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                              ARMOR HOLDINGS, INC.

                             1998 STOCK OPTION PLAN


                                   I. PURPOSE

         ARMOR HOLDINGS, INC. (the "Company") desires to afford certain of its
key employees and the key employees of any subsidiary corporation or parent
corporation of the Company now existing or hereafter formed or acquired who are
responsible for the continued growth of the Company an opportunity to acquire a
proprietary interest in the Company, and thus to create in such key employees an
increased interest in and a greater concern for the welfare of the Company and
its subsidiaries.

         The Company, by means of this 1998 Stock Option Plan (the "Plan"),
seeks to retain the services of key employees and to enable the Company to
attract and retain persons of competence.

         The stock options ("Options") offered pursuant to the Plan are a matter
of separate inducement and are not in lieu of any salary or other compensation
for the services of any key employee.

         The Options granted under the Plan are not intended to be options that
meet the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") ("NonQualified Options").

                     II. AMOUNT OF STOCK SUBJECT TO THE PLAN
                              AND OTHER LIMITATIONS

         (a) The total number of shares of common stock of the Company which may
be purchased or acquired pursuant to the exercise of Options granted under the
Plan shall not exceed, in the aggregate, 725,000 shares of the authorized common
stock, $.01 par value per share (the "Common Stock"), of the Company (the
"Shares"), such number subject to adjustment as provided in Article XI hereof.
Shares of Common Stock that are the subject of Options shall be counted only
once in determining whether the maximum number of Shares of Common Stock that
may be purchased or awarded under the Plan has been exceeded.

         (b) Shares of Common Stock acquired under the Plan may be either
authorized but unissued Shares or Shares of issued stock held in the Company's
treasury, or both, at the discretion of the Company. If and to the extent that
Options granted under the Plan expire or terminate without having been
exercised, the Shares of Common Stock covered by such expired or terminated
Options shall not again become available for award under the Plan.

         Except as provided in Articles XVIII and XXI, the Company may, from
time to time during the period beginning on the date of the adoption of the Plan
by the Company (the "Effective

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Date") and ending on the date which is ten (10) years from the Effective Date
(the "Termination Date"), grant to Participants (as defined in Article IV),
Non-Qualified Options under the terms hereinafter set forth.

         As used in the Plan, the terms "subsidiary corporation" and "parent
corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 424(f) and 424(e) of the Code.

                               III. ADMINISTRATION

         The board of directors of the Company (the "Board of Directors") shall
administer the Plan or may designate from among its members a committee (the
"Committee") to administer the Plan. The Committee shall consist of not less
than two (2) members of the Board who meet the definition of "outside director"
under the provisions of Section 162(m) of the Code and the definition of
"non-employee director" under the provisions of Rule 16b-3 (or any successor
rule or regulation ("Rule 16b-3") promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). No member of the Committee shall have
been within one year prior to appointment to, or while serving on, the Committee
granted or awarded equity securities of the Company pursuant to this or any
other plan of the Company except to the extent that participation in any such
plan or receipt of any such grant or award would not adversely affect the
Committee member's status as a "non-employee director" or as an "outside
director." A majority of the members of the Committee shall constitute a quorum,
and the act of a majority of the members of the Committee shall be the act of
the Committee. Any member of the Committee may be removed at any time, either
with or without cause, by resolution adopted by the Board of Directors, and any
vacancy on the Committee at any time may be filled by resolution adopted by the
Board of Directors.

         Any or all powers and functions of the Committee may be exercised at
any time and from time to time by the Board of Directors.

         Subject to the express provisions of the Plan, the Board of Directors
or the Committee, as the case may be, shall have authority, in its discretion,
to determine the Participants (as defined in Article IV) to whom Options shall
be granted, the time when such Options shall be granted, the number of Shares of
Common Stock which shall be subject to each Option, the exercise price of each
Option, the period(s) during which such Options shall be exercisable (whether in
whole or in part) and the other terms and provisions thereof (which need not be
identical).

         Subject to the express provisions of the Plan, the Board of Directors
or the Committee, as the case may be, also shall have authority to construe the
Plan and the Options granted thereunder, to amend the Plan and the Options
thereunder, to prescribe, amend and rescind rules and regulations relating to
the Plan, to determine the terms and provisions of the Options (which need not
be identical) granted thereunder and to make all other determinations necessary
or advisable for administering the Plan. The Board of Directors or the
Committee, as the case may be, also shall have the authority to require, in its
discretion, as a condition of the granting of any such Option, that the
Participants (as defined in Article IV) agree (i) not to sell or otherwise
dispose of Shares of Common Stock acquired pursuant to the exercise of such
Option for a period of six (6) months following the date of the acquisition of
such Option and (ii) that in the event of termination of

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employment of such employee other than as a result of dismissal without cause,
such Participant (as defined in Article IV) will not, for a period to be fixed
at the time of the grant of the Option, enter into any other employment or
consulting arrangement or participate directly or indirectly in any other
business or enterprise which is competitive with the business of the Company or
any subsidiary corporation or parent corporation of the Company, or enter into
any employment in which such employee or consultant, as the case may be, will be
called upon to utilize special knowledge obtained through employment with or
retention by the Company or any subsidiary corporation or parent corporation
thereof. In no event will a Participant (as defined in Article IV) who is
subject to the reporting requirements of Section 16(a) of the Exchange Act be
entitled to sell or otherwise dispose of any Shares of Common Stock acquired
pursuant to exercise of any such Options for a period of six (6) months from the
date of the acquisition of such Options without having obtained the written
consent of the Board of Directors or the Committee.

         The determination of the Board of Directors or the Committee, as the
case may be, on matters referred to in this Article III shall be conclusive.

         The Board of Directors or the Committee, as the case may be, may employ
such legal counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion or computation received
from any such legal counsel, consultant or agent. Expenses incurred by the Board
of Directors or the Committee, as the case may be, in the engagement of such
counsel, consultant or agent shall be paid by the Company. No member or former
member of the Board of Directors or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any award of
Options granted hereunder.

                                 IV. ELIGIBILITY

         Options may be granted only to persons employed by the Company or of
any subsidiary corporation or parent corporation of the Company (such employees
hereinafter at times collectively referred to as the "Participants"), except as
hereinafter provided, and shall not be granted to any director who is not also
an employee of the Company.

         The Plan does not create a right in any employee to participate in the
Plan, to become or remain an employee of the Company, nor does it create a right
in any Participant to have any Options granted to him or her.

                           V. OPTION PRICE AND PAYMENT

         The exercise price for each Share of Common Stock purchasable under any
NonQualified Option granted hereunder shall be such amount as the Board of
Directors or the Committee, as the case may be, shall deem appropriate, but in
no event less than the par value of a Share of Common Stock.

         In determining stock ownership of a Participant for any purposes under
the Plan, the rules of Section 424(d) of the Code shall be applied, and the
Board of Directors or the Committee, 

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as the case may be, may rely on representations of fact made to it by the
Participant and believed by it to be true.

         If the Common Stock is listed on a national securities exchange in the
United States on any date on which the fair market value per Share is to be
determined, the fair market value per Share shall be deemed to be the average of
the high and low quotations at which such Shares are sold on such national
securities exchange on the date such Option is granted. If the Common Stock is
listed on a national securities exchange in the United States on such date, but
is not traded on such date, or such national securities exchange is not open for
business on such date, the fair market value per Share shall be determined as of
the closest preceding date on which such exchange shall have been open for
business and the Common Stock was traded. If the Common Stock is listed on more
than one national securities exchange in the United States on the date on which
the fair market value per Share is to be determined, the Board of Directors or
the Committee, as the case may be, shall determine which national securities
exchange shall be used for the purpose of determining the fair market value per
Share.

         For purposes of this Plan, the determination by the Board of Directors
or the Committee, as the case may be, of the fair market value of a Share shall
be conclusive.

         Upon the exercise of an Option granted hereunder, the Company shall
cause the purchased Shares of Common Stock to be issued only when it shall have
received the full purchase price for the Shares in cash or by certified check or
such other arrangement for the satisfaction of the full purchase price as the
Board of Directors or the Committee may determine to the extent permitted by
applicable law, including but not limited to, pursuant to a cashless exercise
program or by delivering to the Company shares of Common Stock of the Company
(in proper form for transfer and accompanied by all requisite stock transfer tax
stamps or cash in lieu thereof) owned by such holder free and clear of all liens
and encumbrances having a fair market value equal to the exercise price
applicable to that portion of the Option being exercised by the delivery of such
Shares. The fair market value of the stock so delivered shall be determined by
the Board of Directors or the Committee, in its sole discretion, as of the date
immediately preceding the date on which the Option is exercised, or as may be
required in order to comply with or to conform to the requirements of any
applicable laws or regulations.

                               VI. USE OF PROCEEDS

         The cash proceeds of the sale of Shares of Common Stock pursuant to the
Plan are to be added to the general funds of the Company and used for its
general corporate purposes as the Board of Directors shall determine.

VII.  TERM OF OPTIONS; LIMITATIONS ON THE RIGHT OF EXERCISE AND SALE

         Any Option shall be exercisable at such times, in such amounts and
during such period or periods as the Board of Directors or the Committee, as the
case may be, shall determine at the date of the grant of such Option.

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         Subject to the provisions of Article XVII, the Board of Directors or
the Committee, as the case may be, shall have the right to accelerate, in whole
or in part, from time to time, conditionally or unconditionally, rights to
exercise any Option granted hereunder.

         To the extent that an Option is not exercised within the period of
exercisability specified therein, it shall expire as to the then unexercised
part.

         In no event shall an Option granted hereunder be exercised for a
fraction of a Share.

         The Committee may at any time on behalf of the Company offer to buy out
an Option previously granted, based on such terms and conditions as the
Committee shall establish and communicate to the Participant at the time that
such offer is made.

         Neither Options granted to an employee who is an officer (as defined in
Rule 16a-1(f) of the Exchange Act) of the Company nor the Shares underlying such
Options may be disposed of by such officer for a period of six (6) months
following the date such Options were granted, unless such disposition has been
approved in writing by the Board of Directors or the Committee.

                            VIII. EXERCISE OF OPTIONS

         Options granted under the Plan shall be exercised by the optionee as to
all or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Corporate Secretary of the Company at the principal
business office of the Company, specifying the number of shares to be purchased
and specifying a business day not more than fifteen (15) days from the date such
notice is given for the payment of the purchase price against delivery of the
Shares of Common Stock being purchased. Subject to the terms of Articles XIII,
XV, and XVI, the Company shall cause certificates for the Shares of Common Stock
so purchased to be delivered to the optionee at the principal business office of
the Company, against payment of the full purchase price, or in the manner
prescribed in a cashless exercise program, on the date specified in the notice
of exercise.

                       IX. NON-TRANSFERABILITY OF OPTIONS

         No option granted hereunder shall be transferable otherwise than by
will or by the laws of descent and distribution, and such option shall be
exercisable, during the Participant's lifetime, only by the Participant.
Notwithstanding the foregoing, the Committee may set forth in a stock option
agreement at the time of grant or thereafter, that the options may be
transferred to members of the Participant'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. For this purpose,
immediate family means the Participant's spouse, parents, children,
stepchildren, grandchildren and legal dependents. Any transfer of options made
under this provision will not be effective until notice of such transfer is
delivered to the Company.

                          X. TERMINATION OF EMPLOYMENT

         Upon termination of the employment of any Participant with the Company
and all subsidiary corporations and parent corporations of the Company, an
Option previously granted to 

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the Participant, unless otherwise specified by the Board of Directors or the
Committee, as the case may be, shall, to the extent not theretofore exercised,
terminate and become null and void, provided that:

         (a)  if the Participant shall die while in the employ of such
              corporation or during either the three (3) month or one (1) year
              period, whichever is applicable, specified in clause (b) below and
              at a time when such Participant was entitled to exercise an Option
              as herein provided, the legal representative of such Participant,
              or such person who acquired such Option by bequest or inheritance
              or by reason of the death of the Participant, may, not later than
              one (1) year from the date of death, but in no event later than
              the expiration of the stated term of such Option, exercise such
              Option, to the extent not theretofore exercised, in respect of any
              or all of such number of Shares of Common Stock as specified by
              the Board of Directors or the Committee, as the case may be, in
              such Option; and

         (b)  if the employment of any Participant to whom such Option shall
              have been granted shall terminate by reason of the Participant's
              retirement (at such age or upon such conditions as shall be
              specified by the Board of Directors), disability (as defined in
              Section 22(e)(3) of the Code) or dismissal by the employer other
              than for "cause" (as defined below), and while such Participant is
              entitled to exercise such Option as herein provided, such
              Participant shall have the right to exercise such Option so
              granted, to the extent not theretofore exercised, in respect of
              any or all of such number of Shares of Common Stock as specified
              by the Board of Directors or the Committee, as the case may be, in
              such Option, at any time up to and including (i) three (3) months
              after the date of such termination of employment in the case of
              termination by reason of dismissal other than for cause, and (ii)
              one (1) year after the date of termination of employment in the
              case of termination by reason of retirement or disability.
              Notwithstanding anything to the foregoing to the contrary
              contained herein, upon the termination without cause of any
              Participant who has been granted Non-Qualified Options pursuant to
              the Plan, the Board of Directors or the Committee, as the case may
              be, shall have the right, in their sole discretion, to either (i)
              accelerate the time period during which a Participant may exercise
              all or a part of any such Option previously granted and/or (ii)
              extend the time period in which such Participant may exercise such
              Option, to a period of up to one (1) year after the date of such
              Participant's termination without cause.

         In no event, however, shall any person be entitled to exercise any
Option after the expiration of the period of exercisability of such Option as
specified therein.

         If the Participant voluntarily terminates his or her employment, other
than by reason of his/her retirement, or is discharged for cause, any Option
granted hereunder shall, unless otherwise 

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specified by the Board of Directors or the Committee, as the case may be,
forthwith terminate with respect to any unexercised portion thereof.

         If an Option granted hereunder shall be exercised by the legal
representative of a deceased or disabled Participant or former Participant, or
by a person who acquired an Option granted hereunder by bequest or inheritance
or by reason of death of any Participant or former Participant, written notice
of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative or
other person to exercise such Option.

         For the purposes of the Plan, the term "for cause" shall mean (i) with
respect to a Participant who is party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
a subsidiary corporation or parent corporation of the Company, which agreement
or plan contains a definition of "for cause" or "cause" (or words of like
import) for purposes of termination of employment thereunder by the Company or
such subsidiary corporation or parent corporation of the Company, "for cause" or
"cause" as defined in the most recent of such agreements or plans, or (ii) in
all other cases, as determined by the Board of Directors or the Committee, as
the case may be, in its sole discretion, (a) the willful commission by a
Participant of a criminal or other act that causes or probably will cause
substantial economic damage to the Company or a subsidiary corporation or parent
corporation of the Company or substantial injury to the business reputation of
the Company or a subsidiary corporation or parent corporation of the Company;
(b) the commission by a Participant of an act of fraud in the performance of
such Participant's duties on behalf of the Company or a subsidiary corporation
or parent corporation of the Company; or (c) the continuing willful failure of a
Participant to perform the duties of such Participant to the Company or a
subsidiary corporation or parent corporation of the Company (other than such
failure resulting from the Participant's incapacity due to physical or mental
illness) after written notice thereof (specifying the particulars thereof in
reasonable detail) and a reasonable opportunity to be heard and cure such
failure are given to the Participant by the Board of Directors. For purposes of
the Plan, no act, or failure to act, on the Participant's part shall be
considered "willful" unless done or omitted to be done by the Participant not in
good faith and without reasonable belief that the Participant's action or
omission was in the best interest of the Company or a subsidiary corporation or
parent corporation of the Company.

         For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and a corporation if, at the time of the
determination, the individual was an "employee" of such corporation for purposes
of Section 422(a) of the Code. If an individual is on military, sick leave or
other bona fide leave of absence, such individual shall be considered an
"employee" for purposes of the exercise of an Option and shall be entitled to
exercise such Option during such leave if the period of such leave does not
exceed ninety (90) days, or, if longer, so long as the individual's right to
reemployment with the corporation granting the option (or a related corporation)
is guaranteed either by statute or by contract. If the period of leave exceeds
ninety (90) days, the employment relationship shall be deemed to have terminated
on the ninety-first (91st) day of such leave, unless the individual's right to
reemployment is guaranteed by statute or contract.

         A termination of employment shall not be deemed to occur by reason of
(i) the transfer of a Participant from employment by the Company to employment
by a subsidiary

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corporation or a parent corporation of the Company, or (ii) the transfer of a
Participant from employment by a subsidiary corporation or a parent corporation
of the Company to employment by the Company or by another subsidiary corporation
or parent corporation of the Company.

         In the event of the complete liquidation or dissolution of a subsidiary
corporation, or in the event that such corporation ceases to be a subsidiary
corporation, any unexercised Options theretofore granted to any person employed
by such subsidiary corporation will be deemed cancelled unless such person is
employed by the Company or by any parent corporation or another subsidiary
corporation after the occurrence of such event. In the event an Option is to be
cancelled pursuant to the provisions of the previous sentence, notice of such
cancellation will be given to each Participant holding unexercised Options and
such holder will have the right to exercise such Options in full (without regard
to any limitation set forth or imposed pursuant to Article VII) during the
thirty (30) day period following notice of such cancellation.

            XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS

         In the event of any change in the outstanding Shares of Common Stock
through merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or other like change in capital structure of the Company, the Board of
Directors or the Committee, as the case may be, shall make such adjustment to
each outstanding Option that it, in its sole discretion, deems appropriate. The
term "Shares" after any such change shall refer to the securities, cash and/or
property then receivable upon exercise of an Option. In addition, in the event
of any such change, the Board of Directors or the Committee, as the case may be,
shall make any further adjustment as may be appropriate to the maximum number of
Shares which may be acquired under the Plan pursuant to the exercise of Options,
the maximum number of Shares which may be so acquired by one Participant and the
number of Shares and price per Share subject to outstanding Options as shall be
equitable to prevent dilution or enlargement of rights under such Options, and
the determination of the Board of Directors as to these matters shall be
conclusive.

                       XII. RIGHT TO TERMINATE EMPLOYMENT

         The Plan shall not impose any obligation on the Company or on any
subsidiary corporation or parent corporation thereof to continue the employment
of any holder of Options and it shall not impose any obligation on the part of
any holder of Options to remain in the employ of the Company or of any
subsidiary corporation or parent corporation thereof.

                          XIII. PURCHASE FOR INVESTMENT

         Except as hereinafter provided, the Board of Directors or the
Committee, as the case may be, may require a Participant, as a condition upon
exercise of any Option granted hereunder, to execute and deliver to the Company
(a) stock powers with respect to Shares underlying a particular Option and
required to be held by a custodian, and (b) a written statement, in form
satisfactory to the Board of Directors or the Committee, as the case may be, in
which the Participant represents and warrants that Shares are being acquired for
such person's own account for investment only and not with a view to the resale
or distribution thereof. The Participant shall, at the request of the Board

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of Directors or the Committee, as the case may be, be required to represent and
warrant in writing that any subsequent resale or distribution of Shares by the
Participant shall be made only pursuant to either (i) a Registration Statement
on an appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being sold, or (ii) a specific exemption from
the registration requirements of the Securities Act, but in claiming such
exemption the Participant shall, prior to any offer of sale or sale of such
Shares, obtain a prior favorable written opinion of counsel, in form and
substance satisfactory to counsel for the Company, as to the application of such
exemption thereto. The foregoing restriction shall not apply to (i) issuances by
the Company so long as the Shares being issued are registered under the
Securities Act and a prospectus in respect thereof is current, or (ii)
re-offerings of Shares by affiliates of the Company (as defined in Rule 405 or
any successor rule or regulation promulgated under the Securities Act) if the
Shares being re-offered are registered under the Securities Act and a prospectus
in respect thereof is current.

            XIV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES

         Upon any exercise of an Option which may be granted hereunder and, in
the case of an Option, payment of the purchase price, a certificate or
certificates for the Shares shall be issued by the Company in the name of the
person exercising the Option and shall be delivered to or upon the order of such
person.

         The Company may endorse such legend or legends upon the certificates
for Shares issued pursuant to the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such Shares as, in its
discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, or (ii) implement the provisions of the Plan and any
agreement between the Company and the optionee or grantee with respect to such
Shares.

         The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares, as well as all fees and expenses necessarily
incurred by the Company in connection with such issuance or transfer, except
fees and expenses which may be necessitated by the filing or amending of a
Registration Statement under the Securities Act, which fees and expenses shall
be borne by the recipient of the Shares, unless such Registration Statement
under the Securities Act has been filed by the Company for its own corporate
purposes (and the Company so states) in which event the recipient of the Shares
shall bear only such fees and expenses as are attributable solely to the
inclusion of the Shares he or she receives in the Registration Statement.

         All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.

                              XV. WITHHOLDING TAXES

         The Company may require a Participant, if applicable, exercising a
Non-Qualified Option granted hereunder to reimburse the corporation that employs
such Participant for any taxes required by any government to be withheld or
otherwise deducted and paid by such corporation in respect of the issuance or
disposition of such Shares. In lieu thereof, the corporation that employs

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such Participant shall have the right to withhold the amount of such taxes from
any other sums due or to become due from such corporation to the Participant
upon such terms and conditions as the Board of Directors shall prescribe. The
corporation that employs such Participant may, in its discretion, hold the stock
certificate to which such Participant is entitled upon the exercise of an Option
as security for the payment of such withholding tax liability, until cash
sufficient to pay that liability has been accumulated. In addition, at any time
that the Company becomes subject to a withholding obligation under applicable
law with respect to the exercise of a Non-Qualified Option (the "Tax Date"),
except as set forth below, a holder of a Non-Qualified Option may elect to
satisfy, in whole or in part, the holder's related personal tax liabilities (an
"Election") by (i) directing the Company to withhold from Shares of Common Stock
issuable in the related exercises either a specified number of Shares or Shares
having a specified value (in each case not in excess of the related personal tax
liabilities), (ii) tendering Shares previously issued pursuant to the exercise
of an Option or other Shares of the Company's Common Stock owned by the holder,
or (iii) combining any or all of the foregoing options in any fashion. An
Election shall be irrevocable. The withheld Shares and other Shares tendered in
payment shall be valued at their fair market value (determined in accordance
with the principles set forth in Article V of the Plan) on the Tax Date. The
Board of Directors or the Committee, as the case may be, may disapprove of any
Election, suspend or terminate the right to make Elections or provide that the
right to make Elections shall not apply to particular Shares of Common Stock or
exercises. The Board of Directors or the Committee, as the case may be, may
impose any additional conditions or restrictions on the right to make an
Election as it shall deem appropriate.

                   XVI. LISTING OF SHARES AND RELATED MATTERS

         The Board of Directors or the Committee, as the case may be, may delay
any award, issuance or delivery of Shares of Common Stock if it determines that
listing, registration or qualification of Shares of Common Stock or the consent
or approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the sale or purchase of Shares under the
Plan, until such listing, registration, qualification, consent or approval shall
have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Board of Directors or the Committee, as the
case may be.

                           XVII. AMENDMENT OF THE PLAN

         The Board of Directors or the Committee, as the case may be, may, from
time to time, amend the Plan, provided that no amendment shall be made, without
the approval of the stockholders of the Company, if and to the extent required
by Rule 16b-3 or for the exception for performance-based compensation under
Section 162(m) of the Code, that will (i) increase the total number of Shares
reserved for Options under the Plan (other than an increase resulting from an
adjustment provided for in Article XI), (ii) reduce the exercise price of any
Option granted hereunder, (iii) modify the provisions of the Plan relating to
eligibility, or (iv) materially increase the benefits accruing to Participants
under the Plan or extend the maximum option period under Section VII. The rights
and obligations under any Option granted before amendment of the Plan or any
unexercised portion of such Option shall not be adversely affected by amendment
of the Plan or Option without the consent of the holder of such Option.

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                  XVIII. TERMINATION OR SUSPENSION OF THE PLAN

         The Board of Directors or the Committee, as the case may be, may at any
time suspend or terminate the Plan. The Plan, unless sooner terminated under
Article XXI or by action of the Board of Directors, shall terminate at the close
of business on the Termination Date. Options may not be granted while the Plan
is suspended or after it is terminated. Rights and obligations under any Option
granted while the Plan is in effect shall not be altered or impaired by
suspension or termination of the Plan, except upon the consent of the person to
whom the Option was granted. The power of the Board of Directors to construe and
administer any Options granted prior to the termination or suspension of the
Plan under Article III nevertheless shall continue after such termination or
during such suspension.

                               XIX. GOVERNING LAW

         The Plan and such Options as may be granted thereunder and all related
matters shall be governed by, and construed and enforced in accordance with, the
laws of the State of Delaware from time to time obtaining or such other
jurisdiction as the Company may become reincorporated under.

                             XX. PARTIAL INVALIDITY

         The invalidity or illegibility of any provision hereof shall not be
deemed to affect the validity of any other provision.

                               XXI. EFFECTIVE DATE

         The Plan shall become effective upon its approval by the Board of
Directors of the Company.

                                       11