STORAGE TECHNOLOGY CORPORATION
                             AMENDED AND RESTATED
                         1995 EQUITY PARTICIPATION PLAN

                                    May 2000

                                   SECTION I

                                 INTRODUCTION

      1.1  Establishment.  The Storage  Technology  Corporation  (the "Company")
original 1995 Equity  Participation  Plan (the "Original Plan") was effective as
of March 8,  1995,  the  date it was  adopted  by the  Board of  Directors  (the
"Board") of the Company.  The Original Plan was approved by  stockholders of the
Company on May 24,  1995.  The  Original  Plan was  amended in  September  1996,
February  1997,  March  1998,  March  1999  and  March  2000  (individually,  an
"Amendment"), in each instance receiving stockholder approval when required. The
Company has determined that, for sake of clarity, it is advisable to incorporate
all the  Amendments  to the Original  Plan into this  Amended and Restated  1995
Equity Participation Plan (the "1995 Plan").

      Effective as provided in Section 22, the Company hereby establishes a plan
of  long-term  stock-based   compensation  incentives  for  selected  employees,
directors and consultants of the Company and its affiliated corporations.

      1.2  Purpose.  The  purpose  of the  1995  Plan is to  provide  employees,
directors and consultants selected for participation in the 1995 Plan with added
incentives to continue in the service of the Company and its  affiliates  and to
create in such  employees,  directors and  consultants a more direct interest in
the  future  success  of  the  operations  of the  Company  and  its  affiliated
corporations by relating incentive  compensation to the achievement of long-term
corporate  economic  objectives.  The 1995 Plan is also  designed to attract key
employees,  directors and consultants  and to retain and motivate  participating
employees,  directors and  consultants  by providing an  opportunity  for equity
investment in the Company.

      1.3 No  Effect on 1987  Plan  Options.  Options  granted  pursuant  to the
Storage Technology  Corporation 1987 Equity Participation Plan (the "1987 Plan")
shall be governed by the terms and provisions of the option agreements  covering
such grants and by the provisions of the 1987 Plan.

                                   SECTION II

                                  DEFINITIONS

      2.1  Definitions.  The  following  terms shall have the meanings set forth
below:

      (a) "Affiliated Corporation" means any corporation that is either a parent
corporation with respect to the Company or a subsidiary corporation with respect
to the Company (within the meaning of Sections 424(e) and (f), respectively,  of
the Internal Revenue Code).

      (b) "Board" means the Board of Directors of the Company.

      (c) "Cause" means performance or conduct problems  resulting in discharge,
as determined by the Company or Affiliated Company,  which determination will be
conclusive.

      (d)  "Committee"  means a committee  designated by the Board to administer
the Plan or, if no committee is so designated, the Board.

      (e) "Common Stock" means the Company's $.10 par value voting common stock.

      (f) "Common Stock Equivalent" means a right to receive Common Stock in the
future that may be granted to a Participant pursuant to Sections 12, 13 or 15 in
lieu of a current  issuance of Common Stock,  subject to certain  conditions and
limitations imposed in accordance with such Sections.

      (g)  "Consultant"  means a natural  person who  performs  services for the
Company, or any Affiliated Corporation,  or any division thereof in exchange for
consideration, but who is not an Employee.

      (h) "Director" means a member of the Board.

      (i)  "Effective  Date" means the  effective  date of the 1995 Plan, as set
forth in Section 22 hereof.

      (j)  "Eligible  Employees"  means  those  Employees  upon whose  judgment,
initiative  and efforts the Company or the Affiliated  Corporations  are, or are
expected  to  become,  largely  dependent  for the  successful  conduct of their
business.

      (k)  "Employee"   means  a  natural  person  who  is  deemed  an  employee
(including,  without limitation, an officer or director who is also an employee)
of the Company,  or any  Affiliated  Corporation,  in accordance  with the rules
contained in Section  3401(c) of the Internal  Revenue Code and the  regulations
thereunder.

      (l) "Fair  Market  Value" means with  respect to Common  Stock,  as of any
date,  the  closing  price of a share  of  Common  Stock  on the New York  Stock
Exchange as reported by The Wall Street  Journal for the last  trading day prior
to that date. If no such prices are reported,  then Fair Market Value shall mean
the average of the high and low sale prices for the Common  Stock (or if no sale
prices are reported,  the average of the high and low bid prices) as reported by
the principal  regional stock  exchange,  or if not so reported,  as reported by
Nasdaq or a quotation system of general circulation to brokers and dealers.

      (m)  "Incentive  Stock  Option"  means the right to purchase  Common Stock
granted to an  Employee  pursuant  to  Sections 6 and 7,  which  constitutes  an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code, and which may or may not be issued with related Stock Appreciation Rights.

      (n) "Internal Revenue Code" means the Internal Revenue Code of 1986, as it
may be amended from time to time.

      (o)  "Long-Term  Employee"  means a person  who,  as of the date he or she
ceases to be an Employee of the Company or any Affiliated Corporation,  has been
an Employee of the Company or any Affiliated  Corporation for six years or more,
with no break in such employment of longer than one year.

      (p)  "MBO  Payment"  means a  payment  to a  Participant  pursuant  to the
Company's MBO Plan,  which payment may be made either in shares of Common Stock,
Common Stock Equivalents or in cash, or partly in Common Stock, partly in Common
Stock  Equivalents  and partly in cash, as  determined  in  accordance  with the
provisions of Section 13.

      (q) "MBO Equity Plan" means the Company's Management By Objective Plan, as
established by the Board or the Committee  from time to time,  pursuant to which
MBO Payments  are made from time to time in the manner and under the  conditions
established by the Board or the Committee.

      (r) "Non-Qualified  Option" means a right to purchase Common Stock granted
to a  Participant  pursuant  to  Sections 6 and 8, which does not  qualify as an
Incentive  Stock Option or which is designated as a  Non-Qualified  Option,  and
which may or may not be issued with related Stock Appreciation Rights.

      (s) "Outside Director" means a Director who is not an Employee.

      (t)  "Participant"  means an Eligible  Employee,  Director  or  Consultant
designated by the  Committee  from time to time during the term of the 1995 Plan
to receive one or more of the stock-based compensation incentives provided under
the 1995 Plan.

      (u) "Reduction in Force" means any termination of employment  that, in the
sole  judgment of the  Company,  is (i) made at the request of the Company or an
Affiliated Corporation and is due to the elimination of the Employee's position,
or (ii) a reduction  in the number of persons  employed by the  Company,  either
overall or in the Employee's  function,  department,  division or other relevant
workplace unit.

      (v)  "Restricted  Stock Award" means an award of Common Stock granted to a
Participant  pursuant  to Section  10 that is  subject  to certain  restrictions
imposed in accordance with the provisions of such Section.

      (w) "Retire" means any  termination  of employment  that is deemed to be a
"Retirement"  by a resolution of the Board of Directors,  or any  termination of
employment  made at the  request  of the  Employee  if,  as of the  date of such
termination,  such  Employee  (a) is age 62 or older and (b) has, at the time of
such termination, been employed by the Company or any Affiliated Corporation for
six years or more, with no break in such employment of longer than one year.

      (x)  "Retired"  means the  status of any former  Employee  after he or she
Retires.

      (y) "Stock  Appreciation  Right"  means a right  granted to a  Participant
pursuant  to  Section  9 to  receive  a payment  from the  Company  equal to the
difference  between the Fair Market  Value of one or more shares of Common Stock
subject to a Non-Qualified  Option or an Incentive Stock Option and the exercise
price of such shares under the terms of such Stock Option.

      (z) "Stock  Option"  means an Incentive  Stock  Option or a  Non-Qualified
Option.

      2.2 Gender and Number. Except when otherwise indicated by the context, the
masculine gender shall also include the feminine  gender,  and the definition of
any term herein in the singular shall also include the plural.


                                   SECTION III

                              PLAN ADMINISTRATION

      3.1 Administration  Generally.  The 1995 Plan shall be administered by the
Board or Committee.  In  accordance  with the  provisions of the 1995 Plan,  the
Committee, in its sole discretion:

      (a)   shall  select  the   Participants   from  Eligible   Employees,
Directors  and Consultants;

      (b) shall  determine the number of shares of Common Stock to be subject to
Incentive  Stock Options,  Non-Qualified  Options,  Stock  Appreciation  Rights,
Restricted Stock Awards and other Common Stock or Common Stock Equivalent awards
granted pursuant to the 1995 Plan;

      (c) shall  determine  the number of shares of Common Stock or Common Stock
Equivalents to be issued as MBO Payments;

      (d) shall  determine  the time at which such options,  rights,  awards and
payments are to be granted;

      (e) shall fix the exercise  price,  period and the manner in which a Stock
Option becomes exercisable;

      (f) shall  establish  the  duration and nature of  Restricted  Stock Award
restrictions;

      (g)  shall  determine  the Fair  Market  Value  of the  Common  Stock,  in
accordance with Section 2.1(l) of the 1995 Plan;

      (h) shall determine whether and under what circumstances,  if any, a Stock
Option or Stock  Appreciation  Right  may be  settled  in cash or  Common  Stock
Equivalents instead of Common Stock;

      (i)   [Intentionally Deleted]

      (j) may  modify or amend the terms  and  conditions  of any Stock  Option,
Stock  Appreciation  Right,  Restricted Stock Award or other Common Stock award,
subject to Section 19 of the Plan (including,  but not limited to,  accelerating
vesting or waiving forfeiture restrictions);

      (k)   may institute an option exchange program;

      (l) may  authorize  any  person to execute  on behalf of the  Company  any
instrument  required to effect the grant of a Stock Option,  Stock  Appreciation
Right,  Restricted  Stock Award or other Common Stock or Common Stock Equivalent
award previously granted by the Committee; and

      (m) shall  establish  such other  terms and  requirements  of the  various
compensation  incentives under the 1995 Plan as the Committee may deem necessary
or desirable and consistent with the terms of the 1995 Plan.

      The Committee  shall  determine the form or forms of the  agreements  with
Participants, which shall evidence the particular provisions, terms, conditions,
rights and duties of the Company and the Participants  with respect to Incentive
Stock Options,  Non-Qualified  Options,  Stock Appreciation Rights, Common Stock
Equivalent and Restricted  Stock Awards granted pursuant to the 1995 Plan, which
provisions need not be identical except as may be provided herein. The Committee
may from time to time adopt  such rules and  regulations  for  carrying  out the
purposes of the 1995 Plan as it may deem proper and in the best interests of the
Company.  The  Committee  may  correct  any  defect or supply  any  omission  or
reconcile any  inconsistency  in the 1995 Plan or in any agreement  entered into
hereunder  in the manner and to the extent it shall deem  expedient to carry the
1995  Plan  into  effect,  and it  shall be the  sole  and  final  judge of such
expediency.  No  member  of the  Committee  shall be  liable  for any  action or
determination made in good faith. The determinations,  interpretations and other
actions of the  Committee  pursuant to the  provisions of the 1995 Plan shall be
binding and conclusive for all purposes and on all persons,  subject only to the
review  and  control  of the  Board on all Plan  matters,  except  selection  of
Participants.

      3.2 Multiple  Administrative  Bodies. If permitted by Rule 16b-3, the 1995
Plan may be administered  by different  bodies with respect to Directors who are
Employees, Outside Directors, officers (within the meaning of Rule 16a-1(f)) who
are not Directors, and Employees who are neither Directors nor officers.

      3.3 Administration With Respect to Directors and Officers. With respect to
grants of Stock Options,  Stock Appreciation Rights,  Restricted Stock Awards or
other  Common  Stock or Common  Stock  Equivalent  awards under the 1995 Plan to
Employees  who  are  also  officers  or  Directors,   the  1995  Plan  shall  be
administered by:

      (a) the Board,  if the Board may  administer  the 1995 Plan and still have
transactions under the 1995 Plan qualify for exemption under Rule 16b-3; or

      (b) a Committee designated by the Board to administer the 1995 Plan, which
Committee  shall be constituted (i) in such a manner as to permit awards granted
under the 1995 Plan to qualify for exemption under Rule 16b-3 and (ii) in such a
manner as to satisfy applicable laws.

      3.4 Administration  With Respect to Other Persons.  With respect to grants
of Stock Options,  Stock Appreciation  Rights,  Restricted Stock Awards or other
Common Stock or Common  Stock  Equivalent  awards to  Employees  who are neither
Directors nor officers, the 1995 Plan shall be administered by:

      (a)   the Board;  or

      (b) a  Committee  designated  by  the  Board,  which  Committee  shall  be
constituted in such a manner as to satisfy applicable laws.

      3.5 Committee Composition. Once a Committee has been appointed pursuant to
Section 3.3 or 3.4, such  Committee  shall  continue to serve in its  designated
capacity until otherwise  directed by the Board. From time to time the Board may
increase  the size of any  Committee  and appoint  additional  members  thereof,
remove members (with or without  cause) and appoint new members in  substitution
therefor, fill vacancies (however caused) or remove all members of the Committee
and thereafter  directly  administer  the Plan,  all to the extent  permitted by
applicable laws and, in the case of a Committee  appointed under Section 3.3, to
the extent  permitted  by Rule 16b-3 as it applies to  transactions  intended to
qualify thereunder as exempt transactions.


                                  SECTION IV

                           STOCK SUBJECT TO THE PLAN

      4.1 Number of Shares.  Twenty Three  Million Five Hundred  Fifty  Thousand
(23,550,000)  shares of Common Stock are  authorized for issuance under the 1995
Plan in  accordance  with the  provisions  of the 1995 Plan and  subject to such
restrictions  or other  provisions  as the  Committee may from time to time deem
necessary.  This authorization may be increased from time to time by approval of
the Board and the  stockholders of the Company.  Shares of Common Stock that are
issued upon exercise of Incentive Stock Options, Non-Qualified Options, or Stock
Appreciation Rights or pursuant to MBO Payments, shares of Common Stock that are
issued as  Restricted  Stock  Awards,  shares of Common Stock that are issued in
connection  with Common Stock  Equivalents,  and shares of Common Stock that are
issued  pursuant to a plan  adopted  pursuant to Section 15, shall be applied to
reduce  the  number of shares of Common  Stock  remaining  available  for future
issuance under the 1995 Plan.

      4.2  Unused  and  Forfeited  Stock.  Any  shares of Common  Stock that are
subject to an Incentive Stock Option or a  Non-Qualified  Option that expires or
for any reason is terminated  unexercised,  and with respect to which no related
Stock Appreciation Right has been exercised, any shares of Common Stock that are
subject to Common Stock  Equivalents or to a Restricted Stock Award and that are
forfeited (the  "Forfeited  Restricted  Stock"),  and any shares of Common Stock
that for any other reason are not issued to a Participant  (not including shares
withheld  pursuant to Section 20.2) or are forfeited (if  forfeited,  the "Other
Forfeited Stock"),  shall automatically  become available for use under the 1995
Plan;  provided,  however,  that (i) no shares of Forfeited  Restricted Stock or
Other  Forfeited  Stock may be subject to Incentive  Stock Options and (ii) such
shares shall not be returned to the 1995 Plan if prohibited by Rule 16b-3.

      4.3 Capital  Adjustments.  (a) Changes in  Capitalization.  Subject to any
required  action by the  stockholders  of the  Company,  the number of shares of
Common Stock covered by each outstanding Stock Option,  Stock Appreciation Right
and Common Stock Equivalent ("Rights"), and the number of shares of Common Stock
that have been  authorized  for issuance under the Plan but as to which no Stock
Options,  Stock  Appreciation  Rights or Common Stock  Equivalents have yet been
granted or that have been returned to the Plan upon  cancellation  or expiration
of a Stock Option,  Stock  Appreciation  Right or Common Stock  Equivalents (the
"Shares  Available for Future Grant"),  as well as the price per share of Common
Stock  covered by each  outstanding  Stock Option or Stock  Appreciation  Right,
shall be proportionately  adjusted for any increase or decrease in the number of
issued and  outstanding  shares of Common  Stock  resulting  from a stock split,
reverse stock split,  stock  dividend,  combination or  reclassification  of the
Common  Stock,  or any other  increase  or  decrease in the number of issued and
outstanding  shares of Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the  Company  shall  not be deemed to have been  "effected  without  receipt  of
consideration."  Such  proportionate  adjustment shall be made by the Committee,
whose  determination  in that respect  shall be final,  binding and  conclusive.
Except as  expressly  provided  herein,  no issuance by the Company of shares of
stock of any class, or securities  convertible into or exercisable for shares of
stock of any class,  shall affect,  and no adjustment by reason thereof shall be
made with  respect to, the number of Shares  Available  for Future  Grant or the
number or price of shares of Common Stock subject to  outstanding  Stock Options
or Stock Appreciation Rights.

      (b) Dissolution or Liquidation.  In the event of the proposed  dissolution
or  liquidation  of the  Company,  to the  extent  that a Stock  Option or Stock
Appreciation  Right  has  not  been  previously  exercised,  it  will  terminate
immediately  prior to the  consummation of such proposed  action.  The Committee
may, in the exercise of its sole discretion in such instances,  declare that any
Stock Option or Stock  Appreciation  Right shall terminate as of a date fixed by
the Committee and give each  Participant  the right to exercise his or her Stock
Option or Stock Appreciation  Right in whole or in part,  including with respect
to shares as to which the Stock  Option or Stock  Appreciation  Right  would not
otherwise be exercisable.  Unless determined otherwise by the Committee,  Common
Stock Equivalents shall convert into shares of Common Stock immediately prior to
the consummation of any such dissolution or liquidation.

      (c) Merger or Asset Sale. In the event of a merger or consolidation of the
Company with or into another  corporation,  or the sale of all or  substantially
all  of  the  assets  of the  Company,  each  outstanding  Stock  Option,  Stock
Appreciation  Right and Common Stock  Equivalent may be assumed or an equivalent
Stock  Option,  Stock  Appreciation  Right or  Common  Stock  Equivalent  may be
substituted  by the  successor  corporation  or a parent  or  subsidiary  of the
successor  corporation.  The  Committee  may,  in  lieu of  such  assumption  or
substitution  of Stock  Options  and  Stock  Appreciation  Rights,  provide  for
Optionees  to have the  right  to  exercise  his or her  Stock  Option  or Stock
Appreciation  Right in whole or in part,  including with respect to shares as to
which it would not otherwise be  exercisable.  If the  Committee  makes a Common
Stock Equivalent convertible into shares of Common Stock or makes a Stock Option
or Stock Appreciation Right exercisable in lieu of assumption or substitution in
the event of a merger,  consolidation  or sale of assets,  the  Committee  shall
notify the Participants and, in the case of a Stock Option or Stock Appreciation
Right,  shall  notify the Optionee  that the Stock Option or Stock  Appreciation
Right shall be fully  exercisable for a period of thirty (30) days from the date
of such notice, and the Stock Option or Stock Appreciation Right shall terminate
upon the  expiration  of such period.  For the purposes of this  paragraph,  the
Stock  Option,  Stock  Appreciation  Right or Common Stock  Equivalent  shall be
considered  assumed if,  following the merger,  consolidation or sale of assets,
the Stock Option,  Stock  Appreciation  Right or Common Stock Equivalent confers
the right to purchase or receive,  for each share of Common Stock subject to the
Stock Option,  Stock Appreciation  Right or Common Stock Equivalent  immediately
prior to the merger, consolidation or sale of assets, the consideration (whether
stock,   cash  or  other  securities  or  property)   received  in  the  merger,
consolidation  or sale of assets by holders of Common  Stock for each share held
on the effective date of the transaction  (and, if holders were offered a choice
of consideration,  the type of consideration chosen by the holders of a majority
of the  outstanding  shares);  provided,  however,  that if  such  consideration
received in the merger,  consolidation  or sale of assets was not solely  common
stock of the successor  corporation  or its parent,  the Committee may, with the
consent  of the  successor  corporation,  provide  for the  consideration  to be
received upon  conversion  of a Common Stock  Equivalent or upon the exercise of
the Stock  Option or Stock  Appreciation  Right,  for each share of Common Stock
subject to the Stock Option, Stock Appreciation Right or Common Stock Equivalent
to be solely  common stock of the successor  corporation  or its parent equal in
fair market value to the per share  consideration  received by holders of Common
Stock in the merger, consolidation or sale of assets.


                                   SECTION V

                                 PARTICIPATION

      5.1  Eligibility.  Participants  in the 1995 Plan shall be those  Eligible
Employees,  Directors and Consultants who, in the judgment of the Committee, are
performing,  or during the term of their  service to the Company are expected to
perform,  vital  services in the  management,  operation and  development of the
Company  or an  Affiliated  Corporation,  and  significantly  contribute  or are
expected to significantly  contribute to the achievement of long-term  corporate
economic objectives.  Participants who are Employees may be granted from time to
time one or more  Incentive  Stock Options  (with or without Stock  Appreciation
Rights), and Participants (whether or not they are Employees) may be granted one
or more Non-Qualified  Options (with or without Stock Appreciation  Rights), one
or more  Restricted  Stock  Awards,  one or more MBO  Payments  in Common  Stock
Equivalents or in shares of Common Stock,  Common Stock equivalents  pursuant to
Section 12, and one or more other Common Stock or Common Stock Equivalent awards
pursuant to Section 15; provided,  however,  that the grant of each such option,
right,  award or payment  shall be  separately  approved by the  Committee,  and
receipt  of one such  option,  right,  award or  payment  shall  not  result  in
automatic  receipt  of  any  other  option,   right,  award  or  payment.   Upon
determination by the Committee that a Stock Option,  Stock  Appreciation  Right,
Restricted  Stock  Award,  MBO  Payment or other  Common  Stock or Common  Stock
Equivalent  award is to be granted to a  Participant,  written  notice  shall be
given to such  person,  specifying  the  terms,  conditions,  rights  and duties
related  thereto.  Each Participant  shall, if required by the Committee,  enter
into an  agreement  with  the  Company,  in such  form  as the  Committee  shall
determine and as is consistent with the provisions of the 1995 Plan,  specifying
such terms,  conditions,  rights and duties.  Stock Options,  Stock Appreciation
Rights,  Restricted Stock Awards,  MBO Payments and other Common Stock or Common
Stock  Equivalent  awards shall be deemed to be granted as of the date specified
in the grant  resolution of the  Committee,  which date shall be the date of any
related  agreement  with the  Participant.  In the  event  of any  inconsistency
between the  provisions  of the 1995 Plan and any such  agreement  entered  into
hereunder, the provisions of the 1995 Plan shall govern.

      5.2 Limitations.  The following limitations shall apply to grants of Stock
Options and Stock Appreciation Rights to Participants:

      (a)(i) Except as set forth in Section  5.2(a)(ii)  hereof,  no Participant
shall be granted,  in any fiscal year of the  Company,  Stock  Options and Stock
Appreciation  Rights to purchase more than two million  (2,000,000)  shares (the
"Individual Limit").

      (ii) No individual  who is a  newly-hired  employee of the Company (a "New
Hire") shall be granted in the fiscal year (the "Initial  Fiscal Year") in which
he or she became a New Hire,  Stock  Options  and Stock  Appreciation  Rights to
purchase shares more than twice the Individual Limit.

      (b) If a Stock Option or Stock  Appreciation Right is canceled in the same
fiscal  year of the Company in which it was  granted  (other than in  connection
with a transaction described in Section 4.3), the canceled Stock Option or Stock
Appreciation  Right  shall be  counted  against  the limit set forth in  Section
5.2(a).

      (c) Incentive Stock Options may not be granted to Outside  Directors or to
Consultants.

      5.3 Rule 16b-3. Stock Options, Stock Appreciation Rights, Restricted Stock
Awards,  MBO Payments and other Common Stock or Common Stock  Equivalent  awards
granted to Participants who are subject to Section 16 of the Securities Exchange
Act of 1934, as amended (the  "Exchange  Act"),  must comply with the applicable
provisions  of Rule  16b-3 and  shall  contain  such  additional  conditions  or
restrictions as may be required  thereunder to qualify for the maximum exemption
from Section 16 of the Exchange Act with respect to 1995 Plan transactions.


                                   SECTION VI

                                 STOCK OPTIONS

      6.1 Grant of Stock Options.  Coincident with or following  designation for
participation  in the 1995 Plan, a Participant  may be granted one or more Stock
Options.  The Committee in its sole  discretion  may  designate  whether a Stock
Option granted to an Employee is to be considered an Incentive Stock Option or a
Non-Qualified Option. The Committee may grant both an Incentive Stock Option and
a  Non-Qualified  Option to the same  Employee at the same time or at  different
times. Incentive Stock Options and Non-Qualified Options, whether granted at the
same or  different  times,  shall be  deemed to have been  awarded  in  separate
grants,  shall be clearly  identified,  and in no event will the exercise of one
Stock  Option  affect the right to exercise any other Stock Option or affect the
number  of shares of Common  Stock  for  which  any other  Stock  Option  may be
exercised. All Stock Options granted to Participants who are not Employees shall
be Non-Qualified Options.

      6.2 Manner of Stock Option Exercise.  A Stock Option may be exercised by a
Participant  in whole or in part from time to time,  subject  to the  conditions
contained  herein,  (i) by delivery of written notice of exercise to the Company
at  its  principal  office  in  Louisville,   Colorado   (Attention:   Corporate
Secretary),  in person or through  mail,  facsimile or  electronic  mail,  or by
delivery of notice of exercise in such other method as has been  approved by the
Committee, and (ii) by paying in full, with the written notice of exercise or at
such other time as the Committee may  establish,  the total exercise price under
the Stock Option for the shares being purchased.  Such notice shall be in a form
satisfactory to the Committee and shall specify the particular  Stock Option (or
portion  thereof) that is being  exercised and the number of shares with respect
to which the Stock Option is being  exercised.  The exercise of the Stock Option
shall be deemed effective upon receipt of such notice by the Corporate Secretary
and payment to the Company.  As soon as practicable after the effective exercise
of the  Stock  Option,  and  upon  satisfaction  of all  applicable  withholding
requirements  pursuant to Section 20, the  Participant  shall be recorded on the
stock transfer books of the Company as the owner of the shares purchased and the
Company  shall deliver to the  Participant  one or more duly issued and executed
stock certificates evidencing such ownership.

      6.3 Payment of Stock Option Exercise Price. At the time of the exercise of
a Stock Option,  payment of the total Stock Option exercise price for the shares
to be purchased  shall be made in the manner  specified in the option  agreement
relating to such Stock  Option,  which may  include any or all of the  following
methods of payment:

      (a)   in cash or by check;

      (b) by transfer  from the  Participant  to the Company of shares of Common
Stock (other than shares of Common Stock that the  Committee  determines by rule
may not be used to exercise  Stock  Options) with a then current  aggregate Fair
Market Value equal to the total Stock Option exercise price;

      (c) delivery to the Company of: (i) a properly  executed  exercise notice,
(ii)  irrevocable  instructions  to a broker to sell a sufficient  number of the
shares being  exercised to cover the exercise  price and to promptly  deliver to
the Company the amount of sale proceeds  required to pay the exercise  price and
any  required tax  withholding  relating to the  exercise,  and (iii) such other
documentation as the Committee and the broker shall require to effect a same-day
exercise and sale;

      (d) delivery to the Company of (i) a properly  executed  exercise  notice,
(ii) irrevocable instructions to a broker or other third party acceptable to the
Company to hold the  shares  being  exercised  as  collateral  for a loan to the
Optionee of an amount  sufficient  to cover the  exercise  price and to promptly
deliver to the Company the amount of loan proceeds  required to pay the exercise
price and any required tax  withholding  relating to the exercise and (iii) such
other  documentation  as the Committee and the broker or other third party shall
require to effect the transaction;

      (e) a reduction in the amount of any Company  liability  to the  Optionee,
including any liability  attributable  to the  Optionee's  participation  in any
Company-sponsored deferred compensation program or arrangement;

      (f)   any combination of the foregoing methods of payment; or

      (g) such other  consideration  and method of payment  for the  issuance of
Shares to the extent  permitted by applicable laws, rules and regulations and by
the agreement relating to the Stock Option being exercised.

      In the event that the option  agreement  does not specify  the  acceptable
methods of  payment of the  exercise  price,  payment  may be made by any of the
methods specified in clauses (a) through (c), inclusive, of this Section 6.3, or
any combination of such methods of payment.

      6.4  Stockholder  Privileges.  No  Participant  shall have any rights as a
stockholder with respect to any shares of Common Stock covered by a Stock Option
until the Participant  becomes the holder of record of such Common Stock, and no
adjustments  shall be made for dividends or other  distributions or other rights
as to which there is a record date preceding the date such  Participant  becomes
the holder of record of such Common Stock.


                                  SECTION VII

                            INCENTIVE STOCK OPTIONS

      7.1 Incentive Stock Option Exercise Price.  The per share price to be paid
by a  Participant  at the time an Incentive  Stock Option is exercised  shall be
determined by the Committee at the time an Incentive Stock Option is granted (or
deemed to have been granted under  applicable tax rules),  but in no event shall
such exercise price be less than:

      (a) one  hundred  percent  of the  Fair  Market  Value,  on the  date  the
Incentive  Stock  Option  is  granted  (or  deemed to have  been  granted  under
applicable  tax  rules),  of one share of the stock to which such  Stock  Option
relates; or

      (b) one hundred and ten percent of the Fair Market Value,  on the date the
Incentive  Stock  Option  is  granted  (or  deemed to have  been  granted  under
applicable  tax  rules),  of one share of the stock to which such  Stock  Option
relates if, at the time the Incentive  Stock Option is granted,  the Participant
owns,  directly or indirectly (as  determined  pursuant to Section 424(d) of the
Internal  Revenue Code),  ten percent or more of the total combined voting power
of all classes of stock of the Company or of any Affiliated  Corporation (such a
Participant is referred to as a "10% Holder").

      7.2 Number of Option Shares.  The number of shares of Common Stock subject
to an Incentive  Stock Option shall be  designated  by the Committee at the time
the Committee decides to grant an Incentive Stock Option.

      7.3 Aggregate Limitation of Stock Exercisable Under Options. To the extent
the aggregate  Fair Market Value,  determined as of the time an Incentive  Stock
Option is granted, of the shares of Common Stock with respect to which Incentive
Stock  Options  are  exercisable  for the first time by an Option  Holder in any
calendar  year  under the 1995 Plan or  otherwise,  granted by the  Company  and
Affiliated  Corporations,  exceeds  $100,000,  such excess shall be treated as a
Non-Qualified Option.

      7.4  Duration of  Incentive  Stock  Options.  The period  during  which an
Incentive Stock Option may be exercised shall be fixed by the Committee,  but in
no event shall such period be more than ten years from the date the Stock Option
is granted,  or, in the case of Participants who are 10% Holders as described in
Section  7.1(b),  five  years  from the date the  Stock  Option is  granted.  No
Incentive Stock Option with respect to which Stock Appreciation Rights have been
granted may be exercised during the six-month period following the date on which
such Stock Option was granted.  Upon the expiration of such exercise period, the
Incentive  Stock  Option,  to the extent not then  exercised,  shall  terminate.
Except as otherwise  provided in Section 11, all Incentive Stock Options granted
to a Participant hereunder shall terminate and may no longer be exercised if the
Participant ceases to be an Employee.

      7.5  Restrictions on Exercise of Incentive Stock Options.  Incentive Stock
Options may be granted subject to such restrictions as to the timing of exercise
of all or various portions thereof as the Committee may determine at the time it
grants Incentive Stock Options to Participants.

      7.6  Disposition of Stock  Acquired  Pursuant to the Exercise of Incentive
Stock Options C Withholding. In the event that a Participant makes a disposition
(as defined in Section 424(c) of the Internal  Revenue Code) of any Common Stock
acquired  pursuant to the  exercise of an  Incentive  Stock  Option prior to the
expiration  of two years from the date on which the  Incentive  Stock Option was
granted or prior to the  expiration of one year from the date on which the Stock
Option was exercised,  the Participant  shall send written notice to the Company
at its principal office in Louisville, Colorado (Attention: Corporate Secretary)
of the date of such disposition, the number of shares disposed of, the amount of
proceeds  received from such disposition and any other  information  relating to
such disposition as the Company may reasonably  request.  The Participant shall,
in the  event of such a  disposition,  make  appropriate  arrangements  with the
Company to provide for the amount of additional withholding required by federal,
state and local income and other tax laws.

                                 SECTION VIII

                             NON-QUALIFIED OPTIONS

      8.1  Option  Exercise  Price.  The  per  share  price  to be  paid  by the
Participant at the time a Non-Qualified  Option is exercised shall be determined
by the  Committee at the time the Stock Option is granted or amended,  but in no
event shall such  exercise  price per share be less than one hundred  percent of
the Fair Market  Value of one share of Common Stock on the date the Stock Option
is granted or amended.

      8.2 Number of Option Shares.  The number of shares of Common Stock subject
to a  Non-Qualified  Option shall be designated by the Committee at the time the
Committee decides to grant a Non-Qualified Option.

      8.3 Duration of  Non-Qualified  Options;  Restrictions  on  Exercise.  The
period during which a Non-Qualified Option may be exercised, and the installment
restrictions on option  exercise  during such period,  if any, shall be fixed by
the Committee, but in no event shall such period be more than ten years from the
date the Stock Option is granted,  and no  Non-Qualified  Option with respect to
which Stock  Appreciation  Rights have been granted may be exercised  during the
six-month period  immediately  following the date on which such Stock Option was
granted.  Upon the expiration of such exercise period, the Non-Qualified Option,
to the extent not then exercised, shall terminate.  Except as otherwise provided
in Section 11, all  Non-Qualified  Options  granted to a  Participant  hereunder
shall terminate and may no longer be exercised if the  Participant  ceases to be
an Employee, Director or Consultant.

                                  SECTION IX

                           STOCK APPRECIATION RIGHTS

      9.1  Grant of  Rights.  A Stock  Appreciation  Right may be  granted  to a
Participant  in  conjunction  with any Incentive  Stock Option or  Non-Qualified
Option granted to such Participant,  as determined by the Committee,  (a) at the
time of the grant of such Stock Option in the case of an Incentive  Stock Option
or (b) at the time of grant,  or at any  subsequent  time during the term of the
Stock Option, in the case of a Non-Qualified Option. Once granted, the term of a
Stock Appreciation Right shall be equal to the term of its related Stock Option.
Upon  exercise of a Stock  Appreciation  Right by a  Participant  for a share of
Common Stock,  the related Stock Option shall be terminated with respect to such
share.   Incentive  Stock  Options  and  Non-Qualified   Options  shall  not  be
exercisable with respect to shares of Common Stock for which Stock  Appreciation
Rights have been exercised.  Upon such Stock  Appreciation  Right exercise,  the
Participant  shall be  entitled  to  receive  the  economic  value of such Stock
Appreciation Right determined in the manner prescribed in Section 9.2.

      9.2 Exercise of Stock Appreciation Rights. Stock Appreciation Rights shall
be subject to such terms and conditions  consistent with other provisions of the
1995  Plan as may be  determined  from time to time by the  Committee  and shall
include the following:

      (a) A Stock Appreciation Right shall be exercisable,  in whole or in part,
at such time or times and only to the extent  that the Stock  Option to which it
relates  shall be  exercisable;  provided,  however,  that,  except as otherwise
provided in Section 11, no Stock  Appreciation Right shall be exercisable during
the six-month period following the date of its grant. A Stock Appreciation Right
shall be  exercised  by the  giving of  notice  in the same  manner as the Stock
Option to which it relates may be exercised.

      (b) Upon the exercise of a Stock  Appreciation  Right, a Participant shall
be entitled to receive the economic value  thereof,  which shall be equal to (i)
the excess of the then Fair Market  Value of one share of Common  Stock over the
exercise  price per share  specified in the related Stock Option,  multiplied by
(ii) the number of shares in respect  of which the Stock  Appreciation  Right is
being exercised.

      (c)  The  Committee  shall,  in  the  agreement   relating  to  the  Stock
Appreciation Right, either (i) specify the form in which payment of the economic
value of exercised  Stock  Appreciation  Rights will be made to the  Participant
upon exercise  thereof (i.e.,  cash,  Common Stock,  or a specified  combination
thereof)  or (ii) grant the  Participant  the right to elect to receive  cash in
full or partial payment of such economic value, at the Participant's discretion.
If the agreement  relating to the Stock  Appreciation Right does not so specify,
then the Participant shall have the right to elect cash or Common Stock,  Common
Stock  Equivalents  or any  combination  thereof.  If the  Participant is not an
"officer" or "director" of the Company,  as those terms are defined in the rules
under  Section 16 of the  Exchange  Act, at the time of grant or exercise of the
Stock  Appreciation  Right,  then the  Committee  may retain the right to either
consent to or disapprove of Participant's elected method of payment.

      9.3  Stockholder  Privileges.  No  Participant  shall have any rights as a
stockholder  with  respect  to any  shares of Common  Stock  covered  by a Stock
Appreciation  Right until the  Participant  becomes the holder of record of such
Common  Stock,  and  no  adjustments  shall  be  made  for  dividends  or  other
distributions  or other rights as to which there is a record date  preceding the
date such Participant becomes the holder of record of such Common Stock.


                                   SECTION X

                            RESTRICTED STOCK AWARDS

      10.1 Awards Granted by Committee. Coincident with or following designation
for  participation  in the 1995 Plan, a  Participant  may be granted one or more
Restricted  Stock Awards  consisting  of shares of Common  Stock.  The number of
shares granted as a Restricted Stock Award shall be determined by the Committee.
The Committee may, in its discretion,  require the payment by the Participant of
cash in an amount  equal to the par value of the  Common  Stock  subject  to the
Restricted Stock Award as a condition  precedent to the issuance of Common Stock
to the Participant.

      10.2  Restrictions.  A  Participant's  right to retain a Restricted  Stock
Award  granted  to him or her  under  Section  10.1  shall  be  subject  to such
restrictions,  including but not limited to the Participant's  continuous status
as an Employee, Director or Consultant for a restriction period specified by the
Committee,  or the attainment of specified performance goals and objectives,  as
may be established  by the Committee  with respect to such award.  The Committee
may in its sole discretion  require  different  periods of employment,  director
service or consulting service or different performance goals and objectives with
respect to different  Participants,  to different  Restricted Stock Awards or to
separate,  designated  portions  of  the  Common  Stock  shares  constituting  a
Restricted  Stock Award.  Subject to the  provisions of Sections 11 and 14, if a
Participant's   continuous  status  as  an  Employee,   Director  or  Consultant
terminates prior to the end of such restriction period or the attainment of such
goals and objectives as may be specified by the Committee,  the Restricted Stock
Award shall be forfeited and all shares of Common Stock related thereto shall be
immediately returned to the Company.

      10.3  Privileges of a Stockholder;  Transferability.  A Participant  shall
have all voting,  dividend,  liquidation and other rights with respect to Common
Stock in accordance with its terms received by him or her as a Restricted  Stock
Award under this  Section 10 upon  becoming  the holder of record of such Common
Stock;  provided,  however,  that the Participant's right to sell, encumber,  or
otherwise transfer such Common Stock (and any other securities issued in respect
of such  shares of Common  Stock as a stock  dividend,  stock split or the like)
shall be subject to the limitations of Section 16.2 hereof.

      10.4 Enforcement of Restrictions. The Committee may in its sole discretion
require  one or more of the  following  methods of  enforcing  the  restrictions
referred to in Section 10.2 and 10.3:

      (a)   Placing a legend on the stock certificates referring to the
 restrictions;

      (b)  Requiring  the  Participant  to keep  the  stock  certificates,  duly
endorsed, in the custody of the Company while the restrictions remain in effect;
or

      (c) Requiring that the stock certificates,  duly endorsed,  be held in the
custody of a third party while the restrictions remain in effect.


                                  SECTION XI

              EFFECT OF TERMINATION OF SERVICE ON STOCK OPTIONS,
             STOCK APPRECIATION RIGHTS AND RESTRICTED STOCK AWARDS

      11.1  Effect  of  Termination  of  Service  on  Stock  Options  and  Stock
Appreciation  Rights.  No  Stock  Option  or  Stock  Appreciation  Right  may be
exercised unless, at the time of such exercise,  the Participant is an Employee,
Director or Consultant, except as follows:

      (a) The Stock Option or Stock  Appreciation  Right may be exercised within
such period of time after  termination  of service as is  specified in the Stock
Option or Stock Appreciation Right agreement or instrument,  but (i) in no event
may such  post-termination  period extend beyond the original expiration date of
the Stock  Option or Stock  Appreciation  Right and (ii) only to the extent that
the  Participant  was  entitled  to exercise  it at the date of  termination  of
service.  In the  absence  of a  specified  time in the  Stock  Option  or Stock
Appreciation   Right  agreement  or  instrument,   the  Stock  Option  or  Stock
Appreciation Right shall remain exercisable for the applicable period and to the
extent specified in Section 11.5 below following the  Participant's  termination
of service as an Employee,  Director or Consultant.  In the case of an Incentive
Stock  Option,  such  period of time  shall not  exceed 90 days from the date of
termination of status as an Employee;  provided, however, that the agreement may
specify  a  longer  period,  in which  case  Stock  Option  shall  convert  to a
Non-Qualified Option on the 91st day following termination of employment;

      (b) If the  Participant  dies while  serving as an  Employee,  Director or
Consultant,  or within three months after the  Participant  ceases such service,
the Stock Option or Stock  Appreciation  Right may be exercised by the person to
whom it is  transferred by will or the laws of descent and  distribution  within
such period of time after  death as is  specified  in the Stock  Option or Stock
Appreciation Right agreement or instrument,  but in no event may such post-death
period extend beyond the original  expiration  date of the Stock Option or Stock
Appreciation  Right.  In the absence of a specified  time in the Stock Option or
Stock  Appreciation  Right  agreement or  instrument,  the Stock Option or Stock
Appreciation Right shall remain exercisable for the applicable period and to the
extent specified in Section 11.5 below; or

      (c) If the  Participant  becomes  disabled  (within the meaning of Section
22(e)(3) of the Internal Revenue Code) while serving as an Employee, Director or
Consultant, the Stock Option or Stock Appreciation Right may be exercised within
such period of time after  termination  of service as is  specified in the Stock
Option or Stock Appreciation Right agreement or instrument,  but in no event may
such  post-termination  period extend beyond the original expiration date of the
Stock Option or Stock Appreciation  Right. In the absence of a specified time in
the Stock Option or Stock Appreciation Right agreement or instrument,  the Stock
Option or Stock  Appreciation  Right shall remain exercisable for the applicable
period and to the extent specified in Section 11.5 below.

      11.2 Effect of Termination of Service on Restricted  Stock Awards.  In the
event  of  the  death  or  disability  (as  defined  in  Section  11.1(c))  of a
Participant,  all  period  of  service  and  other  restrictions  applicable  to
Restricted  Stock Awards then held by such  Participant  shall  lapse,  and such
awards  shall  become  fully  vested  and  nonforfeitable.  In  the  event  of a
Participant's  termination of service for any other reason, any Restricted Stock
Awards as to which the  employment  period or other  restrictions  have not been
satisfied shall be forfeited.

      11.3  Meaning of  Employment.  For all  purposes  of the 1995 Plan and any
Stock Option or Stock Appreciation  Right granted hereunder,  "employment" shall
be defined in accordance  with the provisions of Section 3401(c) of the Internal
Revenue Code and the regulations thereunder.

      11.4 Meaning of Continuous Status. Unless otherwise specified in the Stock
Option  or  Stock  Appreciation  Right  agreement  or  instrument,  so long as a
Participant is either an Employee or a Director or a Consultant, he or she shall
be considered to be in continuous status as an Employee, Director or Consultant,
even if the  person is  serving in one  capacity  when the award is granted  and
subsequently  changes to service in a different  capacity,  such as  terminating
employment but continuing to serve as a Consultant.

      11.5 Default Provisions for Termination of Service.  In the event that the
Stock Option or Stock  Appreciation Right agreement or instrument do not specify
the  post-termination  period of exercisability,  the following provisions shall
apply:

      (a) Subject to  11.5(f),  if such  termination  is due to the death of the
Participant, or the Participant dies within three months after such termination,
or if such termination occurs after the Participant becomes disabled (within the
meaning of Section  22(e)(3) of the Internal  Revenue Code), the Stock Option or
Stock Appreciation Right may be exercised by the Participant (or, in the case of
death,  by the person to whom it is  transferred  by will of the laws of descent
and   distribution):   (i)  for  all  Incentive  Stock  Option  grants,  or  for
Non-Qualified Stock Option grants or Stock Appreciation Right grants made before
May 22, 1997, or for  Non-Qualified  Stock Option  grants or Stock  Appreciation
Right grants made on or after May 22, 1997, if, at the time of the Participant's
termination, such Participant was not a Long-Term Employee, then within a period
of one year after the date of death (but in no event longer than the term of the
Stock Option or Stock Appreciation  Right); and (ii) for grants made on or after
May 22, 1997,  if the  Participant  was a Long-Term  Employee at the time of the
Participant's termination,  the Non-Qualified Stock Option or Stock Appreciation
Right  may be  exercised,  to the  extent  it is  vested  as of the  date of the
Participant's termination, for the entire remaining term of such Stock Option or
Stock Appreciation Right.

      (b) Subject to 11.5(f),  if such termination  occurs after the Participant
becomes disabled (within the meaning of Section 22(e)(3) of the Internal Revenue
Code), the Stock Option or Stock  Appreciation  Right may be exercised:  (i) for
all Incentive Stock Option grants,  or for  Non-Qualified  Stock Option or Stock
Appreciation  Right grants made before May 22, 1997, or for Non-Qualified  Stock
Option grants or Stock  Appreciation Right grants made on or after May 22, 1997,
if, at the time of the  Participant's  termination,  such  Participant was not a
Long-Term  Employee,  then  within a period  of one year  after the date of such
termination  (but in no event  longer than the term of the Stock Option or Stock
Appreciation  Right);  and (ii) for grants made on or after May 22, 1997, if the
Participant  is a Long-Term  Employee,  a  Non-Qualified  Stock  Option or Stock
Appreciation Right may be exercised to the extent it is vested as of the date of
the Participant's termination for the entire remaining term of such Stock Option
or Stock Appreciation Right.

      (c)  Subject to 11.5(f),  if such  termination  is due to a  Reduction  in
Force,  then,  for grants on or after May 22,  1997,  the Stock  Option or Stock
Appreciation  Right shall be  exercisable,  to the extent  vested at the time of
such termination, for a period of six months from the date of such termination.

      (d) Subject to 11.5(f), if the Participant Retires, then, for grants on or
after May 22,  1997,  the  Stock  Option or Stock  Appreciation  Right  shall be
exercisable,  to the extent vested at the time the Participant  Retires, for the
entire remaining term of such Stock Option or Stock Appreciation Right.

      (e) Subject to 11.5(f), if the Participant's  employment is terminated for
any reason other than those reasons  covered by  subsections  (a) through (d) of
this Section 11.5,  then the Stock Option or Stock  Appreciation  Right shall be
exercisable, to the extent vested at the time of such termination,  for a period
of ninety (90) days after the date of such termination.

      (f) Notwithstanding the provisions of Section 11.5(a) through (e) above:

            (i)  With   respect  to  all  grants  of  Stock   Options  or  Stock
      Appreciation  Rights  occurring on or after May 22,  1997,  no such grants
      shall be exercisable after the date of termination of employment if either
      the termination was for Cause,  or if the former  Employee,  Consultant or
      Director is then, in the sole judgment of the Company,  in material breach
      of any contractual,  statutory, fiduciary or other legal obligation to the
      Company.

                  (ii) In addition to the  provisions  of  paragraph  (i) above,
      unless  otherwise  provided  in the  Option  or Stock  Appreciation  Right
      agreement,   with  respect  to  all  grants  of  Stock  Options  or  Stock
      Appreciation  Rights  occurring on or after March 4, 1998 (or earlier date
      if  agreed  to by the  Company  and the  participant):  (x) if at any time
      within  six months  after  termination  of the  optionee's  employment  or
      service,  the former  Employee,  Consultant  or  Director  is, in the sole
      judgment  of the  Company,  engaging  or has  engaged in any  activity  in
      competition  with any activity of the  Company,  or harmful or contrary to
      the  interests of the Company,  including,  but not limited to:  accepting
      employment with or serving as a consultant or advisor to any employer that
      is in competition  with the Company or acting against the interests of the
      Company, including employing or recruiting any Employee of the Company; or
      disclosing  or  misusing  any   confidential,   proprietary   or  material
      information  concerning the Company (such  information  includes,  without
      limitation,  information regarding the Company's operations, its products,
      product  designs,   business  plans,   strategic   plans,   marketing  and
      distribution plans and arrangements,  customers, and financial statements,
      budgets and forecasts);  or  participating in any hostile takeover attempt
      of the Company,  then (I) any Options or Stock  Appreciation  Rights still
      held by the optionee shall  immediately  cease to be exercisable and shall
      be canceled,  and (II) any shares issued upon exercise of Options or Stock
      Appreciation Rights after the date of termination of employment or service
      shall be sold back to the  Company  at the  exercise  price  paid for such
      shares,  and any cash received upon exercise of a Stock Appreciation Right
      after  termination  of  employment  or service  shall be  returned  to the
      Company; (y) if the Employee, Consultant or Director leaves the employment
      of the  Company  within six months of  exercising  Stock  Options or Stock
      Appreciation Rights for any reason except death, disability or retirement,
      then any gain represented by the fair market value on the date of exercise
      over the exercise price multiplied by the number of shares such individual
      purchased  ("option gain"),  without regard to any subsequent market price
      decrease or increase, shall be paid by such individual to the Company; and
      (z) shares  issued upon exercise of Options or Stock  Appreciation  Rights
      after termination of employment or service shall be non-transferable until
      six  months  after  such  termination  and  shall be held in escrow by the
      Company  until  such  time.  The  Compensation   Committee,  in  its  sole
      discretion, may, with respect to a particular Option or Stock Appreciation
      Right,  omit the provisions of this paragraph (ii) or release the optionee
      from  the  operation  of such  provisions  if the  Compensation  Committee
      determines that such action is in the best interests of the Company.


                                   SECTION XII

                     DIRECTOR STOCK AND STOCK EQUIVALENTS

      12.1 Director Stock and Stock Equivalents. Effective with the beginning of
the Company's fiscal year beginning December 28, 1996, each Outside Director may
receive  all or a portion of his or her annual  retainer  and any  meeting  fees
(which shall include any additional  annual retainer or fees paid to a committee
chair) in shares of Common Stock or, if elected by the Director, in Common Stock
Equivalents.  An election pursuant to this Section 12 must be made in writing on
or before  the first  day of the  beginning  of the  Outside  Director's  annual
retainer period and shall entitle the Outside  Director to a number of shares of
Common Stock or Common Stock  Equivalents  determined by dividing (a) the dollar
amount of the portion of the retainer  for the fiscal  period that is to be paid
in shares of Common  Stock or Common  Stock  Equivalents  by (b) the Fair Market
Value of one  share of  Common  Stock  as of the  last day of each  such  fiscal
period,  rounded up to the next full  number of shares.  In the event any person
becomes an Outside  Director  other than at the beginning of an annual  retainer
period, such person may elect, within thirty (30) days of the date on which such
person  becomes an Outside  Director,  to receive  his or her  retainer  and any
meeting fees in shares of Common Stock or Common Stock  Equivalents as described
above for the  balance of such annual  retainer  period in  accordance  with the
formula set forth in the preceding sentence.

      For purposes of this Section 12, an annual  retainer period shall begin on
the date of an Annual Meeting of the  Stockholders  of the Company and shall end
on the day immediately preceding the next following Annual Meeting.

      12.2 Stock Equivalents.  The number of Common Stock Equivalents determined
under Section 12.1 for each Outside  Director shall be credited to a bookkeeping
account  established in the name of that Director subject to the following terms
and conditions:

            (a) If the Company pays a cash  dividend  with respect to the Common
 Stock at any time while  Common  Stock  Equivalents  are credited to an Outside
 Director's  account,  there shall be credited to the Outside Director's account
 additional  Common Stock Equivalents equal to (i) the dollar amount of the cash
 dividend the Director  would have  received had he or she been the actual owner
 of the Common Stock to which the Common Stock  Equivalents then credited to the
 Director's  account relate,  divided by (ii) the Fair Market Value of one share
 of the Company's  Common Stock on the dividend  payment date.  The Company will
 pay the Director a cash payment in lieu of fractional stock  equivalents on the
 date of such dividend payment;

      (b) Upon the death or other termination of the Outside  Director's service
on the Board,  or, if authorized by the  Committee,  such other time or times as
specified by the Outside Director at the time of his or her annual  election(s),
the Company  shall  deliver to the Outside  Director  (or his or her  designated
beneficiary  or  estate) a number of shares of Common  Stock  equal to the whole
number of Common Stock  Equivalents  then  credited to the  Director's  account,
together  with a cash payment  equal to the Fair Market Value of any  fractional
Common Stock Equivalent;

      (c) The  Company's  obligation  with respect to Common  Stock  Equivalents
shall not be funded or secured in any  manner,  nor shall an Outside  Director's
right  to  receive  Common  Stock   equivalents  be  assigned  or  transferable,
voluntarily or involuntarily, except as expressly provided herein; and

      (d) An  Outside  Director  shall not be  entitled  to any  voting or other
stockholder  rights as a result of the credit of Common Stock Equivalents to the
Director's  account until certificates  representing  shares of Common Stock are
delivered  to the  Director  (or his or her  designated  beneficiary  or estate)
hereunder.

      12.3  Elections.  The  Committee  shall  determine  the  form  of  Outside
Director's  elections pursuant to this Section 12, which form shall evidence the
particular provisions,  terms, conditions,  rights and duties of the Company and
the Outside  Directors with respect to Common Stock and Common Stock Equivalents
paid with respect to the Director's annual retainer and any meeting fees.




                                 SECTION XIII

                                 MBO PAYMENTS

      13.1 Participant Election As to MBO Payment. At such time as the Committee
determines  that a  Participant  has or may become  eligible  for an MBO Payment
pursuant to the MBO Plan, the Committee may notify the Participant as to whether
or not the  Participant  will be required by the  Committee to, or will be given
the right to elect to,  accept all or a part of such MBO  Payment in the form of
shares of Common Stock or Common Stock Equivalents.  If the Committee grants the
Participant the right to elect whether to accept the MBO Payment in Common Stock
or Common Stock  Equivalents,  then the Participant shall have ten (10) business
days after the receipt of such notice from the Committee to make such  election.
The  Participant  shall notify the Committee with respect to his or her election
on such form as may be provided for this purpose by the Committee, setting forth
thereon  the  dollar  value of the  portion of the MBO  Payment  which he or she
desires to receive in shares of Common Stock or Common Stock  Equivalents.  If a
Participant  fails to make an election  pursuant to this Section with respect to
the mode of payment of an MBO Payment,  the entire MBO Payment  shall be made in
cash.

      13.2  Determination  of Number of  Shares.  The number of shares of Common
Stock or Common  Stock  Equivalents  that shall be issued or  credited as an MBO
Payment  shall be  determined by dividing the dollar value of the portion of the
MBO  Payment  that is to be paid in  shares  of  Common  Stock or  Common  Stock
Equivalents  (whether as elected above or as adjusted by the Committee  pursuant
to Section  13.3) by the Fair Market  Value of the Common  Stock on the date the
shares are issued or credited with respect to such Payment. No fractional shares
of Common Stock or Common Stock Equivalent shall be issued or credited as a part
of an MBO  Payment  and the  value  of any  such  fractional  share  that  would
otherwise  be issued  pursuant to the  Participant's  election  shall be paid in
cash.

      13.3 Decision of Committee.  The Committee  shall have the sole discretion
to either  accept the  Participant's  election with respect to the payment of an
MBO  Payment,  in whole or in part,  in shares of Common  Stock or Common  Stock
Equivalents or to determine that a lesser  portion,  or none, of the MBO Payment
will be made in shares of Common  Stock or  Common  Stock  Equivalents,  and the
Committee's  determination  in this  regard  shall be final and  binding  on the
Participant.

                                  SECTION XIV

                        TENDER OFFERS AND ACQUISITIONS

      14.1 Tender Offers and  Acquisitions.  If any person or entity (other than
the Company or any person or entity that is  controlled  by the  Company)  shall
make a tender offer or exchange offer for all or any part of the Common Stock or
other  capital  shares of the Company and shall  purchase any part of the Common
Stock or other capital shares  tendered to it, and the Board opposes or does not
affirmatively recommend acceptance of such tender offer or exchange offer, then:

      (a) all Stock Options with respect to which no Stock  Appreciation  Rights
have  been  granted,   and  all  Stock  Options  with  respect  to  which  Stock
Appreciation  Rights have been issued (and all such related  Stock  Appreciation
Rights)  that  have  been  outstanding  for at least six  months,  shall  become
immediately  exercisable in full during the remaining  term thereof,  whether or
not the  Participants  to whom such options and rights have been granted  remain
Employees,  Directors or Consultants  of the Company;  provided,  however,  that
Stock  Appreciation  Rights shall remain subject to the  requirements of Section
9.2(a) with respect to the exercise thereof only within prescribed periods after
public release of Company financial information;

      (b) all restrictions  with respect to outstanding  Restricted Stock Awards
shall immediately lapse; and

      (c) all Common Stock Equivalents shall convert into shares of Common Stock
as of the date determined by the Committee.


                                  SECTION XV

                          OTHER COMMON STOCK PROGRAMS

      15.1 Other Common Stock Programs. From time to time during the duration of
the 1995  Plan,  the  Board  may,  in its  sole  discretion,  adopt  one or more
incentive  compensation  arrangements  for  Eligible  Employees,   Directors  or
Consultants pursuant to which such Eligible Employees,  Directors or Consultants
may  acquire  shares of Common  Stock or Common  Stock  Equivalents,  whether by
purchase, outright grant or otherwise. Any such arrangements shall be subject to
the general provisions of the 1995 Plan and all shares of Common Stock or Common
Stock  Equivalents  issued or credited  pursuant to such  arrangements  shall be
issued under the 1995 Plan if so designated by the Committee.


                                  SECTION XVI

                            RIGHTS OF PARTICIPANTS

      16.1  Employment,   Directorship  or  Consulting   Relationship.   Nothing
contained in the 1995 Plan or in any Stock  Option,  Stock  Appreciation  Right,
Restricted  Stock Award or other Common Stock or Common Stock  Equivalent  award
granted  under the 1995 Plan shall  confer upon any  Participant  any right with
respect to the  continuation of his or her employment,  service as a director or
consulting  relationship  with the  Company or any  Affiliated  Corporation,  or
interfere  in  any  way  with  the  right  of  the  Company  or  any  Affiliated
Corporation,  subject to the terms of any separate agreement to the contrary, at
any time to terminate  such service or to increase or decrease the  compensation
of the  Participant  from the rate in  existence  at the time of the  grant of a
Stock Option,  Stock Appreciation Right,  Restricted Stock Award or other Common
Stock or Common Stock Equivalent award.  Whether an authorized leave of absence,
or absence in military or government  service,  shall constitute  termination of
service shall be determined by the Committee at the time.

      16.2 Nontransferability. Except as otherwise approved by the Committee and
set forth in the agreement between the Company and the Participant,  no right or
interest of any  Participant in a Stock Option,  a Stock  Appreciation  Right, a
Restricted  Stock  Award  prior  to the  completion  of the  restriction  period
applicable  thereto,  or other  Common Stock or Common  Stock  Equivalent  award
granted pursuant to the 1995 Plan shall be assignable or transferable during the
lifetime of the Participant,  either voluntarily or involuntarily,  or subjected
to any  lien,  directly  or  indirectly,  by  operation  of law,  or  otherwise,
including execution,  levy, garnishment,  attachment,  pledge or bankruptcy.  If
permitted  by  applicable  law  (including  Rule 16b-3,  as amended from time to
time),  the Committee  may (but need not) permit the transfer of Stock  Options,
Stock Appreciation Rights,  Restricted Stock Awards and/or other Common Stock or
Common Stock Equivalent awards either  generally,  to a limited class of persons
or  on  a  case-by-case  basis.  In  the  event  of  a  Participant's  death,  a
Participant's  rights and interest in Stock Options,  Stock Appreciation Rights,
Restricted Stock Awards and other Common Stock or Common Stock Equivalent awards
shall  be  transferable  by  testamentary  will  or  the  laws  of  descent  and
distribution,  and  payment of any amounts due under the 1995 Plan shall be made
to, and exercise of any Stock Options or Stock  Appreciation  Rights may be made
by,  the  Participant's  legal  representatives,  heirs or  legatees.  If in the
opinion of the  Committee a person  entitled  to payments or to exercise  rights
with  respect to the 1995 Plan is  disabled  from  caring for his or her affairs
because of mental condition, physical condition, or age, payment due such person
may be made to, and such rights shall be exercised by, such  person's  guardian,
conservator or other legal personal representative upon furnishing the Committee
with evidence satisfactory to the Committee of such status.

                                  SECTION XVII

                             GENERAL RESTRICTIONS

      17.1  Investment  Representations.  The  Company may require any person to
whom a Stock Option,  Stock  Appreciation  Right,  Restricted  Stock Award,  MBO
Payment or other Common Stock or Common Stock Equivalent award is granted,  as a
condition  of  exercising  such Stock  Option or Stock  Appreciation  Right,  or
receiving such Restricted  Stock Award,  MBO Payment or other Common Stock award
or Common Stock  Equivalent  award, to give written  assurances in substance and
form  satisfactory to the Company and its counsel to the effect that such person
is acquiring the Common Stock subject to the Stock  Option,  Stock  Appreciation
Right,  Restricted  Stock  Award,  MBO Payment or Common  Stock or Common  Stock
Equivalent  award for his or her own  account  for  investment  and not with any
present  intention of selling or otherwise  distributing  the same,  and to such
other effects as the Company deems  necessary or  appropriate in order to comply
with federal and applicable state securities laws.

      17.2   Compliance  with   Securities   Laws.  Each  Stock  Option,   Stock
Appreciation  Right  and  Common  Stock  Equivalent  shall  be  subject  to  the
requirement that, if at any time counsel to the Company shall determine that the
listing,  registration  or  qualification  of the  shares  subject to such Stock
Option,  Stock Appreciation Right or Common Stock Equivalent upon any securities
exchange  or under any state or federal  law,  or the consent or approval of any
governmental  or  regulatory  body,  is  necessary  as a  condition  of,  or  in
connection  with,  the  issuance or purchase  of shares  thereunder,  such Stock
Option,  Stock Appreciation Right or Common Stock Equivalent may not be accepted
or   exercised  in  whole  or  in  part  unless  such   listing,   registration,
qualification,  consent or  approval  shall have been  effected  or  obtained on
conditions  acceptable  to the  Committee.  Nothing  herein  shall be  deemed to
require  the  Company to apply for or to obtain such  listing,  registration  or
qualification.

      17.3 Changes in Accounting Rules.  Notwithstanding  any other provision of
the 1995 Plan to the contrary, if, during the term of the 1995 Plan, any changes
in the financial or tax  accounting  rules  applicable to Stock  Options,  Stock
Appreciation Rights, Restricted Stock Awards, MBO Payments or other Common Stock
or Common Stock Equivalent  awards shall occur that, in the sole judgment of the
Committee,  may have a material adverse effect on the reported earnings,  assets
or liabilities of the Company,  the Committee  shall have the right and power to
modify as necessary,  or cancel,  any then  outstanding  and  unexercised  Stock
Options or Stock  Appreciation  Rights,  any then  outstanding  Restricted Stock
Awards as to which the  applicable  restriction  has not been  satisfied and any
other Common Stock awards or Common Stock Equivalent.


                                 SECTION XVIII

                                OTHER BENEFITS

      18.1 Other Benefits.  The amount of any compensation deemed to be received
by an Employee,  Director or  Consultant  as a result of the exercise of a Stock
Option,  a Stock  Appreciation  Right or the sale of shares  received  upon such
exercise or the  vesting of any  Restricted  Stock  Awards or the receipt of any
other  Common  Stock or  Common  Stock  Equivalent  award  will  not  constitute
"earnings"  with respect to which any other benefits  provided by the Company or
an  Affiliated  Corporation  to such person are  determined,  including  without
limitation benefits under any pension,  profit sharing, life insurance or salary
continuation plan.


                                  SECTION XIX

                 PLAN AMENDMENT, MODIFICATION AND TERMINATION

      19.1  Amendment or  Termination.  The Board,  upon  recommendation  of the
Committee or at its own  initiative,  at any time may  terminate and at any time
and from time to time and in any respect, may amend or modify the 1995 Plan. The
Company  shall  obtain  stockholder  approval  of any  amendment  to the  extent
necessary and desirable to comply with Applicable Laws.  "Applicable Laws" means
the requirements relating to the administration of stock option plans under U.S.
state  corporate  laws, U.S.  federal and state  securities  laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or quoted
and the  applicable  laws of any  foreign  country or  jurisdiction  where Stock
Options,  Stock  Appreciation  Rights,  Restricted  Stock Awards or other Common
Stock or Common Stock Equivalent  awards are, or will be, granted under the 1995
Plan.

      19.2  Effect of  Amendment.  (a) With  regard to any Stock  Option,  Stock
Appreciation  Right,  Restricted  Stock Award or other Common  Stock  Equivalent
awards that has been granted to a  Participant,  the terms and conditions of the
Company's 1995 equity participation plan in effect on the date of such grant was
made shall  govern,  notwithstanding  subsequent  amendments,  unless  otherwise
agreed upon by the Participant;  provided, however, that this sentence shall not
impair the right of the Committee to take whatever  action it deems  appropriate
under Section 4.3, Section 14, Section 17.3 or Section 19.3;  provided  further,
that the Board's  deletion of its right  pursuant to Section 3.1(i) hereof shall
shall be effective as to all Stock Options and Stock Appreciation Rights issued,
whether  under the Original  Plan,  the Original  Plan, as amended by any of the
Amendments or the 1995 Plan.

      (b) Except as set forth in Section 19.2(a) hereof,  the termination or any
modification  or amendment of the 1995 Plan shall not,  without the consent of a
Participant,  affect his or her rights under a Stock Option,  Stock Appreciation
Right,  Restricted  Stock Award or other Common Stock or Common Stock Equivalent
award  previously  granted to him or her.  With the  consent of the  Participant
affected,  the Committee may amend outstanding option agreements in a manner not
inconsistent with the 1995 Plan.

      19.3  Preservation  of Incentive  Stock Options.  The Board shall have the
right to amend or modify  the terms and  provisions  of the 1995 Plan and of any
outstanding  Incentive  Stock Options  granted under the 1995 Plan to the extent
necessary to qualify any or all such Stock Options for such favorable  treatment
as may be afforded  Incentive  Stock  Options  under Section 422 of the Internal
Revenue Code.

                                   SECTION XX

                                  WITHHOLDING

      20.1 Withholding Requirement.  The Company's obligations to deliver shares
of Common  Stock upon the  exercise  of any Stock  Option or Stock  Appreciation
Right granted under the 1995 Plan or upon any MBO Payment under the 1995 Plan or
pursuant to any other Common Stock or Common Stock  Equivalent  award,  shall be
subject to the Participant's  satisfaction of all applicable federal,  state and
local income and other tax withholding requirements.

      20.2  Withholding  With  Common  Stock.  The  Committee  may,  in its sole
discretion,  allow Participants to pay all or any portion of any tax withholding
obligation  that results from Stock  Options,  Stock  Appreciation  Rights,  MBO
Payments,  or any  other  Common  Stock or Common  Stock  Equivalent  award,  by
electing to transfer to the Company, or to have the Company withhold from shares
otherwise  issuable to the  Participant,  shares of Common  Stock having a value
equal to the amount  required to be  withheld  or such  lesser  amount as may be
elected by the Participant.  Any such  withholding  election shall be subject to
such terms and  conditions as the Committee  may, from time to time,  establish;
provided,  that, in the case of a  Participant  who is an officer or director of
the  Company  within the  meaning of Section 16 of the  Exchange  Act,  then the
approval by the  Committee  of the grant of the award shall be deemed to include
approval by the  Committee of the election by such  Participant  to utilize this
withholding  provision,  unless otherwise specified in the agreement relating to
the award.


                                  SECTION XXI

                              REQUIREMENTS OF LAW

      21.1  Requirements  of Law.  The issuance of stock and the payment of cash
pursuant  to the 1995 Plan shall be subject to all  applicable  laws,  rules and
regulations.

      21.2 Governing Law. The 1995 Plan and all  agreements  hereunder  shall be
construed in accordance with and governed by the laws of the State of Colorado.




                                  SECTION XXII

                        EFFECTIVE DATE OF THE 1995 PLAN

      22.1  Effective  Date.  The Original Plan became  effective as of March 8,
1995,  the date it was adopted by the Board of Directors  of the  Company.  Each
subsequent Amendment became effective as of the date it was adopted by the Board
of Directors of the Company. The 1995 Plan is effective as of May 18, 2000.

      22.2 Duration of the 1995 Plan. The 1995 Plan shall  terminate at midnight
on March 7, 2005, which is the day before the tenth anniversary of the Effective
Date, and may be terminated prior thereto by Board action;  and no Stock Option,
Stock Appreciation Right, Restricted Stock Award or other Common Stock or Common
Stock Equivalent award shall be granted after such  termination.  Stock Options,
Stock  Appreciation  Rights,  Restricted Stock Awards and other Common Stock and
Common  Stock  Equivalent  awards  outstanding  at the  time  of the  1995  Plan
termination  may continue to be exercised,  or become free of  restrictions,  in
accordance with their terms.