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                                      10.67

                          THE SPORTS CLUB COMPANY, INC.
                            2001 STOCK INCENTIVE PLAN





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                          THE SPORTS CLUB COMPANY, INC.
                            2001 STOCK INCENTIVE PLAN

                                    ARTICLE 1
                             GENERAL PURPOSE OF PLAN

        The name of this plan is The Sports Club Company, Inc. 2001 Stock
Incentive Plan (the "Plan"). The purpose of the Plan is to enable The Sports
Club Company, Inc. (the "Company") and any Parent or any Subsidiary to obtain
and retain the services of the types of employees, consultants, officers and
directors who will contribute to the Company's long range success and to provide
incentives which are linked directly to increases in share value which will
inure to the benefit of all shareholders of the Company.

                                    ARTICLE 2
                                   DEFINITIONS

        For purposes of the Plan, the following terms shall be defined as set
forth below:

        "Administrator" shall have the meaning set forth in Article 3.1(a).

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

        "Cash Election" has the meaning set forth in Section 7.2(c)(v).

        "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.

        "Committee" means a committee of at least two Directors appointed by the
Board to administer the Plan.

        "Company" means The Sports Club Company, Inc., a corporation organized
under the laws of the State of Delaware (or any successor corporation).

        "Date of Grant" means the date on which the Administrator adopts a
resolution expressly granting a Right to a Participant.

        "Director" means a member of the Board.

        "Disability" means permanent and total disability as defined by the
Administrator.

        "Election" shall have the meaning set forth in Section 11.3(c)(i).

        "Eligible Person" shall have the meaning set forth in Article 5.



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

        "Exercise Price" shall have the meaning set forth in Section 6.2(c).

        "Fair Market Value" per share at any date shall mean (i) if the Stock is
listed on an exchange or exchanges, or admitted for trading in the Nasdaq
National Market ("National Market"), the last reported sales price per share on
the last business day prior to such date on the principal exchange on which it
is traded, or on the National Market, as applicable, or if no sale was made on
such day on such principal exchange or on the National Market, as applicable,
the last reported sales price per share on the most recent day prior to such
date on which a sale was reported on such exchange or the National Market, as
applicable; or (ii) if the Stock is not then traded on an exchange or on the
National Market, the average of the closing bid and asked prices per share for
the Stock in the over-the-counter market as quoted on NASDAQ on the day prior to
such date; or (iii) if the Stock is not listed on an exchange or quoted on
NASDAQ, an amount determined in good faith by the Administrator. In determining
the last reported sales price or the closing bid and asked prices, the
Administrator shall refer to The Wall Street Journal or such other source as the
Administrator deems reliable.

        "Grantee" means an Eligible Participant who is granted a SAR pursuant to
the Plan.

        "Incentive Stock Option" means a Stock Option intended to qualify as an
"incentive stock option" as that term is defined in Section 422 of the Code.

        "Initial Valuation" shall have the meaning set forth in Section 7.2(b).

        "Liquidating Event" shall have the meaning set forth in Section 9.1(b).

        "Non-Qualified Stock Option" means a Stock Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable written
Stock Option agreement.

        "Offeree" means an Eligible Participant who is granted a Purchase Right
pursuant to the Plan.

        "Optionee" means an Eligible Participant who is granted a Stock Option
pursuant to the Plan.

        "Parent" means any present or future corporation which would be a
"parent corporation" as that term is defined in Section 424(e) of the Code, or
any successor provision.

        "Participant" means any Eligible Person selected by the Administrator,
pursuant to the Administrator's authority in Article 3, to receive grants of
Rights.



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        "Plan" means The Sports Club Company, Inc. 2001 Stock Incentive Plan, as
the same may be amended or supplemented from time to time.

        "Purchase Price" shall have the meaning set forth in Section 8.2(b).

        "Purchase Right" means the right to purchase Stock granted pursuant to
Article 8.

        "Related SAR Option" shall have the meaning set forth in Section 7.1.

        "Rights" means Stock Options, Purchase Rights and/or SARs, as
applicable, granted to Participants.

        "Retirement" means retirement from active employment with the Company or
any Parent or Subsidiary as defined by the Administrator.

        "SAR" means a stock appreciation right granted alone or in tandem with a
Stock Option pursuant to Article 7.

        "Special Terminating Event" with respect to a Participant shall mean the
death, Disability or Retirement of that Participant.

        "Spread" shall have the meaning set forth in Section 7.2(c)(iv).

        "Stock" means the Common Stock, par value $.01 per share, of the
Company.

        "Stock Exchange" means any stock exchange or consolidated stock price
reporting system on which prices for the Stock are quoted at any given time.

        "Stock Option" means any option to purchase shares of Stock granted
pursuant to Article 6.

        "Subsidiary" means any present or future corporation which would be a
"subsidiary corporation" as that term is defined in Section 424(f) of the Code,
or any successor provision.

        "Tax Date" shall have the meaning set forth in Section 11.3(c)(iv).

        "Ten Percent Shareholder" means a person who on the Date of Grant owns,
either directly or through attribution as provided in Section 424(d) of the
Code, Stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of his or her employer corporation or of any
Parent or Subsidiary.

        "Withholding Right" has the meaning set forth in Section 11.3(b).



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                                    ARTICLE 3
                                 ADMINISTRATION

        SECTION 3.1 The Administrator.

               (a) Administrator. The Plan shall be administered by either (i)
        the Board; or (ii) the Committee (the group that administers the Plan is
        referred to as the "Administrator").

               (b) Powers in General. Subject to the provisions of the Plan and
        in the case of a Committee, the specific duties delegated by the Board,
        and subject to the approval of any relevant authorities, including the
        approval, if required, of any Stock Exchange, the Administrator shall
        have the power and authority in its discretion to grant to Eligible
        Persons: (i) Stock Options; (ii) SARs; (iii) Purchase Rights; or (iv)
        any combination of the foregoing.

               (c) Specific Powers. In particular, the Administrator shall have
        the authority: (i) to construe and interpret the Plan and Rights granted
        thereunder and to apply the Plan's provisions; (ii) to promulgate, amend
        and rescind rules and regulations relating to the administration of the
        Plan; (iii) to authorize any person to execute, on behalf of the
        Company, any instrument required to carry out the purposes of the Plan;
        (iv) to determine, subject to the limitations set forth in the Plan,
        when Rights are to be granted under the Plan; (v) from time to time to
        select, subject to the limitations set forth in this Plan, those
        Eligible Participants to whom Rights shall be granted; (vi) to determine
        the number of shares of Stock to be made subject to each Right; (vii) to
        prescribe the terms and conditions of each Stock Option, including,
        without limitation, the exercise price and medium of payment, to
        determine whether the Stock Option is to be an Incentive Stock Option or
        a Non-Qualified Stock Option and to specify the provisions of the Stock
        Option agreement relating to such Stock Option including, without
        limitation, vesting provisions; (viii) to prescribe the terms and
        conditions of each SAR, including, without limitation, to determine
        whether such SAR is to be granted alone or in tandem with Stock Options
        during the term of the Related SAR Option and to specify the provisions
        of the SAR agreement relating to such SAR including, without limitation,
        vesting provisions; (ix) to prescribe the terms and conditions of each
        Purchase Right, including, without limitation, the purchase price and
        medium of payment, vesting provisions and repurchase provisions, and to
        specify the provisions of the Stock purchase agreement relating to such
        sale; (x) to amend any outstanding Rights for the purpose of modifying
        the Exercise Price, Initial Valuation or Purchase Price, as the case may
        be, thereunder or otherwise, subject to applicable legal restrictions
        and to the consent of the other party to such agreement; (xi) to
        determine when a consultant's relationship with the Company is
        sufficient to constitute employment with the Company for purposes of the
        Plan; (xii) to determine the duration and purpose of leaves of absences
        which may be granted to a Participant without constituting termination
        of their employment for purposes of the Plan; and (xiii) to make any and
        all other




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        determinations which it determines to be necessary or advisable for
        administration of the Plan.

               (d) Decisions Final. All decisions made by the Administrator
        pursuant to the provisions of the Plan shall be final and binding on the
        Company and the Participants.

               (e) The Committee. The Board may, in its sole and absolute
        discretion, from time to time delegate any or all of its duties and
        authority with respect to the Plan to a Committee of not less than two
        Directors to be appointed by and to serve at the pleasure of the Board.
        Once appointed, the Committee shall continue to serve until otherwise
        directed by the Board. From time to time, the Board may increase or
        decrease (to not less than two members) the size of the Committee, add
        additional members to, remove members (with or without cause) from,
        appoint new members in substitution therefor, and fill vacancies,
        however caused, in the Committee. The Committee shall act pursuant to a
        vote of the majority of its members or, in the case of a Committee
        comprised of two Directors, the unanimous vote of its members, whether
        present or not, or by the written consent of the majority of its members
        or, in the case of a Committee comprised of two Directors, the unanimous
        vote of its members, and minutes shall be kept of all of its meetings
        and copies thereof shall be provided to the Board. Subject to the
        limitations prescribed by the Plan and the Board, the Committee may
        establish and follow such rules and regulations for the conduct of its
        business as it may determine to be advisable.

                                    ARTICLE 4
                              STOCK SUBJECT TO PLAN

        SECTION 4.1 Stock Subject to the Plan.

        Subject to adjustment as provided in Article 9, the total number of
shares of Stock reserved and available for issuance under the Plan shall be
4,300,000 shares. Solely for purposes of determining the number of shares of
Stock reserved and available for issuance under the Plan, each SAR granted
without relation to a Stock Option shall be treated as a Stock Option. Shares
reserved hereunder may consist, in whole or in part, of authorized and unissued
shares or treasury shares.

        SECTION 4.2 Unexercised Rights.

        To the extent that any Rights expire or are otherwise terminated without
being exercised, the shares underlying such Rights (and shares related thereto)
shall again be available for issuance upon exercise of future Rights granted
under the Plan. Shares acquired by the Company upon exercise of Rights pursuant
to Sections 6.2(e), 8.2(c) or 11.3 hereof shall not increase the shares
available for issuance under the Plan.



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                                    ARTICLE 5
                                   ELIGIBILITY

        Officers, employees, consultants and Directors of the Company, any
Parent or any Subsidiary, other than the Administrator, who are responsible for
or contribute to the management, growth or profitability of the business of the
Company, any Parent or any Subsidiary shall be eligible to be granted Rights
hereunder subject to limitations set forth in this Plan (each, an "Eligible
Person"). The Participants under the Plan shall be selected from time to time by
the Administrator, in its sole discretion, from among those Eligible Persons.

                                    ARTICLE 6
                                  STOCK OPTIONS

        SECTION 6.1   General.

        Stock Options may be granted alone or in addition to other Rights
granted under the Plan. Any Stock Option granted under the Plan shall be in such
form as the Administrator may from time to time approve, and the provisions of
Stock Option grants need not be the same with respect to each Optionee or each
Stock Option granted. Stock Options granted under the Plan may be either
Incentive Stock Options or Non-Qualified Stock Options.

        SECTION 6.2 Terms and Conditions of Stock Options.

        Each Stock Option granted pursuant to the Plan shall be evidenced by a
written Stock Option agreement between the Company and the Optionee, which
agreement shall comply with and be subject to the following terms and
conditions:

               (a) Number of Shares. Each Stock Option agreement shall state the
        number of shares of Stock to which the Stock Option relates.

               (b) Type of Option. Each Stock Option agreement shall identify
        the portion (if any) of the Stock Option which constitutes an Incentive
        Stock Option. However, notwithstanding such designations, to the extent
        that the aggregate Fair Market Value of shares of Stock with respect to
        which Stock Options designated as Incentive Stock Options are
        exercisable for the first time by any Optionee during any calendar year
        (under all plans of the Company or any Parent or Subsidiary) exceeds
        $100,000, such Stock Options covering shares of Stock with a Fair Market
        Value in excess of $100,000 shall be treated as Non-Qualified Stock
        Options. For purposes of this Section 6.2(b), Incentive Stock Options
        shall be taken into account in the order in which they were granted, and
        the Fair Market Value of the shares of Stock subject to an Incentive
        Stock Option shall be determined as of the Date of Grant of such Stock
        Option.



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               (c) Exercise Price. Each Stock Option agreement shall state the
        price at which shares subject to the Stock Option may be purchased (the
        "Exercise Price"), which with respect to Incentive Stock Options, shall
        not be less than one hundred percent (100%) of the Fair Market Value of
        the shares of Stock on the Date of Grant; provided, however, that in the
        case of an Incentive Stock Option granted to a Ten Percent Shareholder,
        the Exercise Price shall not be less than one hundred ten percent (110%)
        of such Fair Market Value. With respect to Non-Qualified Stock Options,
        the Exercise Price shall not be less than eighty-five percent (85%) of
        the Fair Market Value of the shares of Stock on the Date of Grant of the
        Non-Qualified Stock Option.

               (d) Term of Option. The term of each Stock Option shall be the
        term stated in the applicable Stock Option agreement; provided, however,
        that the term shall be no more than ten (10) years from the Date of
        Grant thereof or such shorter term as may be provided in the applicable
        Stock Option agreement; and provided further that, in the case of an
        Incentive Stock Option granted to an Optionee who, at the time the Stock
        Option is granted, is a Ten Percent Shareholder, the term of the Stock
        Option shall be five (5) years from the Date of Grant thereof or such
        shorter term as may be provided in the applicable Stock Option
        agreement.

               (e) Consideration for Stock Option. The consideration to be paid
        for the shares of Stock to be issued upon exercise of a Stock Option,
        including the method of payment, shall be determined by the
        Administrator (and, in the case of an Incentive Stock Option, shall be
        determined on the Date of Grant) and may consist entirely of (1) cash,
        (2) check, subject to collection, (3) promissory note in accordance with
        Section 11.5, (4) the shares of Stock that (x) in the case of Stock
        acquired upon exercise of a Stock Option, have been owned by the
        Optionee for more than six months on the date of surrender or such other
        period as may be required to avoid a charge to the Company's earnings,
        and (y) have a Fair Market Value on the date of surrender equal to the
        aggregate Exercise Price of the Stock as to which such Stock Option
        shall be exercised, (5) authorization for the Company to retain from the
        total number of shares of Stock as to which the Stock Option is
        exercised that number of shares of Stock having a Fair Market Value on
        the date of exercise equal to the Exercise Price for the total number of
        shares of Stock as to which the Stock Option is exercised, (6) any
        combination of the foregoing methods of payment, or (7) such other
        consideration and method of payment for the issuance of Stock to the
        extent permitted under applicable law. In making its determination as to
        the type of consideration to accept, the Administrator shall consider if
        acceptance of such consideration may be reasonably expected to benefit
        the Company.

               (f) Procedure for Exercise; Rights as a Stockholder. Any Stock
        Option granted hereunder shall be exercisable at such times and under
        such conditions as determined by the Administrator and reflected in the
        applicable Stock Option agreement, which may include vesting
        requirements and/or performance criteria



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        with respect to the Company and/or the Optionee; provided, however, that
        such Stock Option shall become exercisable at the rate of at least
        twenty percent (20%) per year over five (5) years from the Date of
        Grant. Notwithstanding the above, in the case of a Stock Option granted
        to an officer, Director or consultant of the Company or any Parent or
        Subsidiary of the Company, the Stock Option may become fully
        exercisable, and a repurchase right, if any, in favor of the Company
        shall lapse, at any time or during any period established by the
        Administrator.

                      (i) A Stock Option may not be exercised for a fraction of
        a Share.

                      (ii) A Stock Option shall be deemed to be exercised when
        written notice of such exercise has been given to the Company in
        accordance with the terms of the Stock Option agreement and the Company
        has received full payment for the Stock with respect to which the Option
        is exercised. Full payment may, as authorized by the Administrator,
        consist of any consideration and method of payment allowable under
        Section 6(e) above. Until the issuance (as evidenced by the appropriate
        entry on the books of the Company or of a duly authorized transfer agent
        of the Company) of the stock certificate evidencing such Stock, no right
        to vote or receive dividends or any other rights as a stockholder shall
        exist with respect to the optioned Stock, notwithstanding the exercise
        of the Stock Option. The Company shall issue (or cause to be issued)
        such stock certificate promptly upon exercise of the Stock Option. No
        adjustment will be made for a dividend or other right for which the
        record date is prior to the date the stock certificate is issued, except
        as provided in Section 9 of the Plan.

                      (iii) Exercise of a Stock Option in any manner shall
        result in a decrease in the number of shares of Stock that thereafter
        may be available, both for purposes of the Plan and for sale under the
        Stock Option, by the number of shares of Stock as to which the Stock
        Option is exercised.

               (g) Employee's or Engagement Agreement. Each person receiving a
        Stock Option under the Plan shall agree to remain in the employ of,
        and/or to render services pursuant to his or her engagement with, the
        Company, any Subsidiary or any Parent, as the Administrator may from
        time to time direct, for a period of one (1) year from the Date of
        Grant, but such agreement shall not obligate the Company, any Subsidiary
        or any Parent to continue to employ or maintain the engagement of the
        Optionee for any period whatsoever. The sole remedy of the Company for
        breach of this employment or engagement term by the Optionee shall be
        cancellation of the Stock Option granted to the Optionee.



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                                    ARTICLE 7
                            STOCK APPRECIATION RIGHTS

        SECTION 7.1   General.

        The Administrator shall have the authority to grant SARs in tandem with
Stock Options granted under this Plan (the "Related SAR Option") with respect to
all or some of the shares of Stock covered by the Related SAR Option. SARs
granted in tandem with Related SAR Options may be granted either on the Date of
Grant of the Related SAR Option or at any time thereafter during the term of the
Related SAR Option. The Administrator shall also have the authority to grant
SARs without relation to any Stock Option granted under this Plan. Each SAR
shall be granted on such terms and conditions not inconsistent with the Plan as
the Administrator may determine. The provisions of the various SAR awards need
not be the same with respect to each Grantee or with respect to any SARs granted
to the same Grantee.

        SECTION 7.2 Terms and Conditions of SARs.

        Each SAR granted pursuant to the Plan shall be evidenced by a written
SAR agreement between the Company and the Grantee, which agreement shall comply
with and be subject to the following terms and conditions:

               (a) Number of SARs. Each SAR agreement shall state the number of
        SARs granted pursuant to the agreement.

               (b) Initial Valuations. Each SAR agreement shall provide that
        each SAR granted in tandem with a Related Stock Option is valued at the
        Exercise Price of the Related SAR Option and that each SAR granted
        without relation to a Stock Option is valued at the Fair Market Value of
        a share of Stock on the Date of Grant (the "Initial Valuation").

               (c)    Term and Exercise of SARs.

                      (i) Each SAR granted otherwise than in tandem with a Stock
               Option shall be exercisable as determined by the Administrator,
               but in no event after ten (10) years from the Date of Grant. Each
               other SAR shall be exercisable only if, and to the extent that,
               the Related SAR Option is exercisable and has not yet terminated
               or expired, and in the case of a SAR granted in respect of an
               Incentive Stock Option, only when the Fair Market Value per share
               of the Stock exceeds the Exercise Price of the Related SAR
               Option; and upon the exercise of a SAR, the Related SAR Option
               shall cease to be exercisable to the extent of the shares of
               Stock with respect to which such SAR is exercised, and shall be
               considered to have been exercised to that extent for purposes of
               determining the number of shares of Stock available for the grant
               of further Rights pursuant to the Plan. Upon the exercise or
               termination of a Related SAR Option, the SAR




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               granted in tandem with such Related SAR Option shall terminate to
               the extent of the shares of Stock with respect to which the
               Related SAR Option was exercised or terminated.

                      (ii) To exercise a SAR granted in tandem with a Related
               SAR Option, the Grantee shall (A) give written notice thereof to
               the Company specifying the number of shares of Stock with respect
               to which the SAR is being exercised and the percentage of the
               total amount that the Grantee is entitled to receive which such
               person elects to receive in cash or shares of Stock with respect
               to the exercise of the SAR; and (B) if requested by the
               Administrator, deliver the Related SAR Option agreement to the
               Secretary of the Company, who shall endorse thereon a notation of
               such exercise and return the Related SAR Option agreement to the
               Grantee. To exercise a SAR granted without relation to a Stock
               Option, the Grantee shall give written notice thereof to the
               Company specifying the number of shares of Stock with respect to
               which the SAR is being exercised and the percentage of the total
               amount that the Grantee is entitled to receive which the Grantee
               elects to receive in cash or shares of Stock with respect to the
               exercise of the SAR. The date of exercise of a SAR which is
               validly exercised shall be deemed to be the date on which there
               shall have been delivered to the Company the appropriate
               aforesaid instruments.

                      (iii) Upon the exercise of a SAR, the holder thereof shall
               be entitled at the holder's election to receive either:

                                    (A) a number of shares of Stock equal to the
                             quotient computed by dividing the Spread (as
                             defined in Section 7.2(c) (iv)) by the Fair Market
                             Value per share of Stock on the date of exercise of
                             the SAR; provided, however, that in lieu of
                             fractional shares, the Company shall pay in cash or
                             cash equivalent an amount equal to the same
                             fraction of the Fair Market Value per share of
                             Stock on the date of exercise of the SAR; or

                                    (B) an amount of money payable in cash or
                             cash equivalent equal to the Spread; or

                                    (C) a combination of an amount payable in
                             cash or cash equivalent and a number of shares of
                             Stock calculated as provided in Section 7.2 (c)
                             (iii) (A) (after reducing the Spread by such dollar
                             amount), plus any amounts payable in lieu of any
                             fractional shares as provided above.


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                      (iv) The term "Spread" as used in this Section 7.2(c)
               shall mean an amount equal to the product computed by multiplying
               (A) the excess of (x) the Fair Market Value per share of Stock on
               the date the SAR is exercised, over either (y) in the case of an
               SAR granted in tandem with a Related SAR Option, the Exercise
               Price per share of the Related SAR Option, the Exercise Price per
               share of the Related SAR Option, or (z) in the case of an SAR not
               granted in tandem with a Stock Option, the Initial Valuation of
               the SAR; by (B) the number of shares of Stock with respect to
               which such SAR is being exercised.

                      (v) Notwithstanding the provisions of Section 7.2 (c)
               (iii), the Administrator shall have sole discretion to consent to
               or disapprove a Participant's election to receive an amount of
               money payable in cash or cash equivalent in whole or in part
               ("Cash Election") upon the exercise of a SAR. Such consent or
               disapproval may be given at any time after the election to which
               it relates. If the Administrator shall disapprove a Cash
               Election, the exercise of the SAR with respect to which the Cash
               Election was made shall be of no effect, but without prejudice to
               the right of the holder to exercise such SAR in the future in
               accordance with its terms.

                      (vi) Notwithstanding the foregoing, in the case of a SAR
               granted in tandem with an Incentive Stock Option, the holder may
               not receive an amount in excess of such amount as will enable the
               Stock Option to qualify as an Incentive Stock Option.

        (d) Securities Laws. The Company intends that this Section 7.2 shall
comply with the requirements of Rule l6b-3, and any future rules promulgated in
substitution therefor (the "Rule") under the Exchange Act, during the term of
the Plan. Should any provision of Section 7.2 not be necessary to comply with
the requirements of the Rule or should any additional provisions be necessary to
render Section 7.2 in compliance with the requirements of the Rule, the Board
may amend the Plan to add to or modify the provisions of the Plan accordingly.

        (e) Limitation on Amounts Payable. Notwithstanding Section 7.2(c)(iii),
the Administrator may place a limitation on the amount payable in cash, Stock or
both upon exercise of a SAR. Any such limitation must be determined as of the
Date of Grant and noted on the instrument evidencing the Participant's SAR
granted hereunder.

                                    ARTICLE 8
                                 PURCHASE RIGHTS

        SECTION 8.1   General.

        Purchase Rights may be granted alone or in addition to other Rights
under the Plan. Each sale of Stock under this Article 8 shall be evidenced by a
Stock purchase agreement between the Offeree and the Company in the form from
time to time adopted




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by the Administrator and containing such terms and conditions which the
Administrator deems appropriate, provided, that such terms and conditions are
not inconsistent with the Plan. The provisions of the various Stock purchase
agreements entered into under the Plan need not be identical.

        SECTION 8.2 Terms and Conditions of Purchase Rights.

        Each Purchase Right granted pursuant to the Plan shall be evidenced by a
written Stock purchase agreement between the Company and the Offeree, which
agreement shall comply with and be subject to the following terms and
conditions:

               (a) Number of Shares. Each Stock purchase agreement shall state
        the number of shares of Stock which may be purchased pursuant to such
        agreement.

               (b) Purchase Price. Each Stock purchase agreement shall state the
        price at which the Stock subject to such purchase agreement may be
        purchased (the "Purchase Price"); provided, however, that the Purchase
        Price shall not be less than eighty-five percent (85%) of the Fair
        Market Value of the Stock on the Date of Grant, or, in the case of a Ten
        Percent Shareholder, the Purchase Price shall not be less than one
        hundred percent (100%) of the Fair Market Value of the Stock on the Date
        of Grant.

               (c) Medium and Time of Payment. The consideration to be paid for
        the shares of Stock to be issued upon exercise of a Purchase Right,
        including the method of payment, shall be determined by the
        Administrator and may consist entirely of (1) cash, (2) check, subject
        to collection, (3) promissory note in accordance with Section 11.5, (4)
        other shares of Stock that (x) in the case of Stock acquired upon
        exercise of a Stock Option, have been owned by the Offeree for more than
        six months on the date of surrender or such other period as may be
        required to avoid a charge to the Company's earnings, and (y) have a
        Fair Market Value on the date of surrender equal to the aggregate
        Purchase Price of the Stock as to which such Purchase Right shall be
        exercised, (5) any combination of the foregoing methods of payment, or
        (6) such other consideration and method of payment for the issuance of
        Stock to the extent permitted under applicable law. In making its
        determination as to the type of consideration to accept, the
        Administrator shall consider if acceptance of such consideration may be
        reasonably expected to benefit the Company.

               (d) Repurchase Option. Unless the Administrator determines
        otherwise, the Stock purchase agreement shall grant the Company a
        repurchase option exercisable upon the voluntary or involuntary
        termination of the purchaser's employment with the Company for any
        reason (including death or disability). The purchase price for Stock
        repurchased shall be the original purchase price paid by the purchaser
        and may be paid by cancellation of any indebtedness of the purchaser to
        the Company. The repurchase option shall lapse at such rate as the
        Administrator may determine; provided, however, that with



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        respect to an Offeree who is not an officer, Director or consultant of
        the Company or of any Parent or Subsidiary of the Company, it shall
        lapse at a minimum rate of twenty percent (20%) per year.

                                    ARTICLE 9
                                   ADJUSTMENTS

        SECTION 9.1 Effect of Certain Changes.

               (a) Stock Dividends, Splits, Etc. If there is any change in the
        number of outstanding shares of Stock resulting from a Stock split,
        reverse Stock split, Stock dividend, combination, recapitalization, or
        reclassification of the Stock, or any other increase or decrease in the
        number of issued and outstanding shares of Stock effected without
        receipt of consideration by the Company, (i) the number of shares of
        Stock available for Rights, (ii) the number of shares of Stock covered
        by outstanding Rights, (iii) the Exercise Price or Purchase Price of any
        Stock Option or Purchase Right and (iv) the Initial Valuations of SARs
        in effect prior to such change shall be proportionately adjusted by the
        Administrator to reflect any increase or decrease in the number of
        issued and outstanding shares of Stock; provided, however, that
        conversion of any convertible securities of the Company shall not be
        deemed to have been "effected without receipt of consideration"; and
        provided, further, that any fractional shares resulting from the
        adjustment shall be eliminated. Except as expressly provided herein, no
        issuance by the Company of Stock of any class or securities convertible
        into shares of Stock of any class shall affect, and no adjustment by
        reason thereof shall be made with respect to, the number or price of
        shares of Stock subject to a Stock Option, Purchase Right or SAR.

               (b) Liquidating Event. In the event of the proposed dissolution
        or liquidation of the Company, or in the event of any corporate
        separation or division, including, but not limited to, a split-up,
        split-off or spin-off (each, a "Liquidating Event"), the Administrator
        may provide that the holder of any Right then exercisable shall have the
        right to exercise such Right (at the price provided in the applicable
        Rights agreement) subsequent to the Liquidating Event, and for the
        balance of its term, solely for the kind and amount of shares of Stock
        and other securities, property, cash or any combination thereof
        receivable upon such Liquidating Event by a holder of the number of
        shares of Stock for or with respect to which such Right might have been
        exercised immediately prior to such Liquidating Event. Alternatively,
        the Administrator may provide that each Right granted under the Plan
        shall terminate as of a date to be fixed by the Board; provided,
        however, that not less than thirty (30) days prior written notice of the
        date so fixed shall be given to each Rights holder, and if such notice
        is given, each Rights holder shall have the right, during the period of
        thirty (30) days preceding such termination, to exercise the Right as to
        all or any part of the shares of Stock covered thereby, without regard
        to any installment or vesting provisions in his or her Rights agreement,
        on the condition, however, that the Liquidating Event




                                       14
<PAGE>

        actually occurs. If the Liquidating Event actually occurs, such exercise
        shall be deemed effective (and, if applicable, the Rights holder shall
        be deemed a shareholder with respect to the Rights exercised)
        immediately preceding the occurrence of the Liquidating Event, (or as of
        the date of record for shareholders entitled to share in such
        Liquidating Event, if a record date is set).

               (c) Merger or Consolidation. Each outstanding Right shall
        terminate upon a merger, reorganization or consolidation in which the
        Company is not the surviving corporation, provided that (A) each Rights
        holder to whom no Rights have been tendered by the surviving corporation
        pursuant to the terms of item (B) immediately below shall have the
        right, exercisable during a ten (10)-day period ending on the fifth
        (5th) day prior to such merger, reorganization or consolidation in which
        the Company is not the surviving corporation, to exercise his or her
        Rights in whole or in part, without regard to any installment or vesting
        provisions under his or her Rights agreement on the condition, however,
        that the merger, reorganization or consolidation is actually effected;
        and if the merger, reorganization or consolidation is actually effected,
        such exercise shall be deemed effective (and, if applicable, the
        Participant shall be deemed a shareholder with respect to the Rights
        exercised) immediately preceding the effective time of such merger,
        reorganization or consolidation (on the date of record for shareholders
        entitled to share in the securities or property distributed in such
        merger, reorganization or consolidation, if a record date is set); and
        (B) in its sole and absolute discretion, the surviving corporation may,
        but shall not be obligated to, tender to any Rights holder Rights with
        respect to the surviving corporation, and such new Rights shall contain
        such terms and provisions as shall substantially preserve the rights and
        benefits of any Rights then outstanding under this Plan.

               (d) Where Company Survives. Section 9.1(c) shall not apply to a
        merger, reorganization or consolidation in which the Company is the
        surviving corporation, unless shares of Stock are converted into or
        exchanged for securities other than publicly-traded common stock, cash
        (excluding cash in payment for actual shares) or any other thing of
        value. Notwithstanding the preceding sentence, in case of any merger,
        reorganization or consolidation of another corporation into the Company
        in which the Company is the surviving corporation and in which there is
        a reclassification or change (including a change to the right to receive
        an amount of money payable by cash or cash equivalent or other property)
        of the shares of Stock (other than a change in par value, or from par
        value to no par value, or as a result of a subdivision or combination,
        but including any change in such shares into two or more classes or
        series of shares), the Administrator may provide that the holder of each
        Right then exercisable shall have the right to exercise such Right
        solely for the kind and amount of shares of Stock and other securities
        (including those of any new direct or indirect Parent of the Company),
        property, cash or any combination thereof receivable upon such
        reclassification change, merger, reorganization or consolidation by the
        holder of the number of shares of Stock for which such Right might have
        been exercised.




                                       15
<PAGE>

               (e) Surviving Corporation Defined. The determination as to which
        party to a merger, reorganization or consolidation is the "surviving
        corporation" shall be made on the basis of the relative equity interests
        of the shareholders in the corporation existing after the merger,
        reorganization or consolidation, as follows: if following any merger,
        reorganization or consolidation the holders of outstanding voting
        securities of the Company immediately prior to the merger,
        reorganization or consolidation own equity securities possessing more
        than fifty percent (50%) of the voting power of the corporation existing
        following the merger, reorganization or consolidation, then for purposes
        of this Plan, the Company shall be the surviving corporation. In all
        other cases, the Company shall not be the surviving corporation. In
        making the determination of ownership by the shareholders of a
        corporation immediately after the merger, reorganization or
        consolidation, of equity securities pursuant to this Section 9.1(e),
        equity securities which the shareholders owned immediately before the
        merger, reorganization or consolidation as shareholders of another party
        to the transaction shall be disregarded. Further, for purposes of this
        Section 9.1(e) only, outstanding voting securities of a corporation
        shall be calculated by assuming the conversion of all equity securities
        convertible (immediately or at some future time) into shares entitled to
        vote.

               (f) Par Value Changes. In the event of a change in the Stock of
        the Company as presently constituted which is limited to a change of all
        of its authorized shares with par value, into the same number of shares
        without par value, or a change in the par value, the shares resulting
        from any such change shall be "Stock" within the meaning of the Plan.

               (g) Certain Distributions. In the event of any distribution to
        the Company's stockholders of securities of any other entity or other
        assets (other than dividends payable in cash or stock of the Company)
        without receipt of consideration by the Company, the Administrator may,
        in its discretion, appropriately adjust the price per share of Stock
        covered by each outstanding Stock Option, SAR or Purchase Right to
        reflect the effect of such distribution.

               (h) Decision of Administration Final. To the extent that the
        foregoing adjustments relate to stock or securities of the Company, such
        adjustments shall be made by the Administrator, whose determination in
        that respect shall be final, binding and conclusive; provided that, each
        Incentive Stock Option granted pursuant to the Plan shall not be
        adjusted in a manner that causes such Stock Option to fail to continue
        to qualify as an Incentive Stock Option.

               (i) No Other Rights. Except as hereinbefore expressly provided in
        this Article 9, no Rights holder shall have any rights by reason of any
        subdivision or consolidation of shares of Stock or the payment of any
        dividend or any other increase or decrease in the number of shares of
        stock of any class or by reason of any Liquidating Event, merger,
        reorganization or consolidation of assets or stock of another
        corporation, or any other issue by the Company of shares of stock of




                                       16
<PAGE>

        any class, or securities convertible into shares of stock of any class;
        and except as provided in this Article 9, none of the foregoing events
        shall affect, and no adjustment by reason thereof shall be made with
        respect to, the number or price of shares of Stock subject to Rights.
        The grant of a Right pursuant to the Plan shall not affect in any way
        the right or power of the Company to make adjustments,
        reclassifications, reorganizations or changes of its capital or business
        structures; to merge, reorganize or consolidate, dissolve or liquidate;
        or to sell, transfer or convey all or part of its business or assets.

               (j) No Rights as Shareholder. Except as specifically provided in
        this Article 9, a Rights holder or a transferee of a Right shall have no
        rights as a shareholder with respect to any shares covered by the Rights
        until the date of the issuance of a Stock certificate to him or her for
        such shares, and no adjustment shall be made for dividends (ordinary or
        extraordinary, whether in cash, securities or other property) or
        distributions of other rights for which the record date is prior to the
        date such Stock certificate is issued, except as provided in Section
        9.1(b) or 9.1(c).

                                   ARTICLE 10
                            AMENDMENT AND TERMINATION

        The Board may, at any time, amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which would impair the
rights of a Participant under any Right theretofore granted without such
Participant's consent. Stockholder approval for amendments to the Plan shall be
obtained in such a manner and to such degree as required to comply with all
applicable laws and regulations.

        The Administrator may amend the terms of any Right theretofore granted,
prospectively or retroactively, but, subject to Article 3, no such amendment
shall impair the rights of any Participant under any Right theretofore granted
without such Participant's written consent.

                                   ARTICLE 11
                               GENERAL PROVISIONS

        SECTION 11.1 General Restrictions.

               (a) No View to Distribute. The Administrator may require each
        person purchasing shares of Stock pursuant to the Plan to represent to
        and agree with the Company in writing that such person is acquiring the
        shares without a view to distribution thereof. The certificates for such
        shares may include any legend which the Administrator deems appropriate
        to reflect any restrictions on transfer.

               (b) Legends. All certificates for shares of Stock delivered under
        the Plan shall be subject to such stop transfer orders and other
        restrictions as the




                                       17
<PAGE>

        Administrator may deem advisable under the rules, regulations and other
        requirements of the Securities and Exchange Commission, any stock
        exchange upon which the Stock is then listed and any applicable federal
        or state securities laws, and the Administrator may cause a legend or
        legends to be put on any such certificates to make appropriate reference
        to such restrictions.

        SECTION 11.2   Other Compensation Arrangements.

        Nothing contained in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to shareholder approval
if such approval is required, and such arrangements may be either generally
applicable or applicable only in specific cases.

        SECTION 11.3 Withholding Taxes.

               (a) Withholding Required. Each Participant shall, no later than
        the date as of which the value of a Right first becomes includable in
        the gross income of the Participant for federal income tax purposes, pay
        to the Company, or make arrangements satisfactory to the Administrator
        regarding payment of, any federal, state or local taxes of any kind
        required by law to be withheld with respect to the Right or its
        exercise. The obligations of the Company under the Plan shall be
        conditioned upon such payment or arrangements and the Participant shall,
        to the extent permitted by law, have the right to request that the
        Company deduct any such taxes from any payment of any kind otherwise due
        to the Participant.

               (b) Withholding Right. The Administrator may, in its discretion,
        grant a Rights holder the right (a "Withholding Right") to elect to make
        such payment by irrevocably requiring the Company to withhold from
        shares issuable upon exercise of the Right that number of full shares of
        Stock having a Fair Market Value on the Tax Date (as defined below)
        equal to the amount (or portion of the amount) required to be withheld.
        The Withholding Right may be granted with respect to all or any portion
        of the Right.

               (c) Exercise of Withholding Right. To exercise a Withholding
        Right, the Rights holder must follow the election procedures set forth
        below, together with such additional procedures and conditions as may be
        set forth in the related Rights agreement or otherwise adopted by the
        Administrator:

                      (i) The Rights holder must deliver to the Company his or
               her written notice of election (the "Election") to have the
               Withholding Right apply to all (or a designated portion) of his
               or her Right;

                      (ii) The Election must be delivered to the Company not
               less than twenty (20) days before the date of exercise of the
               Right to which it relates;




                                       18
<PAGE>

                      (iii) unless disapproved by the Administrator as provided
               in Subsection (iv) below, the Election once made will be
               irrevocable; and

                      (iv) no Election is valid unless the Administrator
               consents to the Election; the Administrator has the right and
               power, in its sole discretion, with or without cause or reason
               therefor, to consent to the Election, to refuse to consent to the
               Election, or to disapprove the Election; and if the Administrator
               has not consented to the Election on or prior to the date that
               the amount of tax to be withheld is, under applicable federal
               income tax laws, fixed and determined by the Company (the "Tax
               Date"), the Election will be deemed approved.

               (d) Effect. If the Administrator consents to an Election of a
        Rights holder's Withholding Right, then upon the exercise of the Right
        (or any portion thereof) to which the Withholding Right relates, the
        Company will withhold from the shares otherwise issuable that number of
        full shares of Stock having an actual Fair Market Value equal to the
        amount (or portion of the amount, as applicable) required to be withheld
        under applicable federal and/or state income tax laws as a result of the
        exercise.

        SECTION 11.4   Indemnification.

        In addition to such other rights of indemnification as they may have as
Directors or members of the Committee, and to the extent allowed by applicable
law, each member of the Board or Committee comprising the Administrator shall be
indemnified by the Company against the reasonable expenses, including attorney's
fees, actually incurred in connection with any action, suit or proceeding or in
connection with any appeal therein, to which they or any one of them may be
action, party by reason of any action taken or failure to act under or in
connection with the Plan or any Right granted under the Plan, and against all
amounts paid by them in settlement thereof (provided that the settlement has
been approved by the Company, which approval shall not be unreasonably withheld)
or paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such member of the Board or Committee
comprising the Administrator did not act in good faith and in a manner which
such person reasonably believed to be in the best interests of the Company, and
in the case of a criminal proceeding, had no reason to believe that the conduct
complained of was unlawful; provided, however, that within sixty (60) days after
institution of any such action, suit or proceeding, such member of the Board or
Committee comprising the Administrator shall, in writing, offer the Company the
opportunity at its own expense to handle and defend such action, suit or
proceeding.

        SECTION 11.5   Loans.

        The Company may make loans to Optionees and Offerees as the
Administrator, in its discretion, may determine in connection with the exercise
of outstanding Stock




                                       19
<PAGE>

Options and Purchase Rights granted under the Plan. Such loans shall (i) be
evidenced by promissory notes entered into by the holders in favor of the
Company, (ii) be subject to the terms and conditions set forth in this Section
11.5 and such other terms and conditions, not inconsistent with the Plan, as the
Administrator shall determine; and (iii) bear interest, if any, at such rate as
the Administrator shall determine. In no event may the principal amount of any
such loan exceed the Exercise Price or the Purchase Price less the par value of
the shares of Stock covered by the Stock Option or Purchase Right, or portion
thereof, exercised by the Optionee or Offeree. The initial term of the loan, the
schedule of payments of principal and interest under the loan, the extent to
which the loan is to be with or without recourse against the holder with respect
to principal and applicable interest and the conditions upon which the loan will
become payable in the event of the holder's termination of employment shall be
determined by the Administrator, provided, however, that the term of the loan,
including extensions, shall not exceed ten (10) years. Unless the Administrator
determines otherwise, when a loan shall have been made, shares of Stock having a
Fair Market Value at least equal to the principal amount of the loan shall be
pledged by the holder to the Company as security for payment of the unpaid
balance of the loan and such pledge shall be evidenced by a pledge agreement,
the terms of which shall be determined by the Administrator, in its discretion;
provided, however, that each loan shall comply with all applicable laws,
regulations and rules of the Board of Governors of the Federal Reserve System
and any other governmental agency having jurisdiction.

        SECTION 11.6 Termination of Employment.

        Except as provided in this Section 11.6, no Right may be exercised
unless the Rights holder is then a Director of the Company, or in the employ of
the Company or any Parent or Subsidiary, or rendering services as a consultant
to the Company or any Parent or Subsidiary, and unless he or she has remained
continuously so employed since the Date of Grant. If the employment or services
of a Rights holder shall terminate (other than by reason of a Special
Terminating Event), all Rights previously granted to the Rights holder which are
exercisable at the time of such termination may be exercised for the period
ending ninety (90) days after such termination, unless otherwise provided in the
Rights agreement; provided, however, that no Right may be exercised following
the date of its expiration. Nothing in the Plan or in any Right granted pursuant
to the Plan shall confer upon an employee or consultant any right to continue in
the employ of the Company or any Parent or Subsidiary or interfere in any way
with the right of the Company or any Parent or Subsidiary to terminate such
employment or consulting relationship at any time.

        SECTION 11.7   Special Terminating Events.

        If a Special Terminating Event occurs, all Rights theretofore granted to
such Rights holder which are exercisable at the time of such Special Terminating
Event may, unless earlier terminated in accordance with their terms, be
exercised by the Rights holder or by his or her estate or by a person who
acquired the right to exercise such Right by bequest or inheritance or otherwise
by reason of the death or Disability of the Rights




                                       20
<PAGE>

holder, at any time within one (1) year after the date of the Special
Terminating Event. Notwithstanding the foregoing, an Incentive Stock Option and
any SAR granted in relation to an Incentive Stock Option shall only be
exercisable at any time within three (3) months after the date of Retirement or
termination of employment or consulting relationship of an Optionee.

        SECTION 11.8 Non-Transferability of Rights.

        Unless otherwise approved by the Administrator, Rights granted under the
Plan shall not be transferable otherwise than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order (as defined
in the Code), and Rights may be exercised, during the lifetime of the Rights
holder, only by the Rights holder or by his or her guardian or legal
representative.

        SECTION 11.9 Regulatory Matters.

        Each Rights agreement shall provide that no shares of Stock shall be
purchased or sold thereunder unless and until (A) any then applicable
requirements of state or federal laws and regulatory agencies shall have been
fully complied with to the satisfaction of the Company and its counsel, and (B)
if required to do so by the Company, the Optionee or Offeree shall have executed
and delivered to the Company a letter of investment intent in such form and
containing such provisions as the Board or Committee may require. The Company,
during the term of this Plan, will at all times reserve and keep available such
number of shares of Stock as shall be sufficient to satisfy the requirements of
the Plan. The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Stock hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Stock as to which such requisite authority shall not have been obtained.

        SECTION 11.10   Recapitalizations.

        Each Rights agreement shall contain provisions required to reflect the
provisions of Article 9.

        SECTION 11.11   Delivery.

        Upon exercise of a Right granted under this Plan, the Company shall
issue Stock or pay any amounts due a reasonable period of time thereafter.
Subject to any statutory obligations the Company may otherwise have, for
purposes of this Plan, thirty (30) days shall be considered a reasonable period
of time.



                                       21
<PAGE>

        SECTION 11.12 Other Provisions.

        The Rights agreements authorized under the Plan may contain such other
provisions not inconsistent with this Plan, including, without limitation,
restrictions upon the exercise of the Rights, as the Administrator may deem
advisable.

                                   ARTICLE 12
                             EFFECTIVE DATE OF PLAN

        The Plan shall become effective on the date on which the Plan is adopted
by the Board and approved by its shareholders. Any Right granted before the
approval of the Plan by the Company's shareholders shall be expressly
conditioned upon, and shall not be exercisable until, such approval is obtained.

                                   ARTICLE 13
                                  TERM OF PLAN

        No Right shall be granted pursuant to the Plan on or after January 1,
2011, but Rights theretofore granted may extend beyond that date.