Exhibit 10.31  AXT, Inc.  2007 Equity Incentive Plan  (As Amended Through December 8,
2008)


TABLE OF CONTENTS  Page1.
  Establishment, Purpose
  and Term of Plan
  
  11.1
  Establishment
  
  11.2
  Purpose
  
  11.3
  Term of Plan
  
  12.
  Definitions and
  Construction
  
  12.1
  Definitions
  
  12.2
  Construction
  
  73.
  Administration
  
  73.1
  Administration by the
  Committee
  
  73.2
  Authority of Officers
  
  73.3
  Administration with
  Respect to Insiders
  
  83.4
  Committee Complying
  with Section 162(m)
  
  83.5
  Powers of the Committee
  
  83.6
  Indemnification
  
  93.7
  Arbitration
  
  103.8
  Repricing Prohibited
  
  104.
  Shares Subject to Plan
  
  104.1
  Maximum Number of
  Shares Issuable
  
  104.2
  Adjustments for Changes
  in Capital Structure
  
  105.
  Eligibility and Award
  Limitations
  
  115.1
  Persons Eligible for
  Awards
  
  115.2
  Participation
  
  115.3
  Incentive Stock Option
  Limitations
  
  115.4
  Award Limits
  
  126.
  Terms and Conditions of
  Options
  
  136.1
  Exercise Price
  
  136.2
  Exercisability and Term
  of Options
  
  136.3
  Payment of Exercise
  Price
  
  146.4
  Effect of Termination
  of Service
  
  146.5
  Transferability of
  Options
  
  15  i


TABLE OF
CONTENTS  Page7.
  Terms and Conditions of
  Stock Appreciation Rights
  
  157.1
  Types of SARs
  Authorized
  
  157.2
  Exercise Price
  
  157.3
  Exercisability and Term
  of SARs
  
  167.4
  Deemed Exercise of SARs
  
  167.5
  Effect of Termination
  of Service
  
  167.6
  Nontransferability of
  SARs
  
  168.
  Terms and Conditions of
  Restricted Stock Awards
  
  168.1
  Types of Restricted
  Stock Awards Authorized
  
  178.2
  Purchase Price
  
  178.3
  Purchase Period
  
  178.4
  Vesting and
  Restrictions on Transfer
  
  178.5
  Voting Rights;
  Dividends and Distributions
  
  178.6
  Effect of Termination
  of Service
  
  178.7
  Nontransferability of
  Restricted Stock Award Rights
  
  189.
  Terms and Conditions of
  Performance Awards
  
  189.1
  Types of Performance
  Awards Authorized
  
  189.2
  Initial Value of
  Performance Shares and Performance Units
  
  189.3
  Establishment of
  Performance Period, Performance Goals and Performance Award Formula
  
  189.4
  Measurement of
  Performance Goals
  
  199.5
  Settlement of
  Performance Awards
  
  209.6
  Voting Rights; Dividend
  Equivalent Rights and Distributions
  
  209.7
  Effect of Termination
  of Service
  
  219.8
  Nontransferability of
  Performance Awards
  
  2110.
  Terms and Conditions of
  Restricted Stock Unit Awards
  
  2210.1
  Grant of Restricted
  Stock Unit Awards
  
  2210.2
  Vesting
  
  2210.3
  Voting Rights, Dividend
  Equivalent Rights and Distributions
  
  2210.4
  Effect of Termination
  of Service
  
  23  ii


TABLE OF
CONTENTS  Page10.5
  Settlement of
  Restricted Stock Unit Awards
  
  2310.6
  Nontransferability of
  Restricted Stock Unit Awards
  
  2311.
  Deferred Compensation
  Awards
  
  2311.1
  Establishment of
  Deferred Compensation Award Programs
  
  2311.2
  Terms and Conditions of
  Deferred Compensation Awards
  
  2412.
  Other Stock-Based
  Awards
  
  2513.
  Effect of Change in
  Control on Awards
  
  2513.1
  Accelerated Vesting
  
  2513.2
  Assumption or
  Substitution
  
  2613.3
  Effect of Change in
  Control on Restricted Stock and Other Type of Awards
  
  2614.
  Compliance with
  Securities Law
  
  2615.
  Compliance with
  Section 409A
  
  2715.1
  Awards Subject to
  Section 409A
  
  2715.2
  Deferral and/or
  Distribution Elections
  
  2715.3
  Subsequent Elections
  
  2815.4
  Payments Pursuant to
  Deferral Elections
  
  2815.5
  Unforeseeable Emergency
  
  2915.6
  Disabled
  
  2915.7
  Death
  
  3015.8
  Prohibition of
  Acceleration of Payments
  
  3016.
  Tax Withholding
  
  3016.1
  Tax Withholding in
  General
  
  3016.2
  Withholding in Shares
  
  3017.
  Amendment or
  Termination of Plan
  
  3118.
  Miscellaneous
  Provisions
  
  3118.1
  Repurchase Rights
  
  3118.2
  Provision of
  Information
  
  3118.3
  Rights as Employee,
  Consultant or Director
  
  3118.4
  Rights as a Stockholder
  
  31  iii


TABLE OF CONTENTS  Page18.5
  Fractional Shares
  
  3218.6
  Severability
  
  3218.7
  Beneficiary Designation
  
  3218.8
  Unfunded Obligation
  
  32  iv


AXT, Inc. 2007
Equity Incentive Plan (As Amended Through December       ,
2008)  1.ESTABLISHMENT, PURPOSE AND TERM OF PLAN.  1.1Establishment.  The AXT, Inc. 2007 Equity Incentive Plan
(the Plan) is hereby adopted April 30, 2007
subject to approval by the stockholders of the Company (the date of such
approval, the Effective Date).  The Plan is an amendment and restatement of
the AXT, Inc. 1997 Stock Option Plan. 
An Award under the Plan shall be subject to the terms of the Plan and
governing Agreements in effect on the date of the Awards grant.  1.2Purpose.  The purpose of the Plan is to advance the
interests of the Participating Company Group and its stockholders by providing
an incentive to attract and retain the best qualified personnel to perform
services for the Participating Company Group, by motivating such persons to
contribute to the growth and profitability of the Participating Company Group,
by aligning their interests with interests of the Companys stockholders, and
by rewarding such persons for their services by tying a significant portion of
their total compensation package to the success of the Company.  The Plan seeks to achieve this purpose by
providing for Awards in the form of Options, Stock Appreciation Rights,
Restricted Stock Awards, Performance Shares, Performance Units, Restricted
Stock Units, Deferred Compensation Awards and other Stock-Based Awards as
described below.  1.3Term of Plan.  The
Plan shall continue in effect until the earlier of its termination by the Board
or the date on which all of the shares of Stock available for issuance under
the Plan have been issued and all restrictions on such shares under the terms
of the Plan and the agreements evidencing Awards granted under the Plan have
lapsed.  However, Awards shall not be
granted later than ten (10) years from the Effective Date.  The Company intends that the Plan comply with
Section 409A of the Code (including any amendments to or replacements of
such section), and the Plan shall be so construed.  2.DEFINITIONS AND CONSTRUCTION.  2.1Definitions.  Whenever
used herein, the following terms shall have their respective meanings set forth
below:  (a)Affiliate means (i) an
entity, other than a Parent Corporation, that directly, or indirectly through
one or more intermediary entities, controls the Company or (ii) an entity,
other than a Subsidiary Corporation, that is controlled by the Company
directly, or indirectly through one or more intermediary entities.  For this purpose, the term control
(including the term controlled by) means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
the relevant entity, whether through the ownership of voting securities, by
contract or otherwise; or shall have such other meaning assigned such term for
the purposes of registration on Form S-8 under the Securities Act.  1


(b)Award means any Option, SAR,
Restricted Stock Award, Performance Share, Performance Unit, Restricted Stock
Unit or Deferred Compensation Award or other Stock-Based Award granted under
the Plan.  (c)Award Agreement means a written
agreement between the Company and a Participant setting forth the terms,
conditions and restrictions of the Award granted to the Participant.  (d)Board means the
Board of Directors of the Company.  (e)Change in Control means, unless
such term or an equivalent term is otherwise defined with respect to an Award
by the Participants Award Agreement or written contract of employment or
service, the occurrence of any of the following:  (i)an
Ownership Change Event or a series of related Ownership Change Events
(collectively, a Transaction) in which the
stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same proportions as
their ownership of shares of the Companys voting stock immediately before the
Transaction, direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding voting securities
of the Company or, in the case of an Ownership Change Event described in Section 2.1(y)(iii),
the entity to which the assets of the Company were transferred (the Transferee), as the case may be; or  (ii)the
liquidation or dissolution of the Company.  For
purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting
securities of one or more corporations or other business entities which own the
Company or the Transferee, as the case may be, either directly or through one
or more subsidiary corporations or other business entities.  The Board shall have the right to determine
whether multiple sales or exchanges of the voting securities of the Company or
multiple Ownership Change Events are related, and its determination shall be
final, binding and conclusive.  (f)Code means the
Internal Revenue Code of 1986, as amended, and any applicable regulations or
administrative guidelines promulgated thereunder.  (g)Committee means the
Compensation Committee or other committee of the Board duly appointed to
administer the Plan and having such powers as shall be specified by the
Board.  If no committee of the Board has
been appointed to administer the Plan, the Board shall exercise all of the
powers of the Committee granted herein,
and, in any event, the Board may in its discretion exercise any or all of such
powers, provided, however, that any
discretionary grants to non-Employee Directors shall only be made by a Board
committee comprised solely of independent directors..  The Committee shall have the exclusive
authority to administer the Plan and shall have all of the powers granted
herein, including, without limitation, the power to amend or terminate
the Plan at any time, subject to the terms of the Plan and any applicable
limitations imposed by law.  2


(h)Company means AXT, Inc.,
a Delaware corporation, or any Successor.  (i)Consultant means a
person engaged to provide consulting or advisory services (other than as an
Employee or a member of the Board) to a Participating Company.  (j)Deferred Compensation Award means an award of Stock Units
granted to a Participant pursuant to Section 11 of the Plan.  (k)Director means a member of the
Board or of the board of directors of any Participating Company.  (l)Disability means the
permanent and total disability of the Participant, within the meaning of Section 22(e)(3) of
the Code.  (m)Dividend Equivalent means a
credit, made at the discretion of the Committee or as otherwise provided by the
Plan, to the account of a Participant in an amount equal to the cash dividends
paid on one share of Stock for each share of Stock represented by an Award held
by such Participant.  (n)Employee means any
person treated as an employee (including an Officer or a member of the Board
who is also treated as an employee) in the records of a Participating Company
and, with respect to any Incentive Stock Option granted to such person, who is
an employee for purposes of Section 422 of the Code; provided, however,
that neither service as a member of the Board nor payment of a directors fee
shall be sufficient to constitute employment for purposes of the Plan.  The Company shall determine in good faith and
in the exercise of its discretion whether an individual has become or has
ceased to be an Employee and the effective date of such individuals employment
or termination of employment, as the case may be.  For purposes of an individuals rights, if
any, under the Plan as of the time of the Companys determination, all such
determinations by the Company shall be final, binding and conclusive,
notwithstanding that the Company or any court of law or governmental agency
subsequently makes a contrary determination.  (o)Exchange Act means the
Securities Exchange Act of 1934, as amended.  (p)Fair Market Value means, as
of any date, the value of a share of Stock or other property as determined by
the Committee, in its discretion, or by the Company, in its discretion, if such
determination is expressly allocated to the Company herein, subject to the
following:  (i)Except
as otherwise determined by the Committee, if, on such date, the Stock is listed
on a national or regional securities exchange or market system, the Fair Market
Value of a share of Stock shall be the closing price of a share of Stock as
quoted on such national or regional securities exchange or market system
constituting the primary market for the Stock on the day of determination, as
reported in The Wall Street Journal
or such other source as the Company deems reliable.  If there is no such closing price on the day
of  3


determination, the Fair Market Value of a share of Stock
under this Section 2.1(p)(i) shall be the closing price of a share of
Stock on the next trading day following the day of determination.  (ii)Notwithstanding
the foregoing, the Committee may, in its discretion, determine the Fair Market
Value on the basis of the closing, high, low or average sale price of a share
of Stock or the actual sale price of a share of Stock received by a
Participant, on such date, the preceding trading day, the next succeeding
trading day or an average determined over a specified period of trading days
that is within thirty (30) days before or thirty (30) days after such date,
provided that, with respect to the grant of an Option or SAR, the commitment to
grant such Award based on such valuation method must be irrevocable before the
beginning of the specified period.  The
Committee may vary its method of determination of the Fair Market Value as
provided in this Section for different purposes under the Plan to the
extent consistent with the requirements of Section 409A.  (iii)If, on such date, the
Stock is not listed on a national or regional securities exchange or market
system, the Fair Market Value of a share of Stock shall be as determined by the
Committee in good faith without regard to any restriction other than a restriction
which, by its terms, will never lapse, and in a manner consistent with the
requirements of Section 409A.  (q)Incentive Stock Option means an Option intended to be (as
set forth in the Award Agreement) and which qualifies as an incentive stock
option within the meaning of Section 422(b) of the Code.  (r)Insider means an Officer, a Director or any other person
whose transactions in Stock are subject to Section 16 of the Exchange Act.  (s)Insider Trading means the written policy of the Company
pertaining to the purchase, sale, transfer or other disposition of the Companys
equity securities by Directors, Officers, Employees or other service providers
who may possess material, nonpublic information regarding the Company or its
securities.  (t)Non-Control Affiliate means any
entity in which any Participating Company has an ownership interest and which
the Committee shall designate as a Non-Control Affiliate.  (u)Nonemployee
Director means a Director who is not an Employee.  (v)Nonstatutory Stock
Option
means an Option not intended to be (as set forth in the Award Agreement) an
incentive stock option within the meaning of Section 422(b) of the
Code.  (w)Officer means any person
designated by the Board as an officer of the Company.  4


(x)Option means the
right to purchase Stock at a stated price for a specified period of time
granted to a Participant pursuant to Section 6 of the Plan.  An Option may be either an Incentive Stock
Option or a Nonstatutory Stock Option.  (y)Option Expiration Date means the
date of expiration of the Options term as set forth in the Award Agreement.  (z)An
Ownership Change Event shall be
deemed to have occurred if any of the following occurs with respect to the
Company:  (i) the direct or indirect
sale or exchange in a single or series of related transactions by the
stockholders of the Company of more than fifty percent (50%) of the voting
stock of the Company; (ii) a merger or consolidation in which the Company
is a party; or (iii) the sale, exchange, or transfer of all or
substantially all, as determined by the Board in its discretion, of the assets
of the Company.  (aa)Parent Corporation means any
present or future parent corporation of the Company, as defined in Section 424(e) of
the Code.  (bb)Participant means any eligible
person who has been granted one or more Awards.  (cc)Participating
Company
means the Company or any Parent Corporation, Subsidiary Corporation or
Affiliate.  (dd)Participating
Company Group means, at any point in time, all
entities collectively which are then Participating Companies.  (ee)Performance Award means an Award
of Performance Shares or Performance Units.  (ff)Performance Award Formula means,
for any Performance Award, a formula or table established by the Committee
pursuant to Section 9.3 of the Plan which provides the basis for computing
the value of a Performance Award at one or more threshold levels of attainment
of the applicable Performance Goal(s) measured as of the end of the
applicable Performance Period.  (gg)Performance Goal means a
performance goal established by the Committee pursuant to Section 9.3 of
the Plan.  (hh)Performance Period means a period
established by the Committee pursuant to Section 9.3 of the Plan at the
end of which one or more Performance Goals are to be measured.  (ii)Performance Share means a
bookkeeping entry representing a right granted to a Participant pursuant to Section 9
of the Plan to receive a payment equal to the value of a Performance Share, as
determined by the Committee, based on performance.  5


(jj)Performance Unit means a
bookkeeping entry representing a right granted to a Participant pursuant to Section 9
of the Plan to receive a payment equal to the value of a Performance Unit, as
determined by the Committee, based upon performance.  (kk)Restricted Stock Award means an
Award of Restricted Stock.  (ll)Restricted Stock Unit or Stock Unit
means a bookkeeping entry representing a right granted to a Participant
pursuant to Section 10 or Section 11 of the Plan, respectively, to
receive a share of Stock on a date determined in accordance with the provisions
of Section 10 or Section 11, as applicable, and the Participants
Award Agreement.  (mm)Restriction Period means the
period established in accordance with Section 8.4 of the Plan during which
shares subject to a Restricted Stock Award are subject to Vesting Conditions.  (nn)Rule 16b-3 means Rule 16b-3 under the Exchange
Act, as amended from time to time, or any successor rule or regulation.  (oo)SAR or Stock
Appreciation Right means a bookkeeping entry representing, for
each share of Stock subject to such SAR, a right granted to a Participant
pursuant to Section 7 of the Plan to receive payment in any combination of
shares of Stock or cash of an amount equal to the excess, if any, of the Fair
Market Value of a share of Stock on the date of exercise of the SAR over the
exercise price.  (pp)Section 409A means Section 409A of the Code.  (qq)Section 409A Deferred Compensation means
compensation provided pursuant to an Award that constitutes deferred
compensation subject to and not exempted from the requirements of Section 409A.  (rr)Section 162(m) means Section 162(m) of the
Code.  (ss)Securities Act means the
Securities Act of 1933, as amended.  (tt)Service means a
Participants employment or service with the Participating Company Group,
whether in the capacity of an Employee, a Director or a Consultant.  Unless otherwise provided by the Committee, a
Participants Service shall not be deemed to have terminated merely because of
a change in the capacity in which the Participant renders such Service or a
change in the Participating Company for which the Participant renders such
Service, provided that there is no interruption or termination of the
Participants Service.  Furthermore, a
Participants Service shall not be deemed to have terminated if the Participant
takes any military leave, sick leave, or other bona fide leave of absence
approved by the Company.  However, if any
such leave taken by a Participant exceeds ninety (90) days, then on the
ninety-first (91st) day following the commencement of such leave the
Participants Service shall be deemed to have terminated, unless the
Participants right to return to Service is guaranteed by statute or
contract.  Notwithstanding the foregoing,
unless otherwise designated by the Company or required by law, a leave of
absence shall not be treated as Service for purposes of determining vesting
under the Participants Award Agreement. 
A Participants Service shall  6


be deemed to have terminated either upon an actual
termination of Service or upon the entity for which the Participant performs
Service ceasing to be a Participating Company. 
Subject to the foregoing, the Company, in its discretion, shall
determine whether the Participants Service has terminated and the effective
date of such termination.  (uu)Stock means the
common stock of the Company, as adjusted from time to time in accordance with Section 4.2
of the Plan.  (vv)Stock-Based Awards means any
award that is valued in whole or in part by reference to, or is otherwise based
on, the Stock, including dividends on the Stock, but not limited to those
Awards described in Sections 6 through 11 of the Plan.  (ww)Subsidiary
Corporation
means any present or future subsidiary corporation of the Company, as defined
in Section 424(f) of the Code.  (xx)Successor means a corporation into
or with which the Company is merged or consolidated or which acquires all or
substantially all of the assets of the Company and which is designated by the
Board as a Successor for purposes of the Plan.  (yy)Ten Percent Owner means a Participant who, at the time an
Option is granted to the Participant, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of a
Participating Company (other than an Affiliate) within the meaning of Section 422(b)(6) of
the Code.  (zz)Vesting Conditions mean those
conditions established in accordance with Section 8.4 or Section 10.2
of the Plan prior to the satisfaction of which shares subject to a Restricted
Stock Award or Restricted Stock Unit Award, respectively, remain subject to
forfeiture or a repurchase option in favor of the Company upon the Participants
termination of Service.  2.2Construction. 
Captions and titles contained herein are for convenience only and shall
not affect the meaning or interpretation of any provision of the Plan.  Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular.  Use of the term or is not
intended to be exclusive, unless the context clearly requires otherwise.  3.ADMINISTRATION.  3.1Administration by the Committee.  The Plan shall be administered by the
Committee.  All questions of
interpretation of the Plan or of any Award shall be determined by the
Committee, and such determinations shall be final and binding upon all persons
having an interest in the Plan or such Award.  3.2Authority of Officers. 
Any Officer shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, determination or election which
is the responsibility of or which is allocated to the Company herein, provided
the Officer has apparent authority with respect to such matter, right,
obligation, determination or election.  7


3.3Administration with Respect to Insiders. 
With respect to participation by Insiders in the Plan, at any time that
any class of equity security of the Company is registered pursuant to Section 12
of the Exchange Act, the Plan shall be administered in compliance with the
requirements, if any, of Rule 16b-3.  3.4Committee Complying with Section 162(m). 
While the Company is a publicly held corporation within the meaning of
Section 162(m), the Board may establish a Committee of outside directors
within the meaning of Section 162(m) to approve the grant of any
Award which might reasonably be anticipated to result in the payment of
employee remuneration that would otherwise exceed the limit on employee
remuneration deductible for income tax purposes pursuant to Section 162(m).  3.5Powers of the Committee.  In addition to any other powers set forth in
the Plan and subject to the provisions of the Plan, the Committee shall have
the full and final power and authority, in its discretion:  (a)to
determine the persons to whom, and the time or times at which, Awards shall be
granted and the number of shares of Stock or units to be subject to each Award;  (b)to
determine the type of Award granted and to designate Options as Incentive Stock
Options or Nonstatutory Stock Options;  (c)to
determine the Fair Market Value of shares of Stock or other property;  (d)to
determine the terms, conditions and restrictions applicable to each Award
(which need not be identical) and any shares acquired pursuant thereto,
including, without limitation, (i) the exercise or purchase price of
shares purchased pursuant to any Award, (ii) the method of payment for
shares purchased pursuant to any Award, (iii) the method for satisfaction
of any tax withholding obligation arising in connection with Award, including
by the withholding or delivery of shares of Stock, (iv) the timing, terms
and conditions of the exercisability or vesting of any Award or any shares
acquired pursuant thereto, (v) the Performance Award Formula and
Performance Goals applicable to any Award and the extent to which such
Performance Goals have been attained, (vi) the time of the expiration of
any Award, (vii) the effect of the Participants termination of Service on
any of the foregoing, and (viii) all other terms, conditions and
restrictions applicable to any Award or shares acquired pursuant thereto not
inconsistent with the terms of the Plan;  (e)to
determine whether an Award will be settled in shares of Stock, cash, or in any
combination thereof;  (f)to
approve one or more forms of Award Agreement;  (g)to
amend, modify, extend, cancel or renew any Award or to waive any restrictions
or conditions applicable to any Award or any shares acquired pursuant thereto;  8


(h)to
accelerate, continue, extend or defer the exercisability or vesting of any
Award or any shares acquired pursuant thereto, including with respect to the
period following a Participants termination of Service;  (i)without
the consent of the affected Participant and notwithstanding the provisions of
any Award Agreement to the contrary, to unilaterally substitute at any time a
Stock Appreciation Right providing for settlement solely in shares of Stock in
place of any outstanding Option, provided that such Stock Appreciation Right
covers the same number of shares of Stock and provides for the same exercise price
(subject in each case to adjustment in accordance with Section 4.2) as the
replaced Option and otherwise provides substantially equivalent terms and
conditions as the replaced Option, as determined by the Committee;  (j)to
prescribe, amend or rescind rules, guidelines and policies relating to the
Plan, or to adopt sub-plans or supplements to, or alternative versions of, the
Plan, including, without limitation, as the Committee deems necessary or
desirable to comply with the laws or regulations of or to accommodate the tax
policy, accounting principles or custom of, foreign jurisdictions whose
citizens may be granted Awards;  (k)to
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award Agreement and to make all other determinations and take such
other actions with respect to the Plan or any Award as the Committee may deem
advisable to the extent not inconsistent with the provisions of the Plan or
applicable law; and  (l)to
delegate to any proper Officer the authority to grant one or more Awards,
without further approval of the Committee, to any person eligible pursuant to Section 5,
other than a person who, at the time of such grant, is an Insider; provided,
however, that (i) the exercise price per share of each such Option shall
be equal to the Fair Market Value per share of the Stock on the effective date
of grant, and (ii) each such Award shall be subject to the terms and
conditions of the appropriate standard form of Award Agreement approved by the
Committee and shall conform to the provisions of the Plan and such other
guidelines as shall be established from time to time by the Committee.  3.6Indemnification.  In
addition to such other rights of indemnification as they may have as members of
the Board or the Committee or as officers or employees of the Participating
Company Group, members of the Board or the Committee and any officers or
employees of the Participating Company Group to whom authority to act for the
Board, the Committee or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys fees, actually
and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by them
in satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60)
days after the institution of such action, suit or  9


proceeding, such person shall offer to the Company, in
writing, the opportunity at its own expense to handle and defend the same.  3.7Arbitration.  Any
dispute or claim concerning any Awards granted (or not granted) pursuant to
this Plan and any other disputes or claims relating to or arising out of the
Plan shall be fully, finally and exclusively resolved by binding arbitration
conducted pursuant to the Commercial Arbitration Rules of the American
Arbitration Association.  By accepting an
Award, Participants and the Company waive their respective rights to have any
such disputes or claims tried by a judge or jury.  3.8Repricing Prohibited. 
Without the affirmative vote of holders of a majority of the shares of
Stock cast in person or by proxy at a meeting of the stockholders of the
Company at which a quorum representing a majority of all outstanding shares of
Stock is present or represented by proxy, the Committee shall not approve a
program providing for either (a) the cancellation of outstanding Options
or SARs and the grant in substitution therefore of new Awards having a lower
exercise price or (b) the amendment of outstanding Options or SARs to
reduce the exercise price thereof.  This
paragraph shall not be construed to apply to the issuance or assumption of an
Award in a transaction to which Code section 424(a) applies, within the
meaning of Section 424 of the Code.  4.SHARES SUBJECT TO PLAN.  4.1Maximum Number of Shares Issuable.  Subject to adjustment as provided in Section 4.2,
the maximum aggregate number of shares of Stock that may be issued under the
Plan shall be seven million five hundred fifty thousand (7,550,000) (including
the shares of Stock issuable under the Plan prior to the Effective Date) and
shall consist of authorized but unissued or reacquired shares of Stock or any
combination thereof.  Any shares of Stock
that are Subject to Awards of Options or SARs shall be counted against the
limit as one (1) share for every one (1) share granted.  Any shares of Stock that are subject to
Awards (other than Options or SARs) shall be counted against this limit as two (2) shares
for every one (1) share granted.  If
an outstanding Award for any reason expires or is terminated or canceled
without having been exercised or settled in full, or if shares of Stock
acquired pursuant to an Award subject to forfeiture or repurchase are forfeited
or repurchased by the Company, the shares of Stock allocable to the terminated
portion of such Award or such forfeited or repurchased shares of Stock shall
again be available for issuance under the Plan. 
When a SAR settled in shares of Stock is exercised, the total number of
shares subject to the SAR Agreement with respect to which the exercise occurs
shall count against the limit, regardless of the number of shares actually
issued in settlement of the SAR.  Shares
used to pay the exercise price of an option shall not again become available
for future grant or issuance under the Plan. 
Shares used to satisfy tax withholding obligations shall not become
available for future grant or issuance under the Plan.  To the extent an Award is settled in cash
rather than shares of Stock, such cash payment shall not reduce the number of
shares available for issuance under the Plan.  4.2Adjustments for Changes in Capital Structure.  Subject to any
required action by the stockholders of the Company and the requirements of Section 409A
and 424 of the Code to the extent applicable, in the event of any change in the
Stock effected without receipt of consideration by the Company, whether through
merger, consolidation, reorganization,  10


reincorporation, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares, or similar change in the capital
structure of the Company, or in the event of payment of a dividend or
distribution to the stockholders of the Company in a form other than Stock
(excepting normal cash dividends) that has a material effect on the Fair Market
Value of shares of Stock, appropriate adjustments shall be made in the number
and kind of shares subject to the Plan and to any outstanding Awards, in the
Award limits set forth in Section 5.4, and in the exercise or purchase
price per share under any outstanding Award in order to prevent dilution or
enlargement of Participants rights under the Plan.  For purposes of the foregoing, conversion of
any convertible securities of the Company shall not be treated as effected
without receipt of consideration by the Company.  If a majority of the shares which are of the
same class as the shares that are subject to outstanding Awards are exchanged
for, converted into, or otherwise become (whether or not pursuant to an
Ownership Change Event) shares of another corporation (the New Shares), the Committee may unilaterally
amend the outstanding Options to provide that such Options are exercisable for
New Shares.  In the event of any such
amendment, the number of shares subject to, and the exercise price per share
of, the outstanding Awards shall be adjusted in a fair and equitable manner as
determined by the Board, in its discretion. 
Any fractional share resulting from an adjustment pursuant to this Section 4.2
shall be rounded down to the nearest whole number.  The Committee in its sole discretion, may
also make such adjustments in the terms of any Award to reflect, or related to,
such changes in the capital structure of the Company or distributions as it
deems appropriate, including modification of Performance Goals, Performance
Award Formulas and Performance Periods. 
The adjustments determined by the Committee pursuant to this Section 4.2
shall be final, binding and conclusive.  5.ELIGIBILITY AND AWARD LIMITATIONS.  5.1Persons Eligible for Awards.  Awards may be granted only to Employees,
Consultants and Directors.  5.2Participation. 
Awards are granted solely at the discretion of the Committee, other than
Nonemployee Director Awards that may be granted by the Committee or a
subcommittee of independent members of the Board.  Eligible persons may be granted more than one
Award.  However, eligibility in
accordance with this Section shall not entitle any person to be granted an
Award, or, having been granted an Award, to be granted an additional Award.  5.3Incentive Stock Option Limitations.  (a)Persons Eligible.  An Incentive Stock Option may be granted only
to a person who, on the effective date of grant, is an Employee of the Company,
a Parent Corporation or a Subsidiary Corporation (each being an ISO-Qualifying Corporation).  Any person who is not an Employee of an
ISO-Qualifying Corporation on the effective date of the grant of an Option to
such person may be granted only a Nonstatutory Stock Option.  (b)Fair Market Value Limitation.  To the extent that options designated as
Incentive Stock Options (granted under all stock option plans of the
Participating Company Group, including the Plan) become exercisable by a
Participant for the first time during any calendar year for stock having a Fair
Market Value greater than One Hundred  11


Thousand Dollars ($100,000), the portion of such
options which exceeds such amount shall be treated as Nonstatutory Stock
Options.  For purposes of this Section,
options designated as Incentive Stock Options shall be taken into account in
the order in which they were granted, and the Fair Market Value of stock shall
be determined as of the time the option with respect to such stock is
granted.  If the Code is amended to
provide for a limitation different from that set forth in this Section, such
different limitation shall be deemed incorporated herein effective as of the
date and with respect to such Options as required or permitted by such
amendment to the Code.  If an Option is
treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option
in part by reason of the limitation set forth in this Section, the Participant
may designate which portion of such Option the Participant is exercising.  In the absence of such designation, the
Participant shall be deemed to have exercised the Incentive Stock Option
portion of the Option first.  Upon
exercise, shares issued pursuant to each such portion shall be separately
identified.  5.4Award Limits.  (a)Maximum Number of Shares Issuable
Pursuant to Incentive Stock Options. 
Subject to adjustment as provided in Section 4.2, the maximum
aggregate number of shares of Stock that may be issued under the Plan pursuant
to the exercise of Incentive Stock Options shall not exceed seven million five
hundred fifty thousand (7,550,000) shares. 
The maximum aggregate number of shares of Stock that may be issued under
the Plan pursuant to all Awards other than Incentive Stock Options shall be the
number of shares determined in accordance with Section 4.1, subject to adjustment
as provided in Section 4.2.  (b)Limits on Full Value Awards.  Any Restricted Stock Awards, Restricted Stock
Unit Awards and Performance Awards (Full Value Awards)
which vest on the basis of the Participant continued Service shall not provide
for vesting which is any more rapid than annual pro rata vesting over a three (3) year
period and any Full Value Awards which vest upon the attainment of Performance
Goals shall provide for a Performance Period of at least twelve (12)
months.  There shall be no acceleration
of vesting of such Full Value Awards except in connection with death,
Disability or Change in Control.  (c)Section 162(m) Award
Limits.  The following
limits shall apply to the grant of any Award if, at the time of grant, the
Company is a publicly held corporation within the meaning of Section 162(m).  (i)Options and SARs.  Subject to adjustment as provided in Section 4.2,
no Employee shall be granted within any fiscal year of the Company one or more
Options or Freestanding SARs which in the aggregate are for more than five
hundred thousand (500,000) shares of Stock reserved for issuance under the
Plan.  (ii)Restricted Stock, Restricted Stock Unit Awards and
Performance Shares.  Subject
to adjustment as provided in Section 4.2, no Employee shall be granted
within any fiscal year of the Company one or more Restricted Stock Awards or
Restricted Stock Unit Awards, subject to Vesting Conditions based on the
attainment of Performance Goals, or Performance Shares, for more than three
hundred thousand shares (300,000) shares of Stock in the aggregate under the
Plan.  12


(iii)Performance Units.  Subject to adjustment as provided in Section 4.2,
no Employee shall be granted Performance Units which could result in such
Employee receiving more than two million dollars ($2,000,000) for each full
fiscal year of the Company contained in the Performance Period for such
Award.  No Participant may be granted
more than one Performance Award for the same Performance Period.  6.TERMS AND CONDITIONS OF OPTIONS.  Options shall be
evidenced by Award Agreements specifying the number of shares of Stock covered
thereby, in such form as the Committee shall from time to time establish.  No Option or purported Option shall be a
valid and binding obligation of the Company unless evidenced by a fully
executed Award Agreement.  Award
Agreements evidencing Options may incorporate all or any of the terms of the
Plan by reference and shall comply with and be subject to the following terms
and conditions:  6.1Exercise Price.  The exercise price for each Option shall be
established in the discretion of the Committee; provided, however, that (a) the
exercise price per share shall be not less than the Fair Market Value of a share
of Stock on the effective date of grant of the Option and (b) no Incentive
Stock Option granted to a Ten Percent Owner shall have an exercise price per
share less than one hundred ten percent (110%) of the Fair Market Value of a
share of Stock on the effective date of grant of the Option.  Notwithstanding the foregoing, an Option
(whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of Section 424(a) of
the Code.  6.2Exercisability and Term of Options.  (a)Option Vesting and Exercisability.  Options shall be exercisable at such time or
times, or upon such event or events, and subject to such terms, conditions,
performance criteria and restrictions as shall be determined by the Committee
and set forth in the Award Agreement evidencing such Option; provided, however,
that (a) no Option shall be exercisable after the expiration of ten (10) years
after the effective date of grant of such Option, (b) no Incentive Stock
Option granted to a Ten Percent Owner shall be exercisable after the expiration
of five (5) years after the effective date of grant of such Option, and (c) no
Option shall become fully vested in a period of less than three (3) years
from the date of grant, other than in connection with a termination of Service
without cause or a Change in Control or in the case of an option granted to a
Nonemployee Director.  Subject to the
foregoing, unless otherwise specified by the Committee in the grant of an
Option, any Option granted hereunder shall terminate ten (10) years after
the effective date of grant of the Option, unless earlier terminated in
accordance with its provisions, or the terms of the Plan.  (b)Participant Responsibility for Exercise of Option.  Each Participant is responsible for taking
any and all actions as may be required to exercise any Option in a timely
manner, and for properly executing any documents as may be required for the
exercise of an Option in accordance with such rules and procedures as may
be established from time to time.  By
signing an Option Agreement each Participant acknowledges that information  13


regarding the procedures and requirements for the
exercise of any Option is available upon such Participants request.  The Company shall have no duty or obligation
to notify any Participant of the expiration date of any Option.  6.3Payment of Exercise Price.  (a)Forms of Consideration Authorized.  Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock
being purchased pursuant to any Option shall be made (i) in cash, by check
or in cash equivalent, (ii) by tender to the Company, or attestation to
the ownership, of shares of Stock owned by the Participant having a Fair Market
Value not less than the exercise price, (iii)   provided that the
Participant is an Employee, and not an Officer or Director (unless otherwise
not prohibited by law, including, without limitation, any regulation
promulgated by the Board of Governors of the Federal Reserve System) and in the
Companys sole and absolute discretion at the time the Option is exercised, by
delivery of the Participants promissory note in a form approved by the Company
for the aggregate exercise price, provided that, if the Company is incorporated
in the State of Delaware, the Participant shall pay in cash that portion of the
aggregate exercise price not less than the par value of the shares being
acquired, (iv) by such other consideration as may be approved by the
Committee from time to time to the extent permitted by applicable law, or (v) by
any combination thereof.  The Committee
may at any time or from time to time grant Options which do not permit all of
the foregoing forms of consideration to be used in payment of the exercise
price or which otherwise restrict one or more forms of consideration.  (b)Limitations on Forms of Consideration.  (i)Tender of Stock. 
Notwithstanding the foregoing, an Option may not be exercised by tender
to the Company, or attestation to the ownership, of shares of Stock to the
extent such tender or attestation would constitute a violation of the
provisions of any law, regulation or agreement restricting the redemption of
the Companys stock.  (ii)Payment by Promissory Note. 
No promissory note shall be permitted if the exercise of an Option using
a promissory note would be a violation of any law.  Any permitted promissory note shall be on
such terms as the Committee shall determine. 
The Committee shall have the authority to permit or require the
Participant to secure any promissory note used to exercise an Option with the
shares of Stock acquired upon the exercise of the Option or with other
collateral acceptable to the Company. 
Unless otherwise provided by the Committee, if the Company at any time
is subject to the regulations promulgated by the Board of Governors of the
Federal Reserve System or any other governmental entity affecting the extension
of credit in connection with the Companys securities, any promissory note
shall comply with such applicable regulations, and the Participant shall pay
the unpaid principal and accrued interest, if any, to the extent necessary to
comply with such applicable regulations.  6.4Effect of Termination of Service.  (a)Option Exercisability.  Subject to earlier termination of the Option
as otherwise provided herein and unless otherwise provided by the Committee, an
Option shall  14


be exercisable after a Participants termination of
Service only during the applicable time periods provided in the Award
Agreement.  (b)Extension if Exercise Prevented by Law.  Notwithstanding the foregoing, unless the
Committee provides otherwise in the Award Agreement, if the exercise of an
Option within the applicable time periods is prevented by the provisions of Section 14
below, the Option shall remain exercisable until three (3) months (or such
longer period of time as determined by the Committee, in its discretion) after
the date the Participant is notified by the Company that the Option is
exercisable, but in any event no later than the Option Expiration Date.  (c)Extension if Participant Subject to Section 16(b).  Notwithstanding the foregoing, if a sale
within the applicable time periods of shares acquired upon the exercise of the
Option would subject the Participant to suit under Section 16(b) of
the Exchange Act, the Option shall remain exercisable until the earliest to
occur of (i) the tenth (10th) day following the date on which a sale of
such shares by the Participant would no longer be subject to such suit, (ii) the
one hundred and ninetieth (190th) day after the Participants termination of
Service, or (iii) the Option Expiration Date.  6.5Transferability of Options. 
During the lifetime of the Participant, an Option shall be exercisable
only by the Participant or the Participants guardian or legal
representative.  Prior to the issuance of
shares of Stock upon the exercise of an Option, the Option shall not be subject
in any manner to anticipation, alienation, sale, exchange, transfer,
assignment, pledge, encumbrance, or garnishment by creditors of the Participant
or the Participants beneficiary, except transfer by will or by the laws of
descent and distribution. 
Notwithstanding the foregoing, to the extent permitted by the Committee,
in its discretion, and set forth in the Award Agreement evidencing such Option,
a Nonstatutory Stock Option shall be assignable or transferable subject to the
applicable limitations, if any, described in the General Instructions to Form S-8
Registration Statement under the Securities Act.  7.TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.  Stock Appreciation
Rights shall be evidenced by Award Agreements specifying the number of shares
of Stock subject to the Award, in such form as the Committee shall from time to
time establish.  No SAR or purported SAR
shall be a valid and binding obligation of the Company unless evidenced by a
fully executed Award Agreement.  Award
Agreements evidencing SARs may incorporate all or any of the terms of the Plan
by reference and shall comply with and be subject to the following terms and
conditions:  7.1Types of SARs Authorized. 
SARs may be granted in tandem with all or any portion of a related
Option (a Tandem SAR) or may be
granted independently of any Option (a Freestanding SAR).  A Tandem SAR may be granted either
concurrently with the grant of the related Option or at any time thereafter
prior to the complete exercise, termination, expiration or cancellation of such
related Option.  7.2Exercise Price.  The
exercise price for each SAR shall be established in the discretion of the
Committee; provided, however, that (a) the exercise price per share
subject  15


to a Tandem SAR shall be the exercise price per share
under the related Option and (b) the exercise price per share subject to a
Freestanding SAR shall be not less than the Fair Market Value of a share of
Stock on the effective date of grant of the SAR.  7.3Exercisability and Term of SARs.  (a)Tandem SARs.  Tandem SARs shall be exercisable only at the
time and to the extent, and only to the extent, that the related Option is
exercisable, subject to such provisions as the Committee may specify where the
Tandem SAR is granted with respect to less than the full number of shares of
Stock subject to the related Option.  (b)Freestanding SARs.  Freestanding SARs
shall be exercisable at such time or times, or upon such event or events, and
subject to such terms, conditions, performance criteria and restrictions as
shall be determined by the Committee and set forth in the Award Agreement
evidencing such SAR; provided, however, that no Freestanding SAR shall be
exercisable after the expiration of ten (10) years after the effective
date of grant of such SAR.  No SAR shall
become fully vested in a period of less than three (3) years from the date
of grant, other than in connection with a termination of Service or a Change in
Control or in the case of an SAR granted to a Nonemployee Director.  7.4Deemed Exercise of SARs. 
If, on the date on which an SAR would otherwise terminate or expire, the
SAR by its terms remains exercisable immediately prior to such termination or
expiration and, if so exercised, would result in a payment to the holder of
such SAR, then any portion of such SAR which has not previously been exercised
shall automatically be deemed to be exercised as of such date with respect to
such portion.  7.5Effect of Termination of Service.  Subject to earlier termination of the SAR as
otherwise provided herein and unless otherwise provided by the Committee in the
grant of an SAR and set forth in the Award Agreement, an SAR shall be
exercisable after a Participants termination of Service only as provided in
the Award Agreement.  7.6Nontransferability of SARs. 
During the lifetime of the Participant, an SAR shall be exercisable only
by the Participant or the Participants guardian or legal representative.  Prior to the exercise of an SAR, the SAR
shall not be subject in any manner to anticipation, alienation, sale, exchange,
transfer, assignment, pledge, encumbrance, or garnishment by creditors of the
Participant or the Participants beneficiary, except transfer by will or by the
laws of descent and distribution.  8.TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.  Restricted Stock
Awards shall be evidenced by Award Agreements specifying the number of shares
of Stock subject to the Award, in such form as the Committee shall from time to
time establish.  No Restricted Stock
Award or purported Restricted Stock Award shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Award
Agreement.  Award Agreements evidencing
Restricted Stock Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:  16


8.1Types ofRestricted
Stock Awards Authorized.  Restricted
Stock Awards may or may not require the payment of cash compensation for the
stock.  Restricted Stock Awards may be
granted upon such conditions as the Committee shall determine, including,
without limitation, upon the attainment of one or more Performance Goals
described in Section 9.4.  If either
the grant of a Restricted Stock Award or the lapsing of the Restriction Period
is to be contingent upon the attainment of one or more Performance Goals, the
Committee shall follow procedures substantially equivalent to those set forth
in Sections 9.3 through 9.5(a).  8.2Purchase Price.  The purchase price, if any, for shares of
Stock issuable under each Restricted Stock Award and the means of payment shall
be established by the Committee in its discretion.  8.3Purchase Period.  A Restricted Stock Award requiring the
payment of cash consideration shall be exercisable within a period established
by the Committee.  8.4Vesting and Restrictions on
Transfer.  Shares issued pursuant to any Restricted
Stock Awards will be subject to Vesting Conditions as described in 5.4(b), and
may be based upon the satisfaction of such Service requirements, conditions,
restrictions or performance criteria, including, without limitation,
Performance Goals as described in Section 9.4, as shall be established by
the Committee and set forth in the Award Agreement evidencing such Award.  During any Restriction Period in which shares
acquired pursuant to a Restricted Stock Award remain subject to Vesting
Conditions, such shares may not be sold, exchanged, transferred, pledged,
assigned or otherwise disposed of other than as provided in the Award Agreement
or as provided in Section 8.7.  Upon
request by the Company, each Participant shall execute any agreement evidencing
such transfer restrictions prior to the receipt of shares of Stock hereunder.  8.5Voting Rights; Dividends and Distributions.  Except as provided in this Section, Section 8.4
and any Award Agreement, during the Restriction Period applicable to shares
subject to a Restricted Stock Award, the Participant shall have all of the
rights of a stockholder of the Company holding shares of Stock, including the
right to vote such shares and to receive all dividends and other distributions
paid with respect to such shares. 
However, in the event of a dividend or distribution paid in shares of
Stock or any other adjustment made upon a change in the capital structure of
the Company as described in Section 4.2, any and all new, substituted or
additional securities or other property (other than normal cash dividends) to
which the Participant is entitled by reason of the Participants Restricted
Stock Award shall be immediately subject to the same Vesting Conditions as the
shares subject to the Restricted Stock Award with respect to which such
dividends or distributions were paid or adjustments were made.  8.6Effect of Termination of Service.  Unless otherwise provided
by the Committee in the grant of a Restricted Stock Award and set forth in the
Award Agreement, if a Participants Service terminates for any reason, whether
voluntary or involuntary (including the Participants death or disability),
then the Participant shall forfeit to the Company any shares acquired by the
Participant pursuant to a Restricted Stock Award which remain subject to
Vesting Conditions as of the date of the Participants termination of Service
in exchange for the payment of the purchase price, if any, paid by the
Participant.  The Company shall have the
right  17


to assign at any time any repurchase right it may
have, whether or not such right is then exercisable, to one or more persons as
may be selected by the Company.  8.7Nontransferability ofRestricted
Stock Award Rights.  Prior to the issuance of shares of Stock
pursuant to a Restricted Stock Award, rights to acquire such shares shall not
be subject in any manner to anticipation, alienation, sale, exchange, transfer,
assignment, pledge, encumbrance or garnishment by creditors of the Participant
or the Participants beneficiary, except transfer by will or the laws of
descent and distribution.  All rights
with respect to a Restricted Stock Award granted to a Participant hereunder
shall be exercisable during his or her lifetime only by such Participant or the
Participants guardian or legal representative.  9.TERMS AND CONDITIONS OF PERFORMANCE AWARDS.  Performance Awards
shall be evidenced by Award Agreements in such form as the Committee shall from
time to time establish.  No Performance
Award or purported Performance Award shall be a valid and binding obligation of
the Company unless evidenced by a fully executed Award Agreement.  Award Agreements evidencing Performance
Awards may incorporate all or any of the terms of the Plan by reference and
shall comply with and be subject to the following terms and conditions:  9.1Types of Performance Awards Authorized.  Performance Awards may be in the form of
either Performance Shares or Performance Units. 
Each Award Agreement evidencing a Performance Award shall specify the
number of Performance Shares or Performance Units subject thereto, the
Performance Award Formula, the Performance Goal(s) and Performance Period
applicable to the Award, and the other terms, conditions and restrictions of
the Award.  9.2Initial Value of Performance Shares and Performance Units.  Unless otherwise provided by the Committee in
granting a Performance Award, each Performance Share shall have an initial
value equal to the Fair Market Value of one (1) share of Stock, subject to
adjustment as provided in Section 4.2, on the effective date of grant of
the Performance Share.  Each Performance
Unit shall have an initial value determined by the Committee.  The final value payable to the Participant in
settlement of a Performance Award determined on the basis of the applicable
Performance Award Formula will depend on the extent to which Performance Goals
established by the Committee are attained within the applicable Performance
Period established by the Committee.  9.3Establishment of Performance Period, Performance Goals and Performance
Award Formula.  In granting
each Performance Award, the Committee shall establish in writing the applicable
Performance Period, Performance Award Formula and one or more Performance Goals
which, when measured at the end of the Performance Period, shall determine on
the basis of the Performance Award Formula the final value of the Performance
Award to be paid to the Participant.  To
the extent compliance with the requirements under Section 162(m) with
respect to performance-based compensation is desired, the Committee shall
establish the Performance Goal(s) and Performance Award Formula applicable
to each Performance Award no later than the earlier of (a) the date ninety
(90) days after the  18


commencement of the applicable Performance Period or (b) the
date on which 25% of the Performance Period has elapsed, and, in any event, at
a time when the outcome of the Performance Goals remains substantially
uncertain.  Once established, the
Performance Goals and Performance Award Formula shall not be changed during the
Performance Period.  The Company shall
notify each Participant granted a Performance Award of the terms of such Award,
including the Performance Period, Performance Goal(s) and Performance
Award Formula.  9.4Measurement of Performance Goals.  Performance Goals shall be established by the
Committee on the basis of targets to be attained (Performance
Targets) with respect to one or more measures of business or
financial performance (each, a Performance Measure),
subject to the following:  (a)Performance Measures.  Performance
Measures shall have the same meanings as used in the Companys financial
statements, or, if such terms are not used in the Companys financial
statements, they shall have the meaning applied pursuant to generally accepted
accounting principles, or as used generally in the Companys industry.  Performance Measures shall be calculated with
respect to the Company and each Subsidiary Corporation consolidated therewith
for financial reporting purposes or such division or other business unit as may
be selected by the Committee.  For
purposes of the Plan, the Performance Measures applicable to a Performance
Award shall be calculated in accordance with generally accepted accounting
principles, but prior to the accrual or payment of any Performance Award for
the same Performance Period and excluding the effect (whether positive or
negative) of any change in accounting standards or any extraordinary, unusual
or nonrecurring item, as determined by the Committee, occurring after the
establishment of the Performance Goals applicable to the Performance
Award.  Each such adjustment, if any,
shall be made solely for the purpose of providing a consistent basis from
period to period for the calculation of Performance Measures in order to
prevent the dilution or enlargement of the Participants rights with respect to
a Performance Award.  Performance
Measures may be one or more of the following, as determined by the
Committee:  (i) sales revenue; (ii) gross
margin; (iii) operating margin; (iv) operating income; (v) pre-tax
profit; (vi) earnings before stock-based compensation expense, interest,
taxes and depreciation and amortization; (vii) earnings before interest,
taxes and depreciation and amortization; (viii) earnings before interest
and taxes; (ix) net income; (x) expenses; (xi) the market price
of the Stock; (xii) stock price; (xiii) earnings per share;
(xiv) return on stockholder equity; (xv) return on capital;
(xvi) return on net assets; (xvii) economic value added;
(xviii) market share; (xix) customer service; (xx) customer
satisfaction; (xxi) safety; (xxii) total stockholder return;
(xxiii) free cash flow; (xxiv) net operating income;
(xxv) operating cash flow; (xxvi) return on investment; (xxvii)
employee satisfaction; (xxviii) employee retention; (xxix) balance of
cash, cash equivalents and marketable securities; (xxx) product
development; (xxxi) research and development expenses; (xxxii) completion of an
identified special project; (xxxiii) completion of a joint venture or
other corporate transaction; (xxxiv) inventory balance; (xxxv) inventory
turnover ratio; or (xxxvi) such other measures as determined by the
Committee consistent with this Section 9.4(a).  (b)Performance Targets.  Performance Targets
may include a minimum, maximum, target level and intermediate levels of
performance, with the final value of a Performance Award determined under the
applicable Performance Award Formula by the level  19


attained during the applicable Performance
Period.  A Performance Target may be
stated as an absolute value or as a value determined relative to a standard
selected by the Committee.  9.5Settlement of Performance Awards.  (a)Determination of Final Value.  As soon as
practicable following the completion of the Performance Period applicable to a
Performance Award, the Committee shall certify in writing the extent to which
the applicable Performance Goals have been attained and the resulting final
value of the Award earned by the Participant and to be paid upon its settlement
in accordance with the applicable Performance Award Formula.  (b)Discretionary Adjustment of Award
Formula.  In its discretion,
the Committee may, either at the time it grants a Performance Award or at any
time thereafter, provide for the positive or negative adjustment of the
Performance Award Formula applicable to a Performance Award that is not
intended to constitute qualified performance based compensation to a covered
employee within the meaning of Section 162(m) (a Covered Employee) to reflect such Participants
individual performance in his or her position with the Company or such other
factors as the Committee may determine. 
With respect to a Performance Award intended to constitute qualified
performance-based compensation to a Covered Employee, the Committee shall have
the discretion to reduce some or all of the value of the Performance Award that
would otherwise be paid to the Covered Employee upon its settlement
notwithstanding the attainment of any Performance Goal and the resulting value
of the Performance Award determined in accordance with the Performance Award
Formula.  (c)Payment in Settlement of Performance Awards.  As soon as
practicable following the Committees determination and certification in
accordance with Sections 9.5(a) and (b), but in any event within the
Short-Term Deferral Period described in Section 15.1 (except as otherwise
provided below or consistent with the requirements of Section 409A),
payment shall be made to each eligible Participant (or such Participants legal
representative or other person who acquired the right to receive such payment
by reason of the Participants death) of the final value of the Participants
Performance Award.  Payment of such
amount shall be made in cash in a lump sum or in installments, shares of Stock
(either fully vested or subject to vesting), or a combination thereof, as
determined by the Committee.  9.6Voting Rights; Dividend Equivalent Rights and Distributions.  Participants shall have no voting rights with
respect to shares of Stock represented by Performance Share Awards until the
date of the issuance of such shares, if any (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company).  However, the Committee, in its
discretion, may provide in the Award Agreement evidencing any Performance Share
Award that the Participant shall be entitled to receive Dividend Equivalents
with respect to the payment of cash dividends on Stock having a record date
prior to the date on which the Performance Shares are settled or
forfeited.  Such Dividend Equivalents, if
any, shall be credited to the Participant in the form of additional whole
Performance Shares as of the date of payment of such cash dividends on
Stock.  The number of additional
Performance Shares (rounded to the nearest whole number) to be so credited
shall be determined by dividing (a) the amount of cash dividends paid on
such date with respect to the number of shares of Stock represented by the
Performance Shares previously credited to the  20


Participant by (b) the Fair Market Value per
share of Stock on such date.  Dividend
Equivalents may be paid currently or may be accumulated and paid to the extent
that Performance Shares become nonforfeitable, as determined by the Committee.  Settlement of Dividend Equivalents may be
made in cash, shares of Stock, or a combination thereof as determined by the
Committee, and may be paid on the same basis as settlement of the related
Performance Share as provided in Section 9.5.  Dividend Equivalents shall not be paid with
respect to Performance Units.  In the
event of a dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.2, appropriate adjustments shall be made in the
Participants Performance Share Award so that it represents the right to
receive upon settlement any and all new, substituted or additional securities
or other property (other than normal cash dividends) to which the Participant
would entitled by reason of the shares of Stock issuable upon settlement of the
Performance Share Award, and all such new, substituted or additional securities
or other property shall be immediately subject to the same Performance Goals as
are applicable to the Award.  9.7Effect of Termination of Service.  Unless otherwise provided by the Committee in
the grant of a Performance Award and set forth in the Award Agreement, the
effect of a Participants termination of Service on the Performance Award shall
be as follows:  (a)Death or Disability. 
If the Participants Service terminates because of the death or
Disability of the Participant before the completion of the Performance Period
applicable to the Performance Award, the final value of the Participants
Performance Award shall be determined by the extent to which the applicable
Performance Goals have been attained with respect to the entire Performance
Period and shall be prorated based on the number of months of the Participants
Service during the Performance Period. 
Payment shall be made following the end of the Performance Period in any
manner permitted by Section 9.5.  (b)Other Termination of Service. 
If the Participants Service terminates for any reason except death or
Disability before the completion of the Performance Period applicable to the
Performance Award, such Award shall be forfeited in its entirety; provided,
however, that in the event of an involuntary termination of the Participants
Service, the Committee, in its sole discretion, may waive the automatic
forfeiture of all or any portion of any such Award (e.g., by determining the
final value of the Participants Performance Award in the manner provided by Section 9.7(a))
and provide for payment following the end of the Performance Period in any
manner permitted by Section 9.5.  9.8Nontransferability of Performance Awards.  Prior to settlement in accordance with the
provisions of the Plan, no Performance Award shall be subject in any manner to
anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participants
beneficiary, except transfer by will or by the laws of descent and
distribution.  All rights with respect to
a Performance Award granted to a Participant hereunder shall be exercisable
during his or her lifetime only by such Participant or the Participants
guardian or legal representative.  21


10.TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT
AWARDS.  Restricted Stock
Unit Awards shall be evidenced by Award Agreements specifying the number of
Restricted Stock Units subject to the Award, in such form as the Committee
shall from time to time establish.  No
Restricted Stock Unit Award or purported Restricted Stock Unit Award shall be a
valid and binding obligation of the Company unless evidenced by a fully
executed Award Agreement.  Award
Agreements evidencing Restricted Stock Units may incorporate all or any of the
terms of the Plan by reference and shall comply with and be subject to the
following terms and conditions:  10.1Grant of Restricted Stock Unit Awards. 
Restricted Stock Unit Awards may be granted upon such conditions as the
Committee shall determine, including, without limitation, upon the attainment
of one or more Performance Goals described in Section 9.4.  If either the grant of a Restricted Stock
Unit Award or the Vesting Conditions with respect to such Award is to be
contingent upon the attainment of one or more Performance Goals, the Committee
shall follow procedures substantially equivalent to those set forth in
Sections 9.3 through 9.5(a).  10.2Vesting.  Restricted Stock Units
may or may not be made subject to Vesting Conditions based upon the
satisfaction of such Service requirements, conditions, restrictions or
performance criteria, including, without limitation, Performance Goals as
described in Section 9.4, as shall be established by the Committee and set
forth in the Award Agreement evidencing such Award.  The Committee, in its discretion, may provide
in any Award Agreement evidencing a Restricted Stock Unit Award that, if the
satisfaction of Vesting Conditions with respect to any shares subject to the
Award would otherwise occur on a day on which the sale of such shares would
violate the provisions of the Insider Trading Policy, then the satisfaction of
the Vesting Conditions automatically shall be determined on the first to occur
of (a) the next trading day on which the sale of such shares would not
violate the Insider Trading Policy or (b) the later of (i) last day
of the calendar year in which the original vesting date occurred or (ii) the
last day of the Companys taxable year in which the original vesting date
occurred.  10.3Voting Rights, Dividend Equivalent Rights and
Distributions.  Participants shall have no voting rights with
respect to shares of Stock represented by Restricted Stock Units until the date
of the issuance of such shares (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company).  However, the Committee, in its discretion,
may provide in the Award Agreement evidencing any Restricted Stock Unit Award
that the Participant shall be entitled to receive Dividend Equivalents with
respect to the payment of cash dividends on Stock having a record date prior to
the date on which Restricted Stock Units held by such Participant are
settled.  Such Dividend Equivalents, if
any, shall be paid by crediting the Participant with additional whole
Restricted Stock Units as of the date of payment of such cash dividends on
Stock.  The number of additional
Restricted Stock Units (rounded to the nearest whole number) to be so credited
shall be determined by dividing (a) the amount of cash dividends paid on
such date with respect to the number of shares of Stock represented by the
Restricted Stock Units previously credited to the Participant by (b) the
Fair Market Value per share of Stock on such date.  Such additional Restricted Stock Units shall
be subject to the same terms and conditions and shall be settled in the same manner
and at the same  22


time (or as soon thereafter as practicable) as the
Restricted Stock Units originally subject to the Restricted Stock Unit
Award.  In the event of a dividend or
distribution paid in shares of Stock or any other adjustment made upon a change
in the capital structure of the Company as described in Section 4.2,
appropriate adjustments shall be made in the Participants Restricted Stock
Unit Award so that it represents the right to receive upon settlement any and
all new, substituted or additional securities or other property (other than
normal cash dividends) to which the Participant would entitled by reason of the
shares of Stock issuable upon settlement of the Award, and all such new, substituted
or additional securities or other property shall be immediately subject to the
same Vesting Conditions as are applicable to the Award.  10.4Effect of Termination of Service. 
Unless otherwise provided by the Committee in the grant of a Restricted
Stock Unit Award and set forth in the Award Agreement, if a Participants
Service terminates for any reason, whether voluntary or involuntary (including
the Participants death or disability), then the Participant shall forfeit to
the Company any Restricted Stock Units pursuant to the Award which remain
subject to Vesting Conditions as of the date of the Participants termination
of Service.  10.5Settlement of Restricted Stock Unit Awards. 
The Company shall issue to a Participant on the date on which Restricted
Stock Units subject to the Participants Restricted Stock Unit Award vest or on
such other date determined by the Committee, in its discretion, and set forth
in the Award Agreement one (1) share of Stock (and/or any other new,
substituted or additional securities or other property pursuant to an
adjustment described in Section 10.3) for each Restricted Stock Unit then
becoming vested or otherwise to be settled on such date, subject to the
withholding of applicable taxes. 
Notwithstanding the foregoing, if permitted by the Committee and set
forth in the Award Agreement, the Participant may elect, consistent with the
requirements of Section 409A, to defer receipt of all or any portion of
the shares of Stock or other property otherwise issuable to the Participant
pursuant to this Section, and such deferred issuance date(s) and amount(s) elected
by the Participant shall be set forth in the Award Agreement.  10.6Nontransferability of Restricted Stock Unit Awards. 
Prior to the issuance of shares of Stock in settlement of a Restricted
Stock Unit Award, the Award shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participants beneficiary,
except transfer by will or by the laws of descent and distribution.  All rights with respect to a Restricted Stock
Unit Award granted to a Participant hereunder shall be exercisable during his
or her lifetime only by such Participant or the Participants guardian or legal
representative.  11.DEFERRED COMPENSATION AWARDS.  11.1Establishment of Deferred Compensation Award Programs.  This Section 11 shall not be effective
unless and until the Committee determines to establish a program pursuant to
this Section.  The Committee, in its
discretion and upon such terms and conditions as it may determine, consistent
with the requirements of Section 409A, may establish one or more programs
pursuant to the Plan under which:  23


(a)Participants
designated by the Committee who are Insiders or otherwise among a select group
of highly compensated Employees may irrevocably elect, prior to a date
specified by the Committee in compliance with Section 409A, to reduce such
Participants compensation otherwise payable in cash (subject to any minimum or
maximum reductions imposed by the Committee) and to be granted automatically at
such time or times as specified by the Committee one or more Awards of Stock
Units with respect to such numbers of shares of Stock as determined in
accordance with the rules of the program established by the Committee and
having such other terms and conditions as established by the Committee.  (b)Participants
designated by the Committee who are Insiders or otherwise among a select group
of highly compensated Employees may irrevocably elect, prior to a date
specified by the Committee in compliance with Section 409A, to be granted
automatically an Award of Stock Units with respect to such number of shares of
Stock and upon such other terms and conditions as established by the Committee
in lieu of:  (i)shares
of Stock otherwise issuable to such Participant upon the exercise of an Option;  (ii)cash
or shares of Stock otherwise issuable to such Participant upon the exercise of
an SAR; or  (iii)cash or shares of Stock
otherwise issuable to such Participant upon the settlement of a Performance
Award or Performance Unit.  11.2Terms and Conditions of Deferred Compensation Awards.  Deferred Compensation Awards granted pursuant
to this Section 11 shall be evidenced by Award Agreements in such form as
the Committee shall from time to time establish.  No such Deferred Compensation Award or
purported Deferred Compensation Award shall be a valid and binding obligation
of the Company unless evidenced by a fully executed Award Agreement.  Award Agreements evidencing Deferred
Compensation Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:  (a)Vesting Conditions.  Deferred Compensation Awards shall not be
subject to any vesting conditions.  (b)Terms and Conditions of Stock Units.  (i)Voting Rights; Dividend Equivalent Rights and Distributions.  Participants shall have no voting rights with
respect to shares of Stock represented by Stock Units until the date of the
issuance of such shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company).  However, a Participant shall be entitled to
receive Dividend Equivalents with respect to the payment of cash dividends on
Stock having a record date prior to date on which Stock Units held by such
Participant are settled.  Such Dividend
Equivalents shall be paid by crediting the Participant with additional whole
and/or fractional Stock Units as of the date of payment of such cash dividends
on Stock.  The method of determining the
number of additional Stock Units to be so credited shall be specified by the
Committee and set forth in the Award Agreement.  24


Such additional Stock Units shall be subject to the
same terms and conditions and shall be settled in the same manner and at the
same time (or as soon thereafter as practicable) as the Stock Units originally
subject to the Stock Unit Award.  In the
event of a dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.2, appropriate adjustments shall be made in the
Participants Stock Unit Award so that it represent the right to receive upon
settlement any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant would be
entitled by reason of the shares of Stock issuable upon settlement of the
Award.  (ii)Settlement of Stock Unit Awards.  A Participant electing to receive an Award of
Stock Units pursuant to this Section 11 shall specify at the time of such
election a settlement date with respect to such Award in compliance with the
requirements of Section 409A.  The
Company shall issue to the Participant as soon as practicable following the
earlier of the settlement date elected by the Participant or the date of termination
of the Participants Service, a number of whole shares of Stock equal to the
number of whole Stock Units subject to the Stock Unit Award.  Such shares of Stock shall be fully vested,
and the Participant shall not be required to pay any additional consideration
(other than applicable tax withholding) to acquire such shares.  Any fractional Stock Unit subject to the
Stock Unit Award shall be settled by the Company by payment in cash of an
amount equal to the Fair Market Value as of the payment date of such fractional
share.  (iii)Nontransferability
of Stock Unit Awards.  Prior
to their settlement in accordance with the provision of the Plan, no Stock Unit
Award shall be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by
creditors of the Participant or the Participants beneficiary, except transfer
by will or by the laws of descent and distribution.  All rights with respect to a Stock Unit Award
granted to a Participant hereunder shall be exercisable during his or her
lifetime only by such Participant or the Participants guardian or legal
representative.  12.OTHER STOCK-BASED AWARDS.  In addition to the
Awards set forth in Sections 6 through 11 above, the Committee, in its sole
discretion, may carry out the purpose of this Plan by awarding Stock-Based
Awards as it determines to be in the best interests of the Company and subject
to such other terms and conditions as it deems necessary and appropriate.  13.EFFECT OF CHANGE IN CONTROL ON AWARDS.  13.1Accelerated Vesting.  The Committee, in its sole discretion, may
provide in any Award Agreement or, in the event of a Change in Control, may
take such actions as it deems appropriate to provide for the acceleration of
the exercisability and vesting in connection with such Change in Control of any
or all outstanding Options and SARs and shares acquired upon the exercise of
such Options and SARs upon such conditions and to such extent as the Committee
shall determine.  25


13.2Assumption or Substitution. 
In the event of a Change in Control, the surviving, continuing,
successor, or purchasing corporation or other business entity or parent
thereof, as the case may be (the Acquiring Corporation), may,
without the consent of the Participant, either assume the Companys rights and
obligations under outstanding Options and SARs or substitute for outstanding
Options and SARs substantially equivalent options or stock appreciation rights
for the Acquiring Corporations stock. 
Any Options or SARs which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Change in Control nor exercised as
of the date of the Change in Control shall terminate and cease to be outstanding
effective as of the date of the Change in Control.  Notwithstanding the foregoing, shares
acquired upon exercise of an Option or SAR prior to the Change in Control and
any consideration received pursuant to the Change in Control with respect to such
shares shall continue to be subject to all applicable provisions of the Award
Agreement evidencing such Award except as otherwise provided in such Award
Agreement.  Furthermore, notwithstanding
the foregoing, if the corporation the stock of which is subject to the
outstanding Options or SARs immediately prior to an Ownership Change Event
described in Section 2.1(y)(i) constituting a Change in Control is
the surviving or continuing corporation and immediately after such Ownership
Change Event less than fifty percent (50%) of the total combined voting power
of its voting stock is held by another corporation or by other corporations
that are members of an affiliated group within the meaning of Section 1504(a) of
the Code without regard to the provisions of Section 1504(b) of the
Code, the outstanding Options and SARs shall not terminate unless the Board
otherwise provides in its discretion.  13.3Effect of Change in Control on Restricted Stock and Other Type of
Awards.  The Committee may, in
its discretion, provide in any Award Agreement evidencing a Restricted Stock or
Other Type of Award that, in the event of a Change in Control, the lapsing of
any applicable Vesting Condition, Restriction Period or Performance Goal
applicable to the shares subject to such Award held by a Participant whose
Service has not terminated prior to the Change in Control shall be accelerated
and/or waived effective immediately prior to the consummation of the Change in
Control to such extent as specified in such Award Agreement.  Any acceleration, waiver or the lapsing of
any restriction that was permissible solely by reason of this Section 13.3
and the provisions of such Award Agreement shall be conditioned upon the
consummation of the Change in Control.  14.COMPLIANCE WITH SECURITIES LAW.  The grant of
Awards and the issuance of shares of Stock pursuant to any Award shall be
subject to compliance with all applicable requirements of federal, state and
foreign law with respect to such securities and the requirements of any stock
exchange or market system upon which the Stock may then be listed.  In addition, no Award may be exercised or
shares issued pursuant to an Award unless (a) a registration statement
under the Securities Act shall at the time of such exercise or issuance be in effect
with respect to the shares issuable pursuant to the Award or (b) in the
opinion of legal counsel to the Company, the shares issuable pursuant to the
Award may be issued in accordance with the terms of an applicable exemption
from the registration requirements of the Securities Act.  The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, deemed by the
Companys legal counsel to be necessary to the lawful issuance and sale of any
shares hereunder shall relieve the Company of any liability in respect of the
failure to issue or sell such shares as to which such requisite  26


authority
shall not have been obtained.  As a
condition to issuance of any Stock, the Company may require the Participant to
satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be requested by the Company.  15.COMPLIANCE WITH SECTION 409A.  15.1Awards Subject to Section 409A.  The Company intends that Awards granted
pursuant to the Plan shall either be exempt from or comply with Section 409A,
and the Plan shall be so construed.  The
provisions of this Section 15 shall apply to any Award or portion thereof
that constitutes or provides for payment of Section 409A Deferred
Compensation.  Such Awards may include,
without limitation:  (a)A
Nonstatutory Stock Option or SAR that includes any feature for the deferral of
compensation other than the deferral of recognition of income until the later
of (i) the exercise or disposition of the Award or (ii) the time the
stock acquired pursuant to the exercise of the Award first becomes
substantially vested.  (b)Any
Restricted Stock Unit Award or Performance Award that either (i) provides
by its terms for settlement of all or any portion of the Award at a time or
upon an event that will or may occur later than the end of the Short-Term
Deferral Period (as defined below) or (ii) permits the Participant granted
the Award to elect one or more dates or events upon which the Award will be
settled after the end of the Short-Term Deferral Period.  Subject to the provisions of Section 409A, the term Short-Term
Deferral Period means the 21⁄2 month period ending on the later of (i) the
15th day of the third month following the end of the Participants taxable year
in which the right to payment under applicable portion of the Award is no
longer subject to a substantial risk of forfeiture or (ii) the 15th day of
the third month following the end of the Companys taxable year in which the
right to payment under the applicable portion of the Award is no longer subject
to a substantial risk of forfeiture.  For
this purpose, the term substantial risk of forfeiture shall have the meaning
provided by Section 409A.  15.2Deferral and/or Distribution Elections.  Except as otherwise permitted or required by Section 409A,
the following rules shall apply to any compensation deferral and/or
payment elections (each, an Election) that may be permitted or required by
the Committee pursuant to an Award providing Section 409A Deferred
Compensation:  (a)Elections
must be in writing and specify the amount of the payment in settlement of an Award
being deferred, as well as the time and form of payment as permitted by this
Plan.  (b)Elections
shall be made by the end of the Participants taxable year prior to the year in
which services commence for which an Award may be granted to such Participant.  (c)Elections
shall continue in effect until a written revocation or change in Election is
received by the Company, except that a written revocation or change in  27


Election must be received by the Company prior to the
last day for making the Election determined in accordance with paragraph (b) above
or as permitted by Section 15.3.  15.3Subsequent Elections. 
Except as otherwise permitted or required by Section 409A, any
Award providing Section 409A Deferred Compensation which permits a
subsequent Election to delay the payment or change the form of payment in
settlement of such Award shall comply with the following requirements:  (a)No
subsequent Election may take effect until at least twelve (12) months after the
date on which the subsequent Election is made.  (b)Each
subsequent Election related to a payment in settlement of an Award not
described in Section 15.4(b), 15.4(c) or 15.4(f) must result in
a delay of the payment for a period of not less than five (5) years from
the date on which such payment would otherwise have been made.  (c)No
subsequent Election related to a payment pursuant to Section 15.4(d) shall
be made less than twelve (12) months before the date on which such payment
would otherwise have been made.  (d)Subsequent
Elections shall continue in effect until a written revocation or change in the
subsequent Election is received by the Company, except that a written
revocation or change in a subsequent Election must be received by the Company
prior to the last day for making the subsequent Election determined in
accordance the preceding paragraphs of this Section 15.3.  15.4Payments Pursuant to Deferral Elections.  Except as otherwise permitted or required by Section 409A,
an Award providing Section 409A Deferred Compensation must provide for
payment in settlement of the Award only upon one or more of the following:  (a)The
Participants separation from service (as defined by Section 409A);  (b)The
Participants becoming Disabled (as defined below);  (c)The
Participants death;  (d)A
time or fixed schedule that is either (i) specified by the Committee upon
the grant of an Award and set forth in the Award Agreement evidencing such
Award or (ii) specified by the Participant in an Election complying with
the requirements of Section 15.2 or 15.3, as applicable;  (e)A
change in the ownership or effective control or the Company or in the ownership
of a substantial portion of the assets of the Company determined in accordance
with Section 409A; or  28


(f)The
occurrence of an Unforeseeable Emergency (as defined by Section 409A).  Notwithstanding any provision of the Plan or an Award Agreement to the
contrary, to the extent that any amount constituting Section 409A Deferred
Compensation would become payable under this Plan by reason of a Change in
Control, such amount shall become payable only if the event constituting a
Change in Control would also constitute a change in ownership or effective
control of the Company or a change in the ownership of a substantial portion of
the assets of the Company within the meaning of Section 409A.  Notwithstanding any provision of the Plan or an Award Agreement to the
contrary, except as otherwise permitted by Section 409A, no payment
pursuant to Section 15.4(a) in settlement of an Award providing for Section 409A
Deferred Compensation may be made to a Participant who is a specified employee
(as defined by Section 409A) as of the date of the Participants separation
from service before the date (the Delayed Payment Date) that is six (6) months
after the date of such Participants separation from service, or, if earlier,
the date of the Participants death.  All
such amounts that would, but for this paragraph, become payable prior to the
Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.  15.5Unforeseeable Emergency. 
The Committee shall have the authority to provide in the Award Agreement
evidencing any Award providing for Section 409A Deferred Compensation for
payment in settlement of all or a portion of such Award in the event that a
Participant establishes, to the satisfaction of the Committee, the occurrence
of an Unforeseeable Emergency.  In such
event, the amount(s) distributed with respect to such Unforeseeable
Emergency cannot exceed the amounts reasonably necessary to satisfy the
emergency need plus amounts necessary to pay taxes reasonably anticipated as a
result of such distribution(s), after taking into account the extent to which
such emergency need is or may be relieved through reimbursement or compensation
by insurance or otherwise, by liquidation of the Participants assets (to the
extent the liquidation of such assets would not itself cause severe financial
hardship) or by cessation of deferrals under the Award.  All distributions with respect to an
Unforeseeable Emergency shall be made in a lump sum as soon as practicable
following the Committees determination that an Unforeseeable Emergency has
occurred.  The occurrence of an Unforeseeable Emergency shall be judged and
determined by the Committee.  The
Committees decision with respect to whether an Unforeseeable Emergency has
occurred and the manner in which, if at all, the payment in settlement of an
Award shall be altered or modified, shall be final, conclusive, and not subject
to approval or appeal.  15.6Disabled.  The
Committee shall have the authority to provide in any Award providing Section 409A
Deferred Compensation for payment in settlement of such Award in the event that
the Participant becomes Disabled.  A
Participant shall be considered Disabled if either:  (a)the
Participant is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, or  29


(b)the
Participant is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under
an accident and health plan covering employees of the Participants employer.  All distributions payable by reason of a Participant becoming Disabled
shall be paid in a lump sum or in periodic installments as established by the
Participants Election.  If the Participant
has made no Election with respect to distributions upon becoming Disabled, all
such distributions shall be paid in a lump sum upon the determination that the
Participant has become Disabled.  15.7Death.  If a
Participant dies before complete distribution of amounts payable upon
settlement of an Award subject to Section 409A, such undistributed amounts
shall be distributed to his or her beneficiary under the distribution method
for death established by the Participants Election upon receipt by the Committee
of satisfactory notice and confirmation of the Participants death.  If the Participant has made no Election with
respect to distributions upon death, all such distributions shall be paid in a
lump sum upon receipt by the Committee of satisfactory notice and confirmation
of the Participants death.  15.8Prohibition of Acceleration of Payments.  Notwithstanding any provision of the Plan or
an Award Agreement to the contrary, this Plan does not permit the acceleration
of the time or schedule of any payment under an Award providing Section 409A
Deferred Compensation, except as permitted by Section 409A.  16.TAX WITHHOLDING.  16.1Tax Withholding in General. 
The Company shall have the right to deduct from any and all payments
made under the Plan, or to require the Participant, through payroll
withholding, cash payment or otherwise, including by means of a Cashless
Exercise or Net Exercise of an Option, to make adequate provision for, the
federal, state, local and foreign taxes, if any, required by law to be withheld
by the Participating Company Group with respect to an Award or the shares
acquired pursuant thereto.  The Company
shall have no obligation to deliver shares of Stock, to release shares of Stock
from an escrow established pursuant to an Award Agreement, or to make any
payment in cash under the Plan until the Participating Company Groups tax
withholding obligations have been satisfied by the Participant.  16.2Withholding in Shares. 
The Company shall have the right, but not the obligation, to deduct from
the shares of Stock issuable to a Participant upon the exercise or settlement
of an Award, or to accept from the Participant the tender of, a number of whole
shares of Stock having a Fair Market Value, as determined by the Company, equal
to all or any part of the tax withholding obligations of the Participating
Company Group.  The Fair Market Value of
any shares of Stock withheld or tendered to satisfy any such tax withholding
obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates.  30


17.AMENDMENT OR TERMINATION OF PLAN.  The Board or the
Committee may amend, suspend or terminate the Plan at any time.  However, without the approval of the Companys
stockholders, there shall be (a) no increase in the maximum aggregate
number of shares of Stock that may be issued under the Plan (except by
operation of the provisions of Section 4.2), (b) no change in the
class of persons eligible to receive Incentive Stock Options, (c) no
removal of the stockholder approval requirement in Section 3.8 related to
option and SAR repricings, and (d) no other amendment of the Plan that
would require approval of the Companys stockholders under any applicable law,
regulation or rule.  Except as provided
by the next sentence, no amendment, suspension or termination of the Plan shall
affect any then outstanding Award unless expressly provided by the Board or the
Committee.  In any event, no amendment,
suspension or termination of the Plan may adversely affect any then outstanding
Award without the consent of the Participant. 
Notwithstanding any other provision of the Plan to the contrary, the
Committee may, in its sole and absolute discretion and without the consent of
any Participant, amend the Plan or any Award Agreement, to take effect
retroactively or otherwise, as it deems necessary or advisable for the purpose
of conforming the Plan or such Award Agreement to any present or future law,
regulation or rule applicable to the Plan, including, but not limited to, Section 409A.  18.MISCELLANEOUS PROVISIONS.  18.1Repurchase Rights.  Shares issued under the Plan may be subject
to one or more repurchase options, or other conditions and restrictions as
determined by the Committee in its discretion at the time the Award is
granted.  The Company shall have the
right to assign at any time any repurchase right it may have, whether or not
such right is then exercisable, to one or more persons as may be selected by
the Company.  Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.  18.2Provision of Information. 
Each Participant shall be given access to information concerning the
Company equivalent to that information generally made available to the Companys
common stockholders.  18.3Rights as Employee, Consultant or Director.  No person, even though eligible pursuant to Section 5,
shall have a right to be selected as a Participant, or, having been so
selected, to be selected again as a Participant.  Nothing in the Plan or any Award granted
under the Plan shall confer on any Participant a right to remain an Employee,
Consultant or Director or interfere with or limit in any way any right of a
Participating Company to terminate the Participants Service at any time.  To the extent that an Employee of a
Participating Company other than the Company receives an Award under the Plan,
that Award shall in no event be understood or interpreted to mean that the Company
is the Employees employer or that the Employee has an employment relationship
with the Company.  18.4Rights as a Stockholder. 
A Participant shall have no rights as a stockholder with respect to any
shares covered by an Award until the date of the issuance of such  31


shares (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the
Company).  No adjustment shall be made
for dividends, distributions or other rights for which the record date is prior
to the date such shares are issued, except as provided in Section 4.2 or
another provision of the Plan.  18.5Fractional Shares.  The Company shall not be
required to issue fractional shares upon the exercise or settlement of any
Award.  18.6Severability.  If any one or more of the provisions (or any
part thereof) of this Plan shall be held invalid, illegal or unenforceable in
any respect, such provision shall be modified so as to make it valid, legal and
enforceable, and the validity, legality and enforceability of the remaining
provisions (or any part thereof) of the Plan shall not in any way be affected
or impaired thereby.  18.7Beneficiary Designation. 
Subject to local laws and procedures, each Participant may file with the
Company a written designation of a beneficiary who is to receive any benefit
under the Plan to which the Participant is entitled in the event of such
Participants death before he or she receives any or all of such benefit.  Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participants lifetime.  If a married Participant designates a
beneficiary other than the Participants spouse, the effectiveness of such
designation may be subject to the consent of the Participants spouse.  If a Participant dies without an effective
designation of a beneficiary who is living at the time of the Participants
death, the Company will pay any remaining unpaid benefits to the Participants
legal representative.  18.8Unfunded Obligation. 
Participants shall have the status of general unsecured creditors of the
Company.  Any amounts payable to Participants
pursuant to the Plan shall be unfunded and unsecured obligations for all
purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974. 
No Participating Company shall be required to segregate any monies from
its general funds, or to create any trusts, or establish any special accounts
with respect to such obligations.  The
Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder.  Any investments
or the creation or maintenance of any trust or any Participant account shall
not create or constitute a trust or fiduciary relationship between the
Committee or any Participating Company and a Participant, or otherwise create
any vested or beneficial interest in any Participant or the Participants
creditors in any assets of any Participating Company.  The Participants shall have no claim against
any Participating Company for any changes in the value of any assets which may
be invested or reinvested by the Company with respect to the Plan.  Each Participating Company shall be
responsible for making benefit payments pursuant to the Plan on behalf of its
Participants or for reimbursing the Company for the cost of such payments, as
determined by the Company in its sole discretion.  In the event the respective Participating
Company fails to make such payment or reimbursement, a Participants (or other
individuals) sole recourse shall be against the respective Participating
Company, and not against the Company.  A
Participants acceptance of an Award pursuant to the Plan shall constitute
agreement with this provision.  32


PLAN HISTORY AND
NOTES TO COMPANY  April 30, 2007
  
  Board adopts Plan with a reserve of seven million
  five hundred fifty thousand (7,550,000) shares, including a pre Effective
  Date reserve of five million hundred thousand (5,800,000) shares.May 22, 2007
  
  Stockholders approve Plan.December 8, 2008
  
  Board amends Plan to comply with Section 409A
  of the Code.  i