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                                                                   Exhibit 10.7
                                                                   ------------

                         SATCON TECHNOLOGY CORPORATION

                           1999 STOCK INCENTIVE PLAN
                           -------------------------

1.   Purpose
     -------

     The purpose of this 1999 Stock Incentive Plan (the "Plan") of SatCon
Technology Corporation, a Delaware corporation (the "Company"), is to advance
the interests of the Company's stockholders by enhancing the Company's ability
to attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company's stockholders.
Except where the context otherwise requires, the term "Company" shall include
any of the Company's present or future subsidiary corporations of as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code").

2.   Eligibility
     -----------

     All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options, restricted stock awards, or other stock-based
awards (each, an "Award") under the Plan. Each person who has been granted an
Award under the Plan shall be deemed a "Participant."

3.   Administration, Delegation
     --------------------------

     (a)  Administration by Board of Directors.  The Plan will be administered
          ------------------------------------
by the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem expedient to carry the Plan into effect and it shall be the sole and final
judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.

     (b)  Delegation to Executive Officers.  To the extent permitted by
          --------------------------------
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board
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may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.

     (c)  Appointment of Committees.  To the extent permitted by applicable law,
          -------------------------
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean the Board or a Committee of the Board or the
executive officer referred to in Section 3(b) to the extent that the Board's
powers or authority under the Plan have been delegated to such Committee or
executive officer.

4.   Stock Available for Awards
     --------------------------

     (a)  Number of Shares.  Subject to adjustment under Section 8, Awards may
          ----------------
be made under the Plan for up to 1,500,000 shares of common stock, $0.01 par
value per share, of the Company (the "Common Stock"). If any Award expires or is
terminated, surrendered or canceled without having been fully exercised or is
forfeited in whole or in part or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan, subject, however, in the case of Incentive Stock
Options (as hereinafter defined), to any limitation required under the Code.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

     (b)  Per-Participant Limit. Subject to adjustment under Section 8, for
          ---------------------
Awards granted after the Common Stock is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the maximum number of shares of
Common Stock with respect to which an Award may be granted to any Participant
under the Plan shall be 100,000 shares per calendar year. The per-Participant
limit described in this Section 4(b) shall be construed and applied consistently
with Section 162(m) of the Code.

5.   Stock Options
     -------------

     (a)  General.  The Board may grant options to purchase Common Stock (each,
          -------
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable.  An Option which is not intended to be an Incentive
Stock Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option."

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     (b)  Incentive Stock Options.  An Option that the Board intends to be an
          -----------------------
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.

     (c)  Exercise Price.  The Board shall establish the exercise price at the
          --------------
time each Option is granted and specify it in the applicable option agreement.

     (d)  Duration of Options.  Each Option shall be exercisable at such times
          -------------------
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

     (e)  Exercise of Option.  Options may be exercised by delivery to the
          ------------------
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.

     (f)  Payment Upon Exercise. Common Stock purchased upon the exercise of an
          ---------------------
Option granted under the Plan shall be paid for as follows:

          (1)  in cash or by check, payable to the order of the Company;

          (2)  except as the Board may, in its sole discretion, otherwise
provide in an option agreement, by (i) delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price or (ii) delivery by the
Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price;

          (3)  when the Common Stock is registered under the Exchange Act, by
delivery of shares of Common Stock owned by the Participant valued at their fair
market value as determined by (or in a manner approved by) the Board in good
faith ("Fair Market Value"), provided (i) such method of payment is then
permitted under applicable law and (ii) such Common Stock was owned by the
Participant at least six months prior to such delivery;

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<PAGE>

          (4)  to the extent permitted by the Board, in its sole discretion by
(i) delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) payment of such other lawful consideration as
the Board may determine; or

          (5)  by any combination of the above permitted forms of payment.

6.   Restricted Stock
     ----------------

     (a)  Grants.  The Board may grant Awards entitling recipients to acquire
          ------
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").

     (b)  Terms and Conditions.  The Board shall determine the terms and
          --------------------
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

7.   Other Stock-Based Awards
     ------------------------

     The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including the
grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights.

8.   Adjustments for Changes in Common Stock and Certain Other Events
     ----------------------------------------------------------------

     (a)  Changes in Capitalization. In the event of any stock split, reverse
          -------------------------
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares,

                                       4
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spin-off or other similar change in capitalization or event, or any distribution
to holders of Common Stock other than a normal cash dividend, (i) the number and
class of securities available under this Plan, (ii) the per-Participant limit
set forth in Section 4(b), (iii) the number and class of securities and exercise
price per share subject to each outstanding Option, (iv) the repurchase price
per share subject to each outstanding Restricted Stock Award, and (v) the terms
of each other outstanding Award shall be appropriately adjusted by the Company
(or substituted Awards may be made, if applicable) to the extent the Board shall
determine, in good faith, that such an adjustment (or substitution) is necessary
and appropriate. If this Section 8(a) applies and Section 8(c) also applies to
any event, Section 8(c) shall be applicable to such event, and this Section 8(a)
shall not be applicable.

     (b)  Liquidation or Dissolution.  In the event of a proposed liquidation or
          --------------------------
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.

      (c)  Acquisition and Change in Control Events
           ----------------------------------------

      (1)    Definitions
             -----------

             (a)  An "Acquisition Event" shall mean:

                  (i)   any merger or consolidation of the Company with or
                        into another entity as a result of which the Common
                        Stock is converted into or exchanged for the right to
                        receive cash, securities or other property; or

                  (ii)  any exchange of shares of the Company for cash,
                        securities or other property pursuant to a statutory
                        share exchange transaction.

             (b)  A "Change in Control Event" shall mean:

                  (i)   the acquisition by an individual, entity or group
                        (within the meaning of Section 13(d)(3) or 14(d)(2) of
                        the Securities Exchange Act of 1934, as amended (the

                                       5
<PAGE>

                     "Exchange Act")) (a "Person") of beneficial ownership of
                      any capital stock of the Company if, after such
                      acquisition, such Person beneficially owns (within the
                      meaning of Rule 13d-3 promulgated under the Exchange Act)
                      40% or more of either (x) the then-outstanding shares of
                      common stock of the Company (the "Outstanding Company
                      Common Stock") or (y) the combined voting power of the
                      then-outstanding securities of the Company entitled to
                      vote generally in the election of directors (the
                      "Outstanding Company Voting Securities"); provided,
                                                                --------
                      however, that for purposes of this subsection (i), the
                      -------
                      following acquisitions shall not constitute a Change in
                      Control Event: (A) any acquisition directly from the
                      Company (excluding an acquisition pursuant to the
                      exercise, conversion or exchange of any security
                      exercisable for, convertible into or exchangeable for
                      common stock or voting securities of the Company, unless
                      the Person exercising, converting or exchanging such
                      security acquired such security directly from the Company
                      or an underwriter or agent of the Company), (B) any
                      acquisition by any employee benefit plan (or related
                      trust) sponsored or maintained by the Company or any
                      corporation controlled by the Company, (C) any acquisition
                      by any corporation pursuant to a Business Combination (as
                      defined below) which complies with clauses (x) and (y) of
                      subsection (iii) of this definition, or (D) any
                      acquisition by David B. Eisenhaure (including his heirs)
                      (each such party is referred to herein as an "Exempt
                      Person") of any shares of Common Stock; provided that,
                      after such acquisition, such Exempt Person does not
                      beneficially own more than 50% of either (i) the
                      Outstanding Company Common Stock or (ii) the Outstanding
                      Company Voting Securities; or

                (ii)  such time as the Continuing Directors (as defined below)
                      do not constitute a majority of the Board (or, if
                      applicable, the Board of Directors of a successor
                      corporation to the Company), where the term "Continuing
                      Director" means at any date a member of

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                      the Board (x) who was a member of the Board on the date of
                      the initial adoption of this Plan by the Board or (y) who
                      was nominated or elected subsequent to such date by at
                      least a majority of the directors who were Continuing
                      Directors at the time of such nomination or election or
                      whose election to the Board was recommended or endorsed by
                      at least a majority of the directors who were Continuing
                      Directors at the time of such nomination or election;
                      provided, however, that there shall be excluded from this
                      --------  -------
                      clause (y) any individual whose initial assumption of
                      office occurred as a result of an actual or threatened
                      election contest with respect to the election or removal
                      of directors or other actual or threatened solicitation of
                      proxies or consents, by or on behalf of a person other
                      than the Board; or

               (iii)  the consummation of a merger, consolidation,
                      reorganization, recapitalization or statutory share
                      exchange involving the Company or a sale or other
                      disposition of all or substantially all of the assets of
                      the Company (a "Business Combination"), unless,
                      immediately following such Business Combination, each of
                      the following two conditions is satisfied: (x) all or
                      substantially all of the individuals and entities who were
                      the beneficial owners of the Outstanding Company Common
                      Stock and Outstanding Company Voting Securities
                      immediately prior to such Business Combination
                      beneficially own, directly or indirectly, more than 50% of
                      the then-outstanding shares of common stock and the
                      combined voting power of the then-outstanding securities
                      entitled to vote generally in the election of directors,
                      respectively, of the resulting or acquiring corporation in
                      such Business Combination (which shall include, without
                      limitation, a corporation which as a result of such
                      transaction owns the Company or substantially all of the
                      Company's assets either directly or through one or more
                      subsidiaries) (such resulting or acquiring corporation is
                      referred to herein as the "Acquiring Corporation") in
                      substantially the same proportions

                                       7
<PAGE>

                      as their ownership of the Outstanding Company Common Stock
                      and Outstanding Company Voting Securities, respectively,
                      immediately prior to such Business Combination and (y) no
                      Person (excluding the Acquiring Corporation or any
                      employee benefit plan (or related trust) maintained or
                      sponsored by the Company or by the Acquiring Corporation
                      or any Exempt Person) beneficially owns, directly or
                      indirectly, 40% or more of the then-outstanding shares of
                      common stock of the Acquiring Corporation, or of the
                      combined voting power of the then-outstanding securities
                      of such corporation entitled to vote generally in the
                      election of directors (except to the extent that such
                      ownership existed prior to the Business Combination).

          (c)   "Good Reason" shall mean any significant diminution in the
                Participant's title, authority, or responsibilities from and
                after such Acquisition Event or Change in Control Event, as the
                case may be, or any reduction in the annual cash compensation
                payable to the Participant from and after such Acquisition Event
                or Change in Control Event, as the case may be, or the
                relocation of the place of business at which the Participant is
                principally located to a location that is greater than 50 miles
                from the current site.

          (d)   "Cause" shall mean any (i) willful failure by the Participant,
                which failure is not cured within 30 days of written notice to
                the Participant from the Company, to perform his or her material
                responsibilities to the Company or (ii) willful misconduct by
                the Participant which affects the business reputation of the
                Company. The Participant shall be considered to have been
                discharged for "Cause" if the Company determines, within 30 days
                after the Participant's resignation, that discharge for Cause
                was warranted.

     (2)  Effect on Options
          -----------------

          (a)   Acquisition Event.  Upon the occurrence of an Acquisition Event
                -----------------
                (regardless of whether such event also constitutes a Change in
                Control Event), or the execution by the Company

                                       8
<PAGE>

                of any agreement with respect to an Acquisition Event
                (regardless of whether such event will result in a Change in
                Control Event), the Board shall provide that all outstanding
                Options shall be assumed, or equivalent options shall be
                substituted, by the acquiring or succeeding corporation (or an
                affiliate thereof); provided that if such Acquisition Event also
                                    -------- ----
                constitutes a Change in Control Event, except to the extent
                specifically provided to the contrary in the instrument
                evidencing any Option or any other agreement between a
                Participant and the Company (A) one-half of the number of shares
                subject to the Option which were not already vested shall be
                exercisable upon the occurrence of such Acquisition Event and,
                subject to (B) below, the remaining one-half of such number of
                shares shall continue to become vested in accordance with the
                original vesting schedule set forth in such option, with one-
                half of the number of shares that would otherwise have first
                become vested becoming so vested on each subsequent vesting date
                in accordance with the original schedule and (B) such assumed or
                substituted options shall become immediately exercisable in full
                if, on or prior to the first anniversary of the date of the
                consummation of the Acquisition Event, the Participant's
                employment with the Company or the acquiring or succeeding
                corporation is terminated for Good Reason by the Participant or
                is terminated without Cause by the Company or the acquiring or
                succeeding corporation. For purposes hereof, an Option shall be
                considered to be assumed if, following consummation of the
                Acquisition Event, the Option confers the right to purchase, for
                each share of Common Stock subject to the Option immediately
                prior to the consummation of the Acquisition Event, the
                consideration (whether cash, securities or other property)
                received as a result of the Acquisition Event by holders of
                Common Stock for each share of Common Stock held immediately
                prior to the consummation of the Acquisition Event (and if
                holders were offered a choice of consideration, the type of
                consideration chosen by the holders of a majority of the
                outstanding shares of Common Stock); provided, however, that if
                the consideration received as a result of the Acquisition Event
                is not solely common stock of the acquiring or succeeding
                corporation (or an affiliate thereof),

                                       9
<PAGE>
                the Company may, with the consent of the acquiring or succeeding
                corporation, provide for the consideration to be received upon
                the exercise of Options to consist solely of common stock of the
                acquiring or succeeding corporation (or an affiliate thereof)
                equivalent in fair market value to the per share consideration
                received by holders of outstanding shares of Common Stock as a
                result of the Acquisition Event.

                    Notwithstanding the foregoing, if the acquiring or
               succeeding corporation (or an affiliate thereof) does not agree
               to assume, or substitute for, such Options, then the Board shall,
               upon written notice to the Participants, provide that all then
               unexercised Options will become exercisable in full as of a
               specified time prior to the Acquisition Event and will terminate
               immediately prior to the consummation of such Acquisition Event,
               except to the extent exercised by the Participants before the
               consummation of such Acquisition Event; provided, however, that
               in the event of an Acquisition Event under the terms of which
               holders of Common Stock will receive upon consummation thereof a
               cash payment for each share of Common Stock surrendered pursuant
               to such Acquisition Event (the "Acquisition Price"), then the
               Board may instead provide that all outstanding Options shall
               terminate upon consummation of such Acquisition Event and that
               each Participant shall receive, in exchange therefor, a cash
               payment equal to the amount (if any) by which (A) the Acquisition
               Price multiplied by the number of shares of Common Stock subject
               to such outstanding Options (whether or not then exercisable),
               exceeds (B) the aggregate exercise price of such Options.

     (b)       Change in Control Event that is not an Acquisition Event.  Upon
               --------------------------------------------------------
               the occurrence of a Change in Control Event that does not also
               constitute an Acquisition Event, except to the extent
               specifically provided to the contrary in the instrument
               evidencing any Option or any other agreement between a
               Participant and the Company, the vesting schedule of such Option
               shall be accelerated in part so that one-half of the number of
               shares that would otherwise have first become

                                      10
<PAGE>
               vested on any date after the date of the Change in Control Event
               shall immediately become exercisable. The remaining one-half of
               such number of shares shall continue to become vested in
               accordance with the original vesting schedule set forth in such
               Option, with one-half of the number of shares that would
               otherwise have first become vested becoming so vested on each
               subsequent vesting date in accordance with the original schedule;
               provided, however, that each such Option shall be immediately
               exercisable in full if, on or prior to the first anniversary of
               the date of the consummation of the Change in Control Event, the
               Participant's employment with the Company or the acquiring or
               succeeding corporation is terminated for Good Reason by the
               Participant or is terminated without Cause by the Company or the
               acquiring or succeeding corporation.

     (3)  Effect on Restricted Stock Awards
          ---------------------------------

          (a)  Acquisition Event that is not a Change in Control Event.  Upon
               -------------------------------------------------------
               the occurrence of an Acquisition Event that is not a Change in
               Control Event, the repurchase and other rights of the Company
               under each outstanding Restricted Stock Award shall inure to the
               benefit of the Company's successor and shall apply to the cash,
               securities or other property which the Common Stock was converted
               into or exchanged for pursuant to such Acquisition Event in the
               same manner and to the same extent as they applied to the Common
               Stock subject to such Restricted Stock Award.

          (b)  Change in Control Event.  Upon the occurrence of a Change in
               -----------------------
               Control Event (regardless of whether such event also constitutes
               an Acquisition Event), except to the extent specifically provided
               to the contrary in the instrument evidencing any Restricted Stock
               Award or any other agreement between a Participant and the
               Company, the vesting schedule of all Restricted Stock Awards
               shall be accelerated in part so that one-half of the number of
               shares that would otherwise have first become free from

                                      11
<PAGE>

               conditions or restrictions on any date after the date of the
               Change in Control Event shall immediately become free from
               conditions or restrictions. Subject to the following sentence,
               the remaining one-half of such number of shares shall continue to
               become free from conditions or restrictions in accordance with
               the original schedule set forth in such Restricted Stock Award,
               with one-half of the number of shares that would otherwise have
               first become free from conditions or restrictions becoming free
               from conditions or restrictions on each subsequent vesting date
               in accordance with the original schedule. In addition, each such
               Restricted Stock Award shall immediately become free from all
               conditions or restrictions if, on or prior to the first
               anniversary of the date of the consummation of the Change in
               Control Event, the Participant's employment with the Company or
               the acquiring or succeeding corporation is terminated for Good
               Reason by the Participant or is terminated without Cause by the
               Company or the acquiring or succeeding corporation.

                                      12
<PAGE>

     (4)  Effect on Other Awards
          ----------------------

          (a)  Acquisition Event that is not a Change in Control Event.  The
               -------------------------------------------------------
               Board shall specify the effect of an Acquisition Event that is
               not a Change in Control Event on any other Award granted under
               the Plan at the time of the grant of such Award.

          (b)  Change in Control Event.  Upon the occurrence of a Change in
               -----------------------
               Control Event (regardless of whether such event also constitutes
               an Acquisition Event), except to the extent specifically provided
               to the contrary in the instrument evidencing any Award or any
               other agreement between a Participant and the Company, the
               vesting schedule of all other Awards shall be accelerated in part
               so that one-half of the number of shares that would otherwise
               have first become exercisable, realizable, vested or free from
               conditions or restrictions on any date after the date of the
               Change in Control Event shall immediately become exercisable,
               realizable, vested or free from conditions or restrictions.
               Subject to the following sentence, the remaining one-half of such
               number of shares shall continue to become exercisable,
               realizable, vested or free from conditions or restrictions in
               accordance with the original schedule set forth in such Award,
               with one-half of the number of shares that would otherwise have
               first become exercisable, realizable, vested or free from
               conditions or restrictions becoming so exercisable, realizable,
               vested or free from conditions or restrictions on each subsequent
               vesting date in accordance with the original schedule. In
               addition, each such Award shall immediately become fully
               exercisable, realizable, vested or free from conditions or
               restrictions if, on or prior to the first anniversary of the date
               of the consummation of the Change in Control Event, the
               Participant's employment with the Company or the acquiring or
               succeeding corporation is terminated for Good Reason by the
               Participant or is terminated without Cause by the Company or the
               acquiring or succeeding corporation.

                                      13


<PAGE>

9.   General Provisions Applicable to Awards
     ---------------------------------------

     (a)  Transferability of Awards.  Except as the Board may otherwise
          -------------------------
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall
be exercisable only by the Participant. References to a Participant, to the
extent relevant in the context, shall include references to authorized
transferees.

     (b)  Documentation.  Each Award shall be evidenced by a written instrument
          -------------
in such form as the Board shall determine. Each Award may contain terms and
conditions in addition to those set forth in the Plan.

     (c)  Board Discretion.  Except as otherwise provided by the Plan, each
          ----------------
Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.

     (d)  Termination of Status.  The Board shall determine the effect on an
          ---------------------
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

     (e)  Withholding.  Each Participant shall pay to the Company, or make
          -----------
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may, to the extent then permitted under applicable law, satisfy
such tax obligations in whole or in part by delivery of shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.

     (f)  Amendment of Award.  The Board may amend, modify or terminate any
          ------------------
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that

                                      14
<PAGE>

the action, taking into account any related action, would not materially and
adversely affect the Participant.

     (g)  Conditions on Delivery of Stock.  The Company will not be obligated to
          -------------------------------
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

     (h)  Acceleration.  The Board may at any time provide that any Options
          ------------
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of restrictions in full or in part or that any other
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

10.  Miscellaneous
     -------------

     (a)  No Right To Employment or Other Status.  No person shall have any
          --------------------------------------
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

     (b)  No Rights As Stockholder.  Subject to the provisions of the applicable
          ------------------------
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock

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<PAGE>

acquired upon such Option exercise, notwithstanding the fact that such shares
were not outstanding as of the close of business on the record date for such
stock dividend.

     (c)  Effective Date and Term of Plan.  The Plan shall become effective on
          -------------------------------
the date on which it is adopted by the Board, but no Award granted to a
Participant designated by the Board as subject to Section 162(m) of the Code by
the Board shall become exercisable, vested or realizable, as applicable to such
Award, unless and until the Plan has been approved by the Company's stockholders
to the extent stockholder approval is required by Section 162(m) in the manner
required under Section 162(m) (including the vote required under Section
162(m)). No Awards shall be granted under the Plan after the completion of ten
years from the earlier of (i) the date on which the Plan was adopted by the
Board or (ii) the date the Plan was approved by the Company's stockholders, but
Awards previously granted may extend beyond that date.

     (d)  Amendment of Plan.  The Board may amend, suspend or terminate the Plan
          -----------------
or any portion thereof at any time, provided that to the extent required by
Section 162(m) of the Code, no Award granted to a Participant designated as
subject to Section 162(m) by the Board after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Award (to the
extent that such amendment to the Plan was required to grant such Award to a
particular Participant), unless and until such amendment shall have been
approved by the Company's stockholders as required by Section 162(m) (including
the vote required under Section 162(m)).

     (e)  Governing Law.  The provisions of the Plan and all Awards made
          -------------
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

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