000) shares of Common Stock (subject to adjustment as provided in
        Section 10.3) on the date of his or her election to the Board. Members
        of the Board who are Employees who subsequently retire from the Company
        and remain on the Board will not receive an Option grant pursuant to
        this Section 3.4(d). Notwithstanding the foregoing, nothing in this
        Section 3.4(d) shall prevent the Board or Committee from granting
        additional Options to the Independent Directors beyond the amount
        provided for in the first sentence of this Section 3.4(d). All the
        foregoing Option grants authorized by this Section 3.4(d) are subject to
        stockholder approval of the Plan. Upon adoption of this Plan, the
        persons who are then Independent Directors of the Company will be
        granted Options as provided above as though they are then initially
        elected to the Board.

                (e) On the Distribution Date, the Company shall grant
        Non-Qualified Stock Options to all persons who are employees of the
        Company and are holding Ambassadors Options issued by Ambassadors under
        the Ambassadors Equity Participation Plan, all of which are
        non-qualified stock options. Each such Option shall be issued in
        exchange for each outstanding Ambassadors Option, and it shall be
        identical to the Ambassadors Option as to exercisability, expiration
        dates, and certain other terms except exercise price and number of
        shares underlying such option. The exercise price of and number of
        shares underlying each such Option shall be determined pursuant to
        Section 5 of the Employee Matters Agreement. The purpose of the
        adjustment in exercise price and number of shares underlying each such
        option shall be to preserve the economic value of the Ambassadors
        Options.

                                   ARTICLE IV
                                TERMS OF OPTIONS

        4.1 OPTION AGREEMENT. Each Option shall be evidenced by a written Stock
Option Agreement, which shall be executed by the Optionee and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall determine, consistent with this Plan. Stock Option Agreements


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evidencing Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Stock Option Agreements evidencing Incentive Stock Options
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.

        4.2 OPTION PRICE. The price per share of the shares subject to each
Option shall be set by the Committee; provided, however, that such price shall
be no less than the par value of a share of Common Stock, and in the case of
Options intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, as well as Options granted to Independent
Directors, such price shall be no less than 100% of the Fair Market Value of a
share of Common Stock on the date the Option is granted and in the case of
Incentive Stock Options such price shall not be less than the greater of: (i)
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted, or (ii) 110% of the Fair Market Value of a share of Common Stock on
the date such Option is granted in the case of an individual then owning (within
the meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or any Subsidiary of the
Company. The foregoing notwithstanding, the exercise price of the Options
granted pursuant to Section 3.4(e) shall be determined pursuant to Section 5.3.3
of the Employee Matters Agreement.

        4.3 OPTION TERM. The term of an Option (other than an Option granted to
an Independent Director) shall be set by the Committee in its discretion;
provided, however, that, in the case of Incentive Stock Options, the term shall
not be more than ten (10) years from the date the Incentive Stock Option is
granted, or five (5) years from such date if the Incentive Stock Option is
granted to an individual then owning (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary of the Company. The foregoing
notwithstanding, the option terms of the Options granted pursuant to Section
3.4(e) shall be identical to the option terms of the matching Ambassadors
Options.

        4.4 OPTION VESTING.

                (a) The period during which the right to exercise an Option in
        whole or in part vests in the Optionee shall be set by the Committee (or
        the Board) and the Committee (or the Board) may determine that an Option
        may not be exercised in whole or in part for a specified period after it
        is granted; provided, however, that no Option granted to a person
        subject to Section 16 of the Exchange Act shall be exercisable until at
        least six months have elapsed from (but excluding) the date on which the
        Option was granted. At any time after grant of an Option, the Committee
        (or the Board) may, in its sole discretion and subject to whatever terms
        and conditions it selects, accelerate the period during which an Option
        vests. Notwithstanding the foregoing, all Options granted to Independent
        Directors shall become exercisable in cumulative annual installments of
        25% on each of the first, second, third and fourth anniversaries of the
        date of Option grant, and the term of each such Option shall be ten
        years without variation or acceleration hereunder, except as provided in
        Section 10.4 and except that any Option granted to an Independent
        Director shall become immediately exercisable in full upon the
        retirement of the Independent Director in accordance with the Company's
        retirement policy applicable to Directors. The foregoing
        notwithstanding, with respect to the Options granted pursuant to Section
        3.4(e), the periods


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        during which the right to exercise an Option in whole or in part vests
        in the Optionee shall be identical to such periods of the matching
        Ambassadors Options.

                (b) No portion of an Option which is unexercisable at
        Termination of Employment, Termination of Directorship or Termination of
        a Consultancy, as applicable, shall thereafter become exercisable,
        except as may be otherwise provided by the Committee (or the Board) with
        respect to Options granted to Employees or consultants, either in the
        Stock Option Agreement or in a resolution adopted following the grant of
        the Option.

                (c) To the extent that the aggregate Fair Market Value of stock
        with respect to which "incentive stock options" (within the meaning of
        Section 422 of the Code, but without regard to Section 422(d) of the
        Code) are exercisable for the first time by an Optionee during any
        calendar year (under the Plan and all other incentive stock option plans
        of the Company and any Subsidiary of the Company) exceeds $100,000, such
        Options shall be treated as Non-Qualified Options to the extent required
        by Section 422 of the Code. The rule set forth in the preceding sentence
        shall be applied by taking Options into account in the order in which
        they were granted. For purposes of this Section 4.4(c), the Fair Market
        Value of stock shall be determined as of the time the Option with
        respect to such stock is granted.

        4.5 CONSIDERATION. In consideration of the granting of an Option, the
Optionee shall agree, in the written Stock Option Agreement, to remain in the
employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary of the Company for a period of at
least one year after the Option is granted (or until the next annual meeting of
stockholders of the Company, in the case of an Independent Director). Nothing in
this Plan or in any Stock Option Agreement hereunder shall confer upon any
Optionee any right to continue in the employ of, or as a consultant for, the
Company or any Subsidiary of the Company, or as a director of the Company, or
shall interfere with or restrict in any way the rights of the Company and any
Subsidiary of the Company, which are hereby expressly reserved, to discharge any
Optionee at any time for any reason whatsoever, with or without good cause. The
foregoing shall not apply to the Options granted pursuant to Section 3.4(e).

                                    ARTICLE V
                               EXERCISE OF OPTIONS

        5.1 PARTIAL EXERCISE. An exercisable Option may be exercised in whole or
in part. However, an Option shall not be exercisable with respect to fractional
shares and the Committee (or the Board, in the case of Options granted to
Independent Directors) may require that, by the terms of the Option, a partial
exercise be with respect to a minimum number of shares.

        5.2 MANNER OF EXERCISE. All or a portion of an exercisable Option shall
be deemed exercised upon delivery of all of the following to the Secretary of
the Company or his office:

                (a) A written notice complying with the applicable rules
        established by the Committee or the Board stating that the Option, or a
        portion thereof, is exercised. The notice shall be signed by the
        Optionee or other person then entitled to exercise the Option or such
        portion;


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<PAGE>

                        (b) Such representations and documents as the Committee
                or the Board, in its absolute discretion, deems necessary or
                advisable to effect compliance with all applicable provisions of
                the Securities Act of 1933, as amended, and any other federal or
                state securities laws or regulations. The Committee or the Board
                may, in its absolute discretion, also take whatever additional
                actions it deems appropriate to effect such compliance
                including, without limitation, placing legends on share
                certificates and issuing stop-transfer notices to agents and
                registrars;

                        (c) In the event that the Option shall be exercised
                pursuant to Section 10.1 by any person or persons other than the
                Optionee, appropriate proof of the right of such person or
                persons to exercise the Option; and

                        (d) Full cash payment to the Secretary of the Company
                for the shares with respect to which the Option, or portion
                thereof, is exercised. However, at the discretion of the
                Committee (or the Board, in the case of Options granted to
                Independent Directors), the terms of the Option may (i) allow a
                delay in payment up to thirty (30) days from the date the
                Option, or portion thereof, is exercised; (ii) allow payment, in
                whole or in part, through the delivery of shares of Common Stock
                owned by the Optionee, duly endorsed for transfer to the Company
                with a Fair Market Value on the date of delivery equal to the
                aggregate exercise price of the Option or exercised portion
                thereof; (iii) subject to the timing requirements of Section
                5.3, allow payment, in whole or in part, through the surrender
                of shares of Common Stock then issuable upon exercise of the
                Option having a Fair Market Value on the date of Option exercise
                equal to the aggregate exercise price of the Option or exercised
                portion thereof; (iv) allow payment, in whole or in part,
                through the delivery of property of any kind which constitutes
                good and valuable consideration; (v) allow payment, in whole or
                in part, through the delivery of a full recourse promissory note
                bearing interest (at no less than such rate as shall then
                preclude the imputation of interest under the Code) and payable
                upon such terms as may be prescribed by the Committee or the
                Board, or (vi) allow payment through any combination of the
                consideration provided in the foregoing subparagraphs (ii),
                (iii), (iv) and (v). In the case of a promissory note, the
                Committee or the Board may also prescribe the form of such note
                and the security to be given for such note. The Option may not
                be exercised, however, by delivery of a promissory note or by a
                loan from the Company when or where such loan or other extension
                of credit is prohibited by law.

        5.3 CERTAIN TIMING REQUIREMENTS. At the discretion of the Committee (or
the Board), shares of Common Stock issuable to the Optionee upon exercise of the
Option may be used to satisfy the Option exercise price or the tax withholding
consequences of such exercise, in the case of persons subject to Section 16 of
the Exchange Act, only (i) during the period beginning on the third business day
following the date of release of the quarterly or annual summary statement of
sales and earnings of the Company and ending on the twelfth business day
following such date or (ii) pursuant to an irrevocable written election by the
Optionee to use shares of Common Stock issuable to the Optionee upon exercise of
the Option to pay all or part of the Option price or the withholding taxes made
at least six months prior to the payment of such Option price or withholding
taxes.

        5.4 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:


                                       10
<PAGE>

                (a) The admission of such shares to listing on all stock
        exchanges on which such class of stock is then listed;

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

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

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

                (e) The receipt by the Company of full payment for such shares,
        including payment of any applicable withholding tax.

        5.5 RIGHTS AS STOCKHOLDERS. The holders of Options shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.

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

                                   ARTICLE VI
                            AWARD OF RESTRICTED STOCK

        6.1 AWARD OF RESTRICTED STOCK.

                (a) The Committee (or the Board with respect to Independent
        Directors) shall from time to time, in its absolute discretion:

                        (i) Select from among the Independent Directors, the key
                Employees or consultants (including Independent Directors,
                Employees or consultants who have previously received


                                       11
<PAGE>

                other awards under this Plan) such of them as in its opinion
                should be awarded Restricted Stock; and

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

                (b) The Committee (or the Board) shall establish the purchase
        price, if any, and form of payment for Restricted Stock; provided,
        however, that such purchase price shall be no less than the par value of
        the Common Stock to be purchased. In all cases, legal consideration
        shall be required for each issuance of Restricted Stock.

                (c) Upon the selection of an Independent Director, key Employee
        or consultant to be awarded Restricted Stock, the Committee (or the
        Board) shall instruct the Secretary of the Company to issue such
        Restricted Stock and may impose such conditions on the issuance of such
        Restricted Stock as it deems appropriate.

        6.2 RESTRICTED STOCK AGREEMENT. Restricted Stock shall be issued only
pursuant to a written Restricted Stock Agreement, which shall be executed by the
selected Independent Director, key Employee or consultant and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan.

        6.3 CONSIDERATION. As consideration for the issuance of Restricted
Stock, in addition to payment of any purchase price, the Restricted Stockholder
shall agree, in the written Restricted Stock Agreement, to remain in the employ
of, or to consult for, the Company or any Subsidiary of the Company for a period
of at least one year after the Restricted Stock is issued. Nothing in this Plan
or in any Restricted Stock Agreement hereunder shall confer on any Restricted
Stockholder any right to continue in the employ of, or as a consultant for, the
Company or any Subsidiary of the Company or shall interfere with or restrict in
any way the rights of the Company and any Subsidiary of the Company, which are
hereby expressly reserved, to discharge any Restricted Stockholder at any time
for any reason whatsoever, with or without good cause.

        6.4 RIGHTS AS STOCKHOLDERS. Upon delivery of the shares of Restricted
Stock to the escrow holder pursuant to Section 6.7, the Restricted Stockholder
shall have, unless otherwise provided by the Committee (or the Board), all the
rights of a stockholder with respect to said shares, subject to the restrictions
in his Restricted Stock Agreement, including the right to receive all dividends
and other distributions paid or made with respect to the shares; provided,
however, that in the discretion of the Committee (or the Board), any
extraordinary distributions with respect to the Common Stock shall be subject to
the restrictions set forth in Section 6.5.

        6.5 RESTRICTION. All shares of Restricted Stock issued under this Plan
(including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Restricted Stock
Agreement, be subject to such restrictions as the Committee (or the Board) shall
provide, which restrictions may include, without limitation, restrictions
concerning voting rights and transferability and restrictions based on duration
of employment or consultancy with the Company, Company performance and
individual performance; provided, however, that no share of Restricted


                                       12
<PAGE>

Stock granted to a person subject to Section 16 of the Exchange Act shall be
sold, assigned or otherwise transferred until at least six months have elapsed
from (but excluding) the date on which the Restricted Stock was issued, and
provided, further, that by a resolution adopted after the Restricted Stock is
issued, the Committee (or the Board) may, on such terms and conditions as it may
determine to be appropriate, remove any or all of the restrictions imposed by
the terms of the Restricted Stock Agreement. Restricted Stock may not be sold or
encumbered until all restrictions are terminated or expire. Unless provided
otherwise by the Committee (or the Board), if no consideration was paid by the
Restricted Stockholder upon issuance, a Restricted Stockholder's rights in
unvested Restricted Stock shall lapse upon Termination of Employment or, if
applicable, upon the termination of his consulting relationship with the
Company.

        6.6 REPURCHASE OF RESTRICTED STOCK. The Committee (or the Board) shall
provide in the terms of each individual Restricted Stock Agreement that the
Company shall have the right to repurchase from the Restricted Stockholder the
Restricted Stock then subject to restrictions under the Restricted Stock
Agreement immediately upon a Termination of Employment or, if applicable, upon a
termination of any consulting relationship between the Restricted Stockholder
and the Company, at a cash price per share equal to the price paid by the
Restricted Stockholder for such Restricted Stock; provided, however, that
provision may be made that no such right of repurchase shall exist in the event
of a Termination of Employment or Termination of Consultancy without cause, or
following a change in control of the Company or because of the Restricted
Stockholder's retirement, death or disability, or otherwise.

        6.7 ESCROW. The Secretary of the Company or such other escrow holder as
the Committee (or the Board) may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Restricted Stock Agreement with respect to the shares evidenced by
such certificate expire or shall have been removed.

        6.8 LEGEND. In order to enforce the restrictions imposed upon shares of
Restricted Stock hereunder, the Committee (or the Board) shall cause a legend or
legends to be placed on certificates representing all shares of Restricted Stock
that are still subject to restrictions under Restricted Stock Agreements, which
legend or legends shall make appropriate reference to the conditions imposed
thereby.

                                   ARTICLE VII
                    PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,
                         DEFERRED STOCK, STOCK PAYMENTS

        7.1 PERFORMANCE AWARDS. Any Independent Director, key Employee or
consultant selected by the Committee (or the Board in the case of an Independent
Director) may be granted one or more Performance Awards. The value of such
Performance Awards may be linked to the market value, book value, net profits or
other measure of the value of Common Stock or other specific performance
criteria determined appropriate by the Committee (or the Board), in each case on
a specified date or dates or over any period or periods determined by the
Committee (or the Board), or may be based upon the appreciation in the market
value, book value, net profits or other measure of the value of a specified
number of shares of Common Stock over a fixed period or periods determined by
the Committee (or the Board). In making such determinations, the Committee (or
the Board) shall


                                       13
<PAGE>

consider (among such other factors as it deems relevant in light of the specific
type of award) the contributions, responsibilities and other compensation of the
particular Independent Director, key Employee or consultant.

        7.2 DIVIDEND EQUIVALENTS. Any Independent Director, key Employee or
consultant selected by the Committee (or the Board) may be granted Dividend
Equivalents based on the dividends declared on Common Stock, to be credited as
of dividend payment dates, during the period between the date an Option, Stock
Appreciation Right, Deferred Stock or Performance Award is granted, and the date
such Option, Stock Appreciation Right, Deferred Stock or Performance Award is
exercised, vests or expires, as determined by the Committee (or the Board). Such
Dividend Equivalents shall be converted to cash or additional shares of Common
Stock by such formula and at such time and subject to such limitations as may be
determined by the Committee (or the Board).

        7.3 STOCK PAYMENTS. Any Independent Director, key Employee or consultant
selected by the Committee (or the Board) may receive Stock Payments in the
manner determined from time to time by the Committee (or the Board). The number
of shares shall be determined by the Committee (or the Board) and may be based
upon the Fair Market Value, book value, net profits or other measure of the
value of Common Stock or other specific performance criteria determined
appropriate by the Committee (or the Board) on the date such Stock Payment is
made or on any date thereafter.

        7.4 DEFERRED STOCK. Any Independent Director, key Employee or consultant
selected by the Committee (or the Board) may be granted an award of Deferred
Stock in the manner determined from time to time by the Committee (or the
Board). The number of shares of Deferred Stock shall be determined by the
Committee (or the Board) and may be linked to the market value, book value, net
profits or other measure of the value of Common Stock or other specific
performance criteria determined appropriate by the Committee (or the Board), in
each case on a specified date or dates or over any period or periods determined
by the Committee (or the Board). Common Stock underlying a Deferred Stock award
will not be issued until the Deferred Stock award has vested, pursuant to a
vesting schedule or performance criteria set by the Committee (or the Board).
Unless otherwise provided by the Committee (or the Board), a Grantee of Deferred
Stock shall have no rights as a Company stockholder with respect to such
Deferred Stock until such time as the award has vested and the Common Stock
underlying the award has been issued.

        7.5 PERFORMANCE AWARD AGREEMENT, DIVIDEND EQUIVALENT AGREEMENT, DEFERRED
STOCK AGREEMENT, STOCK PAYMENT AGREEMENT. Each Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment shall be evidenced by a
written agreement, which shall be executed by the Grantee and an authorized
Officer of the Company and which shall contain such terms and conditions as the
Committee (or the Board) shall determine, consistent with this Plan.

        7.6 TERM. The term of a Performance Award, Dividend Equivalent award of
Deferred Stock and/or Stock Payment shall be set by the Committee (or the Board)
in its discretion.

        7.7 EXERCISE UPON TERMINATION OF EMPLOYMENT. A Performance Award,
Dividend Equivalent, award of Deferred Stock and/or Stock Payment is exercisable
only while the Grantee is an Employee or consultant; provided that the Committee
(or the Board) may determine that the Performance Award, Dividend Equivalent,
award of Deferred Stock and/or Stock Payment may be exercised


                                       14
<PAGE>

subsequent to Termination of Employment or Termination of Consultancy without
cause, or following a change in control of the Company, or because of the
Grantee's retirement, death or disability, or otherwise.

        7.8 PAYMENT ON EXERCISE. Payment of the amount determined under Section
7.1 or 7.2 above shall be in cash, in Common Stock or a combination of both, as
determined by the Committee (or the Board). To the extent any payment under this
Article VII is effected in Common Stock, it shall be made subject to
satisfaction of all provisions of Section 5.4.

        7.9 CONSIDERATION. In consideration of the granting of a Performance
Award, Dividend Equivalent award of Deferred Stock and/or Stock Payment, the
Grantee shall agree, in a written agreement, to remain in the employ of, or to
consult for, the Company or any Subsidiary of the Company for a period of at
least one year after such Performance Award, Dividend Equivalent, award of
Deferred Stock and/or Stock Payment is granted. Nothing in this Plan or in any
agreement hereunder shall confer on any Grantee any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary of the Company
or shall interfere with or restrict in any way the rights of the Company and any
Subsidiary of the Company, which are hereby expressly reserved, to discharge any
Grantee at any time for any reason whatsoever, with or without good cause.

                                  ARTICLE VIII
                            STOCK APPRECIATION RIGHTS

        8.1 GRANT OF STOCK APPRECIATION RIGHTS. Subject to the Award Limit, a
Stock Appreciation Right may be granted to any Independent Director, key
Employee or consultant selected by the Committee (or the Board in the case of an
Independent Director). A Stock Appreciation Right may be granted (i) in
connection and simultaneously with the grant of an Option, (ii) with respect to
a previously granted Option, or (iii) independent of an Option. A Stock
Appreciation Right shall be subject to such terms and conditions not
inconsistent with this Plan as the Committee (or the Board) shall impose, and
shall be evidenced by a written Stock Appreciation Right Agreement, which shall
be executed by the Grantee and an authorized officer of the Company. The
Committee (or the Board), in its discretion, may determine whether a Stock
Appreciation Right is to qualify as performance- based compensation as described
in Section 162(m)(4)(C) of the Code and Stock Appreciation Right Agreements
evidencing Stock Appreciation Rights intended to so qualify shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Without limiting the generality of the foregoing,
the Committee (or the Board) may, in its discretion and on such terms as it
deems appropriate, require as a condition of the grant of a Stock Appreciation
Right to an Employee or consultant that the Employee or consultant surrender for
cancellation some or all of the unexercised Options, awards of Restricted Stock
or Deferred Stock, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments, or other rights which have been previously
granted to him under this Plan or otherwise. A Stock Appreciation Right, the
grant of which is conditioned upon such surrender, may have an exercise price
lower (or higher) than the exercise price of the surrendered Option or other
award, may cover the same (or a lesser or greater) number of shares as such
surrendered Option or other award, may contain such other terms as the Committee
(or the Board) deems appropriate, and shall be exercisable in accordance with
its terms, without regard to the number of shares, price, exercise period or any
other term or condition of such surrendered Option or other award.


                                       15
<PAGE>

        8.2 COUPLED STOCK APPRECIATION RIGHTS.

                (a) A Coupled Stock Appreciation Right ("CSAR") shall be related
        to a particular Option and shall be exercisable only when and to the
        extent the related Option is exercisable.

                (b) A CSAR may be granted to the Grantee for no more than the
        number of shares subject to the simultaneously or previously granted
        Option to which it is coupled.

                (c) A CSAR shall entitle the Grantee (or other person entitled
        to exercise the Option pursuant to this Plan) to surrender to the
        Company unexercised a portion of the Option to which the CSAR relates
        (to the extent then exercisable pursuant to its terms) and to receive
        from the Company in exchange therefor an amount determined by
        multiplying the difference obtained by subtracting the Option exercise
        price from the Fair Market Value of a share of Common Stock on the date
        of exercise of the CSAR by the number of shares of Common Stock with
        respect to which the CSAR shall have been exercised, subject to any
        limitations the Committee (or the Board) may impose.

        8.3 INDEPENDENT STOCK APPRECIATION RIGHTS.

                (a) An Independent Stock Appreciation Right ("ISAR") shall be
        unrelated to any Option and shall have a term set by the Committee (or
        the Board). An ISAR shall be exercisable in such installments as the
        Committee (or the Board) may determine. An ISAR shall cover such number
        of shares of Common Stock as the Committee (or the Board) may determine;
        provided, however, that no ISAR granted to a person subject to Section
        16 of the Exchange Act shall be exercisable until at least six months
        have elapsed from (but excluding) the date on which the Option was
        granted. The exercise price per share of Common Stock subject to each
        ISAR shall be set by the Committee (or the Board). An ISAR is
        exercisable only while the Grantee is an Employee or consultant;
        provided that the Committee (or the Board) may determine that the ISAR
        may be exercised subsequent to Termination of Employment or Termination
        of Consultancy without cause, or following a change in control of the
        Company, or because of the Grantee's retirement, death or disability, or
        otherwise.

                (b) An ISAR shall entitle the Grantee (or other person entitled
        to exercise the ISAR pursuant to this Plan) to exercise all or a
        specified portion of the ISAR (to the extent then exercisable pursuant
        to its terms) and to receive from the Company an amount determined by
        multiplying the difference obtained by subtracting the exercise price
        per share of the ISAR from the Fair Market Value of a share of Common
        Stock on the date of exercise of the ISAR by the number of shares of
        Common Stock with respect to which the ISAR shall have been exercised,
        subject to any limitations the Committee (or the Board) may impose.

        8.4 PAYMENT AND LIMITATIONS ON EXERCISE.

                (a) Payment of the amount determined under Section 8.2(c) and
        8.3(b) above shall be in cash, in Common Stock (based on its Fair Market
        Value as of the date the Stock Appreciation Right is exercised) or a
        combination of both, as determined by the Committee (or the Board). To
        the


                                       16
<PAGE>

        extent such payment is effected in Common Stock it shall be made subject
        to satisfaction of all provisions of Section 5.4 hereinabove pertaining
        to Options.

                (b) Grantees of Stock Appreciation Rights who are subject to
        Section 16 of the Exchange Act may, in the discretion of the Board or
        Committee, be required to comply with any timing or other restrictions
        under Rule 16b-3 applicable to the settlement or exercise of a Stock
        Appreciation Right.

        8.5 CONSIDERATION. In consideration of the granting of a Stock
Appreciation Right, the Grantee shall agree, in the written Stock Appreciation
Right Agreement, to remain in the employ of, or to consult for, the Company or
any Subsidiary of the Company for a period of at least one year after the Stock
Appreciation Right is granted. Nothing in this Plan or in any Stock Appreciation
Right Agreement hereunder shall confer on any Grantee any right to continue in
the employ of, or as a consultant for, the Company or any Subsidiary of the
Company or shall interfere with or restrict in any way the rights of the Company
and any Subsidiary of the Company, which are hereby expressly reserved, to
discharge any Grantee at any time for any reason whatsoever, with or without
good cause.

                                   ARTICLE IX
                                 ADMINISTRATION

        9.1 COMPENSATION COMMITTEE. The Compensation Committee (or a
subcommittee of the Board assuming the functions of the Committee under this
Plan) shall consist of two or more Independent Directors appointed by and
holding office at the pleasure of the Board, each of whom is both a
"disinterested person" as defined by Rule 16b-3 and an "outside director" for
purposes of Section 162(m) of the Code. Appointment of Committee members shall
be effective upon acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the Committee may
be filled by the Board.

        9.2 DUTIES AND POWERS OF COMMITTEE. It shall be the duty of the
Committee to conduct the general administration of this Plan in accordance with
its provisions. The Committee shall have the power to interpret this Plan and
the agreements pursuant to which Options, awards of Restricted Stock or Deferred
Stock, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments are granted or awarded, and to adopt such rules for the
administration, interpretation, and application of this Plan as are consistent
therewith and to interpret, amend or revoke any such rules. Notwithstanding the
foregoing, the full Board, acting by a majority of its members in office, shall
conduct the general administration of the Plan with respect to Options, awards
of Restricted Stock or Deferred Stock, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments granted to Independent Directors.
Any such grant or award under this Plan need not be the same with respect to
each Optionee, Grantee or Restricted Stockholder. Any such interpretations and
rules with respect to Incentive Stock Options shall be consistent with the
provisions of Section 422 of the Code. In its absolute discretion, the Board may
at any time and from time to time exercise any and all rights and duties of the
Committee under this Plan except with respect to matters which under Rule 16b-3
or Section 162(m) of the Code, or any regulations or rules issued thereunder,
are required to be determined in the sole discretion of the Committee.


                                       17
<PAGE>

        9.3 MAJORITY RULE. The Committee shall act by a majority of its members
in attendance at a meeting at which a quorum is present or by a memorandum or
other written instrument signed by all members of the Committee.

        9.4 COMPENSATION: PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS. Members
of the Committee shall receive such compensation for their services as members
as may be determined by the Board. All expenses and liabilities which members of
the Committee incur in connection with the administration of this Plan shall be
borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Committee, the Company and the Company's officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Optionees. Grantees,
Restricted Stockholders, the Company and all other interested persons. No
members of the Committee or the Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to this Plan,
Options, awards of Restricted Stock or Deferred Stock, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments, and all members of
the Committee shall be fully protected by the Company in respect of any such
action, determination or interpretation.

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

        10.1 NOT TRANSFERABLE. Options, Restricted Stock awards, Deferred Stock
awards, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments under this Plan may not be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution, unless and until such rights or awards have been exercised, or the
shares underlying such rights or awards have been issued, and all restrictions
applicable to such shares have lapsed. No Option, Restricted Stock award,
Deferred Stock award, Performance Award, Stock Appreciation Right, Dividend
Equivalent or Stock Payment or interest or right therein shall be liable for the
debts, contracts or engagements of the Optionee, Grantee or Restricted
Stockholder or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect.

        During the lifetime of the Optionee or Grantee, only he may exercise an
Option or other right or award (or any portion thereof) granted to him under the
Plan. After the death of the Optionee or Grantee, any exercisable portion of an
Option or other right or award may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement or other
agreement, be exercised by his personal representative or by any person
empowered to do so under the deceased Optionee's or Grantee's will or under the
then applicable laws of descent and distribution.

        10.2 AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN. This Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the


                                       18
<PAGE>

Committee. However, without approval of the Company's stockholders given within
twelve months before or after the action by the Committee, no action of the
Committee may, except as provided in Section 10.3, increase the limits imposed
in Section 2.1 on the maximum number of shares which may be issued under this
Plan or modify the Award Limit, and no action of the Committee may be taken that
would otherwise require stockholder approval as a matter of applicable law,
regulation or rule. Notwithstanding the foregoing, the provisions of this Plan
relating to formula Option grants to Independent Directors, including the
amount, price and timing thereof, shall not be amended more than once in any
six-month period other than to comport with changes, in the Code, the Employee
Retirement Income Security Act, or the respective rules thereunder. No
amendment, suspension or termination of this Plan shall, without the consent of
the holder of Options, Restricted Stock awards, Deferred Stock awards,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments, alter or impair any rights or obligations under any Options,
Restricted Stock awards, Deferred Stock awards, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments theretofore granted
or awarded, unless the award itself otherwise expressly so provides. No Options,
Restricted Stock, Deferred Stock, Performance Awards, Stock Appreciation Rights,
Dividend Equivalents or Stock Payments may be granted or awarded during any
period of suspension or after termination of this Plan, and in no event may any
Incentive Stock Option be granted under this Plan after the first to occur of
the following events:

                (a) The expiration of ten years from the date the Plan is
        adopted by the Board; or

                (b) The expiration of ten years from the date the Plan is
        approved by the Company's stockholders under Section 10.5.

        10.3 CHANGES IN COMMON STOCK OR ASSETS OF THE COMPANY. In the event that
the outstanding shares of Common Stock are hereafter changed into or exchanged
for cash or a different number or kind of shares or other securities of the
Company, or of another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock splitup, stock
dividend, or combination of shares, appropriate adjustments shall be made by the
Committee (or the Board, the case of Independent Directors) in the number and
kind of shares for which Options, Restricted Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents, Deferred Stock awards or Stock
Payments may be granted, including adjustments of the limitations in Section 2.1
on the maximum number and kind of shares which may be issued and of the Award
limit described in Section 1.2.

        In the event of such a change or exchange, subject to the other
provisions of this Plan, the Committee (or the Board, in the case of Independent
Directors) shall also make an appropriate and equitable adjustment in the number
and kind of shares as to which all outstanding Options, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments, or portions
thereof then unexercised, shall be exercisable and in the number and kind of
shares of outstanding Restricted Stock or Deferred Stock. Such adjustment shall
be made with the intent that after the change or exchange of shares, each
Optionee's and each Grantee's and each Restricted Stockholder's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment in an outstanding Option, Performance Award, Stock Appreciation
Right, Dividend Equivalent or Stock Payment may include a necessary or
appropriate corresponding adjustment in Option, Performance Award, Stock
Appreciation Right, Dividend Equivalent or Stock Payment


                                       19
<PAGE>

exercise price, but shall be made without change in the total price applicable
to the Option, Performance Award, Stock Appreciation Right, Dividend Equivalent
or Stock Payment, or the unexercised portion thereof (except for any change in
the aggregate price resulting from rounding-off of share quantities or prices).

        Where an adjustment of the type described above is made to an Incentive
Stock Option under this Section, the adjustment will be made in a manner which
will not be considered a "modification" under the provisions of subsection
424(h)(3) of the Code.

        Notwithstanding the foregoing, in the event of such a reorganization,
merger, consolidation, recapitalization, reclassification, stock splitup, stock
dividend or combination, or other adjustment or event which results in shares of
Common Stock being exchanged for or converted into cash, securities or other
property, the Company will have the right to terminate this Plan as of the date
of the exchange or conversion, in which case all options, rights and other
awards under this Plan shall become the right to receive such cash, securities
or other property, net of any applicable exercise price.

        In the event of a "spin-off" or other substantial distribution of assets
of the Company which has a material diminutive effect upon the Fair Market Value
of the Company's Common Stock, the Committee (or the Board, in the case of
Independent Directors) may in its discretion make an appropriate and equitable
adjustment to the Option, Performance Award, Stock Appreciation Right, Dividend
Equivalent or Stock Payment exercise price to reflect such diminution.

        10.4 MERGER OF THE COMPANY. In the event of the merger or consolidation
of the Company with or into another corporation, the exchange of all or
substantially all of the assets of the Company for the securities of another
corporation, the acquisition by another corporation or person of all or
substantially all of the Company's assets or 80% or more of the Company's then
outstanding voting stock or the liquidation or dissolution of the Company:

                (a) At the discretion of the Committee (or the Board, in the
        case of Independent Directors), the terms of an Option, Performance
        Award, Stock Appreciation Right, Dividend Equivalent or Stock Payment
        may provide that it cannot be exercised after such event.

                (b) In its discretion, and on such terms and conditions as it
        deems appropriate, the Committee (or the Board) may provide either by
        the terms of such Option, Performance Award, Stock Appreciation Right,
        Dividend Equivalent or Stock Payment or by a resolution adopted prior to
        the occurrence of such event that, for a specified period of time prior
        to such event, such Option, Performance Award, Stock Appreciation Right,
        Dividend Equivalent or Stock Payment shall be exercisable as to all
        shares covered thereby, notwithstanding anything to the contrary in this
        Plan or in the provisions of such Option, Performance Award, Stock
        Appreciation Right, Dividend Equivalent or Stock Payment.

                (c) In its discretion, and on such terms and conditions as it
        deems appropriate, the Committee (or the Board) may provide either by
        the terms of such Option, Performance Award, Stock Appreciation Right,
        Dividend Equivalent or Stock Payment or by a resolution adopted prior to
        the occurrence of such event that upon such event, such Option,
        Performance Award, Stock


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                Appreciation Right, Dividend Equivalent or Stock Payment shall
                be assumed by the successor corporation, or a parent or
                subsidiary thereof, or shall be substituted for by similar
                options, rights or awards covering the stock of the successor
                corporation, or a parent or subsidiary thereof, with appropriate
                adjustments as to the number and kind of shares and prices.

                        (d) In its discretion, and on such terms and conditions
                as it deems appropriate, the Committee (or the Board) may
                provide either by the terms of a Restricted Stock award or
                Deferred Stock award or by a resolution adopted prior to the
                occurrence of such event that, for a specified period of time
                prior to such event, the restrictions imposed under a Restricted
                Stock Agreement or a Deferred Stock Agreement upon some or all
                shares of Restricted Stock or Deferred Stock may be terminated,
                and, in the case of Restricted Stock, some or all shares of such
                Restricted Stock may cease to be subject to repurchase under
                Section 6.6 after such event.

                        (e) None of the foregoing discretionary terms of this
                Section 10.4 shall be permitted with respect to any award or
                security under the Plan granted to Independent Directors to the
                extent that such discretion would be inconsistent with the
                requirements of Rule 16b-3.

        10.5 APPROVAL OF PLAN BY STOCKHOLDERS. This Plan will be submitted for
the approval of the Company's stockholders within twelve months after the date
of the Board's initial adoption of this Plan, Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments may be granted and
Restricted Stock or Deferred Stock may be awarded prior to such stockholder
approval, provided that such Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments shall not be exercisable and such
Restricted Stock or Deferred Stock shall not vest prior to the time when this
Plan is approved by the stockholders, and provided further that if such approval
has not been obtained at the end of said twelve-month period, all Options,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments previously granted and all Restricted Stock or Deferred Stock
previously awarded under this Plan shall thereupon be cancelled and become null
and void.

        10.6 TAX WITHHOLDING. The Company shall be entitled to require payment
in cash or deduction from other compensation payable to each Optionee, Grantee
or Restricted Stockholder of any sums required by federal, state or local tax
law to be withheld with respect to the issuance, vesting or exercise of any
Option, Restricted Stock, Deferred Stock, Performance Award, Stock Appreciation
Right, Dividend Equivalent or Stock Payment. Subject to the timing requirements
of Section 5.3, the Committee (or the Board, in the case of Independent
Directors) may in its discretion and in satisfaction of the foregoing
requirement allow such Optionee, Grantee or Restricted Stockholder to elect to
have the Company withhold shares of Common Stock (or allow the return of shares
of Common Stock) having a Fair Market Value equal to the sums required to be
withheld.

        10.7 LOANS. The Committee may, in its discretion, extend one or more
loans to key Employees, or officers of the Company in connection with the
exercise or receipt of an Option, Performance Award, Stock Appreciation Right,
Dividend Equivalent or Stock Payment granted under this Plan, or the issuance of
Restricted Stock or Deferred Stock awarded under this Plan. The terms and
conditions of any such loan shall be set by the Committee.


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        10.8 LIMITATIONS APPLICABLE TO SECTION 16 PERSONS AND PERFORMANCE-BASED
COMPENSATION. Notwithstanding any other provision of this Plan, any Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent or Stock
Payment granted, or Restricted Stock or Deferred Stock awarded, to a key
Employee or Director who is then subject to Section 16 of the Exchange Act shall
be subject to any additional limitations set forth in any applicable exemptive
rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3
of the Exchange Act) that are requirements for the application of such exemptive
rule, and this Plan shall be deemed amended to the extent necessary to conform
to such limitations. Furthermore, notwithstanding any other provision of this
Plan, any Option or Stock Appreciation Right intended to qualify as performance-
based compensation as described in Section 162(m)(4)(C) of the Code shall be
subject to any additional limitations set forth in Section 162(m) of the Code
(including any amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification as
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and this Plan shall be deemed amended to the extent necessary to conform to such
requirements.

        10.9 EFFECT OF PLAN UPON OPTIONS AND COMPENSATION PLANS. The adoption of
this Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary of the Company. Nothing in this Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for Employees, Directors or consultants of the
Company or any Subsidiary of the Company or (ii) to grant or assume options or
other rights otherwise than under this Plan in connection with any proper
corporate purpose including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, partnership, firm or association.

        10.10 COMPLIANCE WITH LAWS. This Plan, the granting and vesting of
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments under this
Plan and the issuance and delivery of shares of Common Stock and the payment of
money under this Plan or under Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments granted or Restricted Stock or
Deferred Stock awarded hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities law and federal margin requirements) and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as the
Company may deem necessary or desirable to assure compliance with all applicable
legal requirements. To the extent permitted by applicable law, the Plan,
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

        10.11 TITLES. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of this Plan.


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        10.12 GOVERNING LAW. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.





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