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                                                                    Exhibit 10.1

                              APPNET SYSTEMS, INC.

                            1999 STOCK INCENTIVE PLAN

                               AS OF JUNE 17, 1999


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                              APPNET SYSTEMS, INC.

                            1999 STOCK INCENTIVE PLAN

         1.       PURPOSE.

                  The purpose of this Plan is to strengthen AppNet Systems,
Inc., a Delaware corporation (the "Company"), by providing an incentive to its
employees, officers, directors and consultants and thereby encouraging them to
devote their abilities and industry to the success of the Company's business
enterprise. It is intended that this purpose be achieved by extending to
employees (including future employees who have received a formal written offer
of employment), officers, directors, and consultants of the Company and its
Subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options, Formula Options, Stock Appreciation Rights, Dividend Equivalent Rights,
Performance Awards, Share Awards, Phantom Stock and Restricted Stock (as each
term is herein defined).

         2.       DEFINITIONS.

                  For purposes of the Plan:

                  2.1  "ADJUSTED FAIR MARKET VALUE" means, in the event of a
Change in Control, the highest price per Share paid to holders of the Shares in
any transaction (or series of related transactions) constituting or resulting in
a Change in Control other than pursuant to Section 2.10(b).

                  2.2  "AFFILIATE" means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or under common control with, such Person. Any
Relative (for this purpose, "Relative" means a spouse, child, parent, parent of
spouse, sibling or grandchild) of an individual shall be deemed to be an
Affiliate of such individual for purposes hereof. Neither the Company nor any
Person controlled by the Company shall be deemed to be an Affiliate of any
holder of Company stock.

                  2.3  "AGREEMENT" means the written agreement between the
Company and an Optionee or Grantee evidencing the grant of an Option or Award
and setting forth the terms and conditions thereof.

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                  2.4  "AWARD" means a grant of Restricted Stock, Phantom Stock,
a Stock Appreciation Right, a Performance Award, a Dividend Equivalent Right, a
Share Award, or any or all of them.

                  2.5  "BENEFICIAL OWNERSHIP" means ownership within the meaning
of Rule 13d-3 promulgated under the Exchange Act.

                  2.6  "BENEFICIARY" means an individual, trust or estate who or
which, by a written designation of the Optionee or Grantee filed with the
Company by operation of law succeeds to the rights and obligations of the
Optionee or Grantee under the Plan and an Agreement upon the Optiontee's or
Grantee's death.

                  2.7  "BOARD" means the Board of Directors of the Company.

                  2.8  "CAUSE" means:

                       (a) for purposes of Section 6.4, the term "Cause"
shall mean (i) intentional failure to perform duties as a Director, (ii)
intentional misrepresentation or the commission of an act of fraud in the
performance of such duties, (iii) breach of fiduciary duty involving personal
profit including, without limitation, embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any of its
Subsidiaries or (iv) willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) in connection with the
performance of duties as a Director; PROVIDED, HOWEVER, that if the term
"Cause" is defined in the Articles of Incorporation of the Company, Cause
shall have the meaning given such term in such Articles, or

                       (b) in the case of an Optionee or Grantee whose
employment with the Company or a Subsidiary is, as the date of the applicable
Agreement, subject to the terms of an employment agreement between such
Optionee or Grantee and the Company or Subsidiary, which employment agreement
includes a definition of "Cause," the term "Cause" as used in this Plan or
any Agreement shall have the meaning set forth in such employment agreement
during the period that such employment agreement remains in effect; or

                       (c) in all other cases, the term "Cause" as used in
this Plan or any Agreement shall mean (i) intentional failure to perform
reasonably assigned duties, (ii) dishonesty or willful misconduct in the
performance of duties, (iii) involvement in a transaction in connection with
the performance of duties to the Company or any of its Subsidiaries which
transaction is adverse to the interests of the Company or any of its
Subsidiaries and which is engaged in for personal profit or (iv) willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) in connection with the performance of duties.

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                  2.9  "CHANGE IN CAPITALIZATION" means any increase or
reduction in the number of Shares, or any change (including, without
limitation, in the case of a spin-off, dividend or other distribution in
respect of Shares, a change in value) in the Shares or exchange of Shares for
a different number or kind of shares or other securities of the Company or
another corporation, by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, spin-off, split-up, issuance of
warrants or rights or debentures, stock dividend, stock split or reverse
stock split, cash dividend, property dividend, combination or exchange of
shares, repurchase of shares, change in corporate structure or a
substantially similar transaction.

                  2.10 A "CHANGE IN CONTROL" shall mean the occurrence of any
of the following:

                       (a) An acquisition in one transaction or a series of
related transactions (other than directly from the Company or pursuant to
Options or Awards granted under this Plan or otherwise by the Company) of any
Voting Securities of the Company by any Person, immediately after which such
Person has Beneficial Ownership of fifty percent (50%) or more of the
combined voting power of the Company's then outstanding Voting Securities;
PROVIDED, HOWEVER, in determining whether a Change in Control has occurred
pursuant to this Section 2.10(a), Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly,
by the Company (for purposes of this definition, a "Related Entity"), (ii)
the Company or any Related Entity, or (iii) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);

                       (b) The individuals who, as of the date hereof, are
members of the Board (the "Incumbent Board"), cease for any reason to
constitute at least a majority of the members of the Board; PROVIDED,
HOWEVER, that if the election, or nomination for election by the Company's
common stockholders, of any new director was approved by a vote of at least a
majority of the Incumbent Board, such new director shall, for purposes of
this Plan, be considered as a member of the Incumbent Board; PROVIDED
FURTHER, HOWEVER, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule
14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or

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                       (c) The consummation of:

                           (i) A merger, consolidation or reorganization
                       involving the Company unless:

                                 (A) the stockholders of the Company,
                           immediately  before such merger, consolidation or
                           reorganization, own directly or indirectly
                           immediately following such merger, consolidation
                           or reorganization, more than fifty percent (50%)
                           of the combined voting power of the outstanding
                           voting securities of the corporation resulting
                           from such merger or consolidation or
                           reorganization (the "Surviving Corporation") in
                           substantially the same proportion as their
                           ownership of the Voting Securities immediately
                           before such merger, consolidation or
                           reorganization,

                                 (B) the individuals who were members of the
                           Incumbent Board immediately prior to the
                           execution of the agreement providing for such
                           merger, consolidation or reorganization
                           constitute at least a majority of the members of
                           the board of directors of the Surviving
                           Corporation, or a corporation Beneficially Owning
                           directly or indirectly a majority of the voting
                           securities of the Surviving Corporation, and

                                 (C) no Person other than (1) the Company,
                           (2) any Related Entity, (3) any employee
                           benefit plan (or any trust forming a part
                           thereof) that, immediately prior to such merger,
                           consolidation or reorganization, was maintained
                           by the Company, the Surviving Corporation, or any
                           Related Entity or (4) any Person who, together
                           with its Affiliates, immediately prior to such
                           merger, consolidation or reorganization had
                           Beneficial Ownership of fifty percent (50%) or
                           more of the then outstanding Voting Securities,
                           owns, together with its Affiliates, Beneficial
                           Ownership of fifty percent (50%) or more of the
                           combined voting power of the Surviving
                           Corporation's then outstanding voting securities.

                                 (D) a transaction described in clauses (A)
                           through (C) above shall herein be referred to as
                           a "Non-Control Transaction;"

                           (ii)  A complete liquidation or dissolution of the
                       Company; or

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                           (iii) An agreement for the sale or other
                       disposition of all or substantially all of the
                       assets of the Company to any Person (other than a
                       transfer to a Related Entity or the distribution
                       to the Company's stockholders of the stock of a
                       Related Entity or any other assets).

         Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of fifty percent (50%) or more of the combined voting
power of the Company's then outstanding Voting Securities as a result of the
acquisition of Voting Securities by the Company which, by reducing the number
of Voting Securities then outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Persons, provided that if a Change
in Control would occur (but for the operation of this sentence) as a result
of the acquisition of Voting Securities by the Company, and (1) before such
share acquisition by the Company the Subject Person becomes the Beneficial
Owner of any new or additional Voting Securities in a related transaction or
(2) after such share acquisition by the Company the Subject Person becomes
the Beneficial Owner of any new or additional Voting Securities which in
either case increases the percentage of the then outstanding Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.

                  2.11 "CODE" means the Internal Revenue Code of 1986, as
amended.

                  2.12 "COMMITTEE" means a committee, as described in Section
3.1, appointed by the Board from time to time to administer the Plan and to
perform the functions set forth herein.

                  2.13 "COMPANY" means AppNet Systems, Inc.

                  2.14 "DIRECTOR" means a director of the Company.

                  2.15 "DISABILITY" means:

                       (a) in the case of an Optionee or Grantee whose
employment with the Company or a Subsidiary is, as of the date of the
applicable Agreement, subject to the terms of an employment agreement between
such Optionee or Grantee and the Company or Subsidiary, which employment
agreement includes a definition of "Disability," the term "Disability" as
used in this Plan or any Agreement shall have the meaning set forth in such
employment agreement during the period that such employment agreement remains
in effect; or

                       (b) in all other cases, the term "Disability" as
used in this Plan or any Agreement shall mean a physical or mental infirmity
which impairs the Optionee's or

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Grantee's ability to perform substantially his or her duties for a period of
one hundred eighty (180) consecutive days.

                  2.16 "DISABILITY DATE" means the date which is six (6)
months after the date on which an Optionee or Grantee is first absent from
active employment with the Company by reason of a Disability.

                  2.17 "DIVIDEND EQUIVALENT RIGHT" means a right to receive
all or some portion of the cash dividends that are or would be payable with
respect to Shares.

                  2.18 "DIVISION" means any of the operating units or divisions
of the Company designated as a Division by the Committee.

                  2.19 "ELIGIBLE INDIVIDUAL" means any of the following
individuals who is designated by the Committee as eligible to receive Options
or Awards subject to the conditions set forth herein: (a) any director (other
than a Nonemployee Director), officer or employee of the Company or a
Subsidiary, (b) any individual to whom the Company or a Subsidiary has
extended a formal, written offer of employment, or (c) any consultant or
advisor of the Company or a Subsidiary.

                  2.20 "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

                  2.21 "FAIR MARKET VALUE" on any date means the closing
sales prices of the Shares on such date on the principal national securities
exchange on which such Shares are listed or admitted to trading, or, if such
Shares are not so listed or admitted to trading, the average of the per Share
closing bid price and per Share closing asked price on such date as quoted on
the National Association of Securities Dealers Automated Quotation System or
such other market in which such prices are regularly quoted, or, if there
have been no published bid or asked quotations with respect to Shares on such
date, the Fair Market Value shall be the value established by the Board in
good faith and, in the case of an Incentive Stock Option, in accordance with
Section 422 of the Code.

                  2.22 "FORMULA OPTION" means an Option granted pursuant to
Section 6.

                  2.23 "GRANTEE" means a person to whom an Award has been
granted under the Plan.

                  2.24 "INCENTIVE STOCK OPTION" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.

                  2.25 "INITIAL PUBLIC OFFERING" means the consummation of the
first public offering of Shares pursuant to a registration statement (other than
on Form S-8 or successor

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form) filed with, and declared effective by, the Securities and
Exchange Commission.

                  2.26 "NONEMPLOYEE DIRECTOR" means a director of the Company
who is a "nonemployee director" within the meaning of Rule 16b-3 promulgated
under the Exchange Act.

                  2.27 "NONQUALIFIED STOCK OPTION" means an Option which is not
an Incentive Stock Option.

                  2.28 "NORMAL RETIREMENT DATE" means the date on which an
Optionee or Grantee terminates active employment with the Company or a
Subsidiary on or after attainment of age 65, but does not include termination by
the Company or a Subsidiary for Cause.

                  2.29 "OPTION" means a Nonqualified Stock Option, an Incentive
Stock Option, a Formula Option, or any or all of them.

                  2.30 "OPTIONEE" means a person to whom an Option has been
granted under the Plan.

                  2.31 "OUTSIDE DIRECTOR" means a director of the Company who is
an "outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.

                  2.32 "PARENT" means any corporation which is a parent
corporation (within the meaning of Section 424(e) of the Code) with respect to
the Company.

                  2.33 "PERFORMANCE AWARDS" means Performance Units, Performance
Shares or either or both of them.

                  2.34 "PERFORMANCE-BASED COMPENSATION" means any Option or
Award that is intended to constitute "performance based compensation" within the
meaning of Section 162(m)(4)(C) of the Code and the regulations promulgated
thereunder.

                  2.35 "PERFORMANCE CYCLE" means the time period specified by
the Committee at the time Performance Awards are granted during which the
performance of the Company, a Subsidiary or a Division will be measured.

                  2.36 "PERFORMANCE OBJECTIVES" has the meaning set forth
in Section 11.

                  2.37 "PERFORMANCE SHARES" means Shares issued or
transferred to an Eligible Individual under Section 11.

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                  2.38 "PERFORMANCE UNITS" means Performance Units
granted to an Eligible Individual under Section 11.

                  2.39 "PERSON" means `person' as such term is used for purposes
of Section 13(d) or 14(d) of the Exchange Act, including without limitation, any
individual, corporation, limited liability company, partnership, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity or any group of Persons.

                  2.40 "PHANTOM STOCK" means a right granted to an Eligible
Individual under Section 12 representing a number of hypothetical Shares.

                  2.41 "PLAN" means the AppNet Systems, Inc. 1999 Stock
 Incentive Plan, as amended and restated from time to time.

                  2.42 "POOLING TRANSACTION" means an acquisition of the Company
in a transaction which is intended to be treated as a "pooling of interests"
under generally accepted accounting principles.

                  2.43 "RESTRICTED STOCK" means Shares issued or transferred
to an Eligible Individual pursuant to Section 10.

                  2.44 "SHARE AWARD" means a grant of Shares pursuant to Section
12.

                  2.45 "SHARES" means the common stock, par value $.0005
per share, of the Company.

                  2.46 "STOCK APPRECIATION RIGHT" means a right to receive all
or some portion of the increase in the value of the Shares as provided in
Section 8 hereof.

                  2.47 "SUBSIDIARY" means (i) except as provided in
subsection (ii) below, any corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) with respect to the
Company, and (ii) with respect to provisions relating to the eligibility to
receive Options or Awards other than Incentive Stock Options and to continued
employment for purposes of Options and Awards (unless the Committee
determines otherwise), any entity, whether or not incorporated, in which the
Company directly or indirectly owns fifty percent (50%) or more of the
outstanding equity or other ownership interests.

                  2.48 "SUCCESSOR CORPORATION" means a corporation, or a parent
or subsidiary thereof, which issues or assumes an Option or Award in a
transaction described in Section 424(a) of the Code without regard to Sections
424(a)(1) and (2) thereof.

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                  2.49 "TAX BENEFIT" means an actual decrease in the Company's
liability for taxes in any period.

                  2.50 "TEN-PERCENT STOCKHOLDER" means an Eligible Individual,
who, at the time an Incentive Stock Option is to be granted to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, or of a Parent or a Subsidiary.

                  2.51 "TERMINATION OF EMPLOYMENT" means the later of (i)
severance of the employer-employee relationship with the Company or any
Subsidiary or (ii) the resignation, removal or termination of an officer or
Director of the Company or any Subsidiary.

                  2.52 "TRANSITION PERIOD" means the period beginning with an
Initial Public Offering and ending as of the earlier of (i) the date of the
first annual meeting of stockholders of the Company at which Directors are to
be elected that occurs after the close of the third (3rd) calendar year
following the calendar year in which the Initial Public Offering occurs, (ii)
the expiration of the Plan, (iii) a material modification of the Plan within
the meaning of Treasury Regulation Section 1.162-27(h)(1)(iii), or (iv) the
issuance of all Shares that have been allocated under the Plan.

                  2.53 "VOTING SECURITIES" means all outstanding voting
securities of the Company entitled to vote generally in the election of the
Board of Directors.

         3.       ADMINISTRATION.

                  3.1  The Plan shall be administered by the Committee, which
shall be appointed by the Board. The Committee shall hold meetings at such times
as may be necessary for the proper administration of the Plan. The Committee
shall keep minutes of its meetings. A quorum shall consist of a majority of the
members of the Committee and a majority of a quorum may authorize any action.
Any decision or determination reduced to writing and signed by all of the
members of the Committee shall be as fully effective as if made by a majority
vote at a meeting duly called and held. The Committee shall consist of at least
two (2) Directors and may consist of the entire Board; PROVIDED, HOWEVER, that
from and after the date of an Initial Public Offering, (A) if the Committee
consists of less than the entire Board, each member shall be a Nonemployee
Director and (B) to the extent necessary for any Option or Award intended to
qualify as Performance-Based Compensation to so qualify, each member of the
Committee, whether or not it consists of the entire Board, shall be an Outside
Director.

                  3.2  For purposes of the preceding sentence, if one or more
members of the Committee is not a Nonemployee Director and, if necessary for any
Option or Award

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intended to qualify as Performance-Based Compensation to so qualify, an
Outside Director, but recuses himself or herself or abstains from voting with
respect to a particular action taken by the Committee, then the Committee,
with respect to that action, shall be deemed to consist only of the members
of the Committee who have not recused themselves or abstained from voting.
Subject to applicable law, the Committee may delegate its authority under the
Plan to any other person or persons.

                  3.3  No member of the Committee shall be liable for any
action, failure to act, determination or interpretation made in good faith
with respect to this Plan or any transaction hereunder. The Company hereby
agrees to indemnify each member of the Committee for all costs and expenses
and, to the extent permitted by applicable law, any liability incurred in
connection with defending against, responding to, negotiating for the
settlement of or otherwise dealing with any claim, cause of action or dispute
of any kind arising in connection with any actions in administering this Plan
or in authorizing or denying authorization to any transaction hereunder.

                  3.4  Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time to:

                       (a) determine those Eligible Individuals to whom
Options shall be granted under the Plan and the number of such Options to be
granted and to prescribe the terms and conditions (which need not be
identical) of each such Option, including the purchase price per Share
subject to each Option, and make any amendment or modification to any Option
Agreement consistent with the terms of the Plan;

                       (b) select those Eligible Individuals to whom Awards
shall be granted under the Plan and to determine the number of Shares in
respect of which each Award is granted, the terms and conditions (which need
not be identical) of each such Award, including the restrictions or
Performance Objectives relating to Awards and the maximum value of any Award,
and make any amendment or modification to any Award Agreement consistent with
the terms of the Plan;

                       (c) construe and interpret the Plan and the Options
and Awards granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, without
limitation, correcting any defect or supplying any omission, or reconciling
any inconsistency in the Plan or in any Agreement, in the manner and to the
extent it shall deem necessary or advisable, including so that the Plan and
the operation of the Plan complies with the Code to the extent applicable and
other applicable law, and otherwise to make the Plan fully effective. All
decisions and determinations by the Committee in the exercise of this power
shall be final, binding and conclusive upon the Company, its Subsidiaries,
the Optionees and Grantees, and all other persons having any interest therein;

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                       (d) determine the duration and purposes for leaves of
absence which may be granted to an Optionee or Grantee on an individual
basis without constituting a termination of employment or service for
purposes of the Plan;

                       (e) exercise its sole discretion with respect to the
powers and rights granted to it as set forth in the Plan; and

                       (f) generally, exercise such powers and to perform
such acts as are deemed necessary or advisable to promote the best interests
of the Company with respect to the Plan.

         4.       STOCK SUBJECT TO THE PLAN; GRANT LIMITATIONS.

                  4.1  The aggregate number of Shares that may be made the
subject of Options and Awards granted under the Plan shall not exceed
2,000,000 plus the additional Shares described in Section 4.2; PROVIDED,
HOWEVER, that the aggregate maximum number of Shares that may be made the
subject of Options and Awards granted under the Plan shall not exceed
10,000,000; and PROVIDED, FURTHER, HOWEVER, that in the aggregate, not more
than one-third of the number of allotted Shares may be made the subject of
Restricted Stock Awards under Section 10 of the Plan (other than shares of
Restricted Stock made in settlement of Performance Units pursuant to Section
11.2(b)). Upon a Change in Capitalization, the maximum number of Shares
referred to in the first sentence of this Section 4.1 shall be adjusted in
number and kind pursuant to Section 14. The Company shall reserve for the
purposes of the Plan, out of its authorized but unissued Shares or out of
Shares held in the Company's treasury, or partly out of each, such number of
Shares as shall be determined by the Board.

                  4.2  As of January 1 of each year, commencing with the year
2000, the aggregate number of Shares that may be made the subject of Options
and Awards granted under the Plan shall automatically increase by a number
equal to an amount determined by the Committee in its sole discretion.

                  4.3  Upon the granting of an Option or an Award, the number
of Shares available under Section 4.1 for the granting of further Options and
Awards shall be reduced as follows:

                       (a) In connection with the granting of an Option or an
Award (other than the granting of a Performance Unit denominated in dollars),
the number of Shares shall be reduced by the number of Shares in respect of
which the Option or Award is granted or denominated.

                       (b) In connection with the granting of a Performance
Unit denominated in dollars, the number of Shares shall be reduced by an
amount equal to the

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quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.

                  4.4  Whenever any outstanding Option or Award or portion
thereof expires, is canceled, or is otherwise terminated for any reason
without having been exercised or payment having been made in respect of the
entire Option or Award, the Shares allocable to the expired, canceled, or
otherwise terminated portion of the Option or Award may again be the subject
of Options or Awards granted hereunder.

         5.       OPTION GRANTS FOR ELIGIBLE INDIVIDUALS.

                  5.1  AUTHORITY OF COMMITTEE. Subject to the provisions of
the Plan, the Committee shall have full and final authority to select those
Eligible Individuals who will receive Options, the terms and conditions of
which shall be set forth in an Agreement; PROVIDED, HOWEVER, that no Eligible
Individual shall receive any Incentive Stock Options unless he is an employee
of the Company, a Parent or a Subsidiary at the time the Incentive Stock
Option is granted.

                  5.2  PURCHASE PRICE. The purchase price (which may be
greater than, less than or equal to the Fair Market Value on the date of
grant) or the manner in which the purchase price is to be determined for
Shares under each Option shall be determined by the Committee and set forth
in the Agreement pursuant to which each Option is granted; PROVIDED, HOWEVER,
that the purchase price per Share under each Incentive Stock Option shall not
be less than 100% of the Fair Market Value of a Share on the date the Option
is granted (110% in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder).

                  5.3  MAXIMUM DURATION. Options granted hereunder shall be
for such term as the Committee shall determine, PROVIDED, HOWEVER, that an
Option shall not be exercisable after the expiration of ten (10) years from
the date it is granted (five (5) years in the case of an Incentive Stock
Option granted to a Ten-Percent Stockholder); PROVIDED, FURTHER, HOWEVER,
that the Committee may provide that an Option (other than an Incentive Stock
Option) may, upon the death of the Optionee, be exercised for up to one (1)
year following the date of the Optionee's death even if such period extends
beyond ten (10) years from the date the Option is granted. The Committee may,
subsequent to the granting of any Option, extend the term thereof, but in no
event shall the term as so extended exceed the maximum term provided for in
the preceding sentence.

                  5.4  EXERCISABILITY. Subject to Sections 5.5 and 7.5, each
Option shall become exercisable in such installments (which need not be
equal) and at such times as may be designated by the Committee and set forth
in the Agreement. To the extent not exercised, installments shall accumulate
and be exercisable, in whole or in part, at any

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time after becoming exercisable, but not later than the date the Option
expires. The Committee may accelerate the exercisability of any Option or
portion thereof at any time.

                  5.5  TERMINATION. Subject to Sections 7.5 and 13 and unless
otherwise provided by the Committee, in its sole discretion, in the
applicable Agreement, the following provisions shall apply to Options upon a
Termination of Employment:

                       (a) Subject to Section 5.3, unless otherwise
determined by the Committee at the time of grant (and set forth in the
applicable Agreement) or at a later date, except in the case of Disability,
retirement on or after the Optionee's Normal Retirement Date and death as
provided in Sections 5.5(c) and 5.5(d) below, upon an Optionee's Termination
of Employment with the Company, a Parent or a Subsidiary for any reason other
than a termination for Cause, any unexercised Option held by such Optionee
shall expire three (3) months after the Optionee has a Termination of
Employment and such Option may only be exercised by the Optionee or his or
her Beneficiary to the extent that the Option or a portion thereof was
exercisable on the date of Termination of Employment; PROVIDED, HOWEVER, that
no Option may be exercised after the expiration date specified for the
particular Option in the Agreement.

                       (b) If the Optionee's Termination of Employment arises
as a result of a termination for Cause, then, unless the Committee determines
otherwise at the time of the Termination of Employment, any unexercised
Options (whether or not vested and exercisable) held by such Optionee shall
terminate and expire concurrently with the Optionee's Termination of
Employment and no rights thereunder may be exercised.

                       (c) Subject to Section 5.3, unless otherwise
determined by the Committee at the time of grant (and set forth in the
applicable Agreement) or at a later date, if an Optionee suffers a Disability
or retires on or after the Optionee's Normal Retirement Date, any unexercised
Option held by such disabled or retired Optionee shall expire one (1) year
after the Disability Date or date of Termination of Employment by reason of
retirement, as the case may be, and such Option may only be exercised by the
Optionee or his or her guardian or legal representative to the extent that
the Option or a portion thereof was exercisable on the Disability Date or the
date of Termination of Employment by reason of retirement, as the case may
be; PROVIDED, HOWEVER, no Option may be exercised after the expiration date
specified for the particular Option in the Agreement.

                       (d) Subject to Section 5.3, unless otherwise
determined by the Committee at the time of grant (and set forth in the
applicable Agreement) or at a later date, if an Optionee dies while still
employed by the Company, the Options which the Optionee was entitled to
exercise on the date of the Optionee's death may be exercised at any time
after the Optionee's death by the Optionee's Beneficiary; PROVIDED, HOWEVER,
that

                                       -13-

<PAGE>

no Option may be exercised after the earlier of: (i) one (1) year after the
Optionee's death or (ii) the expiration date specified for the particular
Option in the Agreement. If an Optionee dies after his or her Termination of
Employment, then the Options which the Optionee was entitled to exercise on
the date of the Optionee's death may be exercised by his or her Beneficiary
within the period specified in Sections 5.5(a) or 5.5(c), as the case may be.

                       (e) Subject to Section 5.3 and notwithstanding any
other provision of this Section 5.5, upon an Optionee's Termination of
Employment at any time on, or within one (1) year after, the occurrence of a
Change in Control, each Option held by the Optionee that was exercisable as
of the date of such Termination of Employment shall remain exercisable for a
period ending not before the earlier of (A) the first anniversary of the
Termination of Employment or (B) the expiration of the stated term of the
Option.

                       (f) Unless otherwise determined by the Committee at
the time of grant (and set forth in the applicable Agreement) or at a later
date, the Option (or portion thereof), to the extent not yet vested and
exercisable as of the date of the Optionee's Termination of Employment, shall
terminate immediately upon such date.

                  5.6  DEFERRED DELIVERY OF OPTION SHARES. The Committee may,
in its sole discretion, permit Optionees to elect to defer the issuance of
Shares upon the exercise of one or more Nonqualified Stock Options granted
pursuant to the Plan. The terms and conditions of such deferral shall be
determined at the time of the grant of the Option or thereafter and shall be
set forth in the Agreement evidencing the Option.

                  5.7  MODIFICATION. No modification of a Option shall
adversely alter or impair any rights or obligations under the Option without
the Optionee's consent.

                  5.8  LIMITATIONS ON INCENTIVE STOCK OPTIONS. To the extent
that the aggregate Fair Market Value (determined as of the date of the grant)
of Shares with respect to which Incentive Stock Options granted under the
Plan and "incentive stock options" (within the meaning of Section 422 of the
Code) granted under all other plans of the Company or its Subsidiaries (in
either case determined without regard to this Section 5.8) are exercisable by
an Optionee for the first time during any calendar year exceeds $100,000,
such Incentive Stock Options shall be treated as Nonqualified Stock Options.
In applying the limitation in the preceding sentence in the case of multiple
Option grants, Options which were intended to be Incentive Stock Options
shall be treated as Nonqualified Stock Options according to the order in
which they were granted such that the most recently granted Options are first
treated as Nonqualified Stock Options.

         6.       OPTION GRANTS FOR NONEMPLOYEE DIRECTORS.

                                       -14-

<PAGE>

                  6.1  GRANT. Formula Options shall be granted (i) to a
Nonemployee Director who becomes a member of the Board after June 17, 1999
upon election or appointment and (ii) to all Nonemployee Directors who are
members of the Board as follows:

                       (a) INITIAL GRANT.  Each Nonemployee Director who
becomes a Director after June 17, 1999 shall, upon becoming a Director, be
granted a Formula Option in respect of 5,000 Shares.

                       (b) ANNUAL GRANT.  Each Nonemployee Director shall be
granted a Formula Option in respect of 5,000 Shares on the first business day
of January in each year that the Plan is in effect provided that the
Nonemployee Director is a Director on such date; PROVIDED, HOWEVER, that a
Nonemployee Director shall not be entitled to receive an annual grant
pursuant to this Section 6.1(b) for the calendar year in which such
Nonemployee Director is first elected or appointed to the Board.

                       (c) TERMS AND CONDITIONS. All Formula Options granted
pursuant to this Section 6 shall be evidenced by an Agreement containing such
other terms and conditions not inconsistent with the provisions of this Plan
as determined by the Board; PROVIDED, HOWEVER, that such terms shall not vary
the price, amount or timing of Formula Options provided under this Section 6,
including provisions dealing with vesting, forfeiture and termination of such
Formula Options.

                  6.2  PURCHASE PRICE. The purchase price for Shares under
each Formula Option shall be equal to 100% of the Fair Market Value of such
Shares on the date the Formula Option is granted.

                  6.3  VESTING. Each Formula Option shall be fully vested and
exercisable on the date of grant; PROVIDED, HOWEVER, that the Optionee is a
Director on such date.

                  6.4  DURATION. Subject to Section 7.5, each Formula Option
shall terminate on the date which is the tenth (10th) anniversary of the date
of grant; PROVIDED, HOWEVER, that if an Optionee dies while a Director and
prior to such tenth (10th) anniversary, the Formula Option may be exercised
for up to one (1) year following the date of the Optionee's death even if
such period extends beyond ten (10) years from the date the Formula Option is
granted, unless terminated earlier as follows:

                       (a) If an Optionee's service as a Director terminates
for any reason other than Disability, death or Cause, the Optionee may for a
period of three (3) months after such termination exercise his or her Formula
Option, after which time the Formula Option shall automatically terminate in
full.

                                       -15-

<PAGE>

                       (b) If an Optionee's service as a Director terminates
by reason of the Optionee's resignation or removal from the Board due to
Disability, the Optionee or his or her guardian or legal representative may,
for a period of one (1) year after such termination, exercise his or her
Formula Option, after which time the Formula Option shall automatically
terminate in full.

                       (c) If an Optionee's service as a Director terminates
for Cause, the Formula Option granted to the Optionee hereunder shall
immediately terminate in full and no rights thereunder may be exercised.

                       (d) If an Optionee dies while a Director, the Formula
Option may be exercised at any time after the Optionee's death by the
Optionee's Beneficiary; PROVIDED, HOWEVER, that no Formula Option may be
exercised after the first anniversary of the Optionee's death. If an Optionee
dies after his or her service as a Director terminates, then the Formula
Option may be exercised by his or her Beneficiary within the period specified
in Sections. 6.4(a) or 6.4 (b), as the case may be.

                       (e) Notwithstanding any other provision of this
Section 6.4, in the event an Optionee's service as a Director of the Company
is terminated at any time on, or within one (1) year after, the occurrence of
a Change in Control, each Formula Option held by the Optionee shall remain
exercisable for a period ending not before the earlier of (A) the first
anniversary of the termination of the Optionee's employment or service or (B)
the expiration of the stated term of the Formula Option.

         7.       TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS.

                  7.1  ADDITIONAL TERMS.  The provisions of this Section 7
shall apply to all Options.

                  7.2  NON-TRANSFERABILITY. No Option granted hereunder shall
be transferable by the Optionee to whom it is granted otherwise than by will
or by the laws of descent and distribution or, in the case of an Option other
than an Incentive Stock Option, in the Committee's sole discretion, to a
spouse or former spouse in a transfer described in Section 1041(a) of the
Code (a "Code 1041 Transfer"), and, except with respect to an Option
transferred pursuant to a Code 1041 Transfer, an Option shall be exercisable
during the lifetime of such Optionee only by the Optionee or his or her
guardian or legal representative. Notwithstanding the foregoing, the
Committee may set forth in the Agreement evidencing an Option (other than an
Incentive Stock Option) at the time of grant or thereafter, that the Option
may be transferred to members of the Optionee's immediate family, to trusts
solely for the benefit of such immediate family members and to partnerships
in which such family members and/or trusts are the only partners. Following
transfer, for purposes of this Plan, a transferee of an Option shall be
deemed to be the Optionee; provided that the Option shall be exercisable by
the transferee

                                       -16-

<PAGE>

only to the extent and for such periods that the Option would have been
exercisable if held by the original Optionee. For this purpose, immediate
family means the Optionee's spouse, parents, children, stepchildren and
grandchildren and the spouses of such parents, children, stepchildren and
grandchildren. The terms of an Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of
the Optionee.

                  7.3  METHOD OF EXERCISE.

                       (a) The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company
at the Company's principal executive office, specifying the number of Shares
to be purchased and, to the extent applicable, accompanied by payment
therefor and otherwise in accordance with such procedures which may be
approved by the Committee from time to time, and in accordance with the
Agreement pursuant to which the Option was granted; PROVIDED, HOWEVER, that
Options may not be exercised by an Optionee for twelve months following a
hardship distribution to the Optionee, to the extent such exercise is
prohibited under Treasury Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4). The
purchase price for any Shares purchased pursuant to the exercise of an Option
shall be paid, as determined by the Committee in its sole discretion, by any
one or a combination of the following: (a) delivery of cash or a check to the
order of the Company or (b) transferring to the Company Shares that have been
held by the Optionee for at least six (6) months (or such lesser period as
may be permitted by the Committee) prior to the exercise of the Option and
that have a Fair Market Value equal in amount to the purchase price, such
transfer to be upon such terms and conditions as determined by the Committee.
In addition, both Options and Formula Options may be exercised through a
registered broker-dealer pursuant to such cashless exercise procedures which
are, from time to time, deemed acceptable by the Committee. Any Shares
transferred to the Company as payment of the purchase price under an Option
shall be valued at their Fair Market Value on the day preceding the date of
exercise of such Option. If requested by the Committee, the Optionee shall
deliver the Agreement evidencing the Option to the Secretary of the Company
who shall endorse thereon a notation of such exercise and return such
Agreement to the Optionee. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that may
be purchased upon exercise shall be rounded to the nearest number of whole
Shares.

                       (b) If the Fair Market Value of the Shares with
respect to which the Option is being exercised exceeds the purchase price of
such Option, an Optionee may, instead of exercising an Option as provided in
Section 7.3(a), request that the Committee authorize payment to the Optionee
of the difference between the Fair Market Value of part or all of the Shares
which are the subject of the Option and the purchase price of the Option,
such difference to be determined as of the date the Committee

                                       -17-

<PAGE>

receives the request from the Optionee. The Committee, in its sole
discretion, may grant or deny such a request from an Optionee with respect to
part or all of the Shares as to which the Option is then exercisable and, to
the extent granted, shall direct the Company to make the payment to the
Optionee either in cash or in Shares or in any combination thereof; PROVIDED,
HOWEVER, that the payment in Shares shall be based upon the Fair Market Value
of Shares as of the date the Committee received the request from the
Optionee. An Option shall be deemed to have been exercised and shall be
canceled to the extent that the Committee grants a request pursuant to this
Section 7.3(b).

                  7.4  RIGHTS OF OPTIONEES. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until (a)
the Option shall have been exercised pursuant to the terms thereof, (b) the
Company shall have issued and delivered Shares to the Optionee, and (c) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.

                  7.5  EFFECT OF CHANGE IN CONTROL.

                       (a) Notwithstanding anything contained in Sections 5
or 6 to the  contrary, in the event of a Change in Control, the Committee, in
its sole discretion, may provide in writing in connection with, or in
contemplation of, any such Change in Control for any or all of the following
alternatives (separately or in any combination): (i) for the assumption by
the Successor Corporation of the Options theretofore granted or the
substitution by such corporation for such Options of new options covering the
stock of the Successor Corporation with appropriate adjustments as to the
number and kinds of shares and the purchase prices; (ii) for the continuation
of the Plan in which event the Plan and the Options shall continue under such
terms as may be provided; (iii) for the accelerated vesting of the Options;
or (iv) for the payment in cash upon the surrender to the Company for
cancellation of any Option or portion of an Option to the extent vested and
not yet exercised in an amount equal to the excess, if any, of (i) (A) in the
case of a Nonqualified Stock Option, the greater of (1) the Fair Market
Value, on the date preceding the date of surrender, of the Shares subject to
the Option or portion thereof surrendered or (2) the Adjusted Fair Market
Value of the Shares subject to the Option or portion thereof surrendered or
(B) in the case of an Incentive Stock Option, the Fair Market Value, on the
date preceding the date of surrender, of the Shares subject to the Option or
portion thereof surrendered, over (ii) the aggregate purchase price for such
Shares under the Option or portion thereof surrendered. Any vesting of an
Option or portion of an Option pursuant to this Section 7.5(a) or surrender
of an Option for a cash payment shall be conditioned upon the consummation of
the Change in Control and shall be effective only immediately before the
consummation of the Change in Control. Upon consummation of the Change in
Control, the Plan and all outstanding but unexercised Options shall
terminate, except to

                                       -18-

<PAGE>

the extent provision is made in writing in connection with such transaction
for continuation of the Plan, or the assumption or substitution of such
Options. The Committee shall send written notice of an event that will result
in such a termination to all individuals who hold Options not later than the
time at which the Company gives notice thereof to its stockholders.

                       (b) To the extent set forth in the applicable
Agreement, if, as a result of a Change in Control transaction, an Option
intended to qualify as an Incentive Stock Option fails to so qualify SOLELY
because of the failure to meet the holding requirements of Code Section
422(a)(1) (a "Disqualifying Disposition"), the Company shall make a cash
payment to the Optionee equal to the amount which will, after taking into
account all taxes imposed on the Disqualifying Disposition and the receipt of
such payment, leave the Optionee in the same after-tax position the Optionee
would have been in had the Code Section 422(a)(1) holding requirements been
met at the time of the Disqualifying Disposition; PROVIDED, HOWEVER, that no
payment described in this Section shall exceed the Tax Benefit to the Company
resulting from deductions relating to ordinary income recognized by the
Optionee as a result of the Disqualifying Disposition and the receipt of such
payment. The payment described in this Section shall be made by the Company
within thirty (30) days of the filing by the Company of the federal tax
return which includes the tax items associated with the income recognized by
the Optionee as a result of the Disqualifying Disposition (or, if the Tax
Benefit described in the preceding sentence is not realized until a later
year, within thirty (30) days of the filing by the Company of the federal tax
return with respect to which such Tax Benefit is realized); PROVIDED,
HOWEVER, that if more than one Optionee is entitled to a cash payment
pursuant to this Section 7.5(b) in any single tax year and the Tax Benefit
realized by the Company in such year with respect to all such Optionees is
less than the aggregate amount of the payments due to such Optionees
hereunder, then (i) each such Optionee shall receive a portion of such cash
payment equal to an amount determined by multiplying the amount of the Tax
Benefit realized by the Company in such year by a fraction the numerator of
which is equal to the amount of payment due to such Optionee and the
denominator of which is equal to the aggregate amount due to all such
Optionees entitled to a payment hereunder, and (ii) subject to further
application of this proviso, shall be entitled to receive the remaining
portion within thirty (30) days of the filing by the Company of the federal
tax return with respect to which such Tax Benefit is realized.

                       (c) To the extent set forth in the  applicable
Agreement and provided that an Optionee is not entitled to payment under
Section 7.5(b) hereof, if, as a result of a Change in Control transaction, an
Option intended to qualify as an Incentive Stock Option fails to so qualify
SOLELY because the vesting of the Option is accelerated pursuant to Section
7.5(a) and such acceleration causes the aggregate fair market value
(determined at the time the Option is granted) of the Shares with respect to
which Options are exercisable for the first time by an Optionee during the
calendar year in which such

                                       -19-

<PAGE>

vesting occurs to exceed $100,000, within the meaning of Code Section 422(d)
(a "Disqualified Option"), then, upon exercise of such Disqualified Option,
the Company shall make a cash payment to the Optionee equal to the amount
which will, after taking into account all taxes imposed on the exercise of
such Disqualified Option and the receipt of such payment, leave the Optionee
in the same after-tax position the Optionee would have been in had the
Disqualified Option continued to qualify as an Incentive Stock Option on the
date of exercise and the Optionee sold the Shares received upon exercise of
the Option at their Fair Market Value on the date of exercise; PROVIDED,
HOWEVER, that no payment described in this Section shall exceed the Tax
Benefit to the Company resulting from deductions relating to ordinary income
recognized by the Optionee as a result of exercising the Disqualified Option
and the receipt of such payment. The payment described in this Section shall
be made by the Company within thirty (30) days of the filing by the Company
of the federal tax return which includes the tax items associated with the
income recognized by the Optionee as a result of exercising the Disqualified
Option (or, if the Tax Benefit described in the preceding sentence is not
realized until a later year, within thirty (30) days of the filing by the
Company of the federal tax return with respect to which such Tax Benefit is
realized); PROVIDED, HOWEVER, that if more than one Optionee is entitled to a
cash payment pursuant to this Section 7.5(c) in any single tax year and the
Tax Benefit realized by the Company in such year with respect to all such
Optionees is less than the aggregate amount of the payments due to such
Optionees hereunder, then (i) each such Optionee shall receive a portion of
such cash payment equal to an amount determined by multiplying the amount of
the Tax Benefit realized by the Company in such year by a fraction the
numerator of which is equal to the amount of payment due to such Optionee and
the denominator of which is equal to the aggregate amount due to all such
Optionees entitled to a payment hereunder, and (ii) subject to further
application of this proviso, shall be entitled to receive the remaining
portion within thirty (30) days of the filing by the Company of the federal
tax return with respect to which such Tax Benefit is realized.

                                       -20-

<PAGE>

         8.       STOCK APPRECIATION RIGHTS.

                  The Committee may in its sole discretion, either alone or
in connection with the grant of an Option, grant Stock Appreciation Rights in
accordance with the Plan, the terms and conditions of which shall be set
forth in an Agreement. If granted in connection with an Option, a Stock
Appreciation Right shall cover the same Shares covered by the Option (or such
lesser number of Shares as the Committee may determine) and shall, except as
provided in this Section 8, be subject to the same terms and conditions as
the related Option.

                  8.1  TIME OF GRANT. A Stock Appreciation Right may be
granted (a) at any time if unrelated to an Option, or (b) if related to an
Option, either at the time of grant, or (except in the case of an Incentive
Stock Option) at any time thereafter during the term of the Option.

                  8.2  STOCK APPRECIATION RIGHT RELATED TO AN OPTION.

                       (a) EXERCISE.  Subject to Section 8.9, a Stock
Appreciation Right granted in connection with an Option shall be exercisable
at such time or times and only to the extent that the related Options are
exercisable (including, without limitation, exercisability upon Termination
of Employment or a Change in Control), and will not be transferable except to
the extent the related Option may be transferable. A Stock Appreciation Right
granted in connection with an Incentive Stock Option shall expire no later
than the expiration of the related Incentive Stock Option and shall be
exercisable only if the Fair Market Value of a Share on the date of exercise
exceeds the purchase price of the Option specified in the related Incentive
Stock Option Agreement.

                       (b) TREATMENT OF RELATED OPTIONS AND STOCK
APPRECIATION RIGHTS UPON EXERCISE. Upon the exercise of a Stock Appreciation
Right granted in connection with an Option, the Option shall be canceled to
the extent of the number of Shares as to which the Stock Appreciation Right
is exercised, and upon the exercise of an Option granted in connection with a
Stock Appreciation Right, the Stock Appreciation Right shall be canceled to
the extent of the number of Shares as to which the Option is exercised or
surrendered.

                  8.3  STOCK APPRECIATION RIGHT UNRELATED TO AN OPTION.

                       (a) TERMS. Stock Appreciation Rights unrelated to
Options shall contain such terms and conditions as to exercisability (subject
to Section 8.9), vesting and duration as the Committee shall determine, but
in no event shall they have a term of greater than ten (10) years; PROVIDED,
HOWEVER, that the Committee may provide that Stock Appreciation right may,
upon the death of the Grantee, be exercised for up to one (1) year

                                       -21-

<PAGE>

following the date of the Grantee's death even if such period extends beyond
ten (10) years from the date the Stock Appreciation Right is granted.

                       (b) TERMINATION. Subject to Section 13 and except as
provided in Section 8.9, and unless otherwise provided by the Committee, in
its sole discretion, in the applicable Agreement, upon a Grantee's
Termination of Employment, a Stock Appreciation Right shall be exercisable by
the Grantee to the same extent that an Option would be exercisable by an
Optionee upon the Optionee's Termination of Employment under the provisions
of Section 5.5; PROVIDED, HOWEVER, no Stock Appreciation Right may be
exercised after the expiration date specified for the particular Stock
Appreciation Right in the applicable Agreement.

                  8.4  AMOUNT PAYABLE. Subject to Section 8.7, upon the
exercise of a Stock Appreciation Right, the Grantee shall be entitled to
receive an amount determined by multiplying (x) the excess of the Fair Market
Value of a Share on the date preceding the date of exercise of such Stock
Appreciation Right over (A) in the case of a Stock Appreciation Right granted
in connection with an Option, the per Share purchase price under the related
Option, or (B) in the case of a Stock Appreciation Right unrelated to an
Option, the Fair Market Value of a Share on the date the Stock Appreciation
Right was granted, by (y) the number of Shares as to which such Stock
Appreciation Right is being exercised. Notwithstanding the foregoing, the
Committee may limit in any manner the amount payable with respect to any
Stock Appreciation Right by including such a limit in the Agreement
evidencing the Stock Appreciation Right at the time it is granted.

                  8.5  NON-TRANSFERABILITY. No Stock Appreciation Right shall
be transferable by the Grantee to whom it was granted otherwise than by will
or by the laws of descent and distribution or, in the Committee's sole
discretion, (except in the case of a Stock Appreciation Right granted in
connection with an Incentive Stock Option), to a spouse or former spouse in a
transfer described in Section 1041(a) of the Code (a "Code 1041 Transfer"),
and, except with respect to a Stock Appreciation Right transferred pursuant
to a Code 1041 Transfer, such Stock Appreciation Right shall be exercisable
during the lifetime of such Grantee only by the Grantee or his or her
guardian or legal representative. The terms of such Stock Appreciation Right
shall be final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Grantee.

                  8.6  METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercised by a Grantee only by a written notice delivered in person or by
mail to the Secretary of the Company at the Company's principal executive
office, specifying the number of Shares with respect to which the Stock
Appreciation Right is being exercised. If requested by the Committee, the
Grantee shall deliver the Agreement evidencing the Stock Appreciation Right
being exercised and the Agreement evidencing any related Option to

                                       -22-

<PAGE>

the Secretary of the Company who shall endorse thereon a notation of such
exercise and return such Agreement to the Grantee.

                  8.7  FORM OF PAYMENT. Payment of the amount determined
under Section 8.4 may be made in the sole discretion of the Committee solely
in whole Shares in a number determined at their Fair Market Value on the date
preceding the date of exercise of the Stock Appreciation Right, or solely in
cash, or in a combination of cash and Shares. If the Committee decides to
make full payment in Shares and the amount payable results in a fractional
Share, no fractional Shares (or cash in lieu thereof) shall be issued upon
the exercise of the Stock Appreciation Right and the number of Shares that
will be delivered shall be rounded to the nearest number of whole Shares.

                  8.8  MODIFICATION. No modification of an Award shall
adversely alter or impair any rights or obligations under the Agreement
without the Grantee's consent.

                  8.9  EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
contained in this Section 8 to the contrary, in the event of a Change in
Control, the Committee, in its sole discretion, may provide in writing in
connection with, or in contemplation of, any such Change in Control for any
or all of the following alternatives (separately or in any combination): (i)
for the assumption by the Successor Corporation of the Stock Appreciation
Rights theretofore granted or the substitution by such corporation for such
Stock Appreciation Rights of new stock appreciation rights covering the stock
of the Successor Corporation with appropriate adjustments as to the number
and kinds of shares and the purchase prices; (ii) for the continuation of the
Plan in which event the Plan and the Stock Appreciation Rights shall continue
under such terms as may be provided; (iii) for the accelerated vesting of the
Stock Appreciation Rights; or (iv) with respect to a Stock Appreciation Right
unrelated to an Option, for the payment in cash upon the surrender to the
Company for cancellation of any such Stock Appreciation Right or portion of a
Stock Appreciation Right to the extent vested and not yet exercised in an
amount equal to the excess, if any, of (A) the greater of (i) the Fair Market
Value, on the date preceding the date of surrender, of the underlying Shares
subject to the Stock Appreciation Right or portion thereof surrendered and
(ii) the Adjusted Fair Market Value, on the date preceding the date of
surrender, of the Shares over (B) the aggregate Fair Market Value, on the
date the Stock Appreciation Right was granted, of the Shares subject to the
Stock Appreciation Right or portion thereof surrendered. Any vesting of Stock
Appreciation Rights pursuant to this Section 8.9 or surrender of a Stock
Appreciation Right for a cash payment shall be conditioned upon the
consummation of the Change in Control and shall be effective only immediately
before the consummation of the Change in Control. Upon consummation of the
Change in Control, the Plan and all outstanding but unexercised Stock
Appreciation Rights shall terminate, except to the extent provision is made
in writing in connection with such transaction for the continuation of the
Plan, or the assumption or substitution of such Stock Appreciation

                                       -23-

<PAGE>

Rights. The Committee shall send written notice of an event that will result
in such a termination to all individuals who hold Stock Appreciation Rights
not later than the time at which the Company gives notice thereof to its
stockholders.

         9.       DIVIDEND EQUIVALENT RIGHTS.

                  The Committee may in its sole discretion grant Dividend
Equivalent Rights to Eligible Individuals in tandem with an Option or Award
or as a separate Award. The terms and conditions (including, without
limitation, terms and conditions relating to a Change in Control) applicable
to each Dividend Equivalent Right shall be specified in the Agreement under
which the Dividend Equivalent Right is granted. In the sole discretion of the
Committee, amounts payable in respect of Dividend Equivalent Rights may be
payable currently or deferred until the lapsing of restrictions on such
Dividend Equivalent Rights or until the vesting, exercise, payment,
settlement or other lapse of restrictions on the Option or Award to which the
Dividend Equivalent Rights relate. In the event that the amount payable in
respect of Dividend Equivalent Rights are to be deferred, the Committee shall
determine whether such amounts are to be held in cash or reinvested in Shares
or deemed (notionally) to be reinvested in Shares. If amounts payable in
respect of Dividend Equivalent Rights are to be held in cash, there may be
credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its sole discretion, may determine. In the sole discretion of
the Committee, Dividend Equivalent Rights may be settled in cash or Shares or
a combination thereof, in a single installment or multiple installments. With
respect to Dividend Equivalent Rights granted in tandem with an Option, the
Agreement may provide that the Optionee may elect to have amounts payable in
respect of such Dividend Equivalent Rights applied against the purchase price
of such Option. To the extent necessary for any Dividend Equivalent Right
intended to qualify as Performance-Based Compensation under Section 162(m) of
the Code to so qualify, the terms and conditions of the Dividend Equivalent
Right shall be such that payment of the Dividend Equivalent Right is
contingent upon attainment of specified Performance Objectives within the
Performance Cycle, as provided for in Section 11, and such Dividend
Equivalent Right shall be treated as a Performance Award for purposes of
Sections 11 and 16.

         10.      RESTRICTED STOCK.

                  10.1 GRANT. The Committee may in its sole discretion grant
Awards to Eligible Individuals of Restricted Stock, which shall be evidenced
by an Agreement between the Company and the Grantee. Each Agreement shall
contain such restrictions, terms and conditions as the Committee may, in its
sole discretion, determine and (without limiting the generality of the
foregoing) such Agreements may require that an appropriate

                                       -24-

<PAGE>

legend be placed on Share certificates. Awards of Restricted Stock shall be
subject to the terms and provisions set forth below in this Section 10.

                  10.2 RIGHTS OF GRANTEE. Shares of Restricted Stock granted
pursuant to an Award hereunder shall be issued in the name of the Grantee as
soon as reasonably practicable after the Award is granted PROVIDED that the
Grantee has executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the sole discretion of the Committee, an escrow
agreement and any other documents which the Committee may require as a
condition to the issuance of such Shares. If a Grantee shall fail to execute
the Agreement evidencing a Restricted Stock Award, the appropriate blank
stock powers, an escrow agreement or any other documents which the Committee
may require within the time period prescribed by the Committee at the time
the Award is granted, the Award shall be null and void. At the sole
discretion of the Committee, Shares issued in connection with a Restricted
Stock Award shall be deposited together with the stock powers with an escrow
agent (which may be the Company) designated by the Committee. Unless the
Committee determines otherwise and as set forth in the Agreement, upon
delivery of the Shares to the escrow agent, the Grantee shall have all of the
rights of a stockholder with respect to such Shares, including the right to
vote the Shares and to receive all dividends or other distributions paid or
made with respect to the Shares.

                  10.3 NON-TRANSFERABILITY. Until all restrictions upon the
Shares of Restricted Stock awarded to a Grantee shall have lapsed in the
manner set forth in Section 10.4, such Shares shall not be sold, transferred
or otherwise disposed of and shall not be pledged or otherwise hypothecated,
nor shall they be delivered to the Grantee.

                  10.4 LAPSE OF RESTRICTIONS.

                       (a) GENERALLY. Subject to Section 10.4(b),
restrictions upon Shares of Restricted Stock awarded hereunder shall lapse at
such time or times and on such terms and conditions as the Committee may
determine; PROVIDED, HOWEVER, that except in the case of Shares of Restricted
Stock issued in full or partial settlement of another Award or other earned
compensation, such restrictions shall not fully lapse prior to the third
anniversary of the date on which such Shares of Restricted Stock were
granted. The Agreement evidencing the Award shall set forth any such
restrictions.

                       (b) EFFECT OF CHANGE IN CONTROL. Notwithstanding
anything in this Section 10 to the contrary, in the event of a Change in
Control, the Committee, in its sole discretion, may provide in writing in
connection with, or in contemplation of, any such Change in Control for any
or all of the following alternatives (separately or in any combination): (i)
for the assumption by the Successor Corporation of the shares of Restricted
Stock theretofore granted or the substitution by such corporation for such
shares of Restricted Stock of new shares of restricted stock of the Successor
Corporation

                                       -25-

<PAGE>

with appropriate adjustments as to the number and kinds of shares; (ii) for
the continuation of the Plan in which event the Plan and the shares of
Restricted Stock shall continue under such terms as may be provided; or (iii)
for the lapse of all restrictions upon the shares of Restricted Stock. Any
vesting of shares of Restricted Stock pursuant to this Section 10.5(b) shall
be conditioned upon the consummation of the Change in Control and shall be
effective only immediately before the consummation of the Change in Control.

                  10.5 TERMS OF RESTRICTED STOCK.

                       (a) FORFEITURE OF RESTRICTED STOCK. Subject to
Sections  10.4(b), 10.5(b) and 13, all Restricted Stock shall be forfeited
and returned to the Company and all rights of the Grantee with respect to
such Restricted Stock shall terminate unless the Grantee continues in the
service of the Company as an employee or director until the expiration of the
forfeiture period for such Restricted Stock and satisfies any and all other
conditions set forth in the Agreement. The Committee, in its sole discretion,
shall determine the forfeiture period (which may, but need not, lapse in
installments) and any other terms and conditions applicable with respect to
any Restricted Stock Award.

                       (b) WAIVER OF FORFEITURE PERIOD. Notwithstanding
anything contained in this Section 10 to the contrary, the Committee may, in
its sole discretion, waive the forfeiture period and any other conditions set
forth in any Agreement under appropriate circumstances (including, without
limitation, the death, Disability or retirement of the Grantee or a material
change in circumstances arising after the date of grant) and subject to such
terms and conditions (including, without limitation, forfeiture of a
proportionate number of the Restricted Stock) as the Committee shall deem
appropriate, PROVIDED that the Grantee shall at that time have completed at
least one (1) year of employment or service after the date of grant.

                  10.6 MODIFICATION OR SUBSTITUTION. Subject to the terms of
the Plan, including, without limitation, Section 16, the Committee may modify
outstanding Awards of Restricted Stock or accept the surrender of outstanding
shares of Restricted Stock (to the extent the restrictions on such Shares
have not yet lapsed) and grant new Awards in substitution for them.
Notwithstanding the foregoing, no modification of an Award shall adversely
alter or impair any rights or obligations under the Agreement without the
Grantee's consent.

                  10.7 TREATMENT OF DIVIDENDS. At the time an Award of Shares
of Restricted Stock is granted, the Committee may, in its sole discretion,
determine that the payment to the Grantee of dividends, or a specified
portion thereof, declared or paid on such Shares by the Company shall be (a)
deferred until the lapsing of the restrictions imposed upon such Shares and
(b) held by the Company for the account of the Grantee until such time. In
the event that dividends are to be deferred, the Committee shall

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<PAGE>


determine whether such dividends are to be reinvested in Shares (which shall
be held as additional Shares of Restricted Stock) or held in cash. If
deferred dividends are to be held in cash, there may be credited at the end
of each year (or portion thereof) interest on the amount of the account at
the beginning of the year at a rate per annum as the Committee, in its sole
discretion, may determine. Payment of deferred dividends in respect of Shares
of Restricted Stock (whether held in cash or as additional Shares of
Restricted Stock), together with interest accrued thereon, if any, shall be
made upon the lapsing of restrictions imposed on the Shares in respect of
which the deferred dividends were paid, and any dividends deferred (together
with any interest accrued thereon) in respect of any Shares of Restricted
Stock shall be forfeited upon the forfeiture of such Shares.

                  10.8 DELIVERY OF SHARES. Upon the lapse of the restrictions
on Shares of Restricted Stock, the Committee shall cause a stock certificate
to be delivered to the Grantee with respect to such Shares, free of all
restrictions hereunder.

         11.      PERFORMANCE AWARDS.

                  11.1 PERFORMANCE OBJECTIVES

                       (a) ESTABLISHMENT. Performance Objectives for
Performance Awards may be expressed in terms of (i) earnings per Share, (ii)
Share price, (iii) pre-tax profits, (iv) net earnings, (v) return on equity
or assets, (vi) revenues, (vii) EBITDA (earnings before interest, taxes,
depreciation and amortization), (viii) market share, or market penetration,
(ix) any combination of the foregoing or (x) prior to the end of the
Transition Period, such other criteria as the Committee may determine, and
may be determined before or after accounting changes, special charges,
foreign currency effects, acquisitions, divestitures, or other extraordinary
events as determined by the Committee. Performance Objectives may be in
respect of the performance of the Company, any of its Subsidiaries, any of
its Divisions or any combination thereof. Performance Objectives may be
absolute or relative (to prior performance of the Company or to the
performance of one or more other entities or external indices) and may be
expressed in terms of a progression within a specified range. The Performance
Objectives with respect to a Performance Cycle shall be established in
writing by the Committee by the earlier of (x) the date on which a quarter of
the Performance Cycle has elapsed or (y) the date which is ninety (90) days
after the commencement of the Performance Cycle, and in any event while the
performance relating to the Performance Objectives remains substantially
uncertain.

                       (b) EFFECT OF CERTAIN EVENTS. At the time of the
granting of a Performance Award, or at any time thereafter, in either case to
the extent permitted under Section 162(m) of the Code and the regulations
thereunder without adversely affecting the treatment of the Performance Award
as Performance-Based Compensation, the Committee may provide for the manner
in which performance will be measured against

                                       -27-

<PAGE>

the Performance Objectives (or may adjust the Performance Objectives) to
reflect the impact of specified corporate transactions, accounting or tax law
changes and other extraordinary or nonrecurring events.

                       (c) DETERMINATION OF PERFORMANCE. Prior to the
vesting, payment, settlement or lapsing of any restrictions with respect to
any Performance Award that is intended to constitute Performance-Based
Compensation made to a Grantee who is subject to Section 162(m) of the Code,
the Committee shall certify in writing that the applicable Performance
Objectives have been satisfied.

                  11.2 PERFORMANCE UNITS. The Committee, in its sole
discretion, may grant Awards of Performance Units to Eligible Individuals,
the terms and conditions of which shall be set forth in an Agreement between
the Company and the Grantee. Performance Units may be denominated in Shares
or a specified dollar amount and, contingent upon the attainment of specified
Performance Objectives within the Performance Cycle, represent the right to
receive payment as provided in Section 11.2(b) of (i) in the case of
Share-denominated Performance Units, the Fair Market Value of a Share on the
date the Performance Unit was granted, the date the Performance Unit became
vested or any other date specified by the Committee, (ii) in the case of
dollar-denominated Performance Units, the specified dollar amount or (iii) a
percentage (which may be more than 100%) of the amount described in clause
(i) or (ii) depending on the level of Performance Objective attainment;
PROVIDED, HOWEVER, that, the Committee may at the time a Performance Unit is
granted specify a maximum amount payable in respect of a vested Performance
Unit. Each Agreement shall specify the number of Performance Units to which
it relates, the Performance Objectives which must be satisfied in order for
the Performance Units to vest and the Performance Cycle within which such
Performance Objectives must be satisfied.

                       (a) VESTING AND FORFEITURE.  Subject to Sections
11.1(c) and 11.4, Performance Units shall become vested in such installments
(which need not be equal) and at such times or times and on such terms,
conditions and satisfaction of Performance Objectives as the Committee may,
in its sole discretion, determine at the time an Award is granted.

                       (b) PAYMENT OF AWARDS.  Subject to Section 11.1(c),
payment to Grantees in respect of vested Performance Units shall be made as
soon as practicable after the last day of the Performance Cycle to which such
Award relates unless the Agreement evidencing the Award provides for the
deferral of payment, in which event the terms and conditions of the deferral
shall be set forth in the Agreement. Subject to Section 11.4, such payments
may be made entirely in Shares valued at their Fair Market Value as of the
day preceding the date of payment or such other date specified by the
Committee, entirely in cash, or in such combination of Shares and cash as the
Committee in its sole discretion shall determine at any time prior to such
payment; PROVIDED,

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<PAGE>

HOWEVER, that if the Committee in its sole discretion determines to make such
payment entirely or partially in Shares of Restricted Stock, the Committee
must determine the extent to which such payment will be in Shares of
Restricted Stock and the terms of such Restricted Stock at the time the Award
is granted.

                       (c) NON-TRANSFERABILITY. Until the vesting of
Performance Units, such Performance Units shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated.

                  11.3 PERFORMANCE SHARES. The Committee, in its sole
discretion, may grant Awards of Performance Shares to Eligible Individuals,
the terms and conditions of which shall be set forth in an Agreement between
the Company and the Grantee. Each Agreement may require that an appropriate
legend be placed on Share certificates. Awards of Performance Shares shall be
subject to the following terms and provisions:

                       (a) RIGHTS OF GRANTEE.  The Committee shall provide
at the time an Award of Performance Shares is made the time or times at which
the actual Shares represented by such Award shall be issued in the name of
the Grantee; PROVIDED, HOWEVER, that no Performance Shares shall be issued
until the Grantee has executed an Agreement evidencing the Award, the
appropriate blank stock powers and, in the sole discretion of the Committee,
an escrow agreement and any other documents which the Committee may require
as a condition to the issuance of such Performance Shares. If a Grantee shall
fail to execute the Agreement evidencing an Award of Performance Shares, the
appropriate blank stock powers, an escrow agreement and any other documents
which the Committee may require within the time period prescribed by the
Committee at the time the Award is granted, the Award shall be null and void.
At the sole discretion of the Committee, Shares issued in connection with an
Award of Performance Shares shall be deposited together with the stock powers
with an escrow agent (which may be the Company) designated by the Committee.
Except as restricted by the terms of the Agreement, upon delivery of the
Shares to the escrow agent, the Grantee shall have, in the sole discretion of
the Committee, all of the rights of a stockholder with respect to such
Shares, including the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.

                       (b) NON-TRANSFERABILITY. Until any restrictions upon
the Performance Shares awarded to a Grantee shall have lapsed in the manner
set forth in Sections 11.3(c) or 11.4, such Performance Shares shall not be
sold, transferred or otherwise disposed of and shall not be pledged or
otherwise hypothecated, nor shall they be delivered to the Grantee. The
Committee may also impose such other restrictions and conditions on the
Performance Shares, if any, as it deems appropriate.

                       (c) LAPSE OF RESTRICTIONS. Subject to Sections
11.1(c) and 11.4, restrictions upon Performance Shares awarded hereunder
shall lapse and such

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<PAGE>

Performance Shares shall become vested at such time or times and on such
terms, conditions and satisfaction of Performance Objectives as the Committee
may, in its sole discretion, determine at the time an Award is granted.

                       (d) TREATMENT OF DIVIDENDS. At the time the Award of
Performance Shares is granted, the Committee may, in its sole discretion,
determine that the payment to the Grantee of dividends, or a specified
portion thereof, declared or paid on Shares represented by such Award which
have been issued by the Company to the Grantee shall be (i) deferred until
the lapsing of the restrictions imposed upon such Performance Shares and (ii)
held by the Company for the account of the Grantee until such time. In the
event that dividends are to be deferred, the Committee shall determine
whether such dividends are to be reinvested in Shares (which shall be held as
additional Performance Shares) or held in cash. If deferred dividends are to
be held in cash, there may be credited at the end of each year (or portion
thereof) interest on the amount of the account at the beginning of the year
at a rate per annum as the Committee, in its sole discretion, may determine.
Payment of deferred dividends in respect of Performance Shares (whether held
in cash or in additional Performance Shares), together with interest accrued
thereon, if any, shall be made upon the lapsing of restrictions imposed on
the Performance Shares in respect of which the deferred dividends were paid,
and any dividends deferred (together with any interest accrued thereon) in
respect of any Performance Shares shall be forfeited upon the forfeiture of
such Performance Shares.

                       (e) DELIVERY OF SHARES. Upon the lapse of the
restrictions on Performance Shares awarded hereunder, the Committee shall
cause a stock certificate to be delivered to the Grantee with respect to such
Shares, free of all restrictions hereunder.

                  11.4 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
in this Section 11 to the contrary, in the event of a Change in Control, the
Committee, in its sole discretion, may provide in writing in connection with,
or in contemplation of, any such Change in Control for any or all of the
following alternatives (separately or in any combination): (i) for the
assumption by the Successor Corporation of the Performance Awards theretofore
granted or the substitution by such corporation for such Performance Awards
of new performance awards of the Successor Corporation with appropriate
adjustments as to the applicable performance objectives and, if necessary,
the number and kinds of shares; (ii) for the continuation of the Plan in
which event the Plan and the Performance Awards shall continue under such
terms as may be provided; or (iii) for the vesting of outstanding Performance
Awards as if all Performance Objectives had been satisfied at the maximum
level and, in the case of Performance Units which become vested as a result
of a Change in Control, for a payment which may be made entirely in Shares
valued at their Fair Market Value as of the day preceding the payment,
entirely in cash, or in such combination of Shares and cash as the Committee
shall determine in its sole discretion at any time prior to such payment;
provided that such payment shall be

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<PAGE>

made within ten (10) business days after such Change in Control. Any vesting
of Performance Awards pursuant to this Section 11.4 shall be conditioned upon
the consummation of the Change in Control and shall be effective only
immediately before the consummation of the Change in Control.

                  11.5 TERMINATION. Except as provided in Section 13, and
unless otherwise provided by the Committee, in its sole discretion, in the
applicable Agreement, the following provisions shall apply to Performance
Awards upon a Termination of Employment:

                       (a) TERMINATION OF EMPLOYMENT PRIOR TO END OF
PERFORMANCE CYCLE. Except as provided in Sections 11.5(b) and (d), in the
case of a Grantee's Termination of Employment, prior to the end of a
Performance Cycle, the Grantee will not be entitled to any Performance
Awards, and any Performance Shares shall be forfeited.

                       (b) DISABILITY, RETIREMENT OR DEATH PRIOR TO END  OF
PERFORMANCE CYCLE. Unless otherwise provided by the Committee, in its sole
discretion, in the Agreement, if a Grantee's Disability Date or Termination
of Employment by reason of retirement on or after the Grantee's Normal
Retirement Date or death occurs following at least twelve (12) months of
participation in any Performance Cycle, but prior to the end of a Performance
Cycle, the Grantee or such Grantee's Beneficiary, as the case may be, shall
be entitled to receive a pro-rata share of his or her Performance Award as
determined under Subsection (c).

                       (c) PRO-RATA PAYMENT.

                           (i) PERFORMANCE UNITS. With respect to
Performance Units,the amount of any payment made to a Grantee (or
Beneficiary) under circumstances described in Section 11.5(b) will be the
amount determined by multiplying the amount of the Performance Units payable
in Shares or dollars which would have been earned, determined at the end of
the Performance Cycle, had such employment not been terminated, by a
fraction, the numerator of which is the number of whole months such Grantee
was employed during the Performance Cycle, and the denominator of which is
the total number of months of the Performance Cycle. Any such payment shall
be made as soon as practicable after the end of the respective Performance
Cycle, and shall relate to attainment of Performance Objectives over the
entire Performance Cycle.

                           (ii) PERFORMANCE SHARES. With respect to
Performance Shares, the amount of Performance Shares held by a Grantee (or
Beneficiary) with respect to which restrictions shall lapse under
circumstances described in Section 11.5(b) will be the amount determined by
multiplying the amount of the Performance Shares with respect to which
restrictions would have lapsed, determined at the end of the Performance
Cycle,

                                       -31-

<PAGE>

had such employment not been terminated, by a fraction, the numerator of
which is the number of whole months such Grantee was employed during the
Performance Cycle, and the denominator of which is the total number of months
of the Performance Cycle. The Committee shall determine the amount of
Performance Shares with respect to which restrictions shall lapse under this
Section 11.5(c)(ii) as soon as practicable after the end of the respective
Performance Cycle, and such determination shall relate to attainment of
Performance Objectives over the entire Performance Cycle. At that time, all
Performance Shares relating to that Performance Cycle with respect to which
restrictions shall not lapse shall be forfeited.

                       (d) OTHER EVENTS. Notwithstanding anything to the
contrary in this Section 11, the Committee may, in its sole discretion,
determine to pay all or any portion of a Performance Award to a Grantee who
has a Termination of Employment prior to the end of a Performance Cycle under
certain circumstances (including, without limitation, a material change in
circumstances arising after the date of grant) and subject to such terms and
conditions as the Committee shall deem appropriate, provided that the Grantee
shall have completed at his or her date of Termination of Employment at least
one (1) year of employment after the date of grant.

                       (e) TERMINATION OF EMPLOYMENT AFTER END OF
PERFORMANCE CYCLE. Subject to Section 11.5(f), in the case of a Grantee's
Termination of Employment after the end of a Performance Cycle in which the
applicable Performance Objectives have been satisfied, the Grantee shall not
be entitled to any Performance Awards that have not yet vested as of the date
of the Grantee's Termination of Employment.

                       (f) WAIVER OF FORFEITURE. Notwithstanding anything to
the contrary in Section 11(e), in the case of a Grantee's Termination of
Employment after the end of a Performance Cycle in which the applicable
Performance Objectives have been satisfied, the Committee may, in its sole
discretion, waive the forfeiture of Performance Awards and any other
conditions set forth in any Agreement under appropriate circumstances
(including, without limitation, the death, Disability, or retirement of the
Grantee or a material change in circumstances arising after the date of
grant) and subject to such terms and conditions as the Committee shall deem
appropriate.

                  11.6 MODIFICATION OR SUBSTITUTION. Subject to the terms of
the Plan, including, without limitation, Section 16, the Committee may modify
outstanding Performance Awards or accept the surrender of outstanding
Performance Awards and grant new Performance Awards in substitution for them.
Notwithstanding the foregoing, no modification of a Performance Award shall
adversely alter or impair any rights or obligations under the Agreement
without the Grantee's consent.

         12.      OTHER SHARE BASED AWARDS.

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<PAGE>

                  12.1 SHARE AWARDS. The Committee may, in its sole
discretion, grant a Share Award to any Eligible Individual on such terms and
conditions as the Committee may, in its sole discretion, determine. Share
Awards may be made as additional compensation for services rendered by the
Eligible Individual or may be in lieu of cash or other compensation to which
the Eligible Individual is entitled from the Company.

                  12.2 PHANTOM STOCK AWARDS.

                       (a) GRANT. The Committee may, in its sole discretion,
grant shares of Phantom Stock to any Eligible Individual. Such Phantom Stock
shall be subject to the terms and conditions established by the Committee and
set forth in the applicable Agreement.

                       (b) PAYMENT OF AWARDS. Upon the vesting of a Phantom
Stock Award, the Grantee shall be entitled to receive a cash payment in
respect of each share of Phantom Stock which shall be equal to the Fair
Market Value of a Share as of the date the Phantom Stock Award was granted,
or such other date as determined by the Committee at the time the Phantom
Stock Award was granted. The Committee may, at the time a Phantom Stock Award
is granted, provide a limitation on the amount payable in respect of each
share of Phantom Stock. In lieu of a cash payment, the Committee may settle
Phantom Stock Awards with Shares having a Fair Market Value on the date of
vesting equal to the cash payment to which the Grantee has become entitled.

         13.      EMPLOYMENT AGREEMENT GOVERNS TERMINATION OF EMPLOYMENT. An
employment agreement, if applicable, between an Optionee or Grantee and the
Company shall govern with respect to the terms and conditions applicable to
such Option or Award upon a termination or change in the status of the
employment of the Optionee or Grantee, to the extent that such employment
agreement provides for terms and conditions that differ from the terms and
conditions provided for in the applicable Agreement or the Plan; PROVIDED,
HOWEVER, that to the extent necessary for an Option or Award intended to
qualify as performance-based compensation under Section 162(m) of the Code to
so qualify, the terms of the applicable Agreement or the Plan shall govern
the Option or Award; and, PROVIDED FURTHER, that the Committee shall have
reviewed and, in its sole discretion, approved the employment agreement.

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<PAGE>

         14.      ADJUSTMENT UPON CHANGES IN CAPITALIZATION.

                  (a) In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate adjustments, if any,
to (i) the maximum number and class of Shares or other stock or securities
with respect to which Options or Awards may be granted under the Plan, (ii)
the maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted to any Eligible Individual
during any calendar year period, (iii) the number and class of Shares or
other stock or securities which are subject to outstanding Options or Awards
granted under the Plan and the purchase price therefor, if applicable, (iv)
the number and class of Shares or other securities in respect of which
Formula Options are to be granted under Section 6 and (v) the Performance
Objectives.

                  (b) Any such adjustment in the Shares or other stock or
securities subject to outstanding Incentive Stock Options (including any
adjustments in the purchase price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and
only to the extent otherwise permitted by Sections 422 and 424 of the Code
and, to the extent necessary for any Option or Award intended to qualify as
Performance-Based Compensation to continue to so qualify, any such adjustment
in the Shares or other stock or securities subject to such Options and Awards
shall be made in such manner as to comply with Section 162(m) of the Code and
the regulations promulgated thereunder.

                  (c) If, by reason of a Change in Capitalization, a Grantee
of an Award shall be entitled to, or an Optionee shall be entitled to
exercise an Option with respect to, new, additional or different shares of
stock or securities of the Company or any other corporation, such new,
additional or different shares shall thereupon be subject to all of the
conditions, restrictions and performance criteria which were applicable to
the Shares subject to the Award or Option, as the case may be, prior to such
Change in Capitalization.

         15.      EFFECT OF CERTAIN TRANSACTIONS. Subject to Sections 7.5,
8.9, 10.4(b) and 11.4 or as otherwise provided in an Agreement, in the event
of (a) the liquidation or dissolution of the Company or (b) a merger or
consolidation of the Company (a "Transaction"), the Plan and the Options and
Awards issued hereunder shall continue in effect in accordance with their
respective terms, except that following a Transaction each Optionee and
Grantee shall be entitled to receive in respect of each Share subject to any
outstanding Options or Awards, as the case may be, upon exercise of any
Option or payment or transfer in respect of any Award, the same number and
kind of stock, securities, cash, property or other consideration that each
holder of a Share was entitled to receive in the Transaction in respect of a
Share; PROVIDED, HOWEVER, that such stock, securities, cash, property, or
other consideration shall remain subject to all of the

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<PAGE>

conditions, restrictions and performance criteria which were applicable to
the Options and Awards prior to such Transaction.

         16.      INTERPRETATION. Following the required registration of any
equity security of the Company pursuant to Section 12 of the Exchange Act,
unless otherwise expressly stated in the relevant Agreement, each Option,
Stock Appreciation Right and Performance Award granted under the Plan to a
"covered employee" within the meaning of Section 162(m)(3) of the Code is
intended to be Performance-Based Compensation (except that, in the event of a
Change in Control, payment of Performance Awards to a Grantee who remains a
"covered employee" with respect to such payment may not qualify as
Performance-Based Compensation). The Committee shall not be entitled to
exercise any discretion otherwise authorized hereunder with respect to such
Options or Awards if the ability to exercise such discretion or the exercise
of such discretion itself would cause the compensation attributable to such
Options or Awards to fail to qualify as Performance-Based Compensation.
Notwithstanding anything to the contrary in the Plan, the provisions of the
Plan may at any time be bifurcated by the Board or the Committee in any
manner so that certain provisions of the Plan or any Performance Award
intended (or required in order) to satisfy the applicable requirements of
Section 162(m) of the Code are only applicable to persons whose compensation
is subject to Section 162(m).

         17.      POOLING TRANSACTIONS. Notwithstanding anything contained in
the Plan or any Agreement to the contrary, in the event of a Change in
Control which is also intended to constitute a Pooling Transaction, the
Committee shall take such actions, if any, as are specifically recommended by
an independent accounting firm retained by the Company to the extent
reasonably necessary in order to assure that the Pooling Transaction will
qualify as such, including, without limitation, (a) deferring the vesting,
exercise, payment, settlement or lapsing of restrictions with respect to any
Option or Award, (b) providing that the payment or settlement in respect of
any Option or Award be made in the form of cash, Shares or securities of a
successor or acquirer of the Company, or a combination of the foregoing, and
(c) providing for the extension of the term of any Option or Award to the
extent necessary to accommodate the foregoing, but not beyond the maximum
term permitted for any Option or Award.

         18.      EFFECTIVE DATE, TERMINATION AND AMENDMENT OF THE PLAN.

                  18.1 EFFECTIVE DATE. The effective date of this Plan shall
be the date the Plan is adopted by the Board, subject only to the approval of
the affirmative vote of the holders of a majority of the securities of the
Company present, or represented, and entitled to vote at a meeting of the
stockholders duly held in accordance with the applicable laws of the State of
Delaware within twelve (12) months of the adoption of the Plan by the Board.

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                  18.2 PLAN AMENDMENT OR TERMINATION. The Plan shall
terminate on the day preceding the tenth anniversary of the date of its
adoption by the Board and no Option or Award may be granted thereafter. The
Board may sooner terminate the Plan and the Board may at any time and from
time to time amend, modify or suspend the Plan; PROVIDED, HOWEVER, that:

                       (a) no such amendment, modification, suspension or
termination shall impair or adversely alter any Options or Awards theretofore
granted under the Plan, except with the consent of the Optionee or Grantee,
nor shall any amendment, modification, suspension or termination deprive any
Optionee or Grantee of any Shares which he or she may have acquired through
or as a result of the Plan; and

                       (b) to the extent necessary under any applicable law,
regulation or exchange requirement no amendment shall be effective unless
approved by the stockholders of the Company in accordance with applicable
law, regulation or exchange requirement.

         19.      NON-EXCLUSIVITY OF THE PLAN. The adoption of the Plan by
the Board shall not be construed as amending, modifying or rescinding any
previously approved incentive arrangement or as creating any limitations on
the power of the Board to adopt such other incentive arrangements as it may
deem desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.

         20.      LIMITATION OF LIABILITY. As illustrative of the limitations
of liability of the Company, but not intended to be exhaustive thereof,
nothing in the Plan shall be construed to:

                  (a) give any person any right to be granted an Option or
Award other than at the sole discretion of the Committee;

                  (b) give any person any rights whatsoever with respect to
Shares except as specifically provided in the Plan;

                  (c) limit in any way the right of the Company or any
Subsidiary to terminate the employment of any person at any time; or

                  (d) be evidence of any agreement or understanding,
expressed or implied, that the Company will employ any person at any
particular rate of compensation or for any particular period of time.

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<PAGE>

         21.      REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.

                  21.1 Except as to matters of federal law, the Plan and the
rights of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of Delaware without giving effect to
conflicts of laws principles thereof.

                  21.2 The obligation of the Company to sell or deliver
Shares with respect to Options and Awards granted under the Plan shall be
subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate
by the Committee.

                  21.3 The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock
Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.

                  21.4 Each Option and Award is subject to the requirement
that, if at any time the Committee determines, in its sole discretion, that
the listing, registration or qualification of Shares issuable pursuant to the
Plan is required by any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the grant of
an Option or Award or the issuance of Shares, no Options or Awards shall be
granted or payment made or Shares issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected
or obtained free of any conditions as acceptable to the Committee.

                  21.5 Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition of Shares
acquired pursuant to the Plan is not covered by a then current registration
statement under the Securities Act of 1933, as amended (the "Securities
Act"), and is not otherwise exempt from such registration, such Shares shall
be restricted against transfer to the extent required by the Securities Act
and Rule 144 or other regulations thereunder. The Company may place on any
certificate representing any such Shares any legend deemed desirable by the
Company's counsel to comply with federal or state securities laws and the
Committee may require any individual receiving Shares pursuant to an Option
or Award granted under the Plan, as a condition precedent to receipt of such
Shares, to represent and warrant to the Company in writing that the Shares
acquired by such individual are acquired without a view to any distribution
thereof and will not be sold or transferred other than pursuant to an
effective registration thereof under said Act or pursuant to an exemption
applicable under the Securities Act or the rules and regulations promulgated
thereunder.

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<PAGE>

         22.      MISCELLANEOUS.

                  22.1 MULTIPLE AGREEMENTS. The terms of each Option or Award
may differ from other Options or Awards granted under the Plan at the same
time, or at some other time. The Committee may also grant more than one
Option or Award to a given Eligible Individual during the term of the Plan,
either in addition to, or in substitution for, one or more Options or Awards
previously granted to that Eligible Individual.

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

                  22.3 SEVERABILITY. Whenever possible, each provision of the
Plan or an Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of the Plan or an
Agreement shall be held by a court of competent jurisdiction to be prohibited
by or invalid or unenforceable under applicable law, then (a) such provision
shall be deemed to be amended to accomplish the objectives of the provision
as originally written to the fullest extent permitted by law and (b) all
other provisions of the Plan or an Agreement shall remain in full force and
effect.

                  22.4 WITHHOLDING OF TAXES.

                       (a) At such times as an Optionee or Grantee recognizes
taxable income in connection with the receipt of Shares or cash hereunder (a
"Taxable Event"), the Optionee or Grantee shall pay to the Company an amount
equal to the federal, state and local income taxes and other amounts as may
be required by law to be withheld by the Company in connection with the
Taxable Event (the "Withholding Taxes") prior to the issuance, or release
from escrow, of such Shares or the payment of such cash. The Company shall
have the right to deduct from any payment of cash to an Optionee or Grantee
an amount equal to the Withholding Taxes in satisfaction of the obligation to
pay Withholding Taxes. In satisfaction of the obligation to pay Withholding
Taxes to the Company, the Optionee or Grantee may make a written election
(the "Tax Election"), which may be accepted or rejected in the sole
discretion of the Committee, to have withheld a portion of the Shares then
issuable to him or her having an aggregate Fair Market Value, on the date
preceding the date of such issuance, equal to the Withholding Taxes.

                       (b) If an Optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated thereunder,
of any Share or Shares issued to such Optionee pursuant to the exercise of an
Incentive Stock Option within the two-year period commencing on the day after
the date of the grant or within the one-year period commencing on the day
after the date of transfer of such Share or Shares to the Optionee pursuant
to such exercise, the Optionee shall, within ten (10) days of such

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<PAGE>

disposition, notify the Company thereof, by delivery of written notice to the
Company at its principal executive office.

                  22.5 POST-TRANSITION PERIOD. Any Option or Award granted under
the Plan after the expiration of the Transition Period which is intended to be
Performance-Based Compensation shall be subject to the approval of the material
terms of the Plan by a majority of the stockholders of the Company in accordance
with Section 162(m) of the Code and the regulations promulgated thereunder.


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