Exhibit 10.1 














LOGICVISION, INC. 




AMENDED AND RESTATED 




2000 STOCK
INCENTIVE PLAN 




(as amended and
restated as of May 13, 2004) 










 

	 	
	 







 

 TABLE
  OF CONTENTS 


			Page
	SECTION 1. ESTABLISHMENT AND PURPOSE	1
	 	 	 
	SECTION 2. DEFINITIONS 	
        1

      
	    	(a)	“Affiliate”	1
	 	
        (b)

      	
        “Award”

      	
        1

      
	 	
        (c)

      	
        “Board of Directors”

      	
        1

      
	 	
        (d)

      	
        “Change in Control”

      	
        1

      
	 	
        (e)

      	
        “Code”

      	
        2

      
	 	
        (f)

      	
        “Committee”

      	
        2

      
	 	
        (g)

      	
        “Company”

      	
        2

      
	 	
        (h)

      	
        “Consultant”

      	
        2

      
	 	
        (i)

      	
        “Employee”

      	
        3

      
	 	
        (j)

      	
        “Exchange Act”

      	
        3

      
	 	
        (k)

      	
        “Exercise Price”

      	
        3

      
	 	
        (l)

      	
        “Fair Market Value”

      	
        3

      
	 	
        (m)

      	
        “ISO”

      	
        3

      
	 	
        (n)

      	
        “Nonstatutory Option” or “NSO”

      	
        3

      
	 	
        (o)

      	
        “Offeree”

      	
        3

      
	 	
        (p)

      	
        “Option”

      	
        4

      
	 	
        (q)

      	
        “Optionee”

      	
        4

      
	 	
        (r)

      	
        “Outside Director”

      	
        4

      
	 	
        (s)

      	
        “Parent”

      	
        4

      
	 	
        (t)

      	
        “Participant”

      	
        4

      
	 	
        (u)

      	
        “Plan”

      	
        4

      
	 	
        (v)

      	
        “Predecessor Plan”

      	
        4

      
	 	
        (w)

      	
        “Purchase Price”

      	
        4

      
	 	
        (x)

      	
        “Restricted Share”

      	
        4

      
	 	
        (y)

      	
        “Restricted Share Agreement”

      	
        4

      
	 	
        (z)

      	
        “SAR”

      	
        4

      
	 	
        (aa)

      	
        “SAR Agreement”

      	
        4

      
	 	
        (bb)

      	
        “Service”

      	
        4

      
	 	
        (cc)

      	
        “Share”

      	
        4

      
	 	
        (dd)

      	
        “Stock”

      	
        4

      
	 	
        (ee)

      	
        “Stock Option Agreement”

      	
        4

      
	 	
        (ff)

      	
        “Stock Purchase Agreement”

      	
        5

      
	 	
        (gg)

      	
        “Stock Unit”

      	
        5

      
	 	
        (hh)

      	
        “Stock Unit Agreement”

      	
        5

      
	 	
        (ii)

      	
        “Subsidiary”

      	
        5

      
	 	
        (jj)

      	
        “Total and Permanent Disability”

      	
        5

      
		
         

      	
         

      	
         

      
	SECTION 3. ADMINISTRATION 	
        5

      
	 	
        (a)

      	
        Committee Composition

      	
        5

      
	 	
        (b)

      	
        Committee for Non-Officer Grants

      	
        5

      




 

	 	
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i -	 


















			Page
	 	    	
        (c)

      	
        Committee Procedures

      	
        5

      
	 	 	
        (d)

      	
        Committee Responsibilities

      	
        6

      
		 	
         

      	
         

      	
         

      
	SECTION 4. ELIGIBILITY 	
        7

      
	 	 	
        (a)

      	
        General Rule

      	
        7

      
	 	 	
        (b)

      	
        Outside Directors

      	
        7

      
	 	 	
        (c)

      	
        Ten Percent Stockholders

      	
        9

      
	 	 	
        (d)

      	
        Attribution Rules

      	
        9

      
	 	 	
        (e)

      	
        Outstanding Stock

      	
        9

      
		 	
         

      	
         

      	
         

      
	SECTION 5. STOCK SUBJECT TO PLAN
      	
        9

      
	 	 	
        (a)

      	
        Basic Limitation

      	
        9

      
	 	 	
        (b)

      	
        Annual Increase in Shares

      	
        10

      
	 	 	
        (c)

      	
        Additional Shares.

      	
        10

      
	 	 	
        (d)

      	
        Dividend Equivalents

      	
        11

      
		 	
         

      	
         

      	
         

      
	SECTION 6. RESTRICTED SHARES 	
        11

      
	 	 	
        (a)

      	
        Restricted Stock Agreement

      	
        11

      
	 	 	
        (b)

      	
        Payment for Awards

      	
        11

      
	 	 	
        (c)

      	
        Vesting

      	
        11

      
	 	 	
        (d)

      	
        Voting and Dividend Rights

      	
        11

      
		 	
         

      	
         

      	
         

      
	SECTION 7. OTHER TERMS AND CONDITIONS OF
        AWARDS OR SALES 	
        11

      
	 	 	
        (a)

      	
        Duration of Offers and Nontransferability of Rights

      	
        11

      
	 	 	
        (b)

      	
        Withholding Taxes

      	
        11

      
	 	 	
        (c)

      	
        Restrictions on Transfer of Shares

      	
        12

      
		 	
         

      	
         

      	
         

      
	SECTION 8. TERMS AND CONDITIONS OF OPTIONS
      	
        12

      
	 	 	
        (a)

      	
        Stock Option Agreement

      	
        12

      
	 	 	
        (b)

      	
        Number of Shares

      	
        12

      
	 	 	
        (c)

      	
        Exercise Price

      	
        12

      
	 	 	
        (d)

      	
        Withholding Taxes

      	
        12

      
	 	 	
        (e)

      	
        Exercisability and Term

      	
        12

      
	 	 	
        (f)

      	
        Nontransferability

      	
        13

      
	 	 	
        (g)

      	
        Exercise of Options Upon Termination of Service

      	
        13

      
	 	 	
        (h)

      	
        Effect of Change in Control

      	
        13

      
	 	 	
        (i)

      	
        Leaves of Absence

      	
        13

      
	 	 	
        (j)

      	
        No Rights as a Stockholder

      	
        13

      
	 	 	
        (k)

      	
        Modification, Extension and Renewal of Options

      	
        13

      
	 	 	
        (l)

      	
        Restrictions on Transfer of Shares

      	
        14

      
	 	 	
        (m)

      	
        Buyout Provisions

      	
        14

      
		 	
         

      	
         

      	
         

      
	SECTION 9. PAYMENT FOR SHARES 	
        14

      
	 	 	
        (a)

      	
        General Rule

      	
        14

      
	 	 	
        (b)

      	
        Surrender of Stock

      	
        14

      
	 	 	
        (c)

      	
        Services Rendered

      	
        14

      
	 	 	
        (d)

      	
        Cashless Exercise

      	
        14

      





 

	 	
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			Page
	 	    	
        (e)

      	
        Exercise/Pledge

      	
        14

      
	 	 	
        (f)

      	
        Promissory Note

      	
        15

      
	 	 	
        (g)

      	
        Other Forms of Payment

      	
        15

      
		 	
         

      	
         

      	
         

      
	SECTION 10. STOCK APPRECIATION RIGHTS
      	
        15

      
	 	 	
        (a)

      	
        SAR Agreement

      	
        15

      
	 	 	
        (b)

      	
        Number of Shares

      	
        15

      
	 	 	
        (c)

      	
        Exercise Price

      	
        15

      
	 	 	
        (d)

      	
        Exercisability and Term

      	
        15

      
	 	 	
        (e)

      	
        Effect of Change in Control

      	
        15

      
	 	 	
        (f)

      	
        Exercise of SARs

      	
        15

      
	 	 	
        (g)

      	
        Special Holding Period

      	
        16

      
	 	 	
        (h)

      	
        Special Exercise Window

      	
        16

      
	 	 	
        (i)

      	
        Modification or Assumption of SARs

      	
        16

      
		 	
         

      	
         

      	
         

      
	SECTION 11. STOCK UNITS 	
        16

      
	 	 	
        (a)

      	
        Stock Unit Agreement

      	
        16

      
	 	 	
        (b)

      	
        Payment for Awards

      	
        16

      
	 	 	
        (c)

      	
        Vesting Conditions

      	
        16

      
	 	 	
        (d)

      	
        Voting and Dividend Rights

      	
        17

      
	 	 	
        (e)

      	
        Form and Time of Settlement of Stock Units

      	
        17

      
	 	 	
        (f)

      	
        Death of Recipient

      	
        17

      
	 	 	
        (g)

      	
        Creditors’ Rights

      	
        17

      
		 	
         

      	
         

      	
         

      
	SECTION 12. ADJUSTMENT OF SHARES
      	
        17

      
	 	 	
        (a)

      	
        Adjustments

      	
        17

      
	 	 	
        (b)

      	
        Dissolution or Liquidation

      	
        18

      
	 	 	
        (c)

      	
        Reorganizations

      	
        18

      
	 	 	
        (d)

      	
        Reservation of Rights

      	
        18

      
		 	
         

      	
         

      	
         

      
	SECTION 13. DEFERRAL OF AWARDS 	
        19

      
		 	
         

      	
         

      	
         

      
	SECTION 14. AWARDS UNDER OTHER PLANS
      	
        19

      
		 	
         

      	
         

      	
         

      
	SECTION 15. PAYMENT OF DIRECTOR’S FEES IN
        SECURITIES 	
        19

      
	 	 	
        (a)

      	
        Effective Date

      	
        19

      
	 	 	
        (b)

      	
        Elections to Receive NSOs, Restricted Shares or Stock
          Units

      	
        19

      
	 	 	
        (c)

      	
        Number and Terms of NSOs, Restricted Shares or Stock
          Units

      	
        20

      
		 	
         

      	
         

      	
         

      
	SECTION 16. LEGAL AND REGULATORY REQUIREMENTS
      	
        20

      
		 	
         

      	
         

      	
         

      
	SECTION 17. WITHHOLDING TAXES 	
        20

      
	 	 	
        (a)

      	
        General

      	
        20

      
	 	 	
        (b)

      	
        Share Withholding

      	
        20

      
		 	
         

      	
         

      	
         

      
	SECTION 18. LIMITATION ON PARACHUTE PAYMENTS
      	
        20

      
	 	 	
        (a)

      	
        Scope of Limitation

      	
        20

      
	 	 	
        (b)

      	
        Basic Rule

      	
        20

      





 

	 	
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			Page
	 	    	
        (c)

      	
        Reduction of Payments

      	
        21

      
	 	 	
        (d)

      	
        Overpayments and Underpayments

      	
        21

      
	 	 	
        (e)

      	
        Related Corporations

      	
        21

      
		 	
         

      	
         

      	
         

      
	SECTION 19. NO EMPLOYMENT RIGHTS
      	
        22

      
		 	
         

      	
         

      	
         

      
	SECTION 20. DURATION AND AMENDMENTS
      	
        22

      
	 	 	
        (a)

      	
        Term of the Plan

      	
        22

      
	 	 	
        (b)

      	
        Predecessor Plan

      	
        22

      
	 	 	
        (c)

      	
        Right to Amend or Terminate the Plan

      	
        22

      
	 	 	
        (d)

      	
        Effect of Amendment or Termination

      	
        22

      
	 	 	 	 	 
	SECTION 21. EXECUTION	23




 

	 	
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LOGICVISION, INC. 




AMENDED AND
RESTATED 2000 STOCK INCENTIVE PLAN 





SECTION 1.
 ESTABLISHMENT AND PURPOSE. 



        The
Plan was adopted by the Board of Directors on August 3, 2000 and was amended and restated
by the Board of Directors on September 25, 2000, effective as of the commencement date of
the Company’s initial public offering of its Stock on October 31, 2001, pursuant to
a registration statement filed under the Securities Act of 1933 (the “IPO”).
The Plan was subsequently amended and restated and is hereby further amended and restated
as of May 13, 2004. 



        The
purpose of the Plan is to promote the long-term success of the Company and the creation
of stockholder value by (a) encouraging Employees, Outside Directors and Consultants to
focus on critical long-range objectives, (b) encouraging the attraction and retention of
Employees, Outside Directors and Consultants with exceptional qualifications and (c)
linking Employees, Outside Directors and Consultants directly to stockholder interests
through increased stock ownership. The Plan seeks to achieve this purpose by providing
for Awards in the form of Restricted Shares, Stock Units, Options (which may constitute
incentive stock options or nonstatutory stock options) or stock appreciation rights. 



SECTION 2.
 DEFINITIONS. 



        (a)
  “Affiliate” shall mean any entity other than a Subsidiary,
  if the Company and/or one of more Subsidiaries own not less than 50% of such
  entity. 



        (b)
  “Award” shall mean any award of an Option, a SAR, a Restricted
  Share or a Stock Unit under the Plan. 



        (c)
  “Board of Directors” shall mean the Board of Directors of the
  Company, as constituted from time to time. 



        (d)
  “Change in Control” shall mean the occurrence of any of the
  following events: 



	  	        (i)
A change in the composition of the Board of Directors occurs, as a          result of
which fewer than one-half of the incumbent directors are          directors who either: 







	  	        (A)
     Had been directors of the Company on the “look-back date” (as defined
         below) (the “original directors”); or 







	  	        (B)
     Were elected, or nominated for election, to the Board of Directors with          the
affirmative votes of at least a majority of the aggregate of the          original
directors who were still in office at the time of the election          or nomination and
the directors whose election or nomination was          previously so approved (the “continuing
directors”); or 







 

	 	
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	  	        (ii)
    Any “person” (as defined below) who by the acquisition or aggregation of
securities, is or becomes the “beneficial owner”         (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or          more of the combined voting power of the Company’s then
outstanding securities ordinarily (and apart from rights accruing          under special
circumstances) having the right to vote at elections of directors (the “Base Capital
Stock”); except that any          change in the relative beneficial ownership of the
Company’s securities by any person resulting solely from a reduction in          the
aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter
in such person’s ownership of          securities, shall be disregarded until such
person increases in any manner, directly or indirectly, such person’s beneficial
         ownership of any securities of the Company; or 







	  	        (iii)
   The consummation of a merger or consolidation of the Corporation with          or into
another entity or any other corporate reorganization, if          persons who were not
stockholders of the Company immediately prior to          such merger, consolidation or
other reorganization own immediately          after such merger, consolidation or other
reorganization 50% or more of          the voting power of the outstanding securities of
each of (A) the          continuing or surviving entity and (B) any direct or indirect
parent          corporation of such continuing or surviving entity; or 







	  	        (iv)
    The sale, transfer or other disposition of all or substantially all of          the
Company’s assets. 







        For
purposes of Section 2(d)(i), the term “look-back” date shall mean the later of
(1) the date of the IPO or (2) the date 24 months prior to the date of the event that may
constitute a Change in Control. 



        For
purposes of Section 2(d)(ii), the term “person” shall have the same meaning as
when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (1) a trustee
or other fiduciary holding securities under an employee benefit plan maintained by the
Company or a Parent or Subsidiary and (2) a corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportions as their ownership
of the Stock. 



        Any
other provision of this Section 2(d) notwithstanding, a transaction shall not constitute
a Change in Control if its sole purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in substantially the same
proportions by the persons who held the Company’s securities immediately before such
transaction. 



	  	        (e)
      “Code” shall mean the Internal Revenue Code of 1986, as
      amended.  






	  	        (f)
      “Committee” shall mean the committee designated by the
      Board of Directors, which is authorized to administer the Plan, as described
      in Section 3 hereof.  






	  	        (g)
      “Company” shall mean LogicVision, Inc., a Delaware corporation.
       






	  	        (h)
      “Consultant” shall mean a consultant or advisor who provides
      bona fide services to the Company, a Parent, a Subsidiary or an Affiliate
      as an independent contractor or a member  







 

	 	
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of
the board of directors of a          Parent or a Subsidiary who is not an Employee.
Service as a Consultant          shall be considered Service for all purposes of the Plan. 






	  	        (i)
      “Employee” shall mean any individual who is a common-law
      employee of the Company, a Parent or a Subsidiary.  






	  	        (j)
      “Exchange Act” shall mean the Securities Exchange Act of
      1934, as amended.  






	  	        (k)
      “Exercise Price” shall mean, in the case of an Option,
      the amount for which one Common Share may be purchased upon exercise of
      such Option, as specified in the applicable Stock Option Agreement. “Exercise
      Price,” in the case of a SAR, shall mean an amount, as specified in
      the applicable SAR Agreement, which is subtracted from the Fair Market Value
      of one Common Share in determining the amount payable upon exercise of such
      SAR.  






	  	        (l)
      “Fair Market Value” with respect to a Share, shall mean
      the market price of one Share of Stock, determined by the Committee as follows:
       






	  	        (i)
     If the Stock was traded over-the-counter on the date in question but          was
not traded on The Nasdaq Stock Market, then the Fair Market Value          shall be equal
to the last transaction price quoted for such date by          the OTC Bulletin Board or,
if not so quoted, shall be equal to the mean          between the last reported
representative bid and asked prices quoted          for such date by the principal
automated inter-dealer quotation system          on which the Stock is quoted or, if the
Stock is not quoted on any such          system, by the “Pink Sheets” published
by the National Quotation          Bureau, Inc.; 







	  	        (ii)
    If the Stock was traded on The Nasdaq Stock Market, then the Fair          Market
Value shall be equal to the last reported sale price quoted for          such date by The
Nasdaq Stock Market; 







	  	        (iii)
   If the Stock was traded on a United States stock exchange on the date          in
question, then the Fair Market Value shall be equal to the closing          price
reported for such date by the applicable composite-transactions          report; and 







	  	        (iv)
    If none of the foregoing provisions is applicable, then the Fair Market
         Value shall be determined by the Committee in good faith on such basis
         as it deems appropriate. 







In all cases, the determination of
Fair Market Value by the Committee shall be conclusive and binding on all persons. 



        (m)
  “ISO” shall mean an employee incentive stock option described
  in Section 422 of the Code. 



        (n)
  “Nonstatutory Option” or “NSO” shall mean an employee
  stock option that is not an ISO. 



        (o)
  “Offeree” shall mean an individual to whom the Committee has
  offered the right to acquire Shares under the Plan (other than upon exercise
  of an Option). 




 

	 	
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        (p)
  “Option” shall mean an ISO or Nonstatutory Option granted under
  the Plan and entitling the holder to purchase Shares. 



        (q)
  “Optionee” shall mean an individual or estate who holds an
  Option or SAR. 



        (r)
  “Outside Director” shall mean a member of the Board of Directors
  who is not a common-law employee of the Company, a Parent or a Subsidiary. Service
  as an Outside Director shall be considered Service for all purposes of the Plan,
  except for purposes of determining eligibility for the grant of ISOs under Section
  4(a). 



        (s)
  “Parent” shall mean any corporation (other than the Company)
  in an unbroken chain of corporations ending with the Company, if each of the
  corporations other than the Company owns stock possessing 50% or more of the
  total combined voting power of all classes of stock in one of the other corporations
  in such chain. A corporation that attains the status of a Parent on a date after
  the adoption of the Plan shall be a Parent commencing as of such date. 



        (t)
  “Participant” shall mean an individual or estate who holds
  an Award. 



        (u)
  “Plan” shall mean this 2000 Stock Incentive Plan of LogicVision,
  Inc., as amended from time to time. 



        (v)
  “Predecessor Plan” shall mean the Company’s 1994 Flexible
  Stock Incentive Plan, as amended. 



        (w)
  “Purchase Price” shall mean the consideration for which one
  Share may be acquired under the Plan (other than upon exercise of an Option),
  as specified by the Committee. 



        (x)
  “Restricted Share” shall mean a Share awarded under the Plan.
  



        (y)
  “Restricted Share Agreement” shall mean the agreement between
  the Company and the recipient of a Restricted Share which contains the terms,
  conditions and restrictions pertaining to such Restricted Shares. 



        (z)
  “SAR” shall mean a stock appreciation right granted under the
  Plan. 



        (aa)
  “SAR Agreement” shall mean the agreement between the Company
  and an Optionee which contains the terms, conditions and restrictions pertaining
  to his or her SAR. 



        (bb)
  “Service” shall mean service as an Employee, Consultant or
  Outside Director. 



        (cc)
  “Share” shall mean one share of Stock, as adjusted in accordance
  with Section 12 (if applicable). 



        (dd)
  “Stock” shall mean the Common Stock of the Company. 



        (ee)
  “Stock Option Agreement” shall mean the agreement between the
  Company and an Optionee that contains the terms, conditions and restrictions
  pertaining to his Option. 





 

	 	
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        (ff)
  “Stock Purchase Agreement” shall mean the agreement between
  the Company and an Offeree who acquires Shares under the Plan that contains
  the terms, conditions and restrictions pertaining to the acquisition of such
  Shares. 



        (gg)
  “Stock Unit” shall mean a bookkeeping entry representing the
  equivalent of one Share, as awarded under the Plan. 



        (hh)
  “Stock Unit Agreement” shall mean the agreement between the
  Company and the recipient of a Stock Unit which contains the terms, conditions
  and restrictions pertaining to such Stock Unit. 



        (ii)
  “Subsidiary” shall mean any corporation, if the Company and/or
  one or more other Subsidiaries own not less than 50% of the total combined voting
  power of all classes of outstanding stock of such corporation. A corporation
  that attains the status of a Subsidiary on a date after the adoption of the
  Plan shall be considered a Subsidiary commencing as of such date. 



        (jj)
  “Total and Permanent Disability” shall mean that the Optionee
  is unable to engage in any substantial gainful activity by reason of any medically
  determinable physical or mental impairment that can be expected to result in
  death or that has lasted, or can be expected to last, for a continuous period
  of not less than 12 months. 



SECTION 3.
 ADMINISTRATION. 



        (a)
  Committee Composition. The Plan shall be administered by the Committee.
  The Committee shall consist of two or more directors of the Company, who shall
  be appointed by the Board. In addition, the composition of the Committee shall
  satisfy 



	  	        (i)
     such requirements as the Securities and Exchange Commission may          establish
for administrators acting under plans intended to qualify for          exemption under
Rule 16b-3 (or its successor) under the Exchange Act;          and 







	  	        (ii)
    such requirements as the Internal Revenue Service may establish for          outside
directors acting under plans intended to qualify for exemption          under Section
162(m)(4)(C) of the Code. 







        (b)
  Committee for Non-Officer Grants. The Board may also appoint one or more
  separate committees of the Board, each composed of one or more directors of
  the Company who need not satisfy the requirements of Section 3(a), who may administer
  the Plan with respect to Employees who are not considered officers or directors
  of the Company under Section 16 of the Exchange Act, may grant Awards under
  the Plan to such Employees and may determine all terms of such grants. Within
  the limitations of the preceding sentence, any reference in the Plan to the
  Committee shall include such committee or committees appointed pursuant to the
  preceding sentence. 



        (c)
  Committee Procedures. The Board of Directors shall designate one of the
  members of the Committee as chairman. The Committee may hold meetings at such
  times and places as it shall determine. The acts of a majority of the Committee
  members present at 




 

	 	
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meetings at which a quorum exists,
         or acts reduced to or approved in writing by all Committee members,
         shall be valid acts of the Committee. 



        (d)
  Committee Responsibilities. Subject to the provisions of the Plan, the Committee
  shall have full discretionary authority to take the following actions: 



	  	        (i)
To interpret the Plan and to apply its provisions; 







	  	        (ii)
    To adopt, amend or rescind rules, procedures and forms relating to the          Plan; 







	  	        (iii)
   To authorize any person to execute, on behalf of the Company, any          instrument
required to carry out the purposes of the Plan; 







	  	        (iv)
    To determine when Shares are to be awarded or offered for sale and when
         Options are to be granted under the Plan; 







	  	        (v)
     To select the Offerees and Optionees; 







	  	        (vi)
    To determine the number of Shares to be offered to each Offeree or to          be
made subject to each Option; 







	  	        (vii)
   To prescribe the terms and conditions of each award or sale of Shares,
         including (without limitation) the Purchase Price, the vesting of the
         award (including accelerating the vesting of awards) and to specify the
         provisions of the Stock Purchase Agreement relating to such award or
         sale; 







	  	        (viii)
  To prescribe the terms and conditions of each Option, including          (without
limitation) the Exercise Price, the vesting or duration of the          Option (including
accelerating the vesting of the Option), to determine          whether such Option is to
be classified as an ISO or as a Nonstatutory          Option, and to specify the
provisions of the Stock Option Agreement          relating to such Option; 







	  	        (ix)
    To amend any outstanding Stock Purchase Agreement or Stock Option          Agreement,
subject to applicable legal restrictions and to the consent          of the Offeree or
Optionee who entered into such agreement; 







	  	        (x)
     To prescribe the consideration for the grant of each Option or other          right
under the Plan and to determine the sufficiency of such          consideration; 







	  	        (xi)
    To determine the disposition of each Option or other right under the          Plan in
the event of an Optionee’s or Offeree’s divorce or dissolution          of
marriage; 







	  	        (xii)
   To determine whether Options or other rights under the Plan will be          granted
in replacement of other grants under an incentive or other          compensation plan of
an acquired business; 









 

	 	
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	  	        (xiii)
  To correct any defect, supply any omission, or reconcile any          inconsistency in
the Plan, any Stock Option Agreement or any Stock          Purchase Agreement; and 







	  	        (xiv)
   To take any other actions deemed necessary or advisable for the
         administration of the Plan. 







Subject to the requirements of
applicable law, the Committee may designate persons other than members of the Committee
to carry out its responsibilities and may prescribe such conditions and limitations as it
may deem appropriate, except that the Committee may not delegate its authority with
regard to the selection for participation of or the granting of Options or other rights
under the Plan to persons subject to Section 16 of the Exchange Act. All decisions,
interpretations and other actions of the Committee shall be final and binding on all
Offerees, all Optionees, and all persons deriving their rights from an Offeree or
Optionee. No member of the Committee shall be liable for any action that he has taken or
has failed to take in good faith with respect to the Plan, any Option, or any right to
acquire Shares under the Plan. 



SECTION 4.
 ELIGIBILITY. 



        (a)
  General Rule. Only Employees shall be eligible for the grant of ISOs.
  Only Employees, Consultants and Outside Directors shall be eligible for the
  grant of Restricted Shares, Stock Units, NSOs or SARs, and grants to Outside
  Directors shall comply with the provisions of Section 4(b). 



        (b)
  Outside Directors. Any other provision of the Plan notwithstanding, the
  participation of Outside Directors in the Plan shall be subject to the following
  restrictions: 



	  	        (i)
              Outside Directors shall only be eligible for the grant of
                  Restricted Shares, Stock Units, Nonstatutory Options and SARs. 







	  	        (ii)
             Each Outside Director who first joins the Board of Directors
                  after May 15, 2003 shall receive a Nonstatutory Option to
                  purchase 20,000 Shares (subject to adjustment under Section
                  12) on the first business day after his or her election to the
                  Board of Directors. Each Outside Director who is re-elected at
                  the Company’s Annual Meeting of Stockholders on May 15, 2003
                  shall receive a Nonstatutory Option to purchase 12,500 Shares
                  (subject to adjustment under Section 12) on the first business
                  day after his or her re-election to the Board of Directors. 







	  	        (iii)
   On the first business day following the conclusion of each regular annual meeting of
the Company’s stockholders after such          Outside Director’s appointment
or election to the Board of Directors, commencing with the annual meeting occurring on
May          15, 2003, each Outside Director who will continue serving as a member of the
Board of Directors thereafter shall receive an          Option to purchase 10,000 Shares,
subject to adjustment under Section 12.  Each Outside Director who is not initially
         elected at a regular annual meeting of the Company’s stockholders shall
receive an Option to purchase a pro rata portion of          10,000 Shares within ten
business days of his or her election based on the number of full months remaining from
date of          election until the next regular annual meeting of the Company’s
stockholders divided by 12.  Any  








 

	 	
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fractional
shares resulting          from such calculation shall be rounded up to the nearest whole
number. 






	  	        (iv)
             The Exercise Price of all Nonstatutory Options granted to an
                  Outside Director under this Section 4(b) shall be equal to
                  100% of the Fair Market Value of a Share on the date of grant,
                  payable in one of the forms described in Section 9(a), Section
                  9(b) or Section 9(d). 







	  	        (v)
     Each Option granted under Section 4(b)(ii) shall become exercisable in two equal
annual installments on each of the first          two anniversaries of the date of grant;
provided, however, that the two equal annual installments of each such Option shall
         become exercisable in full immediately prior to the next two regular annual
meetings of the Company’s stockholders following          such date of grant in the
event such meetings occur prior to such first two anniversary dates.  Except as set forth
in the          next succeeding sentence, each Option granted under Section 4(b)(iii)
above shall become exercisable in full on the first          anniversary of the date of
grant; provided, however, that each such Option shall become exercisable in full
immediately          prior to the next regular annual meeting of the Company’s
stockholders following such date of grant in the event such          meeting occurs prior
to such first anniversary date.  Each Option granted to Outside Directors who were not
initially          elected at a regular annual meeting of the Company’s stockholders
shall become exercisable in full immediately prior to the          next regular annual
meeting of the Company’s stockholders following the date of grant.  Notwithstanding
the foregoing, each          Option that has been outstanding for not less than six
months shall become exercisable in full in the event that a Change in          Control
occurs with respect to the Company. 






	  	        (vi)
      Subject to Section 4(b)(vii) and Section 4(b)(viii), all Nonstatutory Options
      granted to an Outside Director under this Section 4(b) shall terminate on
      the tenth anniversary of the date of grant of such Options.  




	  	        (vii)
            If an Optionee’s Service terminates for any reason other than
                  death, then his or her Options shall expire on the earliest of
                  the following occasions: 







	  	        (A)
              The expiration date determined pursuant to Section 4(b)(vi); 







	  	        (B)
              The date 24 months after the termination of the Optionee’s
                  Service, if the termination occurs because of his or her Total
                  and Permanent Disability; or 







	  	        (C)
              The date six months after the termination of the Optionee’s
                  Service for any reason other than Total and Permanent
                  Disability. 







	  	
The
Optionee may exercise all or part of his or her Options at any time          before the
expiration of such Options under the preceding sentence, but          only to the extent
that such Options had become exercisable before his          or her Service terminated.
The balance of such Options shall lapse when          the Optionee’s Service
terminates. In the event that the Optionee dies          after the termination of his or
her Service but before the expiration          of his or  







 

	 	
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her
Options, all or part of such Options may be exercised at          any time prior to their
expiration by the executors or administrators          of the Optionee’s estate or
by any person who has acquired such Options          directly from him or her by bequest,
inheritance or beneficiary          designation under the Plan, but only to the extent
that such Options          had become exercisable before his or her Service terminated.  






	  	        (viii)
  If an Optionee dies while he or she is in Service, then his or her          Options
shall expire on the earlier of the following dates: 







	  	        (A)
     The expiration date determined pursuant to Section 4(b)(vi) above; or 







	  	        (B)
     The date 24 months after his or her death. 







	  	
All
or part of the Optionee’s Options may be exercised at any time          before the
expiration of such Options under the preceding sentence by          the executors or
administrators of his or her estate or by any person          who has acquired such
Options directly from him or her by bequest,          inheritance or beneficiary
designation under the Plan. 






	  	        (ix)
    No Option shall be transferable by the Optionee other than by will, by
         written beneficiary designation or by the laws of descent and
         distribution. An Option may be exercised during the lifetime of the
         Optionee only by the Optionee or by the Optionee’s guardian or legal
         representative. Except as permitted by the Committee, no Option or
         interest therein may be transferred, assigned, pledged or hypothecated
         by the Optionee during his or her lifetime, whether by operation of law
         or otherwise, or be made subject to execution, attachment or similar
         process. 







        (c)
  Ten-Percent Stockholders. An Employee who owns more than 10% of the total
  combined voting power of all classes of outstanding stock of the Company, a
  Parent or Subsidiary shall not be eligible for the grant of an ISO unless (a)
  the Exercise Price under the ISO is not less than 110% of the Fair Market Value
  of a Share on the date of grant; and (b) the term of the ISO does not exceed
  5 years from the date of grant. 



        (d)
  Attribution Rules. For purposes of Section 4(c) above, in determining
  stock ownership, an Employee shall be deemed to own the stock owned, directly
  or indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors
  and lineal descendants. Stock owned, directly or indirectly, by or for a corporation,
  partnership, estate or trust shall be deemed to be owned proportionately by
  or for its stockholders, partners or beneficiaries. 



        (e)
  Outstanding Stock. For purposes of Section 4(c) above, “outstanding
  stock” shall include all stock actually issued and outstanding immediately
  after the grant. “Outstanding stock” shall not include shares authorized
  for issuance under outstanding options held by the Employee or by any other
  person. 



SECTION 5.  STOCK
SUBJECT TO PLAN. 



        (a)
  Basic Limitation. Shares offered under the Plan shall be authorized but
  unissued Shares or treasury Shares. The maximum aggregate number of Options,
  SARs, Stock Units and 




 

	 	
-9-	 





















Restricted Shares awarded under the
Plan          shall not exceed 1,000,000 Shares, plus the additional Shares described
         in Section 5(b) and Section 5(c). The limitation of this Section 5(a)
         shall be subject to adjustment pursuant to Section 12. 



        (b)
  Annual Increase in Shares. As of January 1 of each year, commencing with
  the year 2002, the aggregate number of Options, SARs, Stock Units and Restricted
  Shares that may be awarded under the Plan shall automatically increase by a
  number equal to the lesser of (i) 750,000 shares, (ii) 3.5% of the outstanding
  shares of Stock of the Company on such date or (iii) a lesser amount determined
  by the Board. The aggregate number of Shares that may be issued under the Plan
  shall at all times be subject to adjustment pursuant to Section 12. The number
  of Shares that are subject to Options or other rights outstanding at any time
  under the Plan shall not exceed the number of Shares which then remain available
  for issuance under the Plan. The Company, during the term of the Plan, shall
  at all times reserve and keep available sufficient Shares to satisfy the requirements
  of the Plan. 



        (c)
  Additional Shares. 



	  	        (i)
     On the effective date of the Plan, all shares of Common Stock which are
         then available for the grant of stock options or for issuance under the
         Predecessor Plan (together with such additional number of shares as may
         be required pursuant to the antidilution provisions of the Predecessor
         Plan), shall become available for Awards under the Plan. 







	  	        (ii)
    Upon the expiration or termination unexercised of currently outstanding
         options or the repurchase of restricted shares under the Predecessor
         Plan, the Company shall reserve an equivalent number of shares as were
         initially reserved for issuance pursuant to such expired or terminated
         unexercised options or repurchased shares (together with such
         additional number of shares as may be required pursuant to the
         antidilution provisions of the Predecessor Plan) of its Common Stock,
         subject to adjustment under Section 12, and such shares shall become
         available for Awards under the Plan. 







	  	        (iii)
   If Restricted Shares or Shares issued upon the exercise of Options are forfeited, then
such Shares shall again become          available for Awards under the Plan.  If Stock
Units, Options or SARs are forfeited or terminate for any other reason before
         being exercised, then the corresponding Shares shall again become available for
Awards under the Plan.  If Stock Units are          settled, then only the number of
Shares (if any) actually issued in settlement of such Stock Units shall reduce the number
         available under Section 5(a) and the balance shall again become available for
Awards under the Plan.  If SARs are exercised,          then only the number of Shares
(if any) actually issued in settlement of such SARs shall reduce the number available in
         Section 5(a) and the balance shall again become available for Awards under the
Plan.  The foregoing notwithstanding, the          aggregate number of Shares that may be
issued under the Plan upon the exercise of ISOs shall not be increased when
         Restricted Shares or other Shares are forfeited. 









 

	 	
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        (d)
  Dividend Equivalents. Any dividend equivalents paid or credited under
  the Plan shall not be applied against the number of Restricted Shares, Stock
  Units, Options or SARs available for Awards, whether or not such dividend equivalents
  are converted into Stock Units. 



SECTION 6.  RESTRICTED
SHARES 



        (a)
  Restricted Stock Agreement. Each grant of Restricted Shares under the
  Plan shall be evidenced by a Restricted Stock Agreement between the recipient
  and the Company. Such Restricted Shares shall be subject to all applicable terms
  of the Plan and may be subject to any other terms that are not inconsistent
  with the Plan. The provisions of the various Restricted Stock Agreements entered
  into under the Plan need not be identical. 



        (b)
  Payment for Awards. Subject to the following sentence, Restricted Shares
  may be sold or awarded under the Plan for such consideration as the Committee
  may determine, including (without limitation) cash, cash equivalents, full-recourse
  promissory notes, past services and future services. To the extent that an Award
  consists of newly issued Restricted Shares, the Award recipient shall furnish
  consideration with a value not less than the par value of such Restricted Shares
  in the form of cash, cash equivalents, or past services rendered to the Company
  (or a Parent or Subsidiary), as the Committee may determine. 



        (c)
  Vesting. Each Award of Restricted Shares may or may not be subject to
  vesting. Vesting shall occur, in full or in installments, upon satisfaction
  of the conditions specified in the Restricted Stock Agreement. A Restricted
  Stock Agreement may provide for accelerated vesting in the event of the Participant’s
  death, disability or retirement or other events. The Committee may determine,
  at the time of granting Restricted Shares of thereafter, that all or part of
  such Restricted Shares shall become vested in the event that a Change in Control
  occurs with respect to the Company. 




        (d)
  Voting and Dividend Rights. The holders of Restricted Shares awarded
  under the Plan shall have the same voting, dividend and other rights as the
  Company’s other stockholders. A Restricted Stock Agreement, however, may
  require that the holders of Restricted Shares invest any cash dividends received
  in additional Restricted Shares. Such additional Restricted Shares shall be
  subject to the same conditions and restrictions as the Award with respect to
  which the dividends were paid. 



SECTION 7.  OTHER
TERMS AND CONDITIONS OF AWARDS OR SALES. 



        (a)
  Duration of Offers and Nontransferability of Rights. Any right to acquire
  Shares under the Plan (other than an Option) shall automatically expire if not
  exercised by the Offeree 30 days after the grant of such right was communicated
  to him by the Committee. Such right shall not be transferable and shall be exercisable
  only by the Offeree to whom such right was granted. 



        (b)
  Withholding Taxes. As a condition to the purchase of Shares, the Offeree
  shall make such arrangements as the Committee may require for the satisfaction
  of any federal, state or local withholding tax obligations that may arise in
  connection with such purchase. 





 

	 	
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        (c)
  Restrictions on Transfer of Shares. Any Shares awarded or sold under
  the Plan shall be subject to such special forfeiture conditions, rights of repurchase,
  rights of first refusal and other transfer restrictions as the Committee may
  determine. Such restrictions shall be set forth in the applicable Stock Purchase
  Agreement and shall apply in addition to any general restrictions that may apply
  to all holders of Shares. 



SECTION 8.  TERMS AND
CONDITIONS OF OPTIONS. 



        (a)
  Stock Option Agreement. Each grant of an Option under the Plan shall
  be evidenced by a Stock Option Agreement between the Optionee and the Company.
  Such Option shall be subject to all applicable terms and conditions of the Plan
  and may be subject to any other terms and conditions which are not inconsistent
  with the Plan and which the Committee deems appropriate for inclusion in a Stock
  Option Agreement. The Stock Option Agreement shall specify whether the Option
  is an ISO or an NSO. The provisions of the various Stock Option Agreements entered
  into under the Plan need not be identical. Options may be granted in consideration
  of a reduction in the Optionee’s other compensation. A Stock Option Agreement
  may provide that a new Option will be granted automatically to the Optionee
  when he or she exercises a prior Option and pays the Exercise Price in a form
  described in Section 9(b). 



        (b)
  Number of Shares. Each Stock Option Agreement shall specify the number
  of Shares that are subject to the Option and shall provide for the adjustment
  of such number in accordance with Section 12. No Employee or Consultant shall
  be granted Options to purchase more than 500,000 Shares in any fiscal year of
  the Company, except that Options granted to a new Employee or Consultant in
  the fiscal year of the Company in which his or her Service first commences shall
  not cover more than 1,000,000 Shares (in each case subject to adjustment in
  accordance with Section 12). 



        (c)
  Exercise Price. Each Stock Option Agreement shall specify the Exercise
  Price. The Exercise Price of an ISO shall not be less than 100% of the Fair
  Market Value of a Share on the date of grant, except as otherwise provided in
  Section 4(c), and the Exercise Price of an NSO shall not be less than 100% of
  the Fair Market Value of a Share on the date of grant. Subject to the foregoing
  in this Section 8(c), the Exercise Price under any Option shall be determined
  by the Committee at its sole discretion. The Exercise Price shall be payable
  in one of the forms described in Section 9. 



        (d)
  Withholding Taxes. As a condition to the exercise of an Option, the Optionee
  shall make such arrangements as the Committee may require for the satisfaction
  of any federal, state or local withholding tax obligations that may arise in
  connection with such exercise. The Optionee shall also make such arrangements
  as the Committee may require for the satisfaction of any federal, state or local
  withholding tax obligations that may arise in connection with the disposition
  of Shares acquired by exercising an Option. 



        (e)
  Exercisability and Term. Each Stock Option Agreement shall specify the
  date when all or any installment of the Option is to become exercisable. The
  Stock Option Agreement shall also specify the term of the Option; provided that
  the term of an ISO shall in no event exceed 10 years from the date of grant
  (five years for Employees described in Section 4(c)). A Stock Option Agreement
  may provide for accelerated exercisability in the event of the 




 

	 	
-12-	 
























Optionee’s death, disability,
or retirement or other events and may provide for expiration prior to the end of its term
in the event of the termination of the Optionee’s service. Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not be
exercisable unless the related SARs are forfeited. Subject to the foregoing in this
Section 8(e), the Committee at its sole discretion shall determine when all or any
installment of an Option is to become exercisable and when an Option is to expire. 



        (f)
  Nontransferability. Except as permitted by the Committee, during an Optionee’s
  lifetime, his or her Option(s) shall be exercisable only by the Optionee and
  shall not be transferable. In the event of an Optionee’s death, his or
  her Option(s) shall not be transferable other than by will or by the laws of
  descent and distribution. 



        (g)
  Exercise of Options Upon Termination of Service. Each Stock Option Agreement
  shall set forth the extent to which the Optionee shall have the right to exercise
  the Option following termination of the Optionee’s Service with the Company
  and its Subsidiaries, and the right to exercise the Option of any executors
  or administrators of the Optionee’s estate or any person who has acquired
  such Option(s) directly from the Optionee by bequest or inheritance. Such provisions
  shall be determined in the sole discretion of the Committee, need not be uniform
  among all Options issued pursuant to the Plan, and may reflect distinctions
  based on the reasons for termination of Service. 



        (h)
  Effect of Change in Control. The Committee may determine, at the time
  of granting an Option or thereafter, that such Option shall become exercisable
  as to all or part of the Shares subject to such Option in the event that a Change
  in Control occurs with respect to the Company. 



        (i)
  Leaves of Absence. An Employee’s Service shall cease when such Employee
  ceases to be actively employed by, or a consultant or adviser to, the Company
  (or any subsidiary) as determined in the sole discretion of the Board of Directors.
  For purposes of Options, Service does not terminate when an Employee goes on
  a bona fide leave of absence, that was approved by the Company in writing, if
  the terms of the leave provide for continued service crediting, or when continued
  service crediting is required by applicable law. However, for purposes of determining
  whether an Option is entitled to ISO status, an Employee’s Service will
  be treated as terminating 90 days after such Employee went on leave, unless
  such Employee’s right to return to active work is guaranteed by law or
  by a contract. Service terminates in any event when the approved leave ends,
  unless such Employee immediately returns to active work. The Company shall have
  the discretionary authority to determine which leaves count toward Service,
  and when Service terminates for all purposes under the Plan. 



        (j)
  No Rights as a Stockholder. An Optionee, or a transferee of an Optionee,
  shall have no rights as a stockholder with respect to any Shares covered by
  his Option until the date of the issuance of a stock certificate for such Shares.
  No adjustments shall be made, except as provided in Section 12. 



        (k)
  Modification, Extension and Renewal of Options. Within the limitations
  of the Plan, the Committee may modify, extend or renew outstanding options or
  may accept the cancellation of outstanding options (to the extent not previously
  exercised), whether or not 




 

	 	
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granted hereunder, in return for the
grant of new Options for the same or a different number of Shares and at the same or a
different exercise price. The foregoing notwithstanding, no modification of an Option
shall, without the consent of the Optionee, alter or impair his or her rights or
obligations under such Option. 



        (l)
  Restrictions on Transfer of Shares. Any Shares issued upon exercise of
  an Option shall be subject to such special forfeiture conditions, rights of
  repurchase, rights of first refusal and other transfer restrictions as the Committee
  may determine. Such restrictions shall be set forth in the applicable Stock
  Option Agreement and shall apply in addition to any general restrictions that
  may apply to all holders of Shares. 



        (m)
  Buyout Provisions. The Committee may at any time (a) offer to buy out
  for a payment in cash or cash equivalents an Option previously granted or (b)
  authorize an Optionee to elect to cash out an Option previously granted, in
  either case at such time and based upon such terms and conditions as the Committee
  shall establish. 



SECTION 9.  PAYMENT
FOR SHARES. 



        (a)
  General Rule. The entire Exercise Price of Shares issued under the Plan
  shall be payable in lawful money of the United States of America at the time
  when such Shares are purchased, except as provided in Section 9(b) through Section
  9(g) below. 



        (b)
  Surrender of Stock. To the extent that a Stock Option Agreement so provides,
  payment may be made all or in part by surrendering, or attesting to the ownership
  of, Shares which have already been owned by the Optionee or his representative
  for more than 12 months. Such Shares shall be valued at their Fair Market Value
  on the date when the new Shares are purchased under the Plan. The Optionee shall
  not surrender, or attest to the ownership of, Shares in payment of the Exercise
  Price if such action would cause the Company to recognize compensation expense
  (or additional compensation expense) with respect to the Option for financial
  reporting purposes. 



        (c)
  Services Rendered. At the discretion of the Committee, Shares may be
  awarded under the Plan in consideration of services rendered to the Company
  or a Subsidiary prior to the award. If Shares are awarded without the payment
  of a Purchase Price in cash, the Committee shall make a determination (at the
  time of the award) of the value of the services rendered by the Offeree and
  the sufficiency of the consideration to meet the requirements of Section 6(b).
  



        (d)
  Cashless Exercise. To the extent that a Stock Option Agreement so provides,
  payment may be made all or in part by delivery (on a form prescribed by the
  Committee) of an irrevocable direction to a securities broker to sell Shares
  and to deliver all or part of the sale proceeds to the Company in payment of
  the aggregate Exercise Price. 



        (e)
  Exercise/Pledge. To the extent that a Stock Option Agreement so provides,
  payment may be made all or in part by delivery (on a form prescribed by the
  Committee) of an irrevocable direction to a securities broker or lender to pledge
  Shares, as security for a loan, and to deliver all or part of the loan proceeds
  to the Company in payment of the aggregate Exercise Price. 





 

	 	
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        (f)
  Promissory Note. To the extent that a Stock Option Agreement so provides,
  payment may be made all or in part by delivering (on a form prescribed by the
  Company) a full-recourse promissory note. However, the par value of the Common
  Shares being purchased under the Plan, if newly issued, shall be paid in cash
  or cash equivalents. 



        (g)
  Other Forms of Payment. To the extent that a Stock Option Agreement so
  provides, payment may be made in any other form that is consistent with applicable
  laws, regulations and rules. 



SECTION 10.  STOCK
APPRECIATION RIGHTS. 



        (a)
  SAR Agreement. Each grant of a SAR under the Plan shall be evidenced by
  a SAR Agreement between the Optionee and the Company. Such SAR shall be subject
  to all applicable terms of the Plan and may be subject to any other terms that
  are not inconsistent with the Plan. The provisions of the various SAR Agreements
  entered into under the Plan need not be identical. SARs may be granted in consideration
  of a reduction in the Optionee’s other compensation. 



        (b)
  Number of Shares. Each SAR Agreement shall specify the number of Shares
  to which the SAR pertains and shall provide for the adjustment of such number
  in accordance with Section 12. SARs granted to any Optionee in a single calendar
  year shall in no event pertain to more than 500,000 Shares, except that SARs
  granted to a new Employee or Consultant in the fiscal year of the Company in
  which his or her Service first commences shall not pertain to more than 1,000,000
  Shares. The limitations set forth in the preceding sentence shall be subject
  to adjustment in accordance with Section 12. 



        (c)
  Exercise Price. Each SAR Agreement shall specify the Exercise Price.
  A SAR Agreement may specify an Exercise Price that varies in accordance with
  a predetermined formula while the SAR is outstanding. 



        (d)
  Exercisability and Term. Each SAR Agreement shall specify the date when
  all or any installment of the SAR is to become exercisable. The SAR Agreement
  shall also specify the term of the SAR. A SAR Agreement may provide for accelerated
  exercisability in the event of the Optionee’s death, disability or retirement
  or other events and may provide for expiration prior to the end of its term
  in the event of the termination of the Optionee’s service. SARs may be
  awarded in combination with Options, and such an Award may provide that the
  SARs will not be exercisable unless the related Options are forfeited. A SAR
  may be included in an ISO only at the time of grant but may be included in an
  NSO at the time of grant or thereafter. A SAR granted under the Plan may provide
  that it will be exercisable only in the event of a Change in Control. 



        (e)
  Effect of Change in Control. The Committee may determine, at the time
  of granting a SAR or thereafter, that such SAR shall become fully exercisable
  as to all Common Shares subject to such SAR in the event that a Change in Control
  occurs with respect to the Company. 



        (f)
  Exercise of SARs. If, on the date when a SAR expires, the Exercise Price
  under such SAR is less than the Fair Market Value on such date but any portion
  of such SAR has not 





 

	 	
-15-	 























been exercised or surrendered, then
such SAR shall automatically be deemed to be exercised as of such date with respect to
such portion. Upon exercise of a SAR, the Optionee (or any person having the right to
exercise the SAR after his or her death) shall receive from the Company (a) Shares, (b)
cash or (c) a combination of Shares and cash, as the Committee shall determine. The
amount of cash and/or the Fair Market Value of Shares received upon exercise of SARs
shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the
date of surrender) of the Shares subject to the SARs exceeds the Exercise Price. 



        (g)
  Special Holding Period. To the extent required by Section 16 of the Exchange
  Act or any rule thereunder, an SAR shall not be exercised for cash unless both
  it and the related Option have been outstanding for more than six months. 



        (h)
  Special Exercise Window. To the extent required by Section 16 of the Exchange
  Act or any rule thereunder, an SAR may only be exercised for cash during a period
  which (a) begins on the third business day following a date when the Company’s
  quarterly summary statement of sales and earnings is released to the public
  and (b) ends on the 45th business day following such date. This Section 10(h)
  shall not apply if the exercise occurs automatically on the date when the related
  Option expires, and the Committee may determine that it shall not apply to limited
  SARs that are exercisable only in the event of a Change in Control. 



        (i)
  Modification or Assumption of SARs. Within the limitations of the Plan,
  the Committee may modify, extend or assume outstanding SARs or may accept the
  cancellation of outstanding SARs (whether granted by the Company or by another
  issuer) in return for the grant of new SARs for the same or a different number
  of shares and at the same or a different exercise price. The foregoing notwithstanding,
  no modification of a SAR shall, without the consent of the Optionee, may alter
  or impair his or her rights or obligations under such SAR. 



SECTION 11.  STOCK
UNITS. 



        (a)
  Stock Unit Agreement. Each grant of Stock Units under the Plan shall
  be evidenced by a Stock Unit Agreement between the recipient and the Company.
  Such Stock Units shall be subject to all applicable terms of the Plan and may
  be subject to any other terms that are not inconsistent with the Plan. The provisions
  of the various Stock Unit Agreements entered into under the Plan need not be
  identical. Stock Units may be granted in consideration of a reduction in the
  recipient’s other compensation. 



        (b)
  Payment for Awards. To the extent that an Award is granted in the form
  of Stock Units, no cash consideration shall be required of the Award recipients.
  



        (c)
  Vesting Conditions. Each Award of Stock Units may or may not be subject
  to vesting. Vesting shall occur, in full or in installments, upon satisfaction
  of the conditions specified in the Stock Unit Agreement. A Stock Unit Agreement
  may provide for accelerated vesting in the event of the Participant’s death,
  disability or retirement or other events. The Committee may determine, at the
  time of granting Stock Units or thereafter, that all or part of such Stock Units
  shall become vested in the event that a Change in Control occurs with respect
  to the Company. 




 

	 	
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        (d)
  Voting and Dividend Rights. The holders of Stock Units shall have no
  voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under
  the Plan may, at the Committee’s discretion, carry with it a right to dividend
  equivalents. Such right entitles the holder to be credited with an amount equal
  to all cash dividends paid on one Share while the Stock Unit is outstanding.
  Dividend equivalents may be converted into additional Stock Units. Settlement
  of dividend equivalents may be made in the form of cash, in the form of Shares,
  or in a combination of both. Prior to distribution, any dividend equivalents
  which are not paid shall be subject to the same conditions and restrictions
  (including without limitation, any forfeiture conditions) as the Stock Units
  to which they attach. 



        (e)
  Form and Time of Settlement of Stock Units. Settlement of vested Stock Units
  may be made in the form of (a) cash, (b) Shares or (c) any combination of both,
  as determined by the Committee. The actual number of Stock Units eligible for
  settlement may be larger or smaller than the number included in the original
  Award, based on predetermined performance factors. Methods of converting Stock
  Units into cash may include (without limitation) a method based on the average
  Fair Market Value of Shares over a series of trading days. Vested Stock Units
  may be settled in a lump sum or in installments. The distribution may occur
  or commence when all vesting conditions applicable to the Stock Units have been
  satisfied or have lapsed, or it may be deferred to any later date. The amount
  of a deferred distribution may be increased by an interest factor or by dividend
  equivalents. Until an Award of Stock Units is settled, the number of such Stock
  Units shall be subject to adjustment pursuant to Section 12. 



        (f)
  Death of Recipient. Any Stock Units Award that becomes payable after
  the recipient’s death shall be distributed to the recipient’s beneficiary
  or beneficiaries. Each recipient of a Stock Units Award under the Plan shall
  designate one or more beneficiaries for this purpose by filing the prescribed
  form with the Company. A beneficiary designation may be changed by filing the
  prescribed form with the Company at any time before the Award recipient’s
  death. If no beneficiary was designated or if no designated beneficiary survives
  the Award recipient, then any Stock Units Award that becomes payable after the
  recipient’s death shall be distributed to the recipient’s estate.
  



        (g)
  Creditors’ Rights. A holder of Stock Units shall have no rights other
  than those of a general creditor of the Company. Stock Units represent an unfunded
  and unsecured obligation of the Company, subject to the terms and conditions
  of the applicable Stock Unit Agreement. 



SECTION 12.
 ADJUSTMENT OF SHARES. 



        (a)
  Adjustments. In the event of a subdivision of the outstanding Stock,
  a declaration of a dividend payable in Shares, a declaration of a dividend payable
  in a form other than Shares in an amount that has a material effect on the price
  of Shares, a combination or consolidation of the outstanding Stock (by reclassification
  or otherwise) into a lesser number of Shares, a recapitalization, a spin-off
  or a similar occurrence, the Committee shall make such adjustments as it, in
  its sole discretion, deems appropriate in one or more of: 



	  	        (i)
The number of Options, SARs, Restricted Shares and Stock Units available for future
Awards under Section 5; 









 

	 	
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	  	        (ii)
The limitations set forth in Section 8(b) and Section 10(b); 







	  	        (iii)
The number of NSOs to be granted to Outside Directors under Section 4(b); 







	  	        (iv)
The number of Shares covered by each outstanding Option and SAR; 







	  	        (v)
The Exercise Price under each outstanding Option and SAR; or 







	  	        (vi)
The number of Stock Units included in any prior Award which has not yet been settled. 







Except as provided in this Section
12, a Participant shall have no rights by reason of any issue by the Company of stock of
any class or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class. 



        (b)
  Dissolution or Liquidation. To the extent not previously exercised or
  settled, Options, SARs and Stock Units shall terminate immediately prior to
  the dissolution or liquidation of the Company. 



        (c)
  Reorganizations. In the event that the Company is a party to a merger
  or other reorganization, outstanding Awards shall be subject to the agreement
  of merger or reorganization. Such agreement shall provide for: 



	  	        (i)
The continuation of the outstanding Awards by the Company, if the Company is a surviving
corporation; 







	  	        (ii)
The assumption of the outstanding Awards by the surviving corporation or its parent or
subsidiary; 







	  	        (iii)
The substitution by the surviving corporation or its parent or subsidiary of its own
awards for the outstanding Awards; 







	  	        (iv)
Full exercisability or vesting and accelerated expiration of the outstanding Awards; or 





	  	        (v)
      Settlement of the full value of the outstanding Awards in cash or cash equivalents
      followed by cancellation of such Awards. 


 
        (d)
  Reservation of Rights. Except as provided in this Section 12, an Optionee
  or Offeree shall have no rights by reason of any subdivision or consolidation
  of shares of stock of any class, the payment of any dividend or any other increase
  or decrease in the number of shares of stock of any class. Any issue by the
  Company of shares of stock of any class, or securities convertible into shares
  of stock of any class, shall not affect, and no adjustment by reason thereof
  shall be made with respect to, the number or Exercise Price of Shares subject
  to an Option. The grant of an Option pursuant to the Plan shall not affect in
  any way the right or power of the Company to make adjustments, reclassifications,
  reorganizations or changes of its capital or 




 

	 	
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business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its business
or assets. 



SECTION 13.  DEFERRAL
OF AWARDS. 



        The
Committee (in its sole discretion) may permit or require a Participant to: 



        (a)
Have cash that otherwise would be paid to such Participant as a result of the exercise of
a SAR or the settlement of Stock Units credited to a deferred compensation account
established for such Participant by the Committee as an entry on the Company’s books; 



        (b)
Have Shares that otherwise would be delivered to such Participant as a result of the
exercise of an Option or SAR converted into an equal number of Stock Units; or 



        (c)
Have Shares that otherwise would be delivered to such Participant as a result of the
exercise of an Option or SAR or the settlement of Stock Units converted into amounts
credited to a deferred compensation account established for such Participant by the
Committee as an entry on the Company’s books. Such amounts shall be determined by
reference to the Fair Market Value of such Shares as of the date when they otherwise
would have been delivered to such Participant. 



        A
deferred compensation account established under this Section 13 may be credited with
interest or other forms of investment return, as determined by the Committee. A
Participant for whom such an account is established shall have no rights other than those
of a general creditor of the Company. Such an account shall represent an unfunded and
unsecured obligation of the Company and shall be subject to the terms and conditions of
the applicable agreement between such Participant and the Company. If the deferral or
conversion of Awards is permitted or required, the Committee (in its sole discretion) may
establish rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under this
Section 13. 



SECTION 14.  AWARDS
UNDER OTHER PLANS. 



        The
Company may grant awards under other plans or programs. Such awards may be settled in the
form of Shares issued under this Plan. Such Shares shall be treated for all purposes
under the Plan like Shares issued in settlement of Stock Units and shall, when issued,
reduce the number of Shares available under Section 5. 



SECTION 15.  PAYMENT
OF DIRECTOR’S FEES IN SECURITIES. 



        (a)
  Effective Date. No provision of this Section 15 shall be effective unless
  and until the Board has determined to implement such provision. 



        (b)
  Elections to Receive NSOs, Restricted Shares or Stock Units. An Outside
  Director may elect to receive his or her annual retainer payments and/or meeting
  fees from the Company in the form of cash, NSOs, Restricted Shares or Stock
  Units, or a combination thereof, as determined by the Board. Such NSOs, Restricted
  Shares and Stock Units shall be issued 




 

	 	 -19-	 






















under the Plan. An election under
this Section 15 shall be filed with the Company on the prescribed form. 



        (c)
  Number and Terms of NSOs, Restricted Shares or Stock Units. The number
  of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors
  in lieu of annual retainers and meeting fees that would otherwise be paid in
  cash shall be calculated in a manner determined by the Board. The terms of such
  NSOs, Restricted Shares or Stock Units shall also be determined by the Board.
  



SECTION 16.  LEGAL AND
REGULATORY REQUIREMENTS. 



        Shares
shall not be issued under the Plan unless the issuance and delivery of such Shares
complies with (or is exempt from) all applicable requirements of law, including (without
limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, state securities laws and regulations and the regulations of any stock
exchange on which the Company’s securities may then be listed, and the Company has
obtained the approval or favorable ruling from any governmental agency which the Company
determines is necessary or advisable. 



SECTION 17.
 WITHHOLDING TAXES. 



        (a)
  General. To the extent required by applicable federal, state, local or
  foreign law, a Participant or his or her successor shall make arrangements satisfactory
  to the Company for the satisfaction of any withholding tax obligations that
  arise in connection with the Plan. The Company shall not be required to issue
  any Shares or make any cash payment under the Plan until such obligations are
  satisfied. 



        (b)
  Share Withholding. The Committee may permit a Participant to satisfy all
  or part of his or her withholding or income tax obligations by having the Company
  withhold all or a portion of any Shares that otherwise would be issued to him
  or her or by surrendering all or a portion of any Shares that he or she previously
  acquired. Such Shares shall be valued at their Fair Market Value on the date
  when taxes otherwise would be withheld in cash. In no event may a Participant
  have Shares withheld that would otherwise be issued to him or her in excess
  of the number necessary to satisfy the legally required minimum tax withholding.
  



SECTION 18.
 LIMITATION ON PARACHUTE PAYMENTS. 



        (a)
  Scope of Limitation. This Section 18 shall apply to an Award unless the
  Committee, at the time of making an Award under the Plan or at any time thereafter,
  specifies in writing that such Award shall not be subject to this Section 18.
  If this Section 18 applies to an Award, it shall supersede any contrary provision
  of the Plan or of any Award granted under the Plan. 



        (b)
  Basic Rule. In the event that the independent auditors most recently
  selected by the Board (the “Auditors”) determine that any payment
  or transfer by the Company under the Plan to or for the benefit of a Participant
  (a “Payment”) would be nondeductible by the Company for federal income
  tax purposes because of the provisions concerning “excess parachute payments”
  in Section 280G of the Code, then the aggregate present value of all Payments
  shall 




 

	 	
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be reduced (but not below zero) to
the Reduced Amount. For purposes of this Section 18, the “Reduced Amount” shall
be the amount, expressed as a present value, which maximizes the aggregate present value
of the Payments without causing any Payment to be nondeductible by the Company because of
Section 280G of the Code. 



        (c)
  Reduction of Payments. If the Auditors determine that any Payment would
  be nondeductible by the Company because of Section 280G of the Code, then the
  Company shall promptly give the Participant notice to that effect and a copy
  of the detailed calculation thereof and of the Reduced Amount, and the Participant
  may then elect, in his or her sole discretion, which and how much of the Payments
  shall be eliminated or reduced (as long as after such election the aggregate
  present value of the Payments equals the Reduced Amount) and shall advise the
  Company in writing of his or her election within 10 days of receipt of notice.
  If no such election is made by the Participant within such 10-day period, then
  the Company may elect which and how much of the Payments shall be eliminated
  or reduced (as long as after such election the aggregate present value of the
  Payments equals the Reduced Amount) and shall notify the Participant promptly
  of such election. For purposes of this Section 18, present value shall be determined
  in accordance with Section 280G(d)(4) of the Code. All determinations made by
  the Auditors under this Section 18 shall be binding upon the Company and the
  Participant and shall be made within 60 days of the date when a Payment becomes
  payable or transferable. As promptly as practicable following such determination
  and the elections hereunder, the Company shall pay or transfer to or for the
  benefit of the Participant such amounts as are then due to him or her under
  the Plan and shall promptly pay or transfer to or for the benefit of the Participant
  in the future such amounts as become due to him or her under the Plan. 



        (d)
  Overpayments and Underpayments. As a result of uncertainty in the application
  of Section 280G of the Code at the time of an initial determination by the Auditors
  hereunder, it is possible that Payments will have been made by the Company that
  should not have been made (an “Overpayment”) or that additional Payments
  that will not have been made by the Company could have been made (an “Underpayment”),
  consistent in each case with the calculation of the Reduced Amount hereunder.
  In the event that the Auditors, based upon the assertion of a deficiency by
  the Internal Revenue Service against the Company or the Participant that the
  Auditors believe has a high probability of success, determine that an Overpayment
  has been made, such Overpayment shall be treated for all purposes as a loan
  to the Participant which he or she shall repay to the Company, together with
  interest at the applicable federal rate provided in Section 7872(f)(2) of the
  Code; provided, however, that no amount shall be payable by the Participant
  to the Company if and to the extent that such payment would not reduce the amount
  subject to taxation under Section 4999 of the Code. In the event that the Auditors
  determine that an Underpayment has occurred, such Underpayment shall promptly
  be paid or transferred by the Company to or for the benefit of the Participant,
  together with interest at the applicable federal rate provided in Section 7872(f)(2)
  of the Code. 



        (e)
  Related Corporations. For purposes of this Section 18, the term “Company”
  shall include affiliated corporations to the extent determined by the Auditors
  in accordance with Section 280G(d)(5) of the Code. 




 

	 	
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SECTION 19.  NO
EMPLOYMENT RIGHTS. 



        No
provision of the Plan, nor any right or Option granted under the Plan, shall be construed
to give any person any right to become, to be treated as, or to remain an Employee. The
Company and its Subsidiaries reserve the right to terminate any person’s Service at
any time and for any reason, with or without notice. 



SECTION 20.  DURATION
AND AMENDMENTS. 



        (a)
  Term of the Plan. The Plan, as set forth herein, shall terminate automatically
  on August 2, 2010 and may be terminated on any earlier date pursuant to Section
  20(c) below. 



        (b)
  Predecessor Plan. The Plan shall serve as the successor to the Predecessor
  Plan, and no further option grants shall be made under the Predecessor Plan
  after the Plan’s effective date. All options outstanding under the Predecessor
  Plans as of the Plan’s effective date shall, immediately upon approval
  of the Plan by the Company’s stockholders, be incorporated into the Plan
  and treated as outstanding options under the Plan. However, each outstanding
  option so incorporated shall continue to be governed solely by the terms of
  the documents evidencing such option, and no provision of the Plan shall be
  deemed to affect or otherwise modify the rights or obligations of the holders
  of such incorporated options with respect to their acquisition of shares of
  Stock. 



        (c)
  Right to Amend or Terminate the Plan. The Board of Directors may amend
  or terminate the Plan at any time and for any reason. Rights and obligations
  under any Option granted before amendment of the Plan shall not be materially
  impaired by such amendment, except with consent of the person to whom the Option
  was granted. An amendment of the Plan shall be subject to the approval of the
  Company’s stockholders only to the extent required by applicable laws,
  regulations or rules. 



        (d)
  Effect of Amendment or Termination. No Shares shall be issued or sold
  under the Plan after the termination thereof, except upon exercise of an Option
  granted prior to such termination. The termination of the Plan, or any amendment
  thereof, shall not affect any Share previously issued or any Option previously
  granted under the Plan. 





 

	 	
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SECTION 21.  EXECUTION. 



        To
record the amendment and restatement of the Plan by the Board of Directors, the Company
has caused its authorized officer to execute the same. 



	 	  	 	  	LOGICVISION, INC.  









	 	  	 	  	By: /S/ BRUCE
      M. JAFFE 

      Bruce M. Jaffe 

      Vice President of Finance 

      and Chief Financial Officer