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                                                                   Exhibit 10.2








                              APPNET SYSTEMS, INC.
                            1999 STOCK INCENTIVE PLAN
                               AS OF JUNE 17, 1999









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                              APPNET SYSTEMS, INC.
                            1999 STOCK INCENTIVE PLAN

         1.   PURPOSE.

              The purpose of this Plan is to strengthen AppNet Systems, Inc., a
Delaware corporation (the "Company"), by providing an incentive to its
employees, officers, directors and consultants and thereby encouraging them to
devote their abilities and industry to the success of the Company's business
enterprise. It is intended that this purpose be achieved by extending to
employees (including future employees who have received a formal written offer
of employment), officers, directors, and consultants of the Company and its
Subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options, Formula Options, Stock Appreciation Rights, Dividend Equivalent Rights,
Performance Awards, Share Awards, Phantom Stock and Restricted Stock (as each
term is herein defined).

         2.   DEFINITIONS.

              For purposes of the Plan:

              2.1       "ADJUSTED FAIR MARKET VALUE" means, in the event of a
Change in Control, the highest price per Share paid to holders of the Shares in
any transaction (or series of related transactions) constituting or resulting in
a Change in Control other than pursuant to Section 2.10(b).

              2.2       "AFFILIATE" means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or under common control with, such Person. Any
Relative (for this purpose, "Relative" means a spouse, child, parent, parent of
spouse, sibling or grandchild) of an individual shall be deemed to be an
Affiliate of such individual for purposes hereof. Neither the Company nor any
Person controlled by the Company shall be deemed to be an Affiliate of any
holder of Company stock.

              2.3       "AGREEMENT" means the written agreement between the
Company and an Optionee or Grantee evidencing the grant of an Option or Award
and setting forth the terms and conditions thereof.


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              2.4       "AWARD" means a grant of Restricted Stock, Phantom
Stock, a Stock Appreciation Right, a Performance Award, a Dividend Equivalent
Right, a Share Award, or any or all of them.

              2.5       "BENEFICIAL OWNERSHIP" means ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.

              2.6       "BENEFICIARY" means an individual, trust or estate who
or which, by a written designation of the Optionee or Grantee filed with the
Company by operation of law succeeds to the rights and obligations of the
Optionee or Grantee under the Plan and an Agreement upon the Optiontee's or
Grantee's death.

              2.7       "BOARD" means the Board of Directors of the Company.

              2.8       "CAUSE" means:

                        (a)  for purposes of Section 6.4, the term "Cause" shall
mean (i) intentional failure to perform duties as a Director, (ii) intentional
misrepresentation or the commission of an act of fraud in the performance of
such duties, (iii) breach of fiduciary duty involving personal profit including,
without limitation, embezzlement, misappropriation or conversion of assets or
opportunities of the Company or any of its Subsidiaries or (iv) willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) in connection with the performance of duties as a Director;
provided, HOWEVER, that if the term "Cause" is defined in the Articles of
Incorporation of the Company, Cause shall have the meaning given such term in
such Articles, or

                        (b)  in the case of an Optionee or Grantee whose
employment with the Company or a Subsidiary is, as the date of the applicable
Agreement, subject to the terms of an employment agreement between such Optionee
or Grantee and the Company or Subsidiary, which employment agreement includes a
definition of "Cause," the term "Cause" as used in this Plan or any Agreement
shall have the meaning set forth in such employment agreement during the period
that such employment agreement remains in effect; or

                        (c)  in all other cases, the term "Cause" as used in
this Plan or any Agreement shall mean (i) intentional failure to perform
reasonably assigned duties, (ii) dishonesty or willful misconduct in the
performance of duties, (iii) involvement in a transaction in connection with the
performance of duties to the Company or any of its Subsidiaries which
transaction is adverse to the interests of the Company or any of its
Subsidiaries and which is engaged in for personal profit or (iv) willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) in connection with the performance of duties.


                                      -2-

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              2.9       "CHANGE IN CAPITALIZATION" means any increase or
reduction in the number of Shares, or any change (including, without limitation,
in the case of a spin-off, dividend or other distribution in respect of Shares,
a change in value) in the Shares or exchange of Shares for a different number or
kind of shares or other securities of the Company or another corporation, by
reason of a reclassification, recapitalization, merger, consolidation,
reorganization, spin-off, split-up, issuance of warrants or rights or
debentures, stock dividend, stock split or reverse stock split, cash dividend,
property dividend, combination or exchange of shares, repurchase of shares,
change in corporate structure or a substantially similar transaction.

              2.10      A "CHANGE IN CONTROL" shall mean the occurrence of any
of the following:

                        (a)  An acquisition in one transaction or a series of
related transactions (other than directly from the Company or pursuant to
Options or Awards granted under this Plan or otherwise by the Company) of any
Voting Securities of the Company by any Person, immediately after which such
Person has Beneficial Ownership of fifty percent (50%) or more of the combined
voting power of the Company's then outstanding Voting Securities; PROVIDED,
HOWEVER, in determining whether a Change in Control has occurred pursuant to
this Section 2.10(a), Voting Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an acquisition which
would cause a Change in Control. A "Non-Control Acquisition" shall mean an
acquisition by (i) an employee benefit plan (or a trust forming a part thereof)
maintained by (A) the Company or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is owned, directly or indirectly, by the Company (for purposes of this
definition, a "Related Entity"), (ii) the Company or any Related Entity, or
(iii) any Person in connection with a "Non-Control Transaction" (as hereinafter
defined);

                        (b)  The individuals who, as of the date hereof, are
members of the Board (the "Incumbent Board"), cease for any reason to constitute
at least a majority of the members of the Board; PROVIDED, HOWEVER, that if the
election, or nomination for election by the Company's common stockholders, of
any new director was approved by a vote of at least a majority of the Incumbent
Board, such new director shall, for purposes of this Plan, be considered as a
member of the Incumbent Board; PROVIDED FURTHER, HOWEVER, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election Contest"
(as described in Rule 14a-11 promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or


                                      -3-

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                        (c)  The consummation of:

                             (i)       A merger, consolidation or reorganization
                        involving the Company unless:

                                       (A) the stockholders of the Company,
                             immediately before such merger, consolidation or
                             reorganization, own directly or indirectly
                             immediately following such merger, consolidation or
                             reorganization, more than fifty percent (50%) of
                             the combined voting power of the outstanding voting
                             securities of the corporation resulting from such
                             merger or consolidation or reorganization (the
                             "Surviving Corporation") in substantially the same
                             proportion as their ownership of the Voting
                             Securities immediately before such merger,
                             consolidation or reorganization,

                                       (B) the individuals who were members of
                             the Incumbent Board immediately prior to the
                             execution of the agreement providing for such
                             merger, consolidation or reorganization constitute
                             at least a majority of the members of the board of
                             directors of the Surviving Corporation, or a
                             corporation Beneficially Owning directly or
                             indirectly a majority of the voting securities of
                             the Surviving Corporation, and

                                       (C) no Person other than (1) the Company,
                             (2) any Related Entity, (3) any employee benefit
                             plan (or any trust forming a part thereof) that,
                             immediately prior to such merger, consolidation or
                             reorganization, was maintained by the Company, the
                             Surviving Corporation, or any Related Entity or (4)
                             any Person who, together with its Affiliates,
                             immediately prior to such merger, consolidation or
                             reorganization had Beneficial Ownership of fifty
                             percent (50%) or more of the then outstanding
                             Voting Securities, owns, together with its
                             Affiliates, Beneficial Ownership of fifty percent
                             (50%) or more of the combined voting power of the
                             Surviving Corporation's then outstanding voting
                             securities.

                                       (D) a transaction described in clauses
                             (A) through (C) above shall herein be referred to
                             as a "Non-Control Transaction;"


                                      -4-

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                             (ii)      A complete liquidation or dissolution of
                        the Company; or

                             (iii)     An agreement for the sale or other
                        disposition of all or substantially all of the assets of
                        the Company to any Person (other than a transfer to a
                        Related Entity or the distribution to the Company's
                        stockholders of the stock of a Related Entity or any
                        other assets).

         Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of fifty percent (50%) or more of the combined voting power of the
Company's then outstanding Voting Securities as a result of the acquisition of
Voting Securities by the Company which, by reducing the number of Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and (1) before such share
acquisition by the Company the Subject Person becomes the Beneficial Owner of
any new or additional Voting Securities in a related transaction or (2) after
such share acquisition by the Company the Subject Person becomes the Beneficial
Owner of any new or additional Voting Securities which in either case increases
the percentage of the then outstanding Voting Securities Beneficially Owned by
the Subject Person, then a Change in Control shall occur.

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

              2.12      "COMMITTEE" means a committee, as described in Section
3.1, appointed by the Board from time to time to administer the Plan and to
perform the functions set forth herein.

              2.13      "COMPANY" means AppNet Systems, Inc.

              2.14      "DIRECTOR" means a director of the Company.

              2.15      "DISABILITY" means:

                        (a)  in the case of an Optionee or Grantee whose
employment with the Company or a Subsidiary is, as of the date of the applicable
Agreement, subject to the terms of an employment agreement between such Optionee
or Grantee and the Company or Subsidiary, which employment agreement includes a
definition of "Disability," the term "Disability" as used in this Plan or any
Agreement shall have the meaning set forth in such employment agreement during
the period that such employment agreement remains in effect; or


                                      -5-

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                        (b)  in all other cases, the term "Disability" as used
in this Plan or any Agreement shall mean a physical or mental infirmity which
impairs the Optionee's or Grantee's ability to perform substantially his or her
duties for a period of one hundred eighty (180) consecutive days.

              2.16      "DISABILITY DATE" means the date which is six (6) months
after the date on which an Optionee or Grantee is first absent from active
employment with the Company by reason of a Disability.

              2.17      "DIVIDEND EQUIVALENT RIGHT" means a right to receive all
or some portion of the cash dividends that are or would be payable with respect
to Shares.

              2.18      "DIVISION" means any of the operating units or divisions
of the Company designated as a Division by the Committee.

              2.19      "ELIGIBLE INDIVIDUAL" means any of the following
individuals who is designated by the Committee as eligible to receive Options or
Awards subject to the conditions set forth herein: (a) any director (other than
a Nonemployee Director), officer or employee of the Company or a Subsidiary, (b)
any individual to whom the Company or a Subsidiary has extended a formal,
written offer of employment, or (c) any consultant or advisor of the Company or
a Subsidiary.

              2.20      "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

              2.21      "FAIR MARKET VALUE" on any date means the closing sales
prices of the Shares on such date on the principal national securities exchange
on which such Shares are listed or admitted to trading, or, if such Shares are
not so listed or admitted to trading, the average of the per Share closing bid
price and per Share closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System or such other
market in which such prices are regularly quoted, or, if there have been no
published bid or asked quotations with respect to Shares on such date, the Fair
Market Value shall be the value established by the Board in good faith and, in
the case of an Incentive Stock Option, in accordance with Section 422 of the
Code.

              2.22      "FORMULA OPTION" means an Option granted pursuant to
Section 6.

              2.23      "GRANTEE" means a person to whom an Award has been
granted under the Plan.

              2.24      "INCENTIVE STOCK OPTION" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.


                                      -6-

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              2.25      "INITIAL PUBLIC OFFERING" means the consummation of the
first public offering of Shares pursuant to a registration statement (other than
on Form S-8 or successor form) filed with, and declared effective by, the
Securities and Exchange Commission.

              2.26      "NONEMPLOYEE DIRECTOR" means a director of the Company
who is a "nonemployee director" within the meaning of Rule 16b-3 promulgated
under the Exchange Act.

              2.27      "NONQUALIFIED STOCK OPTION" means an Option which is not
an Incentive Stock Option.

              2.28      "NORMAL RETIREMENT DATE" means the date on which an
Optionee or Grantee terminates active employment with the Company or a
Subsidiary on or after attainment of age 65, but does not include termination by
the Company or a Subsidiary for Cause.

              2.29      "OPTION" means a Nonqualified Stock Option, an Incentive
Stock Option, a Formula Option, or any or all of them.

              2.30      "OPTIONEE" means a person to whom an Option has been
granted under the Plan.

              2.31      "OUTSIDE DIRECTOR" means a director of the Company who
is an "outside director" within the meaning of Section 162(m) of the Code and
the regulations promulgated thereunder.

              2.32      "PARENT" means any corporation which is a parent
corporation (within the meaning of Section 424(e) of the Code) with respect to
the Company.

              2.33      "PERFORMANCE AWARDS" means Performance Units,
Performance Shares or either or both of them.

              2.34      "PERFORMANCE-BASED COMPENSATION" means any Option or
Award that is intended to constitute "performance based compensation" within the
meaning of Section 162(m)(4)(C) of the Code and the regulations promulgated
thereunder.

              2.35      "PERFORMANCE CYCLE" means the time period specified by
the Committee at the time Performance Awards are granted during which the
performance of the Company, a Subsidiary or a Division will be measured.

              2.36      "PERFORMANCE OBJECTIVES" has the meaning set forth in
Section 11.


                                      -7-

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              2.37      "PERFORMANCE SHARES" means Shares issued or transferred
to an Eligible Individual under Section 11.

              2.38      "PERFORMANCE UNITS" means Performance Units granted to
an Eligible Individual under Section 11.

              2.39      "PERSON" means `person' as such term is used for
purposes of Section 13(d) or 14(d) of the Exchange Act, including without
limitation, any individual, corporation, limited liability company, partnership,
trust, unincorporated organization, government or any agency or political
subdivision thereof, or any other entity or any group of Persons.

              2.40      "PHANTOM STOCK" means a right granted to an Eligible
Individual under Section 12 representing a number of hypothetical Shares.

              2.41      "PLAN" means the AppNet Systems, Inc. 1999 Stock
Incentive Plan, as amended and restated from time to time.

              2.42      "POOLING TRANSACTION" means an acquisition of the
Company in a transaction which is intended to be treated as a "pooling of
interests" under generally accepted accounting principles.

              2.43      "RESTRICTED STOCK" means Shares issued or transferred to
an Eligible Individual pursuant to Section 10.

              2.44      "SHARE AWARD" means a grant of Shares pursuant to
Section 12.

              2.45      "SHARES" means the common stock, par value $.0005 per
share, of the Company.

              2.46      "STOCK APPRECIATION RIGHT" means a right to receive all
or some portion of the increase in the value of the Shares as provided in
Section 8 hereof.

              2.47      "SUBSIDIARY" means (i) except as provided in subsection
(ii) below, any corporation which is a subsidiary corporation (within the
meaning of Section 424(f) of the Code) with respect to the Company, and (ii)
with respect to provisions relating to the eligibility to receive Options or
Awards other than Incentive Stock Options and to continued employment for
purposes of Options and Awards (unless the Committee determines otherwise), any
entity, whether or not incorporated, in which the Company directly or indirectly
owns fifty percent (50%) or more of the outstanding equity or other ownership
interests.

              2.48      "SUCCESSOR CORPORATION" means a corporation, or a parent
or subsidiary thereof, which issues or assumes an Option or Award in a
transaction


                                      -8-

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described in Section 424(a) of the Code without regard to Sections 424(a)(1) and
(2) thereof.

              2.49      "TAX BENEFIT" means an actual decrease in the Company's
liability for taxes in any period.

              2.50      "TEN-PERCENT STOCKHOLDER" means an Eligible Individual,
who, at the time an Incentive Stock Option is to be granted to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, or of a Parent or a Subsidiary.

              2.51      "TERMINATION OF EMPLOYMENT" means the later of (i)
severance of the employer-employee relationship with the Company or any
Subsidiary or (ii) the resignation, removal or termination of an officer or
Director of the Company or any Subsidiary.

              2.52      "TRANSITION PERIOD" means the period beginning with an
Initial Public Offering and ending as of the earlier of (i) the date of the
first annual meeting of stockholders of the Company at which Directors are to be
elected that occurs after the close of the third (3rd) calendar year following
the calendar year in which the Initial Public Offering occurs, (ii) the
expiration of the Plan, (iii) a material modification of the Plan within the
meaning of Treasury Regulation Section 1.162-27(h)(1)(iii), or (iv) the
issuance of all Shares that have been allocated under the Plan.

              2.53      "VOTING SECURITIES" means all outstanding voting
securities of the Company entitled to vote generally in the election of the
Board of Directors.

         3.   ADMINISTRATION.

              3.1       The Plan shall be administered by the Committee, which
shall be appointed by the Board. The Committee shall hold meetings at such times
as may be necessary for the proper administration of the Plan. The Committee
shall keep minutes of its meetings. A quorum shall consist of a majority of the
members of the Committee and a majority of a quorum may authorize any action.
Any decision or determination reduced to writing and signed by all of the
members of the Committee shall be as fully effective as if made by a majority
vote at a meeting duly called and held. The Committee shall consist of at least
two (2) Directors and may consist of the entire Board; PROVIDED, HOWEVER, that
from and after the date of an Initial Public Offering, (A) if the Committee
consists of less than the entire Board, each member shall be a Nonemployee
Director and (B) to the extent necessary for any Option or Award intended to
qualify as Performance-Based Compensation to so qualify, each member of the
Committee, whether or not it consists of the entire Board, shall be an Outside
Director.


                                      -9-

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              3.2       For purposes of the preceding sentence, if one or more
members of the Committee is not a Nonemployee Director and, if necessary for any
Option or Award intended to qualify as Performance-Based Compensation to so
qualify, an Outside Director, but recuses himself or herself or abstains from
voting with respect to a particular action taken by the Committee, then the
Committee, with respect to that action, shall be deemed to consist only of the
members of the Committee who have not recused themselves or abstained from
voting. Subject to applicable law, the Committee may delegate its authority
under the Plan to any other person or persons.

              3.3       No member of the Committee shall be liable for any
action, failure to act, determination or interpretation made in good faith with
respect to this Plan or any transaction hereunder. The Company hereby agrees to
indemnify each member of the Committee for all costs and expenses and, to the
extent permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or otherwise
dealing with any claim, cause of action or dispute of any kind arising in
connection with any actions in administering this Plan or in authorizing or
denying authorization to any transaction hereunder.

              3.4       Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time to:

                        (a)  determine those Eligible Individuals to whom
Options shall be granted under the Plan and the number of such Options to be
granted and to prescribe the terms and conditions (which need not be identical)
of each such Option, including the purchase price per Share subject to each
Option, and make any amendment or modification to any Option Agreement
consistent with the terms of the Plan;

                        (b)  select those Eligible Individuals to whom Awards
shall be granted under the Plan and to determine the number of Shares in respect
of which each Award is granted, the terms and conditions (which need not be
identical) of each such Award, including the restrictions or Performance
Objectives relating to Awards and the maximum value of any Award, and make any
amendment or modification to any Award Agreement consistent with the terms of
the Plan;

                        (c)  construe and interpret the Plan and the Options and
Awards granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, without limitation,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable, including so that the Plan and the
operation of the Plan complies with the Code to the extent applicable and other
applicable law, and otherwise to make the Plan fully effective. All decisions
and determinations by the Committee in the exercise of this power shall be


                                      -10-

<PAGE>


final, binding and conclusive upon the Company, its Subsidiaries, the Optionees
and Grantees, and all other persons having any interest therein;

                        (d)  determine the duration and purposes for leaves of
absence which may be granted to an Optionee or Grantee on an individual basis
without constituting a termination of employment or service for purposes of the
Plan;

                        (e)  exercise its sole discretion with respect to the
powers and rights granted to it as set forth in the Plan; and

                        (f)  generally, exercise such powers and to perform such
acts as are deemed necessary or advisable to promote the best interests of the
Company with respect to the Plan.

         4.   STOCK SUBJECT TO THE PLAN; GRANT LIMITATIONS.

              4.1       The aggregate number of Shares that may be made the
subject of Options and Awards granted under the Plan shall not exceed 2,000,000
plus the additional Shares described in Section 4.2; PROVIDED, HOWEVER, that the
aggregate maximum number of Shares that may be made the subject of Options and
Awards granted under the Plan shall not exceed 10,000,000; and PROVIDED,
FURTHER, HOWEVER, that in the aggregate, not more than one-third of the number
of allotted Shares may be made the subject of Restricted Stock Awards under
Section 10 of the Plan (other than shares of Restricted Stock made in settlement
of Performance Units pursuant to Section 11.2(b)). Upon a Change in
Capitalization, the maximum number of Shares referred to in the first sentence
of this Section 4.1 shall be adjusted in number and kind pursuant to Section 14.
The Company shall reserve for the purposes of the Plan, out of its authorized
but unissued Shares or out of Shares held in the Company's treasury, or partly
out of each, such number of Shares as shall be determined by the Board.

              4.2       As of January 1 of each year, commencing with the year
2000, the aggregate number of Shares that may be made the subject of Options and
Awards granted under the Plan shall automatically increase by a number equal to
an amount determined by the Committee in its sole discretion.

              4.3       Upon the granting of an Option or an Award, the number
of Shares available under Section 4.1 for the granting of further Options and
Awards shall be reduced as follows:

                        (a)  In connection with the granting of an Option or an
Award (other than the granting of a Performance Unit denominated in dollars),
the number of Shares shall be reduced by the number of Shares in respect of
which the Option or Award is granted or denominated.


                                      -11-

<PAGE>


                        (b)  In connection with the granting of a Performance
Unit denominated in dollars, the number of Shares shall be reduced by an amount
equal to the quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.

              4.4       Whenever any outstanding Option or Award or portion
thereof expires, is canceled, or is otherwise terminated for any reason without
having been exercised or payment having been made in respect of the entire
Option or Award, the Shares allocable to the expired, canceled, or otherwise
terminated portion of the Option or Award may again be the subject of Options or
Awards granted hereunder.

         5.   OPTION GRANTS FOR ELIGIBLE INDIVIDUALS.

              5.1       AUTHORITY OF COMMITTEE. Subject to the provisions of the
Plan, the Committee shall have full and final authority to select those Eligible
Individuals who will receive Options, the terms and conditions of which shall be
set forth in an Agreement; PROVIDED, HOWEVER, that no Eligible Individual shall
receive any Incentive Stock Options unless he is an employee of the Company, a
Parent or a Subsidiary at the time the Incentive Stock Option is granted.

              5.2       PURCHASE PRICE. The purchase price (which may be greater
than, less than or equal to the Fair Market Value on the date of grant) or the
manner in which the purchase price is to be determined for Shares under each
Option shall be determined by the Committee and set forth in the Agreement
pursuant to which each Option is granted; PROVIDED, HOWEVER, that the purchase
price per Share under each Incentive Stock Option shall not be less than 100% of
the Fair Market Value of a Share on the date the Option is granted (110% in the
case of an Incentive Stock Option granted to a Ten-Percent Stockholder).

              5.3       MAXIMUM DURATION. Options granted hereunder shall be for
such term as the Committee shall determine, PROVIDED, HOWEVER, that an Option
shall not be exercisable after the expiration of ten (10) years from the date it
is granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder); PROVIDED, FURTHER, HOWEVER, that the Committee may
provide that an Option (other than an Incentive Stock Option) may, upon the
death of the Optionee, be exercised for up to one (1) year following the date of
the Optionee's death even if such period extends beyond ten (10) years from the
date the Option is granted. The Committee may, subsequent to the granting of any
Option, extend the term thereof, but in no event shall the term as so extended
exceed the maximum term provided for in the preceding sentence.

              5.4       EXERCISABILITY. Subject to Sections 5.5 and 7.5, each
Option shall become exercisable in such installments (which need not be equal)
and at such times as


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<PAGE>


may be designated by the Committee and set forth in the Agreement. To the extent
not exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
Option expires. The Committee may accelerate the exercisability of any Option or
portion thereof at any time.

              5.5       TERMINATION. Subject to Sections 7.5 and 13 and unless
otherwise provided by the Committee, in its sole discretion, in the applicable
Agreement, the following provisions shall apply to Options upon a Termination of
Employment:

                        (a)  Subject to Section 5.3, unless otherwise determined
by the Committee at the time of grant (and set forth in the applicable
Agreement) or at a later date, except in the case of Disability, retirement on
or after the Optionee's Normal Retirement Date and death as provided in Sections
5.5(c) and 5.5(d) below, upon an Optionee's Termination of Employment with the
Company, a Parent or a Subsidiary for any reason other than a termination for
Cause, any unexercised Option held by such Optionee shall expire three (3)
months after the Optionee has a Termination of Employment and such Option may
only be exercised by the Optionee or his or her Beneficiary to the extent that
the Option or a portion thereof was exercisable on the date of Termination of
Employment; PROVIDED, HOWEVER, that no Option may be exercised after the
expiration date specified for the particular Option in the Agreement.

                        (b)  If the Optionee's Termination of Employment arises
as a result of a termination for Cause, then, unless the Committee determines
otherwise at the time of the Termination of Employment, any unexercised Options
(whether or not vested and exercisable) held by such Optionee shall terminate
and expire concurrently with the Optionee's Termination of Employment and no
rights thereunder may be exercised.

                        (c)  Subject to Section 5.3, unless otherwise determined
by the Committee at the time of grant (and set forth in the applicable
Agreement) or at a later date, if an Optionee suffers a Disability or retires on
or after the Optionee's Normal Retirement Date, any unexercised Option held by
such disabled or retired Optionee shall expire one (1) year after the Disability
Date or date of Termination of Employment by reason of retirement, as the case
may be, and such Option may only be exercised by the Optionee or his or her
guardian or legal representative to the extent that the Option or a portion
thereof was exercisable on the Disability Date or the date of Termination of
Employment by reason of retirement, as the case may be; PROVIDED, HOWEVER, no
Option may be exercised after the expiration date specified for the particular
Option in the Agreement.

                        (d)  Subject to Section 5.3, unless otherwise determined
by the Committee at the time of grant (and set forth in the applicable
Agreement) or at a later


                                      -13-

<PAGE>


date, if an Optionee dies while still employed by the Company, the Options which
the Optionee was entitled to exercise on the date of the Optionee's death may be
exercised at any time after the Optionee's death by the Optionee's Beneficiary;
PROVIDED, HOWEVER, that no Option may be exercised after the earlier of: (i) one
(1) year after the Optionee's death or (ii) the expiration date specified for
the particular Option in the Agreement. If an Optionee dies after his or her
Termination of Employment, then the Options which the Optionee was entitled to
exercise on the date of the Optionee's death may be exercised by his or her
Beneficiary within the period specified in Sections 5.5(a) or 5.5(c), as the
case may be.

                        (e)  Subject to Section 5.3 and notwithstanding any
other provision of this Section 5.5, upon an Optionee's Termination of
Employment at any time on, or within one (1) year after, the occurrence of a
Change in Control, each Option held by the Optionee that was exercisable as of
the date of such Termination of Employment shall remain exercisable for a period
ending not before the earlier of (A) the first anniversary of the Termination of
Employment or (B) the expiration of the stated term of the Option.

                        (f)  Unless otherwise determined by the Committee at the
time of grant (and set forth in the applicable Agreement) or at a later date,
the Option (or portion thereof), to the extent not yet vested and exercisable as
of the date of the Optionee's Termination of Employment, shall terminate
immediately upon such date.

              5.6       DEFERRED DELIVERY OF OPTION SHARES. The Committee may,
in its sole discretion, permit Optionees to elect to defer the issuance of
Shares upon the exercise of one or more Nonqualified Stock Options granted
pursuant to the Plan. The terms and conditions of such deferral shall be
determined at the time of the grant of the Option or thereafter and shall be set
forth in the Agreement evidencing the Option.

              5.7       MODIFICATION. No modification of a Option shall
adversely alter or impair any rights or obligations under the Option without the
Optionee's consent.

              5.8       LIMITATIONS ON INCENTIVE STOCK OPTIONS. To the extent
that the aggregate Fair Market Value (determined as of the date of the grant)
of Shares with respect to which Incentive Stock Options granted under the
Plan and "incentive stock options" (within the meaning of Section 422 of the
Code) granted under all other plans of the Company or its Subsidiaries (in
either case determined without regard to this Section 5.8) are exercisable by
an Optionee for the first time during any calendar year exceeds $100,000,
such Incentive Stock Options shall be treated as Nonqualified Stock Options.
In applying the limitation in the preceding sentence in the case of multiple
Option grants, Options which were intended to be Incentive Stock Options
shall be treated as

                                      -14-

<PAGE>

Nonqualified Stock Options according to the order in which they were granted
such that the most recently granted Options are first treated as Nonqualified
Stock Options.

         6.   OPTION GRANTS FOR NONEMPLOYEE DIRECTORS.

              6.1       GRANT. Formula Options shall be granted (i) to a
Nonemployee Director who becomes a member of the Board after June 17, 1999 upon
election or appointment and (ii) to all Nonemployee Directors who are members of
the Board as follows:

                        (a)  INITIAL GRANT. Each Nonemployee Director who
becomes a Director after June 17, 1999 shall, upon becoming a Director, be
granted a Formula Option in respect of 5,000 Shares.

                        (b)  ANNUAL GRANT. Each Nonemployee Director shall be
granted a Formula Option in respect of 5,000 Shares on the first business day of
January in each year that the Plan is in effect provided that the Nonemployee
Director is a Director on such date; PROVIDED, HOWEVER, that a Nonemployee
Director shall not be entitled to receive an annual grant pursuant to this
Section 6.1(b) for the calendar year in which such Nonemployee Director is first
elected or appointed to the Board.

                        (c)  TERMS AND CONDITIONS. All Formula Options granted
pursuant to this Section 6 shall be evidenced by an Agreement containing such
other terms and conditions not inconsistent with the provisions of this Plan as
determined by the Board; PROVIDED, HOWEVER, that such terms shall not vary the
price, amount or timing of Formula Options provided under this Section 6,
including provisions dealing with vesting, forfeiture and termination of such
Formula Options.

              6.2       PURCHASE PRICE. The purchase price for Shares under each
Formula Option shall be equal to 100% of the Fair Market Value of such Shares on
the date the Formula Option is granted.

              6.3       VESTING. Each Formula Option shall be fully vested and
exercisable on the date of grant; PROVIDED, HOWEVER, that the Optionee is a
Director on such date.

              6.4       DURATION. Subject to Section 7.5, each Formula Option
shall terminate on the date which is the tenth (10th) anniversary of the date of
grant; PROVIDED, HOWEVER, that if an Optionee dies while a Director and prior to
such tenth (10th) anniversary, the Formula Option may be exercised for up to one
(1) year following the date of the Optionee's death even if such period extends
beyond ten (10) years from the date the Formula Option is granted, unless
terminated earlier as follows:


                                      -15-

<PAGE>


                        (a)  If an Optionee's service as a Director terminates
for any reason other than Disability, death or Cause, the Optionee may for a
period of three (3) months after such termination exercise his or her Formula
Option, after which time the Formula Option shall automatically terminate in
full.

                        (b)  If an Optionee's service as a Director terminates
by reason of the Optionee's resignation or removal from the Board due to
Disability, the Optionee or his or her guardian or legal representative may, for
a period of one (1) year after such termination, exercise his or her Formula
Option, after which time the Formula Option shall automatically terminate in
full.

                        (c)  If an Optionee's service as a Director terminates
for Cause, the Formula Option granted to the Optionee hereunder shall
immediately terminate in full and no rights thereunder may be exercised.

                        (d)  If an Optionee dies while a Director, the Formula
Option may be exercised at any time after the Optionee's death by the Optionee's
Beneficiary; PROVIDED, HOWEVER, that no Formula Option may be exercised after
the first anniversary of the Optionee's death. If an Optionee dies after his or
her service as a Director terminates, then the Formula Option may be exercised
by his or her Beneficiary within the period specified in Sections. 6.4(a) or 6.4
(b), as the case may be.

                        (e)  Notwithstanding any other provision of this Section
6.4, in the event an Optionee's service as a Director of the Company is
terminated at any time on, or within one (1) year after, the occurrence of a
Change in Control, each Formula Option held by the Optionee shall remain
exercisable for a period ending not before the earlier of (A) the first
anniversary of the termination of the Optionee's employment or service or (B)
the expiration of the stated term of the Formula Option.

         7.   TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS.

              7.1       ADDITIONAL TERMS. The provisions of this Section 7 shall
apply to all Options.

              7.2       NON-TRANSFERABILITY. No Option granted hereunder shall
be transferable by the Optionee to whom it is granted otherwise than by will or
by the laws of descent and distribution or, in the case of an Option other than
an Incentive Stock Option, in the Committee's sole discretion, to a spouse or
former spouse in a transfer described in Section 1041(a) of the Code (a "Code
1041 Transfer"), and, except with respect to an Option transferred pursuant to a
Code 1041 Transfer, an Option shall be exercisable during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal representative.
Notwithstanding the foregoing, the Committee may set


                                      -16-

<PAGE>


forth in the Agreement evidencing an Option (other than an Incentive Stock
Option) at the time of grant or thereafter, that the Option may be transferred
to members of the Optionee's immediate family, to trusts solely for the benefit
of such immediate family members and to partnerships in which such family
members and/or trusts are the only partners. Following transfer, for purposes of
this Plan, a transferee of an Option shall be deemed to be the Optionee;
provided that the Option shall be exercisable by the transferee only to the
extent and for such periods that the Option would have been exercisable if held
by the original Optionee. For this purpose, immediate family means the
Optionee's spouse, parents, children, stepchildren and grandchildren and the
spouses of such parents, children, stepchildren and grandchildren. The terms of
an Option shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs and successors of the Optionee.

              7.3       METHOD OF EXERCISE.

                        (a)  The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and, to the extent applicable, accompanied by payment therefor and
otherwise in accordance with such procedures which may be approved by the
Committee from time to time, and in accordance with the Agreement pursuant to
which the Option was granted; PROVIDED, HOWEVER, that Options may not be
exercised by an Optionee for twelve months following a hardship distribution to
the Optionee, to the extent such exercise is prohibited under Treasury
Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4). The purchase price for any Shares
purchased pursuant to the exercise of an Option shall be paid, as determined by
the Committee in its sole discretion, by any one or a combination of the
following: (a) delivery of cash or a check to the order of the Company or (b)
transferring to the Company Shares that have been held by the Optionee for at
least six (6) months (or such lesser period as may be permitted by the
Committee) prior to the exercise of the Option and that have a Fair Market Value
equal in amount to the purchase price, such transfer to be upon such terms and
conditions as determined by the Committee. In addition, both Options and Formula
Options may be exercised through a registered broker-dealer pursuant to such
cashless exercise procedures which are, from time to time, deemed acceptable by
the Committee. Any Shares transferred to the Company as payment of the purchase
price under an Option shall be valued at their Fair Market Value on the day
preceding the date of exercise of such Option. If requested by the Committee,
the Optionee shall deliver the Agreement evidencing the Option to the Secretary
of the Company who shall endorse thereon a notation of such exercise and return
such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that may be
purchased upon exercise shall be rounded to the nearest number of whole Shares.


                                      -17-

<PAGE>


                        (b)  If the Fair Market Value of the Shares with respect
to which the Option is being exercised exceeds the purchase price of such
Option, an Optionee may, instead of exercising an Option as provided in Section
7.3(a), request that the Committee authorize payment to the Optionee of the
difference between the Fair Market Value of part or all of the Shares which are
the subject of the Option and the purchase price of the Option, such difference
to be determined as of the date the Committee receives the request from the
Optionee. The Committee, in its sole discretion, may grant or deny such a
request from an Optionee with respect to part or all of the Shares as to which
the Option is then exercisable and, to the extent granted, shall direct the
Company to make the payment to the Optionee either in cash or in Shares or in
any combination thereof; PROVIDED, HOWEVER, that the payment in Shares shall be
based upon the Fair Market Value of Shares as of the date the Committee received
the request from the Optionee. An Option shall be deemed to have been exercised
and shall be canceled to the extent that the Committee grants a request pursuant
to this Section 7.3(b).

              7.4       RIGHTS OF OPTIONEES. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until (a)
the Option shall have been exercised pursuant to the terms thereof, (b) the
Company shall have issued and delivered Shares to the Optionee, and (c) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.

              7.5       EFFECT OF CHANGE IN CONTROL.

                        (a)  Notwithstanding anything contained in Sections 5
or 6 to the contrary, in the event of a Change in Control, the Committee, in
its sole discretion, may provide in writing in connection with, or in
contemplation of, any such Change in Control for any or all of the following
alternatives (separately or in any combination): (i) for the assumption by
the Successor Corporation of the Options theretofore granted or the
substitution by such corporation for such Options of new options covering the
stock of the Successor Corporation with appropriate adjustments as to the
number and kinds of shares and the purchase prices; (ii) for the continuation
of the Plan in which event the Plan and the Options shall continue under such
terms as may be provided; (iii) for the accelerated vesting of the Options;
or (iv) for the payment in cash upon the surrender to the Company for
cancellation of any Option or portion of an Option to the extent vested and
not yet exercised in an amount equal to the excess, if any, of (i) (A) in the
case of a Nonqualified Stock Option, the greater of (1) the Fair Market
Value, on the date preceding the date of surrender, of the Shares subject to
the Option or portion thereof surrendered or (2) the Adjusted Fair Market
Value of the Shares subject to the Option or portion thereof surrendered or
(B) in the case of an Incentive Stock Option, the Fair Market Value, on the
date preceding the date of surrender, of the Shares subject to the Option or
portion thereof

                                      -18-

<PAGE>

surrendered, over (ii) the aggregate purchase price for such Shares under the
Option or portion thereof surrendered. Any vesting of an Option or portion of
an Option pursuant to this Section 7.5(a) or surrender of an Option for a
cash payment shall be conditioned upon the consummation of the Change in
Control and shall be effective only immediately before the consummation of
the Change in Control. Upon consummation of the Change in Control, the Plan
and all outstanding but unexercised Options shall terminate, except to the
extent provision is made in writing in connection with such transaction for
continuation of the Plan, or the assumption or substitution of such Options.
The Committee shall send written notice of an event that will result in such
a termination to all individuals who hold Options not later than the time at
which the Company gives notice thereof to its stockholders.

                        (b)  To the extent set forth in the applicable
Agreement, if, as a result of a Change in Control transaction, an Option
intended to qualify as an Incentive Stock Option fails to so qualify SOLELY
because of the failure to meet the holding requirements of Code Section
422(a)(1) (a "Disqualifying Disposition"), the Company shall make a cash payment
to the Optionee equal to the amount which will, after taking into account all
taxes imposed on the Disqualifying Disposition and the receipt of such payment,
leave the Optionee in the same after-tax position the Optionee would have been
in had the Code Section 422(a)(1) holding requirements been met at the time of
the Disqualifying Disposition; PROVIDED, HOWEVER, that no payment described in
this Section shall exceed the Tax Benefit to the Company resulting from
deductions relating to ordinary income recognized by the Optionee as a result of
the Disqualifying Disposition and the receipt of such payment. The payment
described in this Section shall be made by the Company within thirty (30) days
of the filing by the Company of the federal tax return which includes the tax
items associated with the income recognized by the Optionee as a result of the
Disqualifying Disposition (or, if the Tax Benefit described in the preceding
sentence is not realized until a later year, within thirty (30) days of the
filing by the Company of the federal tax return with respect to which such Tax
Benefit is realized); PROVIDED, HOWEVER, that if more than one Optionee is
entitled to a cash payment pursuant to this Section 7.5(b) in any single tax
year and the Tax Benefit realized by the Company in such year with respect to
all such Optionees is less than the aggregate amount of the payments due to such
Optionees hereunder, then (i) each such Optionee shall receive a portion of such
cash payment equal to an amount determined by multiplying the amount of the Tax
Benefit realized by the Company in such year by a fraction the numerator of
which is equal to the amount of payment due to such Optionee and the denominator
of which is equal to the aggregate amount due to all such Optionees entitled to
a payment hereunder, and (ii) subject to further application of this proviso,
shall be entitled to receive the remaining portion within thirty (30) days of
the filing by the Company of the federal tax return with respect to which such
Tax Benefit is realized.


                                      -19-

<PAGE>


                        (c)  To the extent set forth in the applicable Agreement
and provided that an Optionee is not entitled to payment under Section 7.5(b)
hereof, if, as a result of a Change in Control transaction, an Option intended
to qualify as an Incentive Stock Option fails to so qualify SOLELY because the
vesting of the Option is accelerated pursuant to Section 7.5(a) and such
acceleration causes the aggregate fair market value (determined at the time the
Option is granted) of the Shares with respect to which Options are exercisable
for the first time by an Optionee during the calendar year in which such vesting
occurs to exceed $100,000, within the meaning of Code Section 422(d) (a
"Disqualified Option"), then, upon exercise of such Disqualified Option, the
Company shall make a cash payment to the Optionee equal to the amount which
will, after taking into account all taxes imposed on the exercise of such
Disqualified Option and the receipt of such payment, leave the Optionee in the
same after-tax position the Optionee would have been in had the Disqualified
Option continued to qualify as an Incentive Stock Option on the date of exercise
and the Optionee sold the Shares received upon exercise of the Option at their
Fair Market Value on the date of exercise; PROVIDED, HOWEVER, that no payment
described in this Section shall exceed the Tax Benefit to the Company resulting
from deductions relating to ordinary income recognized by the Optionee as a
result of exercising the Disqualified Option and the receipt of such payment.
The payment described in this Section shall be made by the Company within thirty
(30) days of the filing by the Company of the federal tax return which includes
the tax items associated with the income recognized by the Optionee as a result
of exercising the Disqualified Option (or, if the Tax Benefit described in the
preceding sentence is not realized until a later year, within thirty (30) days
of the filing by the Company of the federal tax return with respect to which
such Tax Benefit is realized); PROVIDED, HOWEVER, that if more than one Optionee
is entitled to a cash payment pursuant to this Section 7.5(c) in any single tax
year and the Tax Benefit realized by the Company in such year with respect to
all such Optionees is less than the aggregate amount of the payments due to such
Optionees hereunder, then (i) each such Optionee shall receive a portion of such
cash payment equal to an amount determined by multiplying the amount of the Tax
Benefit realized by the Company in such year by a fraction the numerator of
which is equal to the amount of payment due to such Optionee and the denominator
of which is equal to the aggregate amount due to all such Optionees entitled to
a payment hereunder, and (ii) subject to further application of this proviso,
shall be entitled to receive the remaining portion within thirty (30) days of
the filing by the Company of the federal tax return with respect to which such
Tax Benefit is realized.


                                      -20-

<PAGE>


         8.   STOCK APPRECIATION RIGHTS.

              The Committee may in its sole discretion, either alone or in
connection with the grant of an Option, grant Stock Appreciation Rights in
accordance with the Plan, the terms and conditions of which shall be set forth
in an Agreement. If granted in connection with an Option, a Stock Appreciation
Right shall cover the same Shares covered by the Option (or such lesser number
of Shares as the Committee may determine) and shall, except as provided in this
Section 8, be subject to the same terms and conditions as the related Option.

              8.1       TIME OF GRANT. A Stock Appreciation Right may be granted
(a) at any time if unrelated to an Option, or (b) if related to an Option,
either at the time of grant, or (except in the case of an Incentive Stock
Option) at any time thereafter during the term of the Option.

              8.2       STOCK APPRECIATION RIGHT RELATED TO AN OPTION.

                        (a)  EXERCISE. Subject to Section 8.9, a Stock
Appreciation Right granted in connection with an Option shall be exercisable at
such time or times and only to the extent that the related Options are
exercisable (including, without limitation, exercisability upon Termination of
Employment or a Change in Control), and will not be transferable except to the
extent the related Option may be transferable. A Stock Appreciation Right
granted in connection with an Incentive Stock Option shall expire no later than
the expiration of the related Incentive Stock Option and shall be exercisable
only if the Fair Market Value of a Share on the date of exercise exceeds the
purchase price of the Option specified in the related Incentive Stock Option
Agreement.

                        (b)  TREATMENT OF RELATED OPTIONS AND STOCK APPRECIATION
RIGHTS UPON EXERCISE. Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of the
number of Shares as to which the Stock Appreciation Right is exercised, and upon
the exercise of an Option granted in connection with a Stock Appreciation Right,
the Stock Appreciation Right shall be canceled to the extent of the number of
Shares as to which the Option is exercised or surrendered.

              8.3       STOCK APPRECIATION RIGHT UNRELATED TO AN OPTION.

                        (a)  TERMS. Stock Appreciation Rights unrelated to
Options shall contain such terms and conditions as to exercisability (subject to
Section 8.9), vesting and duration as the Committee shall determine, but in no
event shall they have a term of greater than ten (10) years; PROVIDED, HOWEVER,
that the Committee may provide that Stock Appreciation right may, upon the death
of the Grantee, be exercised for up to one


                                      -21-

<PAGE>


(1) year following the date of the Grantee's death even if such period extends
beyond ten (10) years from the date the Stock Appreciation Right is granted.

                        (b)  TERMINATION. Subject to Section 13 and except as
provided in Section 8.9, and unless otherwise provided by the Committee, in its
sole discretion, in the applicable Agreement, upon a Grantee's Termination of
Employment, a Stock Appreciation Right shall be exercisable by the Grantee to
the same extent that an Option would be exercisable by an Optionee upon the
Optionee's Termination of Employment under the provisions of Section 5.5;
PROVIDED, HOWEVER, no Stock Appreciation Right may be exercised after the
expiration date specified for the particular Stock Appreciation Right in the
applicable Agreement.

              8.4       AMOUNT PAYABLE. Subject to Section 8.7, upon the
exercise of a Stock Appreciation Right, the Grantee shall be entitled to receive
an amount determined by multiplying (x) the excess of the Fair Market Value of a
Share on the date preceding the date of exercise of such Stock Appreciation
Right over (A) in the case of a Stock Appreciation Right granted in connection
with an Option, the per Share purchase price under the related Option, or (B) in
the case of a Stock Appreciation Right unrelated to an Option, the Fair Market
Value of a Share on the date the Stock Appreciation Right was granted, by (y)
the number of Shares as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Committee may limit in any manner
the amount payable with respect to any Stock Appreciation Right by including
such a limit in the Agreement evidencing the Stock Appreciation Right at the
time it is granted.

              8.5       NON-TRANSFERABILITY. No Stock Appreciation Right shall
be transferable by the Grantee to whom it was granted otherwise than by will or
by the laws of descent and distribution or, in the Committee's sole discretion,
(except in the case of a Stock Appreciation Right granted in connection with an
Incentive Stock Option), to a spouse or former spouse in a transfer described in
Section 1041(a) of the Code (a "Code 1041 Transfer"), and, except with respect
to a Stock Appreciation Right transferred pursuant to a Code 1041 Transfer, such
Stock Appreciation Right shall be exercisable during the lifetime of such
Grantee only by the Grantee or his or her guardian or legal representative. The
terms of such Stock Appreciation Right shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of the
Grantee.

              8.6       METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercised by a Grantee only by a written notice delivered in person or by mail
to the Secretary of the Company at the Company's principal executive office,
specifying the number of Shares with respect to which the Stock Appreciation
Right is being exercised. If requested by the Committee, the Grantee shall
deliver the Agreement evidencing the Stock Appreciation Right being exercised
and the Agreement evidencing any related


                                      -22-

<PAGE>


Option to the Secretary of the Company who shall endorse thereon a notation of
such exercise and return such Agreement to the Grantee.

              8.7       FORM OF PAYMENT. Payment of the amount determined under
Section 8.4 may be made in the sole discretion of the Committee solely in whole
Shares in a number determined at their Fair Market Value on the date preceding
the date of exercise of the Stock Appreciation Right, or solely in cash, or in a
combination of cash and Shares. If the Committee decides to make full payment in
Shares and the amount payable results in a fractional Share, no fractional
Shares (or cash in lieu thereof) shall be issued upon the exercise of the Stock
Appreciation Right and the number of Shares that will be delivered shall be
rounded to the nearest number of whole Shares.

              8.8       MODIFICATION. No modification of an Award shall
adversely alter or impair any rights or obligations under the Agreement without
the Grantee's consent.

              8.9       EFFECT OF CHANGE IN CONTROL. Notwithstanding anything
contained in this Section 8 to the contrary, in the event of a Change in
Control, the Committee, in its sole discretion, may provide in writing in
connection with, or in contemplation of, any such Change in Control for any
or all of the following alternatives (separately or in any combination): (i)
for the assumption by the Successor Corporation of the Stock Appreciation
Rights theretofore granted or the substitution by such corporation for such
Stock Appreciation Rights of new stock appreciation rights covering the stock
of the Successor Corporation with appropriate adjustments as to the number
and kinds of shares and the purchase prices; (ii) for the continuation of the
Plan in which event the Plan and the Stock Appreciation Rights shall continue
under such terms as may be provided; (iii) for the accelerated vesting of the
Stock Appreciation Rights; or (iv) with respect to a Stock Appreciation Right
unrelated to an Option, for the payment in cash upon the surrender to the
Company for cancellation of any such Stock Appreciation Right or portion of a
Stock Appreciation Right to the extent vested and not yet exercised in an
amount equal to the excess, if any, of (A) the greater of (i) the Fair Market
Value, on the date preceding the date of surrender, of the underlying Shares
subject to the Stock Appreciation Right or portion thereof surrendered and
(ii) the Adjusted Fair Market Value, on the date preceding the date of
surrender, of the Shares over (B) the aggregate Fair Market Value, on the
date the Stock Appreciation Right was granted, of the Shares subject to the
Stock Appreciation Right or portion thereof surrendered. Any vesting of Stock
Appreciation Rights pursuant to this Section 8.9 or surrender of a Stock
Appreciation Right for a cash payment shall be conditioned upon the
consummation of the Change in Control and shall be effective only immediately
before the consummation of the Change in Control. Upon consummation of the
Change in Control, the Plan and all outstanding but unexercised Stock
Appreciation Rights shall terminate, except to the extent provision is made
in writing in connection with such transaction for the continuation of the
Plan, or the assumption or substitution of such Stock Appreciation

                                      -23-

<PAGE>

Rights. The Committee shall send written notice of an event that will result
in such a termination to all individuals who hold Stock Appreciation Rights
not later than the time at which the Company gives notice thereof to its
stockholders.

         9.   DIVIDEND EQUIVALENT RIGHTS.

              The Committee may in its sole discretion grant Dividend
Equivalent Rights to Eligible Individuals in tandem with an Option or Award or
as a separate Award. The terms and conditions (including, without limitation,
terms and conditions relating to a Change in Control) applicable to each
Dividend Equivalent Right shall be specified in the Agreement under which the
Dividend Equivalent Right is granted. In the sole discretion of the Committee,
amounts payable in respect of Dividend Equivalent Rights may be payable
currently or deferred until the lapsing of restrictions on such Dividend
Equivalent Rights or until the vesting, exercise, payment, settlement or other
lapse of restrictions on the Option or Award to which the Dividend Equivalent
Rights relate. In the event that the amount payable in respect of Dividend
Equivalent Rights are to be deferred, the Committee shall determine whether such
amounts are to be held in cash or reinvested in Shares or deemed (notionally) to
be reinvested in Shares. If amounts payable in respect of Dividend Equivalent
Rights are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its sole discretion, may
determine. In the sole discretion of the Committee, Dividend Equivalent Rights
may be settled in cash or Shares or a combination thereof, in a single
installment or multiple installments. With respect to Dividend Equivalent Rights
granted in tandem with an Option, the Agreement may provide that the Optionee
may elect to have amounts payable in respect of such Dividend Equivalent Rights
applied against the purchase price of such Option. To the extent necessary for
any Dividend Equivalent Right intended to qualify as Performance-Based
Compensation under Section 162(m) of the Code to so qualify, the terms and
conditions of the Dividend Equivalent Right shall be such that payment of the
Dividend Equivalent Right is contingent upon attainment of specified Performance
Objectives within the Performance Cycle, as provided for in Section 11, and such
Dividend Equivalent Right shall be treated as a Performance Award for purposes
of Sections 11 and 16.

         10.  RESTRICTED STOCK.

              10.1      GRANT. The Committee may in its sole discretion grant
Awards to Eligible Individuals of Restricted Stock, which shall be evidenced by
an Agreement between the Company and the Grantee. Each Agreement shall contain
such restrictions, terms and conditions as the Committee may, in its sole
discretion, determine and (without limiting the generality of the foregoing)
such Agreements may require that an appropriate


                                      -24-

<PAGE>


legend be placed on Share certificates. Awards of Restricted Stock shall be
subject to the terms and provisions set forth below in this Section 10.

              10.2      RIGHTS OF GRANTEE. Shares of Restricted Stock granted
pursuant to an Award hereunder shall be issued in the name of the Grantee as
soon as reasonably practicable after the Award is granted PROVIDED that the
Grantee has executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the sole discretion of the Committee, an escrow agreement
and any other documents which the Committee may require as a condition to the
issuance of such Shares. If a Grantee shall fail to execute the Agreement
evidencing a Restricted Stock Award, the appropriate blank stock powers, an
escrow agreement or any other documents which the Committee may require within
the time period prescribed by the Committee at the time the Award is granted,
the Award shall be null and void. At the sole discretion of the Committee,
Shares issued in connection with a Restricted Stock Award shall be deposited
together with the stock powers with an escrow agent (which may be the Company)
designated by the Committee. Unless the Committee determines otherwise and as
set forth in the Agreement, upon delivery of the Shares to the escrow agent, the
Grantee shall have all of the rights of a stockholder with respect to such
Shares, including the right to vote the Shares and to receive all dividends or
other distributions paid or made with respect to the Shares.

              10.3      NON-TRANSFERABILITY. Until all restrictions upon the
Shares of Restricted Stock awarded to a Grantee shall have lapsed in the manner
set forth in Section 10.4, such Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated, nor
shall they be delivered to the Grantee.

              10.4      LAPSE OF RESTRICTIONS.

                        (a)  GENERALLY. Subject to Section 10.4(b), restrictions
upon Shares of Restricted Stock awarded hereunder shall lapse at such time or
times and on such terms and conditions as the Committee may determine; PROVIDED,
HOWEVER, that except in the case of Shares of Restricted Stock issued in full or
partial settlement of another Award or other earned compensation, such
restrictions shall not fully lapse prior to the third anniversary of the date on
which such Shares of Restricted Stock were granted. The Agreement evidencing the
Award shall set forth any such restrictions.

                        (b)  EFFECT OF CHANGE IN CONTROL. Notwithstanding
anything in this Section 10 to the contrary, in the event of a Change in
Control, the Committee, in its sole discretion, may provide in writing in
connection with, or in contemplation of, any such Change in Control for any or
all of the following alternatives (separately or in any combination): (i) for
the assumption by the Successor Corporation of the shares of Restricted Stock
theretofore granted or the substitution by such corporation for such


                                      -25-

<PAGE>


shares of Restricted Stock of new shares of restricted stock of the Successor
Corporation with appropriate adjustments as to the number and kinds of shares;
(ii) for the continuation of the Plan in which event the Plan and the shares of
Restricted Stock shall continue under such terms as may be provided; or (iii)
for the lapse of all restrictions upon the shares of Restricted Stock. Any
vesting of shares of Restricted Stock pursuant to this Section 10.5(b) shall be
conditioned upon the consummation of the Change in Control and shall be
effective only immediately before the consummation of the Change in Control.

              10.5      TERMS OF RESTRICTED STOCK.

                        (a)  FORFEITURE OF RESTRICTED STOCK. Subject to Sections
10.4(b), 10.5(b) and 13, all Restricted Stock shall be forfeited and returned to
the Company and all rights of the Grantee with respect to such Restricted Stock
shall terminate unless the Grantee continues in the service of the Company as an
employee or director until the expiration of the forfeiture period for such
Restricted Stock and satisfies any and all other conditions set forth in the
Agreement. The Committee, in its sole discretion, shall determine the forfeiture
period (which may, but need not, lapse in installments) and any other terms and
conditions applicable with respect to any Restricted Stock Award.

                        (b)  WAIVER OF FORFEITURE PERIOD. Notwithstanding
anything contained in this Section 10 to the contrary, the Committee may, in its
sole discretion, waive the forfeiture period and any other conditions set forth
in any Agreement under appropriate circumstances (including, without limitation,
the death, Disability or retirement of the Grantee or a material change in
circumstances arising after the date of grant) and subject to such terms and
conditions (including, without limitation, forfeiture of a proportionate number
of the Restricted Stock) as the Committee shall deem appropriate, PROVIDED that
the Grantee shall at that time have completed at least one (1) year of
employment or service after the date of grant.

              10.6      MODIFICATION OR SUBSTITUTION. Subject to the terms of
the Plan, including, without limitation, Section 16, the Committee may modify
outstanding Awards of Restricted Stock or accept the surrender of outstanding
shares of Restricted Stock (to the extent the restrictions on such Shares have
not yet lapsed) and grant new Awards in substitution for them. Notwithstanding
the foregoing, no modification of an Award shall adversely alter or impair any
rights or obligations under the Agreement without the Grantee's consent.

              10.7      TREATMENT OF DIVIDENDS. At the time an Award of Shares
of Restricted Stock is granted, the Committee may, in its sole discretion,
determine that the payment to the Grantee of dividends, or a specified portion
thereof, declared or paid on such Shares by the Company shall be (a) deferred
until the lapsing of the restrictions

                                      -26-

<PAGE>

imposed upon such Shares and (b) held by the Company for the account of the
Grantee until such time. In the event that dividends are to be deferred, the
Committee shall determine whether such dividends are to be reinvested in
Shares (which shall be held as additional Shares of Restricted Stock) or held
in cash. If deferred dividends are to be held in cash, there may be credited
at the end of each year (or portion thereof) interest on the amount of the
account at the beginning of the year at a rate per annum as the Committee, in
its sole discretion, may determine. Payment of deferred dividends in respect
of Shares of Restricted Stock (whether held in cash or as additional Shares
of Restricted Stock), together with interest accrued thereon, if any, shall
be made upon the lapsing of restrictions imposed on the Shares in respect of
which the deferred dividends were paid, and any dividends deferred (together
with any interest accrued thereon) in respect of any Shares of Restricted
Stock shall be forfeited upon the forfeiture of such Shares.

              10.8      DELIVERY OF SHARES. Upon the lapse of the restrictions
on Shares of Restricted Stock, the Committee shall cause a stock certificate to
be delivered to the Grantee with respect to such Shares, free of all
restrictions hereunder.

         11.  PERFORMANCE AWARDS.

              11.1      PERFORMANCE OBJECTIVES

                        (a)  ESTABLISHMENT. Performance Objectives for
Performance Awards may be expressed in terms of (i) earnings per Share, (ii)
Share price, (iii) pre-tax profits, (iv) net earnings, (v) return on equity or
assets, (vi) revenues, (vii) EBITDA (earnings before interest, taxes,
depreciation and amortization), (viii) market share, or market penetration, (ix)
any combination of the foregoing or (x) prior to the end of the Transition
Period, such other criteria as the Committee may determine, and may be
determined before or after accounting changes, special charges, foreign currency
effects, acquisitions, divestitures, or other extraordinary events as determined
by the Committee. Performance Objectives may be in respect of the performance of
the Company, any of its Subsidiaries, any of its Divisions or any combination
thereof. Performance Objectives may be absolute or relative (to prior
performance of the Company or to the performance of one or more other entities
or external indices) and may be expressed in terms of a progression within a
specified range. The Performance Objectives with respect to a Performance Cycle
shall be established in writing by the Committee by the earlier of (x) the date
on which a quarter of the Performance Cycle has elapsed or (y) the date which is
ninety (90) days after the commencement of the Performance Cycle, and in any
event while the performance relating to the Performance Objectives remains
substantially uncertain.

                        (b)  EFFECT OF CERTAIN EVENTS. At the time of the
granting of a Performance Award, or at any time thereafter, in either case to
the extent permitted under


                                      -27-

<PAGE>


Section 162(m) of the Code and the regulations thereunder without adversely
affecting the treatment of the Performance Award as Performance-Based
Compensation, the Committee may provide for the manner in which performance will
be measured against the Performance Objectives (or may adjust the Performance
Objectives) to reflect the impact of specified corporate transactions,
accounting or tax law changes and other extraordinary or nonrecurring events.

                        (c)  DETERMINATION OF PERFORMANCE. Prior to the vesting,
payment, settlement or lapsing of any restrictions with respect to any
Performance Award that is intended to constitute Performance-Based Compensation
made to a Grantee who is subject to Section 162(m) of the Code, the Committee
shall certify in writing that the applicable Performance Objectives have been
satisfied.

              11.2      PERFORMANCE UNITS. The Committee, in its sole
discretion, may grant Awards of Performance Units to Eligible Individuals, the
terms and conditions of which shall be set forth in an Agreement between the
Company and the Grantee. Performance Units may be denominated in Shares or a
specified dollar amount and, contingent upon the attainment of specified
Performance Objectives within the Performance Cycle, represent the right to
receive payment as provided in Section 11.2(b) of (i) in the case of
Share-denominated Performance Units, the Fair Market Value of a Share on the
date the Performance Unit was granted, the date the Performance Unit became
vested or any other date specified by the Committee, (ii) in the case of
dollar-denominated Performance Units, the specified dollar amount or (iii) a
percentage (which may be more than 100%) of the amount described in clause (i)
or (ii) depending on the level of Performance Objective attainment; PROVIDED,
HOWEVER, that, the Committee may at the time a Performance Unit is granted
specify a maximum amount payable in respect of a vested Performance Unit. Each
Agreement shall specify the number of Performance Units to which it relates, the
Performance Objectives which must be satisfied in order for the Performance
Units to vest and the Performance Cycle within which such Performance Objectives
must be satisfied.

                        (a)  VESTING AND FORFEITURE. Subject to Sections 11.1(c)
and 11.4, Performance Units shall become vested in such installments (which need
not be equal) and at such times or times and on such terms, conditions and
satisfaction of Performance Objectives as the Committee may, in its sole
discretion, determine at the time an Award is granted.

                        (b)  PAYMENT OF AWARDS. Subject to Section 11.1(c),
payment to Grantees in respect of vested Performance Units shall be made as soon
as practicable after the last day of the Performance Cycle to which such Award
relates unless the Agreement evidencing the Award provides for the deferral of
payment, in which event the terms and conditions of the deferral shall be set
forth in the Agreement. Subject to Section 11.4,


                                      -28-

<PAGE>


such payments may be made entirely in Shares valued at their Fair Market Value
as of the day preceding the date of payment or such other date specified by the
Committee, entirely in cash, or in such combination of Shares and cash as the
Committee in its sole discretion shall determine at any time prior to such
payment; PROVIDED, HOWEVER, that if the Committee in its sole discretion
determines to make such payment entirely or partially in Shares of Restricted
Stock, the Committee must determine the extent to which such payment will be in
Shares of Restricted Stock and the terms of such Restricted Stock at the time
the Award is granted.


                        (c)  NON-TRANSFERABILITY. Until the vesting of
Performance Units, such Performance Units shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated.

              11.3      PERFORMANCE SHARES. The Committee, in its sole
discretion, may grant Awards of Performance Shares to Eligible Individuals, the
terms and conditions of which shall be set forth in an Agreement between the
Company and the Grantee. Each Agreement may require that an appropriate legend
be placed on Share certificates. Awards of Performance Shares shall be subject
to the following terms and provisions:

                        (a)  RIGHTS OF GRANTEE. The Committee shall provide at
the time an Award of Performance Shares is made the time or times at which the
actual Shares represented by such Award shall be issued in the name of the
Grantee; PROVIDED, HOWEVER, that no Performance Shares shall be issued until the
Grantee has executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the sole discretion of the Committee, an escrow agreement
and any other documents which the Committee may require as a condition to the
issuance of such Performance Shares. If a Grantee shall fail to execute the
Agreement evidencing an Award of Performance Shares, the appropriate blank stock
powers, an escrow agreement and any other documents which the Committee may
require within the time period prescribed by the Committee at the time the Award
is granted, the Award shall be null and void. At the sole discretion of the
Committee, Shares issued in connection with an Award of Performance Shares shall
be deposited together with the stock powers with an escrow agent (which may be
the Company) designated by the Committee. Except as restricted by the terms of
the Agreement, upon delivery of the Shares to the escrow agent, the Grantee
shall have, in the sole discretion of the Committee, all of the rights of a
stockholder with respect to such Shares, including the right to vote the Shares
and to receive all dividends or other distributions paid or made with respect to
the Shares.

                        (b)  NON-TRANSFERABILITY. Until any restrictions upon
the Performance Shares awarded to a Grantee shall have lapsed in the manner set
forth in Sections 11.3(c) or 11.4, such Performance Shares shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they


                                      -29-

<PAGE>


be delivered to the Grantee. The Committee may also impose such other
restrictions and conditions on the Performance Shares, if any, as it deems
appropriate.

                        (c)  LAPSE OF RESTRICTIONS. Subject to Sections 11.1(c)
and 11.4, restrictions upon Performance Shares awarded hereunder shall lapse and
such Performance Shares shall become vested at such time or times and on such
terms, conditions and satisfaction of Performance Objectives as the Committee
may, in its sole discretion, determine at the time an Award is granted.

                        (d)  TREATMENT OF DIVIDENDS. At the time the Award of
Performance Shares is granted, the Committee may, in its sole discretion,
determine that the payment to the Grantee of dividends, or a specified portion
thereof, declared or paid on Shares represented by such Award which have been
issued by the Company to the Grantee shall be (i) deferred until the lapsing of
the restrictions imposed upon such Performance Shares and (ii) held by the
Company for the account of the Grantee until such time. In the event that
dividends are to be deferred, the Committee shall determine whether such
dividends are to be reinvested in Shares (which shall be held as additional
Performance Shares) or held in cash. If deferred dividends are to be held in
cash, there may be credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the year at a rate per
annum as the Committee, in its sole discretion, may determine. Payment of
deferred dividends in respect of Performance Shares (whether held in cash or in
additional Performance Shares), together with interest accrued thereon, if any,
shall be made upon the lapsing of restrictions imposed on the Performance Shares
in respect of which the deferred dividends were paid, and any dividends deferred
(together with any interest accrued thereon) in respect of any Performance
Shares shall be forfeited upon the forfeiture of such Performance Shares.

                        (e)  DELIVERY OF SHARES. Upon the lapse of the
restrictions on Performance Shares awarded hereunder, the Committee shall cause
a stock certificate to be delivered to the Grantee with respect to such Shares,
free of all restrictions hereunder.

              11.4      EFFECT OF CHANGE IN CONTROL. Notwithstanding anything in
this Section 11 to the contrary, in the event of a Change in Control, the
Committee, in its sole discretion, may provide in writing in connection with, or
in contemplation of, any such Change in Control for any or all of the following
alternatives (separately or in any combination): (i) for the assumption by the
Successor Corporation of the Performance Awards theretofore granted or the
substitution by such corporation for such Performance Awards of new performance
awards of the Successor Corporation with appropriate adjustments as to the
applicable performance objectives and, if necessary, the number and kinds of
shares; (ii) for the continuation of the Plan in which event the Plan and the
Performance Awards shall continue under such terms as may be provided; or (iii)
for the vesting of outstanding Performance Awards as if all Performance
Objectives had been


                                      -30-

<PAGE>


satisfied at the maximum level and, in the case of Performance Units which
become vested as a result of a Change in Control, for a payment which may be
made entirely in Shares valued at their Fair Market Value as of the day
preceding the payment, entirely in cash, or in such combination of Shares and
cash as the Committee shall determine in its sole discretion at any time prior
to such payment; provided that such payment shall be made within ten (10)
business days after such Change in Control. Any vesting of Performance Awards
pursuant to this Section 11.4 shall be conditioned upon the consummation of the
Change in Control and shall be effective only immediately before the
consummation of the Change in Control.

              11.5      TERMINATION. Except as provided in Section 13, and
unless otherwise provided by the Committee, in its sole discretion, in the
applicable Agreement, the following provisions shall apply to Performance Awards
upon a Termination of Employment:

                        (a)  TERMINATION OF EMPLOYMENT PRIOR TO END OF
PERFORMANCE CYCLE. Except as provided in Sections 11.5(b) and (d), in the case
of a Grantee's Termination of Employment, prior to the end of a Performance
Cycle, the Grantee will not be entitled to any Performance Awards, and any
Performance Shares shall be forfeited.

                        (b)  DISABILITY, RETIREMENT OR DEATH PRIOR TO END OF
PERFORMANCE CYCLE. Unless otherwise provided by the Committee, in its sole
discretion, in the Agreement, if a Grantee's Disability Date or Termination of
Employment by reason of retirement on or after the Grantee's Normal Retirement
Date or death occurs following at least twelve (12) months of participation in
any Performance Cycle, but prior to the end of a Performance Cycle, the Grantee
or such Grantee's Beneficiary, as the case may be, shall be entitled to receive
a pro-rata share of his or her Performance Award as determined under Subsection
(c).

                        (c)  PRO-RATA PAYMENT.

                             (i)       PERFORMANCE UNITS. With respect to
Performance Units, the amount of any payment made to a Grantee (or Beneficiary)
under circumstances described in Section 11.5(b) will be the amount determined
by multiplying the amount of the Performance Units payable in Shares or dollars
which would have been earned, determined at the end of the Performance Cycle,
had such employment not been terminated, by a fraction, the numerator of which
is the number of whole months such Grantee was employed during the Performance
Cycle, and the denominator of which is the total number of months of the
Performance Cycle. Any such payment shall be made as soon as practicable after
the end of the respective Performance Cycle, and shall relate to attainment of
Performance Objectives over the entire Performance Cycle.


                                      -31-

<PAGE>


                             (ii)      PERFORMANCE SHARES. With respect to
Performance Shares, the amount of Performance Shares held by a Grantee (or
Beneficiary) with respect to which restrictions shall lapse under circumstances
described in Section 11.5(b) will be the amount determined by multiplying the
amount of the Performance Shares with respect to which restrictions would have
lapsed, determined at the end of the Performance Cycle, had such employment not
been terminated, by a fraction, the numerator of which is the number of whole
months such Grantee was employed during the Performance Cycle, and the
denominator of which is the total number of months of the Performance Cycle. The
Committee shall determine the amount of Performance Shares with respect to which
restrictions shall lapse under this Section 11.5(c)(ii) as soon as practicable
after the end of the respective Performance Cycle, and such determination shall
relate to attainment of Performance Objectives over the entire Performance
Cycle. At that time, all Performance Shares relating to that Performance Cycle
with respect to which restrictions shall not lapse shall be forfeited.

                        (d)  OTHER EVENTS. Notwithstanding anything to the
contrary in this Section 11, the Committee may, in its sole discretion,
determine to pay all or any portion of a Performance Award to a Grantee who has
a Termination of Employment prior to the end of a Performance Cycle under
certain circumstances (including, without limitation, a material change in
circumstances arising after the date of grant) and subject to such terms and
conditions as the Committee shall deem appropriate, provided that the Grantee
shall have completed at his or her date of Termination of Employment at least
one (1) year of employment after the date of grant.

                        (e)  TERMINATION OF EMPLOYMENT AFTER END OF PERFORMANCE
CYCLE. Subject to Section 11.5(f), in the case of a Grantee's Termination of
Employment after the end of a Performance Cycle in which the applicable
Performance Objectives have been satisfied, the Grantee shall not be entitled to
any Performance Awards that have not yet vested as of the date of the Grantee's
Termination of Employment.

                        (f)  WAIVER OF FORFEITURE. Notwithstanding anything to
the contrary in Section 11(e), in the case of a Grantee's Termination of
Employment after the end of a Performance Cycle in which the applicable
Performance Objectives have been satisfied, the Committee may, in its sole
discretion, waive the forfeiture of Performance Awards and any other conditions
set forth in any Agreement under appropriate circumstances (including, without
limitation, the death, Disability, or retirement of the Grantee or a material
change in circumstances arising after the date of grant) and subject to such
terms and conditions as the Committee shall deem appropriate.

              11.6      MODIFICATION OR SUBSTITUTION. Subject to the terms of
the Plan, including, without limitation, Section 16, the Committee may modify
outstanding Performance Awards or accept the surrender of outstanding
Performance Awards and


                                      -32-

<PAGE>


grant new Performance Awards in substitution for them. Notwithstanding the
foregoing, no modification of a Performance Award shall adversely alter or
impair any rights or obligations under the Agreement without the Grantee's
consent.

         12.  OTHER SHARE BASED AWARDS.

              12.1      SHARE AWARDS. The Committee may, in its sole discretion,
grant a Share Award to any Eligible Individual on such terms and conditions as
the Committee may, in its sole discretion, determine. Share Awards may be made
as additional compensation for services rendered by the Eligible Individual or
may be in lieu of cash or other compensation to which the Eligible Individual is
entitled from the Company.

              12.2      PHANTOM STOCK AWARDS.

                        (a)  GRANT. The Committee may, in its sole discretion,
grant shares of Phantom Stock to any Eligible Individual. Such Phantom Stock
shall be subject to the terms and conditions established by the Committee and
set forth in the applicable Agreement.

                        (b)  PAYMENT OF AWARDS. Upon the vesting of a Phantom
Stock Award, the Grantee shall be entitled to receive a cash payment in respect
of each share of Phantom Stock which shall be equal to the Fair Market Value of
a Share as of the date the Phantom Stock Award was granted, or such other date
as determined by the Committee at the time the Phantom Stock Award was granted.
The Committee may, at the time a Phantom Stock Award is granted, provide a
limitation on the amount payable in respect of each share of Phantom Stock. In
lieu of a cash payment, the Committee may settle Phantom Stock Awards with
Shares having a Fair Market Value on the date of vesting equal to the cash
payment to which the Grantee has become entitled.

         13.  EMPLOYMENT AGREEMENT GOVERNS TERMINATION OF EMPLOYMENT. An
employment agreement, if applicable, between an Optionee or Grantee and the
Company shall govern with respect to the terms and conditions applicable to such
Option or Award upon a termination or change in the status of the employment of
the Optionee or Grantee, to the extent that such employment agreement provides
for terms and conditions that differ from the terms and conditions provided for
in the applicable Agreement or the Plan; PROVIDED, HOWEVER, that to the extent
necessary for an Option or Award intended to qualify as performance-based
compensation under Section 162(m) of the Code to so qualify, the terms of the
applicable Agreement or the Plan shall govern the Option or Award; and, PROVIDED
FURTHER, that the Committee shall have reviewed and, in its sole discretion,
approved the employment agreement.


                                      -33-

<PAGE>

         14.  ADJUSTMENT UPON CHANGES IN CAPITALIZATION.

                        (a)  In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate adjustments, if any, to
(i) the maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted under the Plan, (ii) the
maximum number and class of Shares or other stock or securities with respect to
which Options or Awards may be granted to any Eligible Individual during any
calendar year period, (iii) the number and class of Shares or other stock or
securities which are subject to outstanding Options or Awards granted under the
Plan and the purchase price therefor, if applicable, (iv) the number and class
of Shares or other securities in respect of which Formula Options are to be
granted under Section 6 and (v) the Performance Objectives.

                        (b)  Any such adjustment in the Shares or other stock or
securities subject to outstanding Incentive Stock Options (including any
adjustments in the purchase price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code and, to
the extent necessary for any Option or Award intended to qualify as
Performance-Based Compensation to continue to so qualify, any such adjustment in
the Shares or other stock or securities subject to such Options and Awards shall
be made in such manner as to comply with Section 162(m) of the Code and the
regulations promulgated thereunder.

                        (c)  If, by reason of a Change in Capitalization, a
Grantee of an Award shall be entitled to, or an Optionee shall be entitled to
exercise an Option with respect to, new, additional or different shares of stock
or securities of the Company or any other corporation, such new, additional or
different shares shall thereupon be subject to all of the conditions,
restrictions and performance criteria which were applicable to the Shares
subject to the Award or Option, as the case may be, prior to such Change in
Capitalization.

         15.  EFFECT OF CERTAIN TRANSACTIONS. Subject to Sections 7.5, 8.9,
10.4(b) and 11.4 or as otherwise provided in an Agreement, in the event of (a)
the liquidation or dissolution of the Company or (b) a merger or consolidation
of the Company (a "Transaction"), the Plan and the Options and Awards issued
hereunder shall continue in effect in accordance with their respective terms,
except that following a Transaction each Optionee and Grantee shall be entitled
to receive in respect of each Share subject to any outstanding Options or
Awards, as the case may be, upon exercise of any Option or payment or transfer
in respect of any Award, the same number and kind of stock, securities, cash,
property or other consideration that each holder of a Share was entitled to
receive in the Transaction in respect of a Share; PROVIDED, HOWEVER, that such
stock, securities, cash, property, or other consideration shall remain subject
to all of the


                                      -34-

<PAGE>


conditions, restrictions and performance criteria which were applicable to the
Options and Awards prior to such Transaction.

         16.  INTERPRETATION. Following the required registration of any equity
security of the Company pursuant to Section 12 of the Exchange Act, unless
otherwise expressly stated in the relevant Agreement, each Option, Stock
Appreciation Right and Performance Award granted under the Plan to a "covered
employee" within the meaning of Section 162(m)(3) of the Code is intended to be
Performance-Based Compensation (except that, in the event of a Change in
Control, payment of Performance Awards to a Grantee who remains a "covered
employee" with respect to such payment may not qualify as Performance-Based
Compensation). The Committee shall not be entitled to exercise any discretion
otherwise authorized hereunder with respect to such Options or Awards if the
ability to exercise such discretion or the exercise of such discretion itself
would cause the compensation attributable to such Options or Awards to fail to
qualify as Performance-Based Compensation. Notwithstanding anything to the
contrary in the Plan, the provisions of the Plan may at any time be bifurcated
by the Board or the Committee in any manner so that certain provisions of the
Plan or any Performance Award intended (or required in order) to satisfy the
applicable requirements of Section 162(m) of the Code are only applicable to
persons whose compensation is subject to Section 162(m).

         17.  POOLING TRANSACTIONS. Notwithstanding anything contained in the
Plan or any Agreement to the contrary, in the event of a Change in Control which
is also intended to constitute a Pooling Transaction, the Committee shall take
such actions, if any, as are specifically recommended by an independent
accounting firm retained by the Company to the extent reasonably necessary in
order to assure that the Pooling Transaction will qualify as such, including,
without limitation, (a) deferring the vesting, exercise, payment, settlement or
lapsing of restrictions with respect to any Option or Award, (b) providing that
the payment or settlement in respect of any Option or Award be made in the form
of cash, Shares or securities of a successor or acquirer of the Company, or a
combination of the foregoing, and (c) providing for the extension of the term of
any Option or Award to the extent necessary to accommodate the foregoing, but
not beyond the maximum term permitted for any Option or Award.

         18.  EFFECTIVE DATE, TERMINATION AND AMENDMENT OF THE PLAN.

              18.1      EFFECTIVE DATE. The effective date of this Plan shall be
the date the Plan is adopted by the Board, subject only to the approval of the
affirmative vote of the holders of a majority of the securities of the Company
present, or represented, and entitled to vote at a meeting of the stockholders
duly held in accordance with the applicable laws of the State of Delaware within
twelve (12) months of the adoption of the Plan by the Board.


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<PAGE>


              18.2      PLAN AMENDMENT OR TERMINATION. The Plan shall terminate
on the day preceding the tenth anniversary of the date of its adoption by the
Board and no Option or Award may be granted thereafter. The Board may sooner
terminate the Plan and the Board may at any time and from time to time amend,
modify or suspend the Plan; PROVIDED, HOWEVER, that:

                        (a)  no such amendment, modification, suspension or
termination shall impair or adversely alter any Options or Awards theretofore
granted under the Plan, except with the consent of the Optionee or Grantee, nor
shall any amendment, modification, suspension or termination deprive any
Optionee or Grantee of any Shares which he or she may have acquired through or
as a result of the Plan; and

                        (b)  to the extent necessary under any applicable law,
regulation or exchange requirement no amendment shall be effective unless
approved by the stockholders of the Company in accordance with applicable law,
regulation or exchange requirement.

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

         20.  LIMITATION OF LIABILITY. As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing in
the Plan shall be construed to:

                        (a)  give any person any right to be granted an Option
or Award other than at the sole discretion of the Committee;

                        (b)  give any person any rights whatsoever with respect
to Shares except as specifically provided in the Plan;

                        (c)  limit in any way the right of the Company or any
Subsidiary to terminate the employment of any person at any time; or

                        (d)  be evidence of any agreement or understanding,
expressed or implied, that the Company will employ any person at any particular
rate of compensation or for any particular period of time.


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<PAGE>


         21.  REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.

              21.1      Except as to matters of federal law, the Plan and the
rights of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of Delaware without giving effect to
conflicts of laws principles thereof.

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

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

              21.4      Each Option and Award is subject to the requirement
that, if at any time the Committee determines, in its sole discretion, that the
listing, registration or qualification of Shares issuable pursuant to the Plan
is required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.

              21.5      Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), and is not
otherwise exempt from such registration, such Shares shall be restricted against
transfer to the extent required by the Securities Act and Rule 144 or other
regulations thereunder. The Company may place on any certificate representing
any such Shares any legend deemed desirable by the Company's counsel to comply
with federal or state securities laws and the Committee may require any
individual receiving Shares pursuant to an Option or Award granted under the
Plan, as a condition precedent to receipt of such Shares, to represent and
warrant to the Company in writing that the Shares acquired by such individual
are acquired without a view to any distribution thereof and will not be sold or
transferred other than pursuant to an effective registration thereof under said
Act or pursuant to an exemption applicable under the Securities Act or the rules
and regulations promulgated thereunder.


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<PAGE>


         22.  MISCELLANEOUS.

              22.1      MULTIPLE AGREEMENTS. The terms of each Option or Award
may differ from other Options or Awards granted under the Plan at the same time,
or at some other time. The Committee may also grant more than one Option or
Award to a given Eligible Individual during the term of the Plan, either in
addition to, or in substitution for, one or more Options or Awards previously
granted to that Eligible Individual.

              22.2      CAPTIONS. The use of captions in this Plan or any
Agreement is for the convenience of reference only and shall not affect the
meaning of any provision of the Plan or such Agreement.

              22.3      SEVERABILITY. Whenever possible, each provision of the
Plan or an Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of the Plan or an Agreement
shall be held by a court of competent jurisdiction to be prohibited by or
invalid or unenforceable under applicable law, then (a) such provision shall be
deemed to be amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan or an Agreement shall remain in full force and effect.

              22.4      WITHHOLDING OF TAXES.

                        (a)  At such times as an Optionee or Grantee recognizes
taxable income in connection with the receipt of Shares or cash hereunder (a
"Taxable Event"), the Optionee or Grantee shall pay to the Company an amount
equal to the federal, state and local income taxes and other amounts as may be
required by law to be withheld by the Company in connection with the Taxable
Event (the "Withholding Taxes") prior to the issuance, or release from escrow,
of such Shares or the payment of such cash. The Company shall have the right to
deduct from any payment of cash to an Optionee or Grantee an amount equal to the
Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes. In
satisfaction of the obligation to pay Withholding Taxes to the Company, the
Optionee or Grantee may make a written election (the "Tax Election"), which may
be accepted or rejected in the sole discretion of the Committee, to have
withheld a portion of the Shares then issuable to him or her having an aggregate
Fair Market Value, on the date preceding the date of such issuance, equal to the
Withholding Taxes.

                        (b)  If an Optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Optionee pursuant to the exercise of an
Incentive Stock Option within the two-year period commencing on the day after
the date of the grant or within the one-year period commencing on the day after
the date of transfer of such Share or


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<PAGE>


Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten
(10) days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office.

              22.5      POST-TRANSITION PERIOD. Any Option or Award granted
under the Plan after the expiration of the Transition Period which is intended
to be Performance-Based Compensation shall be subject to the approval of the
material terms of the Plan by a majority of the stockholders of the Company in
accordance with Section 162(m) of the Code and the regulations promulgated
thereunder.


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