Exhibit 10.1

                             1999 STOCK OPTION PLAN

                                       OF

                               I.D. SYSTEMS, INC.

                AS AMENDED AND RESTATED EFFECTIVE APRIL 20, 2005


1.       PURPOSES  OF THE  PLAN.  This  stock  incentive  plan (the  "Plan")  is
designed to provide an  incentive  to key  employees  (including  directors  and
officers who are key employees) and to consultants who are not employees of I.D.
Systems,  Inc.,  a  Delaware  corporation  (the  "Company"),  and  to  offer  an
additional  inducement  in  obtaining  the  services of such  persons.  The Plan
provides for the grant of "incentive stock options"  ("ISOs") within the meaning
of Section 422 of the Internal  Revenue Code of 1986,  as amended (the  "Code"),
nonqualified  stock options which do not qualify as ISOs  ("NQSOs"),  restricted
stock  awards  ("Restricted  Stock  Awards")  and  restricted  stock unit awards
("Restricted  Stock Units" and,  together with Restricted  Stock Awards,  "Stock
Awards").  The Company makes no representation or warranty,  express or implied,
as to the  qualification  of any option as an "incentive stock option" under the
Code.

2.       STOCK SUBJECT TO THE PLAN.  Subject to the  provisions of Paragraph 12,
the aggregate number of shares of Common Stock, $.01 par value per share, of the
Company  ("Common Stock") for which options or Stock Awards may be granted under
the Plan shall not exceed  2,812,500  (taking into account a 1.25 stock split to
be  effected  prior to or  contemporaneous  with the  Company's  initial  public
offering).  Such shares of Common Stock may, in the  discretion  of the Board of
Directors of the Company (the "Board of Directors"),  consist either in whole or
in part of  authorized  but unissued  shares of Common Stock or shares of Common
Stock  held  in the  treasury  of the  Company.  Subject  to the  provisions  of
Paragraph  13, any shares of Common  Stock  subject to an option or Stock  Award
which for any reason expires, is canceled or is terminated  unexercised or which
ceases for any reason to be  exercisable,  shall again become  available for the
granting of options and Stock  Awards under the Plan.  The Company  shall at all
times  during the term of the Plan  reserve  and keep  available  such number of
shares of Common Stock as will be sufficient to satisfy the  requirements of the
Plan.

         The  maximum  number of shares  with  respect to which  options  may be
granted under the Plan to any individual in any fiscal year shall be 750,000.

3.       ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board
of  Directors  or a  committee  of the  Board of  Directors  (collectively,  the
"Committee").  A majority of the members of the  Committee  shall  constitute  a
quorum,  and the acts of a majority  of the  members  present at any  meeting at
which a quorum is  present,  and any acts  approved  in writing  by all  members
without a meeting, shall be the acts of the Committee.

         Subject to the express provisions of the Plan, the Committee shall have
the authority,  in its sole discretion,  to make all determinations  relating to
the  Plan,  including,  but not  limited  to,  the right to  determine:  the key
employees and  consultants  who shall be granted  options and Stock Awards;  the
type(s) of options or Stock  Awards to be granted to a key  employee;  the times
when an


                                       1
<PAGE>

option or Stock Award shall be granted;  the number of shares of Common Stock to
be subject to each  option and Stock  Award;  the term of each  option and Stock
Award; the date each option shall become exercisable; whether an option shall be
exercisable in whole, in part or in installments  and, if in  installments,  the
number of shares of Common Stock to be subject to each installment,  whether the
installments  shall  be  cumulative,  the date  each  installment  shall  become
exercisable and the term of each installment; the terms of the restricted period
and other  conditions and  restrictions  applicable to Stock Awards;  whether to
accelerate  the date of exercise of any option or to accelerate the lapse of any
restrictions  applicable to a Stock Award or any  installment  thereof;  whether
shares of Common  Stock may be issued  upon the  exercise of an option as partly
paid and, if so, the dates when future  installments of the exercise price shall
become due and the  amounts of such  installments;  the  exercise  price of each
option;  the form of  payment of the  exercise  price;  whether  to require  the
optionee to enter into a stockholder's agreement with the Company as a condition
to exercising any option;  whether to restrict the sale or other  disposition of
the shares of Common  Stock  acquired  upon the  exercise  of an option or Stock
Award  and,  if so,  whether  and  under  what  conditions  to  waive  any  such
restriction;  whether and under what  conditions  to subject all or a portion of
the grant or  exercise  of an  option or the  shares  acquired  pursuant  to the
exercise  of  an  option  or  a  Stock  Award  to  the  fulfillment  of  certain
restrictions  or  contingencies  as  specified  in the  contract  referred to in
Paragraph 12 hereof (the "Contract"), including without limitation, restrictions
or  contingencies  relating to entering  into a covenant not to compete with the
Company,  to  financial  objectives  for the Company or a division of any of the
foregoing,  a product line or other category,  and/or to the period of continued
employment of the participant  with the Company,  and to determine  whether such
restrictions or  contingencies  have been met; whether a participant is Disabled
(as defined in  Paragraph  20);  the amount,  if any,  necessary  to satisfy the
obligation of the Company,  to withhold taxes or other amounts;  the fair market
value of a share of Common Stock;  to construe the respective  Contracts and the
Plan;  with the  consent  of the  participant,  to cancel or modify an option or
Stock Award,  provided,  that the modified provision is permitted to be included
in an  option  granted  under  the  Plan on the  date of the  modification,  and
further,  provided,  that in the case of a  modification  (within the meaning of
Section  424(h)  of the  Code)  of an ISO,  such  option  as  modified  would be
permitted to be granted on the date of such modification  under the terms of the
Plan; to  prescribe,  amend and rescind  rules and  regulations  relating to the
Plan;  and  to  make  all  other  determinations   necessary  or  advisable  for
administering  the Plan. Any  controversy or claim arising out of or relating to
the Plan, any option or Stock Award granted under the Plan or any Contract shall
be  determined  unilaterally  by the  Committee  in  its  sole  discretion.  The
determinations  of the Committee on the matters  referred to in this Paragraph 3
shall be  conclusive  and binding on the parties.  No member or former member of
the Committee  shall be liable for any action,  failure to act or  determination
made in good faith with respect to the Plan, any Contract or any option or Stock
Award hereunder.

4.       ELIGIBILITY.  The  Committee  may  from  time  to  time,  in  its  sole
discretion,  consistent  with the purposes of the Plan,  grant  options or Stock
Awards  to (a) key  employees  (including  officers  and  directors  who are key
employees) of the Company or any of its  Subsidiaries and (b) consultants to the
Company or any of its  Subsidiaries.  An individual to whom an option or a Stock
Award has been granted is referred to under the Plan as a "participant".

         Options and Stock Awards granted  hereunder  shall cover such number of
shares of Common Stock as the Committee may determine,  in its sole  discretion,
as set forth in the applicable Contract;  provided,  however, that the aggregate
market value  (determined  at the time the option is granted in accordance  with
Paragraph 5) of the shares of Common  Stock for which any eligible  employee may
be  granted  ISOs  under the Plan or any  other  plan of the  Company  which are


                                       2
<PAGE>

exercisable  for the first time by such optionee  during any calendar year shall
not exceed $100,000;  provided  further,  that the maximum number of shares with
respect to which ISOs may be granted under the Plan to any eligible  employee in
any fiscal year shall be 300,000. Such ISO limitation shall be applied by taking
ISOs into account in the order in which they were granted. Any option granted in
excess of such ISO limitation amount shall be treated as a NQSO to the extent of
such excess.

5.       EXERCISE PRICE.  The exercise price of the shares of Common Stock under
each option shall be determined by the Committee, in its sole discretion, as set
forth in the applicable Contract;  provided, however, that the exercise price of
an ISO shall not be less than the fair market value of the Common Stock  subject
to such option on the date of grant; and further, provided, that if, at the time
an ISO is granted,  the optionee owns (or is deemed to own under Section  424(d)
of the Code) stock  possessing  more than 10% of the total combined voting power
of all classes of stock of the Company, the exercise price of such ISO shall not
be less than 110% of the fair market value of the Common  Stock  subject to such
ISO on the date of grant.

         The fair  market  value of a share of Common  Stock on any day shall be
(a) if the  principal  market  for the  Common  Stock is a  national  securities
exchange, the average of the highest and lowest sales prices per share of Common
Stock on such day as reported by such exchange or on a composite tape reflecting
transactions on such exchange,  (b) if the principal market for the Common Stock
is not a national  securities  exchange  and the  Common  Stock is quoted on The
Nasdaq Stock Market  ("Nasdaq"),  and (i) if actual sales price  information  is
available  with  respect to the Common  Stock,  the  average of the  highest and
lowest sales prices per share of Common Stock on such day on Nasdaq,  or (ii) if
such  information  is not  available,  the average of the highest bid and lowest
asked  prices  per share of Common  Stock on such day on  Nasdaq,  or (c) if the
principal market for the Common Stock is not a national  securities exchange and
the Common  Stock is not quoted on Nasdaq,  the  average of the  highest bid and
lowest asked prices per share of Common Stock on such day as reported on the OTC
Bulletin  Board  Service or by  National  Quotation  Bureau,  Incorporated  or a
comparable service; provided,  however, that if clauses (a), (b) and (c) of this
Paragraph are all inapplicable,  or if no trades have been made or no quotes are
available  for such day,  the fair  market  value of the Common  Stock  shall be
determined by the Board of Directors or the  Committee by any method  consistent
with applicable regulations adopted by the Treasury Department relating to stock
options.

6.       TERM.  The term of each  option  granted  pursuant to the Plan shall be
such term as is  established by the Committee,  in its sole  discretion,  as set
forth in the applicable Contract;  provided,  however, that the term of each ISO
granted  pursuant to the Plan shall be for a period not  exceeding 10 years from
the date of grant thereof; and further, provided, that if, at the time an ISO is
granted,  the  optionee  owns (or is deemed to own under  Section  424(d) of the
Code) stock  possessing  more than 10% of the total combined voting power of all
classes  of stock of the  Company  the term of the ISO shall be for a period not
exceeding five years from the date of grant. Options shall be subject to earlier
termination as hereinafter provided.

7.       EXERCISE. An option (or any part or installment thereof), to the extent
then exercisable,  shall be exercised by giving written notice to the Company at
its principal  office  stating which option is being  exercised,  specifying the
number of shares of Common Stock as to which such option is being  exercised and
accompanied by payment in full of the aggregate  exercise price therefor (or the
amount due on exercise if the applicable Contract permits installment  payments)
(a) in cash or by certified  check or (b) if the  applicable  Contract  permits,
with previously acquired shares of


                                       3
<PAGE>

Common  Stock  having an  aggregate  fair  market  value on the date of exercise
(determined  in accordance  with  Paragraph 5) equal to the  aggregate  exercise
price of all options being exercised, or with any combination of cash, certified
check or shares of Common  Stock  having  such value.  The Company  shall not be
required to issue any shares of Common  Stock  pursuant to any such option until
all required payments, including any required withholding, have been made.

         A person  entitled  to receive  Common  Stock upon the  exercise  of an
option shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock  certificate  for such shares
or in the case of  uncertificated  shares,  an entry is made on the books of the
Company's transfer agent representing such shares; provided, however, that until
such stock  certificate  is issued or book  entry is made,  any  optionee  using
previously  acquired  shares of Common  Stock in payment  of an option  exercise
price shall  continue to have the rights of a  stockholder  with respect to such
previously acquired shares.

         In no case may a fraction of a share of Common  Stock be  purchased  or
issued under the Plan.

8.       STOCK AWARDS.

         (a) The  Committee  may from time to time  cause the  Company  to grant
Restricted  Stock Awards and/or  Restricted  Stock Unit Awards under the Plan. A
Restricted  Stock Award is a grant of shares of Common  Stock,  and a Restricted
Stock Unit Award is the grant of a right to  receive  shares of Common  Stock in
the future, with such shares of Common Stock or right to future delivery of such
shares of Common Stock  subject to a risk of  forfeiture  or other  restrictions
that will lapse  upon the  achievement  of one or more  conditions  relating  to
completion of service by the participant, or achievement of performance goals or
such other  objectives,  as established  and  determined by the  Committee.  The
Committee   may   designate   whether   any  Stock   Award  is  intended  to  be
"performance-based  compensation"  within the  meaning of Section  162(m) of the
Code. Any Stock Award intended to be  "performance-based  compensation" shall be
conditioned on the achievement of one or more performance  goals  established by
the Committee in a manner that is consistent with Section 162(m) of the Code.

         (b) At the time a grant of a Stock Award is made,  the Committee  shall
establish a period of time (the "Restricted Period") applicable to the shares of
Common  Stock that are the  subject of such Stock Award  ("Restricted  Shares").
Each grant of Restricted Shares may be subject to a different Restricted Period.
The  Committee  may,  in its  sole  discretion,  at the  time a grant  is  made,
prescribe  restrictions  in  addition  to or other  than the  expiration  of the
Restricted  Period,  including  the  satisfaction  of  corporate  or  individual
performance  objectives,  which shall be applicable to all or any portion of the
Restricted  Shares.  The Committee may also, in its sole discretion,  shorten or
terminate the Restricted  Period or waive any other  restrictions  applicable to
all or a portion of such Restricted Shares. None of the Restricted Shares may be
sold,  transferred,  assigned,  pledged or otherwise  encumbered  or disposed of
during  the  Restricted  Period  or  prior  to the  satisfaction  of  any  other
restrictions prescribed by the Committee with respect to such Restricted Shares.

         (c) The Company shall issue,  in the name of each  participant  to whom
Restricted  Shares  under a  Restricted  Stock  Award have been  granted,  stock
certificates  representing the total number of Restricted Shares granted to such
person, as soon as reasonably  practicable after the grant.  Stock  certificates
with respect to the Restricted  Shares under a Restricted Stock Unit Award shall
be issued when such shares are no longer subject to forfeiture.  The Company, at
the direction of the


                                       4
<PAGE>

Committee, shall hold such certificates, properly endorsed for transfer, for the
participant's  benefit until such time as the Restricted Shares are forfeited to
the Company, or the restrictions lapse.

         (d) Unless otherwise  provided by the Committee,  holders of Restricted
Shares  shall  have the right to vote such  shares and have the right to receive
any cash  dividends  with respect to such  shares.  All  distributions,  if any,
received by a participant  with respect to Restricted  Shares as a result of any
stock split,  stock  distribution,  a  combination  of shares,  or other similar
transaction  shall  be  subject  to the  restrictions  of  this  Paragraph  8. A
participant  shall  not  have  any  rights  of a  shareholder  with  respect  to
Restricted  Shares that are the subject of a  Restricted  Stock Unit Award until
such Shares are issued by the Company.

         (e) Except as may  otherwise be expressly  provided by the Committee in
the applicable Contract,  if a participant's  relationship as an employee of, or
consultant  to,  the  Company,  terminates  for any reason  (including  death or
Disability),   all  Restricted  Shares  for  which  the  restrictions  have  not
previously lapsed shall thereupon immediately be forfeited to the Company.

         (f) Upon the expiration or termination of the Restricted Period and the
satisfaction  of  any  other  conditions   prescribed  by  the  Committee,   the
restrictions  applicable  to the  Restricted  Shares  shall  lapse  and a  stock
certificate  for the  number of  Restricted  Shares  with  respect  to which the
restrictions have lapsed shall be delivered,  free of all such restrictions,  to
the participant or his beneficiary or estate, as the case may be.

9.       TERMINATION  OF  RELATIONSHIP  -  EFFECT  ON  OPTIONS.  Except  as  may
otherwise be expressly  provided in the applicable  Contract,  an optionee whose
relationship with the Company, as an employee or a consultant has terminated for
any reason  (other than as a result of the death or  Disability of the optionee)
may  exercise  his  options,  to the  extent  exercisable  on the  date  of such
termination, at any time within three months after the date of termination,  but
not  thereafter  and in no event after the date the option would  otherwise have
expired;  provided,  however, that if such relationship is terminated either (a)
for Cause (as  defined in  Paragraph  19),  or (b)  without  the  consent of the
Company,  such option shall  terminate  immediately.  Except as may otherwise be
expressly provided in the applicable Contract, options granted under the Plan to
an employee or  consultant  shall not be affected by any change in the status of
the  optionee  so long as the  optionee  continues  to be an  employee  of, or a
consultant to, the Company.

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

10.      DEATH  OR  DISABILITY  OF AN  OPTIONEE.  Except  as  may  otherwise  be
expressly provided in the applicable Contract,  if an optionee dies (a) while he
is an employee of, or consultant to, the Company,  (b) within three months after
the termination of such  relationship  (unless such termination was for Cause or
without  the  consent  of the  Company)  or (c) within  one year  following  the
termination of such  relationship by reason of his Disability,  the options that
were granted to him


                                       5
<PAGE>

as an employee or consultant may be exercised,  to the extent exercisable on the
date of his death, by his Legal  Representative  (as defined in Paragraph 20) at
any time within one year after death,  but not  thereafter and in no event after
the date the option would otherwise have expired.

         Except  as may  otherwise  be  expressly  provided  in  the  applicable
Contract,  any optionee whose  relationship as an employee of, or consultant to,
the Company, has terminated by reason of such optionee's Disability may exercise
the options that were granted to him as an employee or consultant, to the extent
exercisable upon the effective date of such termination,  at any time within one
year after  such date,  but not  thereafter  and in no event  after the date the
option would otherwise have expired.

11.      COMPLIANCE WITH SECURITIES LAWS. The Committee may require, in its sole
discretion,  as a  condition  to the  exercise of any option or Stock Award that
either (a) a Registration Statement under the Securities Act of 1933, as amended
(the "Securities  Act"), with respect to the shares of Common Stock to be issued
upon such  exercise or as a result of such Stock Award  shall be  effective  and
current at the time of  exercise  or grant,  or (b) there is an  exemption  from
registration  under the  Securities Act for the issuance of the shares of Common
Stock that are subject to such option or Stock  Award.  Nothing  herein shall be
construed as requiring the Company to register  shares  subject to any option or
Stock  Award  under the  Securities  Act or to keep any  Registration  Statement
effective or current.

         The Committee may require,  in its sole  discretion,  as a condition to
the receipt of an option or Stock  Award or the  exercise of any option that the
optionee execute and deliver to the Company his  representations and warranties,
in form, substance and scope satisfactory to the Committee,  which the Committee
determines  are  necessary or  convenient  to  facilitate  the  perfection of an
exemption from the registration  requirements of the Securities Act,  applicable
state securities laws or other legal  requirement,  including without limitation
that (a) the shares of Common Stock to be issued upon the exercise of the option
or grant or lapse of  restrictions  with  respect  to a Stock  Award  are  being
acquired by the  participant  for his own account,  for investment  only and not
with a view to the resale or distribution thereof, and (b) any subsequent resale
or distribution of shares of Common Stock by such  participant will be made only
pursuant  to (i) a  Registration  Statement  under the  Securities  Act which is
effective and current with respect to the shares of Common Stock subject to such
option  or Stock  Award,  or (ii) a  specific  exemption  from the  registration
requirements  of  the  Securities  Act,  but in  claiming  such  exemption,  the
participant  shall  prior to any offer of sale or sale of such  shares of Common
Stock  provide  the  Company  with  a  favorable   written  opinion  of  counsel
satisfactory to the Company,  in form,  substance and scope  satisfactory to the
Company,  as to the  applicability  of such  exemption to the  proposed  sale or
distribution.

         In addition, if at any time the Committee shall determine,  in its sole
discretion,  that the  listing or  qualification  of the shares of Common  Stock
subject to any option or Stock Award on any securities exchange, Nasdaq or under
any  applicable  law, or the consent or approval of any  governmental  agency or
regulatory  body,  is necessary or desirable as a condition to, or in connection
with,  the  granting  of an option or Stock  Award or the  issuing  of shares of
Common Stock thereunder,  such option or Stock Award may not be granted and such
option  may  not  be  exercised  in  whole  or  in  part  unless  such  listing,
qualification,  consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.

12.      CONTRACTS.  Each  option  and  Stock  Award  shall be  evidenced  by an
appropriate  Contract  which  shall  be duly  executed  by the  Company  and the
optionee,   and  shall  contain  such  terms,


                                       6
<PAGE>

provisions and conditions not inconsistent  herewith as may be determined by the
Committee.  The  terms of each  option,  Stock  Award and  Contract  need not be
identical.

13.      ADJUSTMENTS  UPON CHANGES IN COMMON  STOCK.  Notwithstanding  any other
provisions of the Plan:

         (a) a stock  dividend,  recapitalization,  merger or  consolidation  in
which  the  Company  is the  surviving  corporation,  or a  spin-off,  split-up,
combination  or exchange of shares or the like which  results in a change in the
number or kind of shares of Common Stock which is outstanding  immediately prior
to such event, the Committee shall appropriately adjust the aggregate number and
kind of shares  subject  to the Plan,  the  aggregate  number and kind of shares
subject  to each  outstanding  option and the  exercise  price  thereof  and the
aggregate  number  and  kind  of  shares  subject  to  each  Stock  Award.  Such
adjustments  shall be conclusive  and binding on all parties and may provide for
the elimination of fractional shares which might otherwise be subject to options
without payment therefor.

         (b) in the event of the liquidation or dissolution of the Company, or a
merger  to which  the  Company  is a party  whether  or not it is the  surviving
corporation or a consolidation  or a sale by the Company of all or substantially
all of its assets,  then,  except as set forth  below,  (i) the options  granted
hereunder which are outstanding or unvested as of the date of such event,  shall
continue  to be  outstanding  and the  optionee  shall be entitled to receive an
option in the  surviving  corporation  for the same number of shares as he would
have been entitled to receive if he had exercised the options granted  hereunder
immediately  prior to the  transaction  and actually  owned the shares of common
stock subject to such option,  and (ii) all  restrictions  and  conditions  with
respect to Restricted  Shares shall lapse.  The exercise  price of the option in
the surviving corporation shall be such that the aggregate consideration for the
shares of stock  subject to the  option in the  surviving  corporation  shall be
equal to the aggregate  consideration payable with respect to the option granted
under the Plan.

         Notwithstanding  the  foregoing,  the Company shall have the right,  by
written notice,  provided to an optionee sent no later than 15 days prior to the
proposed liquidation,  dissolution,  merger or other transaction,  to advise the
optionee that upon  consummation  of the  transaction all options granted to any
optionee  under  the Plan  shall  terminate  and be void,  in which  event,  the
optionee shall have the right to exercise all options then currently exercisable
in accordance  with the terms of the applicable  option  Contract within 10 days
after the date of the notice from the Company.

         Upon a Change of Control of the Company (as defined below), each option
shall become immediately  exercisable with respect to all shares of Common Stock
subject thereto and all  restrictions  and conditions with respect to Restricted
Shares  shall  lapse,  unless  the  provisions  of  Paragraphs  13(a) or (b) are
operative.  For purposes  hereof,  a "Change in Control" shall be deemed to have
occurred  if: (i) any  "person"  or "group"  (as such terms are used in Sections
3(a)(9) and 13(d)(3) of the  Securities  Exchange  Act of 1934,  as amended (the
"Act")),  except if an employee  stock  ownership  trust (or any of the trustees
thereof) or any of the executive officers as of the date of stockholder approval
of the Plan  become a  "beneficial  owner"  (as such term is used in Rule  13d-3
promulgated  under the Act), after the date hereof,  directly or indirectly,  of
securities of the Company  representing 20% or more of the combined voting power
of the Company's then outstanding securities;  (ii) a change in "control" of the
Company (as the term  "control" is defined in Rule 12b-2 or any  successor  rule
promulgated under the Act) shall have occurred; (iii) individuals


                                       7
<PAGE>

who, as of the date this Plan was first  adopted by the Board of Directors  (the
"Effective  Date"),  constitute the Board of Directors (the  "Incumbent  Board")
cease for any reason to  constitute  a majority  of the  members of the Board of
Directors,  provided, however, that any person becoming a director subsequent to
the Effective  Date whose  election or nomination for election was approved by a
vote of at least  two-thirds of the directors  constituting  the Incumbent Board
shall be considered a member of the Incumbent Board, provided, further, however,
that no individual  initially elected or nominated as a director of the Board of
Directors as a result of an actual or threatened  election  contest with respect
to  directors  or any other  actual or  threatened  solicitation  of  proxies or
consents by or on behalf of any person other than the Board of  Directors  shall
be deemed to be a member of the Incumbent  Board;  (iv) the  stockholders of the
Company  approve a plan of complete  liquidation  of the Company or an agreement
for the sale or  disposition by the Company of all or  substantially  all of the
Company's  assets;  or (v) the  stockholders  of the Company approve a merger or
consolidation  of the  Company  with any other  company,  other than a merger or
consolidation  which would result in the combined  voting power of the Company's
voting securities outstanding  immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving  entity) more than 70% of the combined  voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation.

14.      AMENDMENTS  AND  TERMINATION  OF THE PLAN.  The Plan was adopted by the
Board of Directors on May 14, 1999.  No ISO may be granted  under the Plan after
May 13, 2009. The Board of Directors,  without further approval of the Company's
stockholders,  may at any time  suspend or  terminate  the Plan,  in whole or in
part, or amend it from time to time in such  respects as it may deem  advisable,
including,  without  limitation,  in order that ISOs granted  hereunder meet the
requirements  for  "incentive  stock options" under the Code, to comply with any
change  in  applicable  law,  regulations,  rulings  or  interpretations  of any
administrative agency;  provided,  however, that no amendment shall be effective
without the requisite prior or subsequent  stockholder  approval which would (a)
except as contemplated in Paragraph 13, increase the maximum number of shares of
Common Stock for which  options or Stock  Awards may be granted  under the Plan,
(b) change the  eligibility  requirements  to  receive  options or Stock  Awards
hereunder  or (c) make any  other  change  for  which  applicable  law  requires
stockholder approval. No termination, suspension or amendment of the Plan shall,
without the consent of the  participant,  adversely  affect his rights under any
option or Stock Award  granted  under the Plan.  The power of the  Committee  to
construe and  administer  any option or Stock Award granted under the Plan prior
to the termination or suspension of the Plan  nevertheless  shall continue after
such termination or during such suspension.

15.      NON-TRANSFERABILITY.  No option or Stock Award  granted  under the Plan
shall  be  transferable  otherwise  than  by will or the  laws  of  descent  and
distribution, and options may be exercised, during the lifetime of the optionee,
only by the optionee or his Legal Representatives. Except to the extent provided
above, options, Stock Awards, and the shares of Common Stock subject thereto may
not be assigned,  transferred,  pledged,  hypothecated or disposed of in any way
(whether  by  operation  of law or  otherwise)  and  shall  not  be  subject  to
execution,  attachment or similar  process,  and any such attempted  assignment,
transfer, pledge,  hypothecation or disposition shall be null and void ab initio
and of no force or effect.

16.      WITHHOLDING  TAXES.  The Company,  may withhold (a) cash, (b) shares of
Common  Stock to be issued upon  exercise of an option or with  respect to which
forfeiture  restrictions  lapse  having an  aggregate  fair market  value on the
relevant  date   (determined  in  accordance  with  Paragraph  5),  or  (c)  any
combination  thereof,  in an amount  equal to the  amount  which  the  Committee
determines is


                                       8
<PAGE>

necessary to satisfy the obligation of the Company,  to withhold Federal,  state
and local  income  taxes or other  amounts  incurred  by  reason  of the  grant,
vesting,  exercise or disposition of an option or Stock Award, as applicable, or
the  disposition of the underlying  shares of Common Stock.  Alternatively,  the
Company  may  require the holder to pay to the  Company  such  amount,  in cash,
promptly upon demand.

17.      LEGENDS;  PAYMENT OF  EXPENSES.  The Company may endorse such legend or
legends upon the  certificates  for shares of Common Stock issued under the Plan
and may issue such "stop transfer" instructions to its transfer agent in respect
of  such  shares  as it  determines,  in  its  discretion,  to be  necessary  or
appropriate to (a) prevent a violation of, or to perfect an exemption  from, the
registration  requirements  of the  Securities  Act  and  any  applicable  state
securities  laws,  (b)  implement  the  provisions  of the Plan or any agreement
between  the  Company  and the  optionee  with  respect to such shares of Common
Stock,  including  any  stockholder's  agreement,  or (c) permit the  Company to
determine  the  occurrence  of a  "disqualifying  disposition,"  as described in
Section  421(b) of the Code, of the shares of Common Stock issued or transferred
upon the exercise of an ISO granted under the Plan. Each participant may, in the
Committee's  discretion,  be required to execute a stockholders'  agreement as a
condition to receiving a grant of options or a Stock Award hereunder.

         The Company  shall pay all issuance  taxes with respect to the issuance
of shares  of Common  Stock  under  the Plan,  as well as all fees and  expenses
incurred by the Company in connection with such issuance.

18.      USE OF PROCEEDS.  The cash  proceeds  received  upon the exercise of an
option  under the Plan shall be added to the  general  funds of the  Company and
used for such corporate purposes as the Board of Directors may determine.

19.      SUBSTITUTIONS  AND  ASSUMPTIONS  OF  OPTIONS  OF  CERTAIN   CONSTITUENT
CORPORATIONS.  Anything in this Plan to the contrary notwithstanding,  the Board
of Directors may, without further approval by the  stockholders,  substitute new
options for prior options of a Constituent  Corporation (as defined in Paragraph
20) or assume the prior options of such Constituent Corporation.

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

         (a) "Cause" shall mean (i) in the case of an employee or consultant, if
there is a written  employment or consulting  agreement between the optionee and
the Company,  any of its  Subsidiaries or a Parent which defines  termination of
such relationship for cause, cause as defined in such agreement, and (ii) in all
other cases, cause as defined by applicable state law.

         (b) "Constituent  Corporation" shall mean any corporation which engages
with the Company,  any of its Subsidiaries or a Parent in a transaction to which
Section  424(a) of the Code  applies  (or would  apply if the option  assumed or
substituted were an ISO), or any Parent or any Subsidiary of such corporation.

         (c) "Disability" shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Code.


                                       9
<PAGE>

         (d) "Legal  Representative"  shall mean the executor,  administrator or
other  person who at the time is  entitled  by law to  exercise  the rights of a
deceased or  incapacitated  optionee with respect to an option granted under the
Plan.

         (e) "Parent" shall have the same definition as "parent  corporation" in
Section 424(e) of the Code.

         (f)  "Subsidiary"   shall  have  the  same  definition  as  "subsidiary
corporation" in Section 424(f) of the Code.

21.      GOVERNING  LAW;  CONSTRUCTION.  The Plan,  the  options  and  Contracts
hereunder  and all  related  matters  shall be  governed  by, and  construed  in
accordance  with, the laws of the State of Delaware,  without regard to conflict
of law  provisions.  Neither the Plan nor any  Contract  shall be  construed  or
interpreted  with any  presumption  against the Company by reason of the Company
causing the Plan or Contract to be drafted. Whenever from the context it appears
appropriate,  any term stated in either the singular or plural shall include the
singular and plural,  and any term stated in the  masculine,  feminine or neuter
gender shall include the masculine, feminine and neuter.

22.      NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE.  Nothing in the Plan or in
any option or Stock Award granted under the Plan shall confer on any participant
any right to continue in the employ of, or as a consultant to, the Company or as
a director of the Company, or interfere in any way with any right of the Company
to  terminate  the  participant's  relationship  at  any  time  for  any  reason
whatsoever without liability to the Company.

23.      PARTIAL INVALIDITY.  The invalidity,  illegality or unenforceability of
any provision in the Plan, any option or Contract shall not affect the validity,
legality or enforceability of any other provision,  all of which shall be valid,
legal and enforceable to the fullest extent permitted by applicable law.

24.      STOCKHOLDER  APPROVAL.  The Plan shall be subject  to  approval  by the
Company's stockholders.