S-8











Exhibit 4.2  



ECtel LTD. 



2003 U.S. EMPLOYEE
STOCK OPTION PLAN 



     A.
          NAME AND PURPOSE 



         1.       
          Name and Purpose: ECtel Ltd. sponsors this plan, as amended from time to
          time, which shall be known as the “ECtel Ltd. 2003 U.S. Employee Stock
          Option Plan” (the “Plan”). The purpose and intent of the Plan is
          to provide incentives to officers, employees and consultants of ECtel Inc. and
          other non-Israeli subsidiaries of ECtel Ltd. (hereinafter, together with their
          subsidiaries, the “Companies”) by providing them with opportunities to
          purchase Ordinary Shares, nominal value 0.04 New Israeli Shekels each
          (“Shares”), of the parent company of the Companies, ECtel Ltd. (the
          “Parent”). 



    2.        Definitions:  



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







		    2.2        "Incentive
 Stock Option" means an "incentive  stock option"  within the meaning of Section 422 of
the Code.  







		    2.3        "Nonqualified
Stock Option" means an Option that is not an Incentive Stock Option. 







		    2.4        “Ten-Percent
Stockholder” means an Eligible Grantee, who, at the time an Incentive Stock Option
is to be granted to such Eligible Grantee, owns (within the meaning of Section 422(b)(6)
of the Code) stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, a parent or a subsidiary within the meaning
of Sections 424(e) and 424(f), respectively, of the Code.  


















     B.
          GENERAL TERMS AND CONDITIONS OF THE PLAN 



    3.        Administration:  



		    3.1        The
Board of Directors of the Parent may appoint a Share Incentive Committee, which will
consist of such number of Directors of the Parent, as may be fixed from time to time by
the Board. The Board shall appoint the members of the committee, may from time to time
remove members from, or add members to, the Committee and shall fill vacancies in the
Committee however caused. The Plan will be administered by the Share Incentive Committee,
or by the Board (including, but not limited to, actions which the Share Incentive
Committee is not permitted to take according to Section 112 of the Companies Law, 1999
(the “Companies Law”)) (collectively – the “Committee”).  







		    3.2        The
Committee shall select one of its members as its Chairman and shall hold its meetings at
such times and places as it shall determine. Actions taken by a majority of the members
of the Committee, at a meeting at which a majority of its members is present, or acts
reduced to or approved in writing by all members of the Committee, shall be the valid
acts of the Committee. The Committee may appoint a Secretary, who shall keep records of
its meetings and shall make such rules and regulations for the conduct of its business as
it shall deem advisable.  







		    3.3        Subject
to the general terms and conditions of this Plan, the Committee shall have the full
authority in its sole and absolute discretion, from time to time and at any time, to
determine (i) the persons (“Grantees”) to whom options to purchase Shares (“Option(s)”)
shall be granted, (ii) the number of Shares to be covered by each Option, (iii) the time
or times at which the same shall be granted, (iv) the price, vesting schedule and
conditions on which such Options may be exercised and on which such Shares shall be paid
for, and/or (v) interpret or construe the Plan or make determinations with respect to any
other matter which is necessary or desirable for, or incidental to, the administration of
the Plan. In determining the number of Shares covered by the Option to be granted to each
Grantee, the Committee may consider, among other things, the Grantee’s salary and
the duration of the Grantee’s employment by the Parent.  







		    3.4        The
Committee may, from time to time, adopt such rules and regulations for carrying out the
Plan as it may deem necessary. No member of the Board or of the Committee shall be liable
for any act or determination made in good faith with respect to the Plan or any Option
granted thereunder.  







		    3.5        The
interpretation and construction by the Committee of any provision of the Plan or of any
Option thereunder shall be final and conclusive unless otherwise determined by the Board,
in which event the Board’s determination shall be final and conclusive.  


















         4.       
          Eligible Grantees: The Committee, at its discretion, may grant Options to
          any officer, director or consultant of the Parent or its subsidiaries, provided
          that such person is not an employee of the Parent resident in Israel; and
          provided, however, that Incentive Stock Options shall be granted only to
          employees of the Parent or its subsidiaries. Anything in this Plan to the
          contrary notwithstanding, all grants of Options to Directors and Office Holders
          – “Nosei Misra” – as such term is defined in the Israeli
          Companies Law – 1999, as amended from time to time (the “Companies
          Law”) – shall be authorized and implemented only in accordance with
          the provisions of the Companies Law. The grant of an Option to a Grantee
          hereunder, shall neither entitle such Grantee to participate, nor disqualify him
          from participating, in any other grant of options pursuant to this Plan or any
          other stock option plan of the Parent. 



         5.       
          Grant of Options and Issuance of Shares: Subject to any applicable law,
          the effective date of the grant of an Option (the “Date of Grant”)
          shall be the date specified by the Committee in its determination relating to
          the award of such Option. The Committee shall promptly give the Grantee written
          notice of the grant of an Option, and the Grantee shall execute an agreement
          evidencing such grant and the rights and obligations of the Grantee and the
          Company with respect to such Option Agreement (the “Option
          Agreement”). 



         6.       
          Reserved Shares: The total number of Shares that may be subject to
          Options granted under the Plan shall not exceed 50,000 in the aggregate, subject
          to adjustments as provided in Section 11 hereof. Without derogating from
          the foregoing, the Committee shall have full authority in its discretion to
          determine that the Parent may issue, for the purposes of this Plan, previously
          issued Shares that are held by the Parent, from time to time, as Dormant Shares
          (as such term is defined in the Companies Law).. All Shares under the Plan, in
          respect of which the right hereunder of a Grantee to purchase the same shall,
          for any reason, terminate, expire or otherwise cease to exist, shall again be
          available for grant through Options under the Plan. 



         7.       
          Grant of Options: 



		    7.1        The
Committee in its discretion may award to Grantees Options to purchase Shares in the
Parent available under the Plan.  







		    7.2        The
Option Agreement shall state, inter alia, the number of Shares covered thereby, the dates
when the Option may be exercised, the exercise price, and such other terms and conditions
as the Committee at its discretion may prescribe, provided that they are consistent with
this Plan.  


















		    7.3        Options
granted thereunder shall be for such term as the Committee shall determine, provided that
(i) no Incentive Stock Option shall be exercisable after the expiration of ten (10) years
from the date it is granted (five (5) years in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder) and (ii) no Nonqualified Stock Option shall be
exercisable after the expiration of ten (10) years and one (1) day from the date it is
granted. The Committee may, subsequent to the granting of any Option, extend the term
thereof but in no event shall the term as so extended exceed the maximum term provided
for in the preceding sentence.  







		    7.4        The
schedule pursuant to which such Options shall vest, and the Grantee shall be entitled to
pay for, and acquire, the Shares, shall be determined by the Committee at its sole
discretion. Unless determined otherwise by the Committee, the schedule pursuant to which
such Options shall vest, and the Grantee thereof shall be entitled to pay for and acquire
the Shares, shall be such that the Options shall be fully vested on the first business
day following the passing of three (3) years from the Date of Grant (the “Vesting
Period”) as follows: fifty percent (50%) of such Options shall vest on each of the
first and second anniversaries of the Date of Grant. Vesting period of an Option means,
for the purpose of the Plan and its related instruments, the period between the Date of
Grant and the date on which the holder of an Option may exercise the rights awarded
pursuant to terms of the Option. Vesting of Options granted hereunder will continue only
during periods while the employer-employee or other service provider relationship exists
between the relevant Company and the Grantee, as the case may be. For the purposes of
this paragraph 7.4, the employer-employee or other service-provider relationship will not
be deemed to exist with regard to periods during which the Grantee is on an unpaid leave
of absence from the Company.  







         8.       
          Exercise Price: The exercise price per Share covered by each Option shall
          be determined by the Committee in its sole and absolute discretion; provided,
          however: 



		    8.1        In
the case of an Incentive Stock Option granted to any Eligible Grantee other than a
Ten-Percent Stockholder, the per Share exercise price shall be no less than 100% of the
Fair Market Value per Share on the date of the grant.  







		    8.2        In
the case of an Incentive Stock Option granted to any Ten-Percent Stockholder, the per
Share exercise price shall be no less than 110% of the Fair Market Value per Share on the
date of the grant.  


















		    8.3        In
no event shall the exercise price of an Option be less than the nominal value of the
Shares into which such Option is exercisable.  







		    8.4        Repricing:
Subject to applicable law, the Committee shall have full authority to, at any time and
from time to time, without the approval of the shareholders of the Parent, (i) grant, in
its discretion, to the holder of an outstanding Incentive Stock Option and/or
Nonqualified Stock Option, in exchange for the surrender and cancellation of such Option,
a new Option having an exercise price lower than provided in the Option so surrendered
and canceled and containing such other terms and conditions as the Committee may
prescribe in accordance with the provisions of the Plan, or (ii) effectuate a decrease in
the Exercise Price of outstanding Nonqualified Stock Option as provided in Section 8.5
below. At the full discretion of the Committee, such actions may be brought before the
shareholders of the Parent for their approval.  







		    8.5        Subject
to the foregoing, the Committee may reduce the exercise price of any outstanding
Nonqualified Stock Option. In the event of such amendment, the Date of Grant of such
Option shall thereafter be considered to be the date of such amendment; provided,
however, that for purposes of vesting, the Option shall continue to be exercisable based
on the terms set forth in the original Option Agreement.  







		    8.6        For
the purposes hereof, “Fair Market Value” on any date shall be the last sale
price reported for the Shares on NASDAQ National Market System (“NMS”) on such
date or on the last day preceding such date on which a sale was reported.  







		    8.7        Notwithstanding
any other provision of the Plan to the contrary, the aggregate Fair Market Value
(determined as of the date of grant) of the Shares with respect to which Incentive Stock
Options granted to a Grantee by the Parent or any parent or subsidiary of the Parent are
exercisable for the first time shall not exceed $100,000 in any calendar year; provided,
however, that any Option designated as an Incentive Stock Option under the Plan or any
portion thereof that exceeds the foregoing limit or that is otherwise disqualified as an
incentive stock option by operation of Section 422(d) or any other provision of the Code,
shall be treated as a Nonqualified Stock Option for purposes of the Plan.  







    9.        Exercise
of Options:  



		    9.1        Options
shall be exercisable pursuant to the terms under which they were awarded and subject to
the terms and conditions of this Plan and the Option Agreement.  


















		    9.2        The
exercise of an Option shall be made by a written notice of exercise (the “Notice of
Exercise”) delivered by the Grantee to the Parent at its principal executive office,
specifying the number of Shares to be purchased and accompanied by the payment therefor,
and containing such other terms and conditions as the Committee shall prescribe from time
to time. An Option may be exercised in whole or in part to the extent exercisable under
the Plan and Option Agreement.  







		    9.3        Anything
herein to the contrary notwithstanding, but without derogating from the provisions of
Section 10 hereof, if any Option has not been exercised and the Shares covered
thereby not paid for within ten (10) years after the Date of Grant (or any shorter period
set forth in the Option Agreement), such Option and the right to acquire such Shares
shall terminate, and all interests and rights of the Grantee in and to the same shall
ipso facto expire.  







		    9.4        Each
payment for Shares shall be in respect of a whole number of Shares, and shall be effected
in cash or by a cashier’s check payable to the order of the Parent, or such other
method of payment acceptable to the Parent.  







    10.        Termination
of Employment:  



		    10.1        In
the event that a Grantee ceases, for any reason, to be employed by the Companies, all
Options theretofore granted to such Grantee shall terminate as follows, subject to the
provisions of 7.4 above and 11.3 below:  







		    (a)        All
Options which are not vested and not exercisable at the time of the           cessation
of employment shall terminate immediately.  







		    (b)        If
the Grantee ceases to be employed by reason of such Grantee’s death or
          “Disability” (as hereinafter defined), such Options (to the extent
          exercisable at the time of the Grantee’s cessation of employment) shall be
          exercisable by the Grantee, Grantee’s legal representative, estate or
other           person to whom the Grantee’s rights are transferred by will or by
laws of           descent or distribution (the “Estate”) at any time until
thirty (30)           days after such Grantee’s Disability has been established, or
after the           Estate has been legally established (but in no event after the
expiration date           of such Option), and shall thereafter terminate. In the event
of Disability, the           Committee will be authorized, at its sole discretion, to
decide that the said           exercise period is extended, with or without being subject
to additional terms           or restrictions (except that to the extent that the Grantee
holds Incentive           Stock Options, the Committee will not extend such term for more
than one year           after such Grantee’s Disability has been established). For
purposes hereof,           Disability shall mean a physical or mental impairment
constituting a permanent           and total disability within the meaning of Section
22(e)(3) of the Code.  


















		    (c)        If
the Grantee ceases to be employed for any other reason, such Options (to the
          extent exercisable at the time of the Grantee’s termination of employment)
          shall be exercisable at any time until the two (2) weeks from the termination
of           the Employee’s employment (but in no event after the expiration date of
          such Option), and shall thereafter terminate. For the purposes of this Section
          10.1(c), the date of termination of employment shall be the date on which the
          termination notice is sent to the Grantee, or the date on which the resignation
          notice is sent to the employer, as the case may be, regardless of the actual
          date of cessation of work.  







		    (d)        Notwithstanding
the aforesaid in Section 10.1(c) above, if the Grantee’s           termination of
employment is due to (i) breach of the Grantee’s fiduciary           duties towards
any of the Companies, or (ii) breach of the Grantee’s duty           of care towards
any of the Companies, or (iii) the Grantee has committed any           fellony, or (iv)
the Grantee has committed a fraudulent act towards any of the           Companies, or (v)
the Grantee caused intentionally, by act or omission, any           material financial
damage to any of the Companies, all the Options whether           vested or not shall ipso
facto expire immediately and be of no legal           effect. For the purposes of
this Section 10.1(d), the date of termination of           employment shall be the date
on which the termination notice is sent to the           Grantee, or the date on which
the resignation notice is sent to the employer, as           the case may be, regardless
of the actual date of cessation of work.  







		    (e)        Notwithstanding
the aforesaid, if the Grantee ceases to be a full-time employee           of any of the
Companies and becomes a part-time employee, such Options (to the           extent
exercisable at the time the Grantee ceases to be a full-time employee of           any of
the Companies) shall be exercisable for a period of six (6) months           following
such cessation of the full-time employment, and shall thereafter           terminate. All
Options that are not vested at the time of cessation of the           full-time
employment shall ipso facto expire and be of no legal effect.  







		    (f)        If
a Grantee should retire (as such term is defined by the Committee at its sole
          and absolute discretion), he shall, subject to the approval of the Committee,
          continue to enjoy such rights, if any, under the Plan and on such terms and
          conditions, with such limitations and subject to such requirements as the
          Committee in its discretion may determine.  







		    10.2        Whether
the cessation of employment of a particular Grantee is for reason of “Disability” for
the purposes of paragraph 10.1(b) hereof or by virtue of “retirement” for
purposes of paragraph 10.1(f) hereof, or is a termination of employment other than
by reason of such Disability or retirement, or is for reasons as set forth in paragraph
10.1(d) hereof, shall be finally and conclusively determined by the Committee in its
absolute discretion.  


















		    10.3        Notwithstanding
the foregoing provisions of Section 10.1, the Committee may provide, either at the
time an Option is granted or thereafter, that such Option may be exercised after the
periods provided for in Section 10.1, but in no event beyond the term of the Option.  







    11.        Adjustment
Upon Changes in Capitalization  



		    11.1        to
any required action by the shareholders of the Parent, the number of Shares covered by
each outstanding Option, and the number of Shares which have been authorized for issuance
under the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as the price
per share of Shares covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting from a
stock split, reverse stock split, stock dividend, combination or reclassification of the
Shares or the payment of a stock dividend (bonus shares) with respect to the Shares or
any other increase or decrease in the number of issued Shares effected without receipt of
consideration by the Parent; provided, however, that conversion of any convertible
securities of the Parent shall not be deemed to have been “effected without receipt
of consideration.” Such adjustment shall be made in the sole and absolute discretion
of the Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Parent of shares 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 subject to an Option.  







		    11.2        Any
such adjustment in the Shares or other securities subject to outstanding Incentive Stock
Options (including any adjustments in the purchase price) shall be made in such manner as
not to constitute a modification as defined by Section 424 (h) (3) of the Code
and only to the extent otherwise permitted by Sections 422 and 424 of the Code.  







		    11.3        In
the event of the proposed dissolution or liquidation of the Parent, the Committee shall
notify each Grantee at lease fifteen (15) days prior to such proposed action. To the
extent it has not been previously exercised, each Option will terminate immediately prior
to the consummation of such proposed action.  


















		    11.4        (a)
In the event of a Corporate Transaction (as defined below), immediately prior to the
effective date of such Corporate Transaction, each Option may, at the sole and absolute
discretion of the Committee, either:  







		    (i)        be
substituted for options to purchase securities of any successor entity (the
          “Successor Entity Option”) such that the Grantee may exercise the
          Successor Entity Option for such number and class of securities of the
successor           entity which would have been issuable to the Grantee in consummation
of such           Corporate Transaction, had the Option been exercised immediately prior
to the           effective date of such Corporate Transaction; and/or  







		    (ii)        be
assumed by the successor entity such that the Grantee may exercise the           Options
for such number and class of securities of the successor entity which           would
have been issuable to the Grantee in consummation of such Corporate
          Transaction, had the Option been exercised immediately prior to the effective
          date of such Corporate Transaction.  







In the event of a clause (i) or
clause (ii) action, appropriate adjustments shall be made to the exercise price per Share
to reflect such action. 



         (b)       
          Immediately following the consummation of the Corporate Transaction, all
          outstanding Options shall terminate and cease to be outstanding, except to the
          extent assumed by a successor entity. 



         (c)       
          Notwithstanding the aforementioned in Section 7.4 above, ten (10) days prior to
          the effective date of the Corporate Transaction, all Options granted under the
          plan to directors and executive officers of Parent, notwithstanding the Vesting
          Period of such Options, subject to closing of said transaction, shall vest in
          full and become fully exercisable. 



         (d)       
          Notwithstanding the foregoing, and without derogating from the power of the
          Committee pursuant to the provisions of this Plan, the Committee shall have full
          authority and sole discretion to determine that any of the provisions of
          Sections 11.4(a)(i) and/or 11.4(a)(ii) above shall apply in the event of a
          Corporate Transaction in which the consideration received by the shareholders of
          the Parent is not solely comprised of securities of a successor entity, or in
          which such consideration is solely cash or assets other than securities of a
          successor entity. 



         (e)       
          “Corporate Transaction” means the occurrence, in
          a single transaction or in a series of related transactions, of any one or more
          of the following events: 



		    (i)        a
sale  or  other  disposition  of all or  substantially all, as determined by the Board in
its discretion,  of the  consolidated  assets of the Parent and its subsidiaries; 







		    (ii)        a
sale or other disposition of at least eighty percent (80%) of the outstanding
          securities of the Parent;  


















		    (iii)        a
merger, consolidation or similar transaction following which the Parent is not
          the surviving corporation; or  







		    (iv)        a
merger, consolidation or similar transaction following which the Parent is the
          surviving corporation but the Ordinary Shares of the Parent outstanding
          immediately preceding the merger, consolidation or similar transaction are
          converted or exchanged by virtue of the merger, consolidation or similar
          transaction into other property, whether in the form of securities, cash or
          otherwise.  







		    11.5        Subject
to any provision in the Article of Association of the Parent, in the event that all or
substantially all of the issued and outstanding share capital of the Parent is to be sold
(the “Sale”), each Grantee shall be obligated to participate in the Sale and
sell his or her Shares and/or Options in the Company, provided, however, that each such
Share or Option shall be sold at a price equal to that of any other Share sold under the
Sale (minus the applicable exercise price), while accounting for changes in such price
due to the respective terms of any such Option, and subject to the absolute discretion of
the Board.  







    12.        Non-Transferability  



        No
Option shall be assignable or transferable by the Grantee to whom granted otherwise than
by will or the laws of descent and distribution, and an Option may be exercised during the
lifetime of the Grantee only by such Grantee or by such Grantee’s guardian or legal
representative. The terms of such Option shall be binding upon the beneficiaries,
executors, administrators, heirs and successors of such Grantee. 



    13.        Term
and Amendment of the Plan:  



		    13.1        The
Plan shall expire on August 3, 2013 (except as to Options outstanding on that date).  







		    13.2        Subject
to applicable laws, the Board in its discretion may, at any time and from time to time,
without the approval of the Shareholders of the Parent terminate or amend the Plan in any
respect and without derogating from the aforesaid, the Board may (i)  expand of the
class of participants eligible to participate in the Plan; and/or (ii) expand the types
of options or awards provided under the Plan and/or (iii) extend the duration of the
Plan. Notwithstanding the aforesaid, at the full discretion of the Board any of the above
actions may be brought before the shareholders of the Parent for their approval.  


















	 	        In
no event may any action to amend or terminate the Plan of the Parent alter or impair the
rights of a Grantee, without his consent, under any Option previously granted to him.  







         14.       
          Tax Consequences: All tax consequences arising from the grant or exercise
          of any Option, from the payment for, or the subsequent disposition of, Shares
          covered thereby or from any other event or act (of the Parent or the Grantee)
          hereunder, shall be borne solely by the Grantee, and the Grantee shall indemnify
          the Parent and hold it harmless against and from any and all liability for any
          such tax or interest or penalty thereon, including without limitation,
          liabilities relating to the necessity to withhold, or to have withheld, any such
          tax from any payment made to the Grantee. 



    15.        Restricted
Stock:  



		    15.1        The
Shares issuable upon exercise of the Options granted herein will be “restricted
securities” under the Securities Act of 1933 and the regulations promulgated
hereunder (the “Act”) and may not be resold absent registration under the Act
or an available exemption thereunder. In the event that an owner of Shares issued
pursuant to this Plan effects a sale or transfer of such Shares under an available
exemption under the Act, such owner shall, before effecting such sale or transfer, (i)
notify the Parent in writing of the proposed disposition and the name of the proposed
transferees, (ii) furnish the Parent with an opinion of counsel satisfactory in form and
content to the Parent, and (iii) furnish the Parent with an agreement in writing from the
transferee pursuant to which such transferee agrees to be bound by the provisions
contained herein and in the Option Agreement, or (iv) the Parent shall have waived,
expressly and in writing, its rights under clauses (i), (ii) and (iii) of this
subsection.  







		    15.2        The
Shares issuable upon exercise of the Options granted herein, once any such Option is
exercised and the Shares issued, will be subject to a lock-up for 180 days (or for such
longer period as may be requested by the Parent’s underwriter or underwriters)
following the date immediately subsequent to the first date of the effectiveness of the
first underwritten public offering of any of the Parent’s securities. In connection
with any subsequent underwritten public offering of the Parent’s securities, the
Shares issuable upon exercise of the Options granted herein, once any such Option is
exercised and the Shares issued, will be subject to a lock-up for 120 days (or such
longer period as may be requested by the Parent’s underwriter or underwriters)
following the date immediately subsequent to the first date of the effectiveness of such
public offering. During such periods, if the owner of the option Shares is not
participating in such public offering, the owner of the option Shares will not be allowed
to sell or transfer, or offer to sell or transfer, any Shares without the prior written
consent of the Parent’s underwriter or underwriters.  


















    16.        Miscellaneous:  



		    16.1        Continuance
of Employment: Neither the Plan nor the grant of an Option thereunder shall impose
any obligation on the Parent to continue the employment of any Grantee, and nothing in
the Plan or in any Option granted pursuant thereto shall confer upon any Grantee any
right to continue in the employ of the Parent, or restrict the right of the Parent to
terminate such employment at any time.  







		    16.2        Governing
Law; Regulations and Approvals:  







		                               16.2.1        The
Plan and all instruments issued thereunder or in connection  therewith,  shall be
governed by, and interpreted in accordance with, the laws of the State of Israel.  







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







		                               16.2.3        Subject
 to  Section 9, the Board may make such  changes  as may be  necessary  or appropriate to
comply with the rules and regulations of any government authority or to obtain for
Optionees granted Incentive Stock Options the tax benefits under the applicable
provisions of the Code and regulations promulgated thereunder.  







		                               16.2.4        Each
 Option is  subject to the  requirement  that,  if at any time the  Committee determines,
in its absolute discretion, that the listing, registration or qualification of Shares
issuable pursuant to the Plan is required by any securities exchange or under any state
or federal law, or the consent or approval of any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a condition of,
or in connection with, the grant of an Option or the issuance of Shares, no Options shall
be granted or payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained free of
any conditions that are not acceptable to the Committee.  







		    16.3        Application
of Funds: The proceeds received by the Parent from the sale of Shares pursuant to
Options granted under the Plan will be used for general corporate purposes of the Parent.  


















		    16.4        Multiple
Agreements: The terms of each Option may differ from other Options granted under the
Plan at the same time, or at any other time. The Committee may also grant more than one
Option to a given Grantee during the term of the Plan, either in addition to, or in
substitution for, one or more Options previously granted to that Grantee. The grant of
multiple Options may be evidenced by a single Option Agreement or multiple Option
Agreements, as determined by the Committee.  







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







		    16.6        Withholding
of Taxes: The Parent shall have the right to deduct from any payment of cash to any
Optionee an amount equal to the income taxes and other amounts required by law to be
withheld with respect to any Option. Notwithstanding anything to the contrary contained
herein, if an Optionee is entitled to receive Shares upon exercise of an Option, the
Parent shall have the right to require such Optionee, prior to the delivery of such
Shares, to pay to the Parent the amount of any income taxes and other amounts that the
Parent is required by law to withhold. With respect to any Incentive Stock Options
granted under this Plan, if the Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares
issued to such Optionee pursuant to such Optionee’s exercise of the Incentive Stock
Option, and such disposition occurs within the two-year period commencing on the day
after the date of grant of such Option or within the one-year period commencing on the
day after the date of issuance of the Share or Shares to the Optionee pursuant to the
exercise of such Option, such Optionee shall, within ten (10) days of such disposition,
notify the Parent thereof and thereafter immediately deliver to the Parent any amount of
income taxes and other amounts that the Parent informs the Optionee the Parent is
required to withhold.