**EXHIBIT 10.21**

**Abaxis, Inc.**

**2005 Equity Incentive Plan**

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TABLE OF CONTENTS

|   |                                              |                                         | **Page** |
|--------|---------------------------------------------------|----------------------------------------------|----------|
|   |                                              |                                         |          |
| 1.     | Establishment, Purpose and Term of Plan           | 1                                            |
|   |                                              |                                         |
|   | 1.1                                               | Establishment                                | 1        |
|   | 1.2                                               | Purpose                                      | 1        |
|   | 1.3                                               | Term of Plan                                 | 1        |
|   |                                              |                                         |     |
| 2.     | Definitions and Construction                      | 1                                            |
|   |                                              |                                         |
|   | 2.1                                               | Definitions                                  | 1        |
|   | 2.2                                               | Construction                                 | 7        |
|   |                                              |                                         |     |
| 3.     | Administration                                    | 7                                            |
|   |                                              |                                         |
|   | 3.1                                               | Administration by the Committee              | 7        |
|   | 3.2                                               | Authority of Officers                        | 7        |
|   | 3.3                                               | Administration with Respect to Insiders      | 7        |
|   | 3.4                                               | Committee Complying with Section 162(m) | 7        |
|   | 3.5                                               | Powers of the Committee                      | 8        |
|   | 3.6                                               | Option or SAR Repricing                      | 9        |
|   | 3.7                                               | Indemnification                              | 9        |
|   |                                              |                                         |     |
| 4.     | Shares Subject to Plan                            | 9                                            |
|   |                                              |                                         |
|   | 4.1                                               | Maximum Number of Shares Issuable            | 9        |
|   | 4.2                                               | Adjustments for Changes in Capital Structure | 10       |
|   |                                              |                                         |     |
| 5.     | Eligibility and Award Limitations                 | 10                                           |
|   |                                              |                                         |
|   | 5.1                                               | Persons Eligible for Awards                  | 10       |
|   | 5.2                                               | Participation                                | 11       |
|   | 5.3                                               | Incentive Stock Option Limitations           | 11       |
|   | 5.4                                               | Award Limits                                 | 11       |
|   |                                              |                                         |     |
| 6.     | Terms and Conditions of Options                   | 12                                           |
|   |                                              |                                         |
|   | 6.1                                               | Exercise Price                               | 13       |
|   | 6.2                                               | Exercisability and Term of Options           | 13       |
|   | 6.3                                               | Payment of Exercise Price                    | 13       |
|   | 6.4                                               | Effect of Termination of Service             | 14       |
|   | 6.5                                               | Transferability of Options                   | 14       |
|   |                                              |                                         |     |
| 7.     | Terms and Conditions of Stock Appreciation Rights | 14                                           |
|   |                                              |                                         |
|   | 7.1                                               | Types of SARs Authorized                     | 15       |
|   | 7.2                                               | Exercise Price                               | 15       |
|   | 7.3                                               | Exercisability and Term of SARs              | 15       |
|   | 7.4                                               | Deemed Exercise of SARs                      | 15       |
|   | 7.5                                               | Effect of Termination of Service             | 15       |
|   | 7.6                                               | Nontransferability of SARs                   | 15       |
|   |                                              |                                         |     |

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TABLE OF CONTENTS  (continued)

|   |                                                 | **Page**                                                                             |
|--------|------------------------------------------------------|--------------------------------------------------------------------------------------|
|   |                                                 |                                                                                      |
| 8.     | Terms and Conditions of Restricted Stock Awards      | 16                                                                                   |
|   |                                                 |                                                                                 |
|   | 8.1                                                  | Types of Restricted Stock Awards Authorized                                          | 16 |
|   | 8.2                                                  | Purchase Price                                                                       | 16 |
|   | 8.3                                                  | Purchase Period                                                                      | 16 |
|   | 8.4                                                  | Vesting and Restrictions on Transfer                                                 | 16 |
|   | 8.5                                                  | Voting Rights; Dividends and Distributions                                           | 16 |
|   | 8.6                                                  | Effect of Termination of Service                                                     | 17 |
|   | 8.7                                                  | Nontransferability of Restricted Stock Award Rights                                  | 17 |
|   |                                                 |                                                                                 |   |
| 9.     | Terms and Conditions of Performance Awards           | 17                                                                                   |
|   |                                                 |                                                                                 |
|   | 9.1                                                  | Types of Performance Awards Authorized                                               | 17 |
|   | 9.2                                                  | Initial Value of Performance Shares and Performance Units                            | 17 |
|   | 9.3                                                  | Establishment of Performance Period, Performance Goals and Performance Award Formula | 18 |
|   | 9.4                                                  | Measurement of Performance Goals                                                     | 18 |
|   | 9.5                                                  | Settlement of Performance Awards                                                     | 19 |
|   | 9.6                                                  | Voting Rights; Dividend Equivalent Rights and Distributions                          | 19 |
|   | 9.7                                                  | Effect of Termination of Service                                                     | 20 |
|   | 9.8                                                  | Nontransferability of Performance Awards                                             | 20 |
|   |                                                 |                                                                                 |   |
| 10.    | Terms and Conditions of Restricted Stock Unit Awards | 21                                                                                   |
|   |                                                 |                                                                                 |
|   | 10.1                                                 | Grant of Restricted Stock Unit Awards                                                | 21 |
|   | 10.2                                                 | Vesting                                                                              | 21 |
|   | 10.3                                                 | Voting Rights, Dividend Equivalent Rights and Distributions                          | 21 |
|   | 10.4                                                 | Effect of Termination of Service                                                     | 22 |
|   | 11.6                                                 | Settlement of Restricted Stock Unit Awards                                           | 22 |
|   | 10.6                                                 | Nontransferability of Restricted Stock Unit Awards                                   | 22 |
|   |                                                 |                                                                                 |   |
| 11.    | Deferred Compensation Awards                         | 22                                                                                   |
|   |                                                 |                                                                                 |
|   | 11.1                                                 | Establishment of Deferred Compensation Award Programs                                | 22 |
|   | 11.2                                                 | Terms and Conditions of Deferred Compensation Awards                                 | 23 |
|   |                                                 |                                                                                 |   |
| 12.    | Other Stock-Based Awards                             | 24                                                                                   |
|   |                                                 |                                                                                 |
| 13.    | Change in Control                                    | 24                                                                                   |
|   |                                                 |                                                                                 |
|   | 13.1                                                 | Effect of Change in Control on Options and SARs                                      | 24 |
|   | 13.2                                                 | Effect of Change in Control on Restricted Stock Awards                               | 25 |
|   | 13.3                                                 | Effect of Change in Control on Performance Awards                                    | 25 |
|   | 13.4                                                 | Effect of Change in Control on Restricted Stock Unit Awards                          | 25 |
|   | 13.5                                                 | Effect of Change in Control on Deferred Compensation Awards                          | 25 |
|   |                                                 |                                                                                 |   |

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TABLE OF CONTENTS  (continued)

|   |                             | **Page**                                   |
|--------|----------------------------------|--------------------------------------------|
|   |                             |                                            |
| 14.    | Compliance with Securities Law   | 26                                         |
|   |                             |                                       |
| 15.    | Tax Withholding                  | 26                                         |
|   |                             |                                       |
|   | 15.1                             | Tax Withholding in General                 | 26 |
|   | 15.2                             | Withholding in Shares                      | 26 |
|   |                             |                                       |   |
| 16.    | Amendment or Termination of Plan | 26                                         |
|   |                             |                                       |
| 17.    | Miscellaneous Provisions         | 27                                         |
|   |                             |                                       |
|   | 17.1                             | Repurchase Rights                          | 27 |
|   | 17.2                             | Provision of Information                   | 27 |
|   | 17.3                             | Rights as Employee, Consultant or Director | 27 |
|   | 17.4                             | Rights as a Shareholder                    | 27 |
|   | 17.5                             | Fractional Shares                          | 27 |
|   | 17.6                             | Severability                               | 28 |
|   | 17.7                             | Beneficiary Designation                    | 28 |
|   | 17.8                             | Unfunded Obligation                        | 28 |
|   | 17.9                             | Choice of Law                              | 28 |

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**Abaxis, Inc.2005 Equity Incentive Plan**

          1.     **ESTABLISHMENT, PURPOSE   AND TERM OF PLAN.**

                  1.1     **Establishment*.*** The Abaxis, Inc. 2005 Equity Incentive Plan (the *“**Plan**”*) is hereby established effective as of its approvalby the shareholders of the Company (the *“**Effective Date**”*).  The Plan is the successor to theCompany’s 1998 Stock Option Plan and its share reserve.

                  1.2     **Purpose*.*** The purpose of the Plan is to advance the interests of the Participating Company Group and its shareholders by providing an incentiveto attract and retain the best qualified personnel to perform services for the Participating Company Group, by motivating suchpersons to contribute to the growth and profitability of the Participating Company Group, by aligning their interests with interestsof the Company’s shareholders, and by rewarding such persons for their services by tying a significant portion of their totalcompensation package to the success of the Company.  The Plan seeks to achieve this purpose by providing for Awards in the formof Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Shares, Performance Units, Restricted Stock Units,Deferred CompensationAwards and other Stock-Based Awards as described below.

                  1.3     **Termof Plan.**  The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all ofthe shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of thePlan and the agreements evidencing Awards granted under the Plan have lapsed.  However, all Awards shall be granted, if at all,within ten (10) years from the Effective Date.

          2.     **DEFINITIONSAND CONSTRUCTION.**

                  2.1     **Definitions.** Whenever used herein, the following terms shall have their respective meanings set forth below:

                            (a)     “***Affiliate***”means (i) an entity, other than a Parent Corporation, that directly, or indirectly through one or more intermediary entities,controls the Company or (ii) an entity, other than a Subsidiary Corporation, that is controlled by the Company directly, orindirectly through one or more intermediary entities.  For this purpose, the term “control” (including the term“controlled by”) means the possession, direct or indirect, of the power to direct or cause the direction of the managementand policies of the relevant entity, whether through the ownership of voting securities, by contract or otherwise; or shall have suchother meaning assigned such term for the purposes of registration on Form S-8under the Securities Act.

                            (b)     “***Award***” means any Option, SAR, Restricted Stock Award, Performance Share,Performance Unit, Restricted Stock Unit or Deferred Compensation Award or other Stock-Based Award granted under the Plan.

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                            (c)     “***Award Agreement***” means a written agreement between the Company and aParticipant setting forth the terms, conditions and restrictions of the Award granted to the Participant.

                            (d)     “***Board***” means the Boardof Directors of the Company.

                            (e)     “***Change in Control***” means, unless otherwise defined by theParticipant’s Award Agreement or contract of employment or service, an Ownership Change Event or a series of related OwnershipChange Events (collectively, the “Transaction”) wherein the shareholders of the Company immediately before the Transactiondo not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of theCompany’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent(50%) of the total combined voting power of the outstanding voting stock of the Company or the corporation or corporations to whichthe assets of the Company were transferred(the “Transferee Corporation(s)”), as the case may be.  For purposes of the preceding sentence, indirect beneficialownership shall include, without limitation, an interest resulting from ownership of the voting stock of one or more corporationswhich, as a result of the Transaction, own the Company or the Transferee Corporation(s), as the case may be, either directly orthrough one or more subsidiary corporations.  The Board shall have the right to determine whether multiple sales or exchanges ofthe voting stock of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding andconclusive.

                            (f)     “***Code***” means the Internal Revenue Code of 1986, as amended, and anyapplicable regulations promulgated thereunder.

                            (g)     “***Committee***” means the Compensation Committee or other committee of the Boardduly appointed to administer the Plan and having such powers as shall be specified by the Board.  If no committee of the Boardhas been appointed to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in anyevent, the Board may in its discretion exercise any or all of such powers.

                            (h)     “***Company***” means Abaxis, Inc., a California corporation, or any successorcorporation thereto.

                            (i)     “***Consultant***” means a person engaged to provide consulting or advisoryservices (other than as an Employee or a member of the Board) to a Participating Company, provided that the identity of such person,the nature of such services or the entity to which such services are provided would not preclude the Company from offering or sellingsecurities to such person pursuant to the Plan in reliance on registration on a Form S-8 Registration Statement under theSecurities Act.

                            (j)     “***Deferred Compensation Award***” means an award of Stock Units granted to aParticipant pursuant to Section 11 of the Plan.

                            (k)     “***Director***” means a member of the Board.

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                            (l)     “***Disability***” means the permanent and total disability of the Participant,within the meaning of Section 22(e)(3) of the Code.

                            (m)     “***Dividend Equivalent***” means a credit, made at the discretion of theCommittee or as otherwise provided by the Plan, to the account of a Participant in an amount equal to the cash dividends paid on oneshare of Stock for each share of Stock represented by an Award held by such Participant.

                            (n)     “***Employee***” means any person treated as an employee (including an Officer ora member of the Board who is also treated as an employee) in the records of a Participating Company and, with respect to anyIncentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided, however,that neither service as a member of the Board nor payment of a director’s fee shall be sufficient to constitute employment forpurposes of the Plan.  The Company shall determine in good faith and in the exercise of its discretion whether an individual hasbecome or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, asthe case may be. For purposes of an individual’s rights, if any, under the Plan as of the time of the Company’s determination, all suchdeterminations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law orgovernmental agency subsequently makes a contrary determination.

                            (o)     “***Exchange Act***” means the Securities Exchange Act of 1934, asamended.

                            (p)     “***Fair Market Value***” means, as of any date, the value of a share of Stock orother property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination isexpressly allocated to the Company herein, subject to the following:

                                        (i)     Exceptas otherwise determined by the Committee, if, on such date, the Stock is listed on a national or regional securities exchange ormarket system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock as quoted on the New YorkStock Exchange or such other national or regional securities exchange or market system constituting the primary market for the Stock,as reported in *The Wall Street Journal* or such other source as the Company deems reliable.  If the relevant date does notfall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Valueshall be established shall be the lastday on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by theCommittee, in its discretion.

                                        (ii)   Notwithstanding the foregoing, the Committee may, in its discretion, determine the Fair Market Value on thebasis of the opening, closing, high, low or average sale price of a share of Stock or the actual sale price of a share of Stockreceived by a Participant, on such date, the preceding trading day, the next succeeding trading day or an average determined over aperiod of trading days.  The Committee may vary its method of determination of the Fair Market Value as provided in this Sectionfor different purposes under the Plan.

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                                        (iii)  If, on such date, the Stock is not listed on a national or regional securities exchange or market system, the FairMarket Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than arestriction which, by its terms, will never lapse.

                            (q)     “***Incentive Stock Option***” means an Option intended to be (as set forth in theAward Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code.

                            (r)     “***Insider***” means an Officer, a Director or any other person whosetransactions in Stock are subject to Section 16 of the Exchange Act.

                            (s)     “***Net-Exercise***” means a procedure by which the Participant will be issued anumber of shares of Stock determined in accordance with the following formula:

                                        X= Y(A-B)/A, where 

                                        X= the number of shares of Stock to be issued to the Participant upon exercise of the Option;

                                        Y= the total number of shares with respect to which the Participant has electedto exercise the Option;

                                        A= the Fair Market Value of one (1) share of Stock;

                                        B= the exercise price per share (as defined in the Participant’s Award Agreement).

                            (t)     “***Nonemployee Director***” means a Director who is not an Employee.

                            (u)     “***Nonstatutory Stock Option***” means an Option not intended to be (as set forthin the Award Agreement) an incentive stock option within the meaning of Section 422(b) of the Code.

                            (v)     “***Officer***” means any person designated by the Board as an officer of theCompany.

                            (w)     “***Option***” means theright to purchase Stock at a stated price for a specified period of time grantedto a Participant pursuant to Section 6 of the Plan.  An Option may beeither an Incentive Stock Option or a Nonstatutory Stock Option.

                            (x)     “***Option Expiration Date***” means the date of expiration of the Option’sterm as set forth in the Award Agreement.

                            (y)     “***Ownership Change Event***” shall be deemed to have occurred if any of thefollowing occurs with respect to the Company:

                                        (i)     the direct or indirect sale or exchange in a single or series of related transactions by theshareholders of the Company of more than fifty percent (50%) of the voting stock of the Company;

                                        (ii)    a merger or consolidation in which the Company is a party;

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                                        (iii)   the sale, exchange, or transfer of all or substantially all of the assets of the Company; or

                                        (iv)   a liquidation or dissolution of the Company.

                            (z)     “***Parent Corporation***” means any present or future “parentcorporation” of the Company, as defined in Section 424(e) of the Code.

                            (aa)   “***Participant***” means any eligible person who has been granted one or moreAwards.

                            (bb)  “***Participating Company***” means the Company or any Parent Corporation, Subsidiary Corporationor Affiliate.

                            (cc)   “***Participating Company Group***” means, at any point in time, all entities collectivelywhich are then Participating Companies.

                            (dd)  “***Performance Award***” means an Award of Performance Shares or Performance Units.

                                 (ee)   “***Performance Award Formula***”     means, for any Performance Award, a formula or table established by the     Committee pursuant to Section 9.3 of the Plan which provides the basis     for computing the value of a Performance Award at one or more threshold     levels of attainment of the applicable Performance Goal(s) measured as of     the end of the applicable Performance Period.

                                 (ff)    “***Performance Goal***”     means a performance goal established by the Committee pursuant to     Section 9.3 of the Plan.

                                 (gg)   “***Performance Period***” means a     period established by the Committee pursuant to Section 9.3 of the Plan     at the end of which one or more Performance Goals are to be     measured.

                            (hh)   “***Performance Share***” means a bookkeeping entry representing a right granted to aParticipant pursuant to Section 9 of the Plan to receive a payment equal to the value of a Performance Share, as determined bythe Committee, based on performance.

                            (ii)     “***Performance Unit***” means a bookkeeping entry representing a right grantedto a Participant pursuant to Section 9 of the Plan to receive a payment equal to the value of a Performance Unit, as determinedby the Committee, based upon performance.

                            (jj)     “***Restricted Stock Award***” means an Award of Restricted Stock.

                                 (kk)   “***Restricted Stock Unit***” or     “***Stock Unit***” means a bookkeeping entry representing     a right granted to a Participant pursuant to Section 10 or     Section 11 of the Plan, respectively, to receive a share of Stock on a     date determined in accordance with the provisions of Section 10 or     Section 11, as applicable, and the Participant’s Award     Agreement.

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                                 (ll)     “***Restriction     Period***” means the period established in accordance with     Section 8.4 of the Plan during which shares subject to a Restricted     Stock Award are subject to Vesting Conditions.

                                 (mm)  “***Retirement***” means termination as     an Employee of a Participating Company at age 55 or older, provided that     the Participant was an Employee for at least five consecutive years prior     to the date of such termination. 

                                 (nn)   “***Rule 16b-3***” means     Rule 16b-3 under the Exchange Act, as amended from time to time, or     any successor rule or regulation.

                                 (oo)   “***SAR***” or “***Stock     Appreciation Right***” means a bookkeeping entry representing,     for each share of Stock subject to such SAR, a right granted to a     Participant pursuant to Section 7 of the Plan to receive payment in     any combination of shares of Stock or cash of an amount equal to the     excess, if any, of the Fair Market Value of a share of Stock on the date of     exercise of the SAR over the exercise price.

                            (pp)   “***Section 162(m)***” means Section 162(m) of the Code.

                            (qq)   “***Securities Act***” means the Securities Act of 1933, as amended.

                                 (rr)    “***Service***” means a     Participant’s employment or service with the Participating Company     Group, whether in the capacity of an Employee, a Director or a     Consultant.  A Participant’s Service shall not be deemed to have     terminated merely because of a change in the capacity in which the     Participant renders such Service or a change in the Participating Company     for which the Participant renders such Service, provided that there is no     interruption or termination of the Participant’s Service.      Furthermore, a Participant’s Service shall not be deemed to have     terminated if the Participant takes any military leave, sick leave, or     other bona fide leave of absence approved by the Company.  However, if     any such leave taken by a Participant exceeds ninety (90) days, then on the     one hundred eighty-first (181st) day following the commencement of such     leave any Incentive Stock Option held by the Participant shall cease to be     treated as an Incentive Stock Option and instead shall be treated     thereafter as a Nonstatutory Stock Option, unless the Participant’s     right to return to Service with the Participating Company Group is     guaranteed by statute or contract.  Notwithstanding the foregoing,     unless otherwise designated by the Company or required by law, a leave of     absence shall not be treated as Service for purposes of determining vesting     under the Participant’s Award Agreement.  A Participant’s     Service shall be deemed to have terminated either upon an actual     termination of Service or upon the entity for which the Participant     performs Service ceasing to be a Participating Company.  Subject to     the foregoing, the Company, in its discretion, shall determine whether the     Participant’s Service has terminated and the effective date of such     termination.

                                 (ss)    “***Stock***” means the     common stock of the Company, as adjusted from time to time in accordance     with Section 4.2 of the Plan.

                            (tt)     “***Stock-Based Awards***” means any award that is valued in whole or in part byreference to, or is otherwise based on, the Stock, including dividends on the Stock, but not limited to those Awards described inSections 6 through 11 of the Plan.

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                            (uu)   “***Subsidiary Corporation***” means any present or future “subsidiary corporation”of the Company, as defined in Section 424(f) of the Code.

                            (vv)   “***Ten Percent Owner***” means a Participant who, at the time an Option is granted to theParticipant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of aParticipating Company (other than an Affiliate) within the meaning of Section 422(b)(6) of the Code.

                                 (ww)  “***Vesting Conditions***” mean those     conditions established in accordance with Section 8.4 or Section 10.2     of the Plan prior to the satisfaction of which shares subject to a     Restricted Stock Award or Restricted Stock Unit Award, respectively, remain     subject to forfeiture or a repurchase option in favor of the Company upon     the Participant’s termination of Service.

                  2.2     **Construction.** Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision ofthe Plan.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall includethe singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requiresotherwise.

          3.     **ADMINISTRATION.**

                  3.1     **Administrationby the Committee.**  The Plan shall be administered by the Committee.  All questions of interpretation of the Plan or ofany Award shall be determined by the Committee, and such determinations shall be final and binding upon all persons having aninterest in the Plan or such Award.

                  3.2     **Authorityof Officers.**  Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right,obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided theOfficer has apparent authority with respect to such matter, right, obligation, determination or election.  In addition, to theextent specified in a resolution adopted by the Board, the Chief Executive Officer of the Company shall have the authority to grantAwards to an Employee who is not an Insider and who is receiving a salary below the level which requires approval by the Committee;provided that the terms of such Awards conform to guidelines established by the Committee and provided further that at the time ofmaking such Awards the Chief ExecutiveOfficer also is a Director.

                  3.3     **Administrationwith Respect to Insiders.**  With respect to participation by Insiders in the Plan, at any time that any class of equitysecurity of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliancewith the requirements, if any, of Rule 16b-3.

                  3.4     **CommitteeComplying with Section 162(m).**  While the Company is a “publicly held corporation” within the meaning ofSection 162(m), the Board may establish a Committee of “outside directors” within the meaning of Section 162(m)to approve the grant of any Award which might reasonably be anticipated to result in the payment of employee remuneration that wouldotherwise exceed the limit on employee remuneration deductible for income tax purposes pursuant to Section 162(m).

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                  3.5     **Powersof the Committee*.***  In addition to any other powers set forth in the Plan and subject to the provisions of the Plan,the Committee shall have the full and final power and authority, in its discretion:

                            (a)     to determine the persons to whom, and the time or times at which, Awards shall be granted and thenumber of shares of Stock or units to be subject to each Award;

                            (b)     to determine the type of Award granted and to designate Options as Incentive Stock Options orNonstatutory Stock Options;

                            (c)     to determine the Fair Market Value of shares of Stock or other property;

                            (d)     to determine the terms, conditions and restrictions applicable to each Award (which need not beidentical) and any shares acquired pursuant thereto, including, without limitation, (i) the exercise or purchase price of sharespurchased pursuant to any Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the methodfor satisfaction of any tax withholding obligation arising in connection with Award, including by the withholding or delivery ofshares of Stock, (iv) the timing, terms and conditions of the exercisability or vesting of any Award or any shares acquiredpursuant thereto, (v) the Performance Award Formula and Performance Goals applicable to any Award and the extent to which suchPerformance Goals havebeen attained, (vi) the time of the expiration of any Award, (vii) the effect of the Participant’s termination ofService on any of the foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or sharesacquired pursuant thereto not inconsistent with the terms of the Plan;

                            (e)     to determine whether an Award will be settled in shares of Stock, cash, or in any combinationthereof;

                            (f)     to approve one or more forms of Award Agreement;

                            (g)     to amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditionsapplicable to any Award or any shares acquired pursuant thereto;

                            (h)     to accelerate, continue, extend or defer the exercisability or vesting of any Award or any sharesacquired pursuant thereto, including with respect to the period following a Participant’s termination of Service;

                                 (i)     without the consent of the affected     Participant and notwithstanding the provisions of any Award Agreement to     the contrary, to unilaterally substitute at any time a Stock Appreciation     Right providing for settlement solely in shares of Stock in place of any     outstanding Option, provided that such Stock Appreciation Right covers the     same number of shares of Stock and provides for the same exercise price     (subject in each case to adjustment in accordance with Section 4.2) as     the replaced Option and otherwise provides substantially equivalent terms     and conditions as the replaced Option, as determined by the     Committee;

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                            (j)     to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adoptsub-plans or supplements to, or alternative versions of, the Plan, including, without limitation, as the Committee deems necessary ordesirable to comply with the laws or regulations of or to accommodate the tax policy, accounting principles or custom of, foreignjurisdictions whose citizens may be granted Awards; 

                            (k)     to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any AwardAgreement and to make all other determinations and take such other actions with respect to the Plan or any Award as the Committee maydeem advisable to the extent not inconsistent with the provisions of the Plan or applicable law; and

                            (l)     to delegate to the Chief Executive Officer or the Senior Vice President of Human Resources theauthority with respect to ministerial matters regarding the Plan and Awards made under the Plan.

                  3.6     **Optionor SAR Repricing.** Without the affirmative vote of holders of a majority of the shares of Stock cast in person or by proxyat a meeting of the shareholders of the Company at which a quorum representing a majority of all outstanding shares of Stock ispresent or represented by proxy, the Board shall not approve a program providing for either (a) the cancellation of outstandingOptions or SARs and the grant in substitution therefore of new Options or SARs having a lower exercise price or (b) theamendment of outstanding Options or SARs to reduce the exercise price thereof.  This paragraph shall not be construed to applyto “issuing or assuming a stock option in a transaction to which section 424(a) applies,” within the meaning of Section 424of the Code.

                  3.7     **Indemnification.** In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers oremployees of the Participating Company Group, members of the Board or the Committee and any officers or employees of theParticipating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified bythe Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with thedefense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party byreason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against allamounts paid by them insettlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them insatisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged insuch action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties;provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer tothe Company, in writing, the opportunity at its own expense to handle and defend the same.

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               4.     **SHARES SUBJECT TO PLAN.**

                  4.1     **Maximum     Number of Shares Issuable.**  Subject to adjustment as provided in     Section 4.2, the maximum aggregate number of shares of Stock that may     be issued under the Plan shall be four million eight hundred eighty-six     thousand (4,886,000) and shall consist of authorized but unissued or     reacquired shares of Stock or any combination thereof.  If an     outstanding Award for any reason expires or is terminated or canceled     without having been exercised or settled in full, or if shares of Stock     acquired pursuant to an Award subject to forfeiture or repurchase are     forfeited or repurchased by the Company, the shares of Stock allocable to     the terminated portion of such Award or such forfeited or repurchased     shares of Stock shall again be available for issuance under the Plan.      Shares of Stock shall not be deemed to have been issued pursuant to the     Plan (a) with respect to any portion of an Award that is settled in     cash or (b) to the extent such shares are withheld or reacquired by     the Company in satisfaction of tax withholding obligations pursuant to     Section 15.2.  Upon payment in shares of Stock pursuant to the     exercise of an SAR, the number of shares available for issuance under the     Plan shall be reduced only by the number of shares actually issued in such     payment.  If the exercise price of an Option is paid by tender to the     Company, or attestation to the ownership, of shares of Stock owned by the     Participant, or by means of a Net-Exercise, the number of shares available     for issuance under the Plan shall be reduced only by the net number of     shares for which the Option is exercised.

                  4.2     **Adjustmentsfor Changes in Capital Structure*.***  Subject to any required action by the shareholders of the Company, in the event ofany change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation,reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up,split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in theevent of payment of a dividend or distribution to the shareholders of the Company in a form other than Stock (excepting normal cashdividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in thenumber and kind of shares subject to thePlan and to any outstanding Awards, in the Award limits set forth in Section 5.4, and in the exercise or purchase price pershare under any outstanding Award in order to prevent dilution or enlargement of Participants’ rights under the Plan.  Forpurposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected withoutreceipt of consideration by the Company.”  Any fractional share resulting from an adjustment pursuant to thisSection 4.2 shall be rounded down to the nearest whole number.  The Committee in its sole discretion, may also make suchadjustments in the terms of any Award to reflect, or related to, such changes in the capital structure of the Company ordistributions as it deems appropriate, including modification of Performance Goals, Performance Award Formulas and PerformancePeriods.  The adjustments determined by the Committee pursuant to this Section 4.2 shall be final, binding andconclusive.

          5.     **ELIGIBILITYAND AWARD LIMITATIONS.**

                  5.1     **PersonsEligible for Awards.**  Awards may be granted only to Employees, Consultants and Directors.  For purposes of theforegoing sentence, “Employees,” “Consultants” and “Directors” shall include prospective Employees,prospective Consultants and prospective Directors to whom Awards are granted in connection with written offers of an employment orother service relationship with the Participating Company Group; provided, however, that no Stock subject to any such Award shallvest, become exercisable or be issued prior to the date on which such person commences Service.  A Nonemployee Director Awardmay be granted only to a person who, at the time of grant, is a Nonemployee Director.

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                  5.2     **Participation.** Awards other than Nonemployee Director Awards are granted solely at the discretion of the Committee.  Eligible persons may begranted more than one Award.  However, excepting Nonemployee Director Awards, eligibility in accordance with this Section shallnot entitle any person to be granted an Award, or, having been granted an Award, to be granted an additional Award.

                  5.3     **IncentiveStock Option Limitations.**

                            (a)     ***Persons Eligible.***  An Incentive Stock Option may be granted only to a person who,on the effective date of grant, is an Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each being an*“**ISO-Qualifying Corporation**”*).  Any person who is not an Employee of an ISO-Qualifying Corporation onthe effective date of the grant of an Option to such person may be granted only a Nonstatutory Stock Option.  An Incentive StockOption granted to a prospective Employee upon the condition that such person become an Employee of an ISO-Qualifying Corporationshall be deemed granted effective on the date such person commences Service with an ISO-Qualifying Corporation, with an exerciseprice determined as ofsuch date in accordance with Section 6.1.

                            (b)     ***Fair Market Value Limitation.***  To the extent that options designated as IncentiveStock Options (granted under all stock option plans of the Participating Company Group, including the Plan) become exercisable by aParticipant for the first time during any calendar year for stock having a Fair Market Value greater than One Hundred ThousandDollars ($100,000), the portion of such options which exceeds such amount shall be treated as Nonstatutory Stock Options.  Forpurposes of this Section, options designated as Incentive Stock Options shall be taken into account in the order in which they weregranted, and the Fair Market Value of stock shall be determined as of the time the option with respect to such stock isgranted.  If the Code isamended to provide for a limitation different from that set forth in this Section, such different limitation shall be deemedincorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to theCode.  If an Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of thelimitation set forth in this Section, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of theOption first.  Upon exercise, shares issued pursuant to each such portion shall be separately identified.

                  5.4     **AwardLimits.**

                            (a)     ***Maximum Number of Shares Issuable Pursuant to Incentive Stock Options.***  Subjectto adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Planpursuant to the exercise of Incentive Stock Options shall not exceed four million eight hundred eighty-six thousand (4,886,000)shares.  The maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to all Awards other thanIncentive Stock Options shall be the number of shares determined in accordance with Section 4.1, subject to adjustment as providedin Section 4.2 and further subject to the limitation set forth in Section 5.4(b) below.

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                            (b)     ***Aggregate Limit on Full Value Awards.***  Subject to adjustment as provided inSection 4.2, in no event shall more than five hundred thousand (500,000) shares in the aggregate be issued under the Plan pursuantto the exercise or settlement of Restricted Stock Awards, Restricted Stock Unit Awards and Performance Awards (“Full ValueAwards”).  Except with respect to a maximum of five percent (5%) of the shares of Stock authorized in thisSection 5.4(b), any Full Value Awards which vest on the basis of the Participant’s continued  Service shall notprovide for vesting which is any more rapid than annual pro rata vesting over a three (3) year period and any Full Value Awards whichvest upon the attainment of PerformanceGoals shall provide for a Performance Period of at least twelve (12) months.

                            (c)     ***Section 162(m) Award Limits.***  The following limits shall apply to the grant ofany Award if, at the time of grant, the Company is a “publicly held corporation” within the meaning ofSection 162(m).

                                        (i)     **Options and SARs.**  Subject to adjustment as provided in Section 4.2, no Employeeshall be granted within any fiscal year of the Company one or more Options or Freestanding SARs which in the aggregate are for morethan 100,000 shares.

                                        (ii)    **Restricted Stock and Restricted Stock Unit Awards.**  Subject to adjustment as provided inSection 4.2, no Employee shall be granted within any fiscal year of the Company one or more Restricted Stock Awards or RestrictedStock Unit Awards, subject to Vesting Conditions based on the attainment of Performance Goals, for more than 500,000shares.

                                        (iii)   **Performance Awards.**  Subject to adjustment as provided in Section 4.2, no Employee shall begranted (1) Performance Shares which could result in such Employee receiving more than 500,000 shares for each full fiscal yearof the Company contained in the Performance Period for such Award, or (2) Performance Units which could result in such Employeereceiving value equal to more than 500,000 shares for each full fiscal year of the Company contained in the Performance Period forsuch Award.  No Participant may be granted more than one Performance Award for the same Performance Period.

                                        (iv)   **Stock-Based Awards.**  Subject to adjustment as provided in Section 4.2, no Employee may begranted Stock-Based Awards which could result in the Employee receiving more than 50,000 shares (or equivalent value) in any fiscalyear of the Company.

          6.     **TERMS ANDCONDITIONS OF OPTIONS.**

                  Options shall beevidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the Committee shall from timeto time establish.  No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by afully executed Award Agreement.  Award Agreements evidencing Options may incorporate all or any of the terms of the Plan byreference and shall comply with and be subject to the following terms and conditions:

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                  6.1     **ExercisePrice*.***  The exercise price for each Option shall be establishedin the discretion of the Committee; provided, however, that (a) the exerciseprice per share shall be not less than the Fair Market Value of a share of Stockon the effective date of grant of the Option and (b) no Incentive StockOption granted to a Ten Percent Owner shall have an exercise price per shareless than one hundred ten percent (110%) of the Fair Market Value of a share ofStock on the effective date of grant of the Option.  Notwithstanding theforegoing, an Option (whether an Incentive Stock Option or a Nonstatutory StockOption) may be granted with an exercise price lower than the minimum exerciseprice set forth above if such Option is granted pursuant to an assumption orsubstitution for another option in a manner qualifying under the provisions ofSection 424(a) of the Code.

                  6.2     **Exercisabilityand Term of Options*.***  Options shall be exercisable at such time or times, or upon such event or events, and subjectto such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the AwardAgreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of ten (10)years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall beexercisable after the expiration of five (5) years after the effective date of grant of such Option, and (c) no Option grantedto a prospective Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which suchperson commences Service. Subject to the foregoing, unless otherwise specified by the Committee in the grant of an Option, any Option granted hereunder shallterminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with itsprovisions.

                  6.3     **Paymentof Exercise Price.**

                            (a)     ***Forms of Consideration Authorized.***  Except as otherwise provided below, paymentof the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, bycheck or in cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of shares of Stock owned by theParticipant having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice ofexercise together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale orloan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, throughan exercise complyingwith the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a*“**Cashless Exercise**”*), (iv) by delivery of a properly executed notice of exercise electing a Net-Exercise,(v) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law,or (vi) by any combination thereof.  The Committee may at any time or from time to time grant Options which do not permitall of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more formsof consideration.

                            (b)     ***Limitations on Forms of Consideration.***

                                        (i)     **Tender of Stock.**  Notwithstanding the foregoing, an Option may not be exercised bytender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitutea violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. 

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                                        (ii)    **Cashless Exercise.**  The Company reserves, at any and all times, the right, in theCompany’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exerciseof Options by means of a Cashless Exercise, including with respect to one or more Participants specified by the Companynotwithstanding that such program or procedures may be available to other Participants.

                  6.4     **Effectof Termination of Service.**

                            (a)     ***Option Exercisability*.**  Subject to earlier termination of the Option as otherwiseprovided herein and unless otherwise provided by the Committee, an Option shall be exercisable after a Participant’s terminationof Service only during the applicable time periods provided in the Award Agreement.

                            (b)     ***Extension if Exercise Prevented by Law*.**  Notwithstanding the foregoing, unlessthe Committee provides otherwise in the Award Agreement, if the exercise of an Option within the applicable time periods is preventedby the provisions of Section 14 below, the Option shall remain exercisable until three (3) months (or such longer period of timeas determined by the Committee, in its discretion) after the date the Participant is notified by the Company that the Option isexercisable, but in any event no later than the Option Expiration Date.

                            (c)     ***Extension if Participant Subject to Section 16(b*).**  Notwithstanding theforegoing, if a sale within the applicable time periods of shares acquired upon the exercise of the Option would subject theParticipant to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of(i) the tenth (10th) day following the date on which a sale of such shares by the Participant would no longer be subject to suchsuit, (ii) the one hundred and ninetieth (190th) day after the Participant’s termination of Service, or (iii) theOption Expiration Date.

                  6.5     **Transferabilityof Options.**  During the lifetime of the Participant, an Option shall be exercisable only by the Participant or theParticipant’s guardian or legal representative.  Prior to the issuance of shares of Stock upon the exercise of an Option,the Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance,or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws ofdescent and distribution.  

          7.     **TERMS ANDCONDITIONS OF STOCK APPRECIATION RIGHTS.**

                  Stock AppreciationRights shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in such form as theCommittee shall from time to time establish.  No SAR or purported SAR shall be a valid and binding obligation of the Companyunless evidenced by a fully executed Award Agreement.  Award Agreements evidencing SARs may incorporate all or any of the termsof the Plan by reference and shall comply with and be subject to the following terms and conditions:

                  7.1     **Typesof SARs Authorized.**  SARs may be granted in tandem with all or any portion of a related Option (a *“**TandemSAR**”*) or may be granted independently of any Option (a *“**Freestanding SAR**”*).  A Tandem SARmay be granted either concurrently with the grant of the related Option or at any time thereafter prior to the complete exercise,termination, expiration or cancellation of such related Option.

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                 7.2     **ExercisePrice.**  The exercise price for each SAR shall be established in the discretion of the Committee; provided, however, that(a) the exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option and(b) the exercise price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of a share of Stockon the effective date of grant of the SAR.

                  7.3     **Exercisabilityand Term of SARs.**

                            (a)     ***Tandem SARs.***  Tandem SARs shall be exercisable only at the time and to theextent, and only to the extent, that the related Option is exercisable, subject to such provisions as the Committee may specify wherethe Tandem SAR is granted with respect to less than the full number of shares of Stock subject to the related Option.

                            (b)     ***Freestanding SARs.***  Freestanding SARs shall be exercisable at such time or times,or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined bythe Committee and set forth in the Award Agreement evidencing such SAR; provided, however, that no Freestanding SAR shall beexercisable after the expiration of ten (10) years after the effective date of grant of such SAR.

                  7.4     **DeemedExercise of SARs.**  If, on the date on which an SAR would otherwise terminate or expire, the SAR by its terms remainsexercisable immediately prior to such termination or expiration and, if so exercised, would result in a payment to the holder of suchSAR, then any portion of such SAR which has not previously been exercised shall automatically be deemed to be exercised as of suchdate with respect to such portion.

                  7.5     **Effectof Termination of Service.**  Subject to earlier termination of the SAR as otherwise provided herein and unless otherwiseprovided by the Committee in the grant of an SAR and set forth in the Award Agreement, an SAR shall be exercisable after aParticipant’s termination of Service only as provided in the Award Agreement.

                  7.6     **Nontransferabilityof SARs.**  During the lifetime of the Participant, an SAR shall be exercisable only by the Participant or theParticipant’s guardian or legal representative.  Prior to the exercise of an SAR, the SAR shall not be subject in anymanner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of theParticipant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.

          8.     **TERMS ANDCONDITIONS OF RESTRICTED STOCK AWARDS.**

                  Restricted StockAwards shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in such form as theCommittee shall from time to time establish.  No Restricted Stock Award or purported Restricted Stock Award shall be a valid andbinding obligation of the Company unless evidenced by a fully executed Award Agreement.  Award Agreements evidencing RestrictedStock Awards may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the followingterms and conditions:

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                  8.1     **Typesof Restricted Stock Awards Authorized.**  Restricted Stock Awards may or may not require the payment of cash compensation forthe stock.  Restricted Stock Awards may be granted upon such conditions as the Committee shall determine, including, withoutlimitation, upon the attainment of one or more Performance Goals described in Section 9.4.  If either the grant of aRestricted Stock Award or the lapsing of the Restriction Period is to be contingent upon the attainment of one or more PerformanceGoals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 9.3 through 9.5(a).

                  8.2     **PurchasePrice.**  The purchase price, if any, for shares of Stock issuable under each Restricted Stock Award and the means of paymentshall be established by the Committee in its discretion.  

                  8.3     **PurchasePeriod.**  A Restricted Stock Award requiring the payment of cash consideration shall be exercisable within a periodestablished by the Committee; provided, however, that no Restricted Stock Award granted to a prospective Employee, prospectiveConsultant or prospective Director may become exercisable prior to the date on which such person commences Service.

                  8.4     **Vestingand Restrictions on Transfer.**  Shares issued pursuant to any Restricted Stock Award may or may not be made subject toVesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria,including, without limitation, Performance Goals as described in Section 9.4, as shall be established by the Committee and setforth in the Award Agreement evidencing such Award.  During any Restriction Period in which shares acquired pursuant to aRestricted Stock Award remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, assignedor otherwise disposed of other than as provided in the Award Agreement or as provided in Section 8.7.  Upon request by theCompany, each Participant shall execute anyagreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to theCompany any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates ofappropriate legends evidencing any such transfer restrictions.

                  8.5     **VotingRights; Dividends and Distributions.**  Except as provided in this Section, Section 8.4 and any Award Agreement, during theRestriction Period applicable to shares subject to a Restricted Stock Award, the Participant shall have all of the rights of ashareholder of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and otherdistributions paid with respect to such shares.  However, in the event of a dividend or distribution paid in shares of Stock orany other adjustment made upon a change in the capital structure of the Company as described in Section 4.2, any and all new,substituted or additional securities or other property (other than normal cash dividends) to which the Participant is entitled byreason of the Participant’sRestricted Stock Award shall be immediately subject to the same Vesting Conditions as the shares subject to the Restricted StockAward with respect to which such dividends or distributions were paid or adjustments were made.

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                  8.6     **Effectof Termination of Service.**  Unless otherwise provided by the Committee in the grant of a Restricted Stock Award and setforth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (includingthe Participant’s death or disability), then the Participant shall forfeit to the Company any shares acquired by the Participantpursuant to a Restricted Stock Award which remain subject to Vesting Conditions as of the date of the Participant’s terminationof Service in exchange for the payment of the purchase price, if any, paid by the Participant.  The Company shall have the rightto assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as maybe selected by theCompany.

                  8.7     **Nontransferabilityof Restricted Stock Award Rights.**  Prior to the issuance of shares of Stock pursuant to a Restricted Stock Award, rights toacquire such shares shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,encumbrance or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or the lawsof descent and distribution.  All rights with respect to a Restricted Stock Award granted to a Participant hereunder shall beexercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

          9.     **TERMS ANDCONDITIONS OF PERFORMANCE AWARDS.**

                  Performance Awardsshall be evidenced by Award Agreements in such form as the Committee shall from time to time establish.  No Performance Award orpurported Performance Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed AwardAgreement.  Award Agreements evidencing Performance Awards may incorporate all or any of the terms of the Plan by reference andshall comply with and be subject to the following terms and conditions:

                  9.1     **Typesof Performance Awards Authorized.**  Performance Awards may be in the form of either Performance Shares or PerformanceUnits.  Each Award Agreement evidencing a Performance Award shall specify the number of Performance Shares or Performance Unitssubject thereto, the Performance Award Formula, the Performance Goal(s) and Performance Period applicable to the Award, and the otherterms, conditions and restrictions of the Award.

                  9.2     **InitialValue of Performance Shares and Performance Units.**  Unless otherwise provided by the Committee in granting a PerformanceAward, each Performance Share shall have an initial value equal to the Fair Market Value of one (1) share of Stock, subject toadjustment as provided in Section 4.2, on the effective date of grant of the Performance Share.  Each Performance Unit shallhave an initial value determined by the Committee.  The final value payable to the Participant in settlement of a PerformanceAward determined on the basis of the applicable Performance Award Formula will depend on the extent to which Performance Goalsestablished by the Committee are attained within the applicable Performance Period established by the Committee.

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                  9.3     **Establishmentof Performance Period, Performance Goals and Performance Award Formula.**  In granting each Performance Award, the Committeeshall establish in writing the applicable Performance Period, Performance Award Formula and one or more Performance Goals which, whenmeasured at the end of the Performance Period, shall determine on the basis of the Performance Award Formula the final value of thePerformance Award to be paid to the Participant.  To the extent compliance with the requirements under Section 162(m) withrespect to “performance-based compensation” is desired, the Committee shall establish the Performance Goal(s) andPerformance Award Formula applicable to each Performance Award no later than the earlier of (a) the date ninety (90) days after thecommencement of the applicablePerformance Period or (b) the date on which 25% of the Performance Period has elapsed, and, in any event, at a time when the outcomeof the Performance Goals remains substantially uncertain.  Once established, the Performance Goals and Performance Award Formulashall not be changed during the Performance Period.  The Company shall notify each Participant granted a Performance Award ofthe terms of such Award, including the Performance Period, Performance Goal(s) and Performance Award Formula.

                  9.4     **Measurementof Performance Goals.**  Performance Goals shall be established by the Committee on the basis of targets to be attained(*“**Performance Targets**”*) with respect to one or more measures of business or financial performance (each, a*“**Performance Measure**”*), subject to the following:

                            (a)     ***Performance Measures.***  Performance Measures shall have the same meanings as usedin the Company’s financial statements, or, if such terms are not used in the Company’s financial statements, they shallhave the meaning applied pursuant to generally accepted accounting principles, or as used generally in the Company’sindustry.  Performance Measures shall be calculated with respect to the Company and each Subsidiary Corporation consolidatedtherewith for financial reporting purposes or such division or other business unit as may be selected by the Committee.  Forpurposes of the Plan, the Performance Measures applicable to a Performance Award shall be calculated in accordance with generallyaccepted accounting principles,but prior to the accrual or payment of any Performance Award for the same Performance Period and excluding the effect (whetherpositive or negative) of any change in accounting standards or any extraordinary, unusual or nonrecurring item, as determined by theCommittee, occurring after the establishment of the Performance Goals applicable to the Performance Award.  Each suchadjustment, if any, shall be made solely for the purpose of providing a consistent basis from period to period for the calculation ofPerformance Measures in order to prevent the dilution or enlargement of the Participant’s rights with respect to a PerformanceAward.  Performance Measures may be one or more of the following, as determined by the Committee:  revenue; sales;expenses; operating income; gross margin; operating margin; earnings before any one or more of: stock-based compensation expense,interest, taxes, depreciation and amortization; pre-tax profit; net operating income; net income; economic valueadded; free cash flow; operating cash flow; stock price; earnings per share; return on shareholder equity; return on capital; returnon assets; return on investment; employee satisfaction; employee retention; balance of cash, cash equivalents and marketablesecurities; market share; daily average revenue trades; asset gathering metrics; number of customers; customer satisfaction; productdevelopment; completion of a joint venture or other corporate transaction; completion of identified special project; and overalleffectiveness of management; or such other measures as determined by the Committee consistent with thisSection 9.4(a).

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                            (b)     ***Performance Targets.***  Performance Targets may include a minimum, maximum, targetlevel and intermediate levels of performance, with the final value of a Performance Award determined under the applicable PerformanceAward Formula by the level attained during the applicable Performance Period.  A Performance Target may be stated as an absolutevalue or as a value determined relative to a standard selected by the Committee.

                  9.5     **Settlementof Performance Awards.**

                            (a)     ***Determination of Final Value.***  As soon as practicable following the completion ofthe Performance Period applicable to a Performance Award, the Committee shall certify in writing the extent to which the applicablePerformance Goals have been attained and the resulting final value of the Award earned by the Participant and to be paid upon itssettlement in accordance with the applicable Performance Award Formula.

                            (b)     ***Discretionary Adjustment of Award Formula.***  In its discretion, the Committee may,either at the time it grants a Performance Award or at any time thereafter, provide for the positive or negative adjustment of thePerformance Award Formula applicable to a Performance Award that is not intended to constitute “qualified performance basedcompensation” to a “covered employee” within the meaning of Section 162(m) (a *“**CoveredEmployee**”*) to reflect such Participant’s individual performance in his or her position with the Company or suchother factors as the Committee may determine.  With respect to a Performance Award intended to constitute qualifiedperformance-based compensation to a CoveredEmployee, the Committee shall have the discretion to reduce some or all of the value of the Performance Award that would otherwise bepaid to the Covered Employee upon its settlement notwithstanding the attainment of any Performance Goal and the resulting value ofthe Performance Award determined in accordance with the Performance Award Formula.  

                            (c)     ***Payment in Settlement of Performance Awards.***  As soon as practicable followingthe Committee’s determination and certification in accordance with Sections 9.5(a) and (b), payment shall be made to eacheligible Participant (or such Participant’s legal representative or other person who acquired the right to receive such paymentby reason of the Participant’s death) of the final value of the Participant’s Performance Award.  Payment of suchamount shall be made in cash, shares of Stock, or a combination thereof as determined by the Committee.  

                  9.6     **VotingRights; Dividend Equivalent Rights and Distributions.**  Participants shall have no voting rights with respect to shares ofStock represented by Performance Share Awards until the date of the issuance of such shares, if any (as evidenced by the appropriateentry on the books of the Company or of a duly authorized transfer agent of the Company).  However, the Committee, in itsdiscretion, may provide in the Award Agreement evidencing any Performance Share Award that the Participant shall be entitled toreceive Dividend Equivalents with respect to the payment of cash dividends on Stock having a record date prior to the date on whichthe Performance Shares are settled or forfeited.  Such Dividend Equivalents, if any, shall be credited to the Participant in theform of additional whole PerformanceShares as of the date of payment of such cash dividends on Stock.  The number of additional Performance Shares (rounded to thenearest whole number) to be so credited shall be determined by dividing (a) the amount of cash dividends paid on such date withrespect to the 

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number of shares of Stock represented by the Performance Shares previously credited to theParticipant by (b) the Fair Market Value per share of Stock on such date.  Dividend Equivalents may be paidcurrently or may be accumulated and paid to the extent that Performance Shares become nonforfeitable, as determined by theCommittee.  Settlement of Dividend Equivalents may be made in cash, shares of Stock, or a combination thereof as determined bythe Committee, and may be paid on the same basis as settlement of the related Performance Share as provided in Section 9.5. Dividend Equivalents shall not be paid with respect to Performance Units.  In the event of a dividend or distribution paid inshares of Stock or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.2,appropriate adjustments shall be made in the Participant’s Performance Share Award so that it representsthe right to receive upon settlement any and all new, substituted or additional securities or other property (other than normal cashdividends) to which the Participant would entitled by reason of the shares of Stock issuable upon settlement of the Performance ShareAward, and all such new, substituted or additional securities or other property shall be immediately subject to the same PerformanceGoals as are applicable to the Award.

                  9.7     **Effectof Termination of Service.**  Unless otherwise provided by the Committee in the grant of a Performance Award and set forth inthe Award Agreement, the effect of a Participant’s termination of Service on the Performance Award shall be asfollows:

                            (a)     ***Death or Disability.***  If the Participant’s Service terminates because of thedeath or Disability of the Participant before the completion of the Performance Period applicable to the Performance Award, the finalvalue of the Participant’s Performance Award shall be determined by the extent to which the applicable Performance Goals havebeen attained with respect to the entire Performance Period and shall be prorated based on the number of months of theParticipant’s Service during the Performance Period.  Payment shall be made following the end of the Performance Period inany manner permitted by Section 9.5.

                            (b)     ***Other Termination of Service.***  If the Participant’s Service terminates forany reason except death or Disability before the completion of the Performance Period applicable to the Performance Award, such Awardshall be forfeited in its entirety; provided, however, that in the event of an involuntary termination of the Participant’sService, the Committee, in its sole discretion, may waive the automatic forfeiture of all or any portion of any such Award.

                  9.8     **Nontransferabilityof Performance Awards.**  Prior to settlement in accordance with the provisions of the Plan, no Performance Award shall besubject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment bycreditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent anddistribution.  All rights with respect to a Performance Award granted to a Participant hereunder shall be exercisable during hisor her lifetime only by such Participant or the Participant’s guardian or legal representative.

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          10.   **TERMS AND CONDITIONS OF RESTRICTEDSTOCK UNITAWARDS**.

                  Restricted StockUnit Awards shall be evidenced by Award Agreements specifying the number of Restricted Stock Units subject to the Award, in such formas the Committee shall from time to time establish.  No Restricted Stock Unit Award or purported Restricted Stock Unit Awardshall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement.  Award Agreementsevidencing Restricted Stock Units may incorporate all or any of the terms of the Plan by reference and shall comply with and besubject to the following terms and conditions:

                  10.1     **Grantof Restricted Stock Unit Awards.** Restricted Stock Unit Awards may be granted upon such conditions as the Committee shalldetermine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 9.4.  Ifeither the grant of a Restricted Stock Unit Award or the Vesting Conditions with respect to such Award is to be contingent upon theattainment of one or more Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth inSections 9.3 through 9.5(a).

                  10.2     **Vesting.** Restricted Stock Units may or may not be made subject to Vesting Conditions based upon the satisfaction of such Service requirements,conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 9.4, asshall be established by the Committee and set forth in the Award Agreement evidencing such Award.

                  10.3     **VotingRights, Dividend Equivalent Rights and Distributions.**  Participantsshall have no voting rights with respect to shares of Stock represented byRestricted Stock Units until the date of the issuance of such shares (asevidenced by the appropriate entry on the books of the Company or of a dulyauthorized transfer agent of the Company).  However, the Committee, in itsdiscretion, may provide in the Award Agreement evidencing any Restricted StockUnit Award that the Participant shall be entitled to receive DividendEquivalents with respect to the payment of cash dividends on Stock having arecord date prior to the date on which Restricted Stock Units held by suchParticipant are settled.  Such Dividend Equivalents, if any, shall be paidby crediting the Participant with additional whole Restricted Stock Units as ofthe date of payment of such cash dividends on Stock.  The number ofadditional Restricted Stock Units (rounded to the nearest whole number) to be socredited shall be determined by dividing (a) the amount of cash dividends paidon such date with respect to the number of shares of Stock represented by theRestricted Stock Units previously credited to the Participant by (b) the FairMarket Value per share of Stock on such date.  Such additional RestrictedStock Units shall be subject to the same terms and conditions and shall besettled in the same manner and at the same time (or as soon thereafter aspracticable) as the Restricted Stock Units originally subject to the RestrictedStock Unit Award.  In the event of a dividend or distribution paid inshares of Stock or any other adjustment made upon a change in the capitalstructure of the Company as described in Section 4.2, appropriate adjustmentsshall be made in the Participant’s Restricted Stock Unit Award so that itrepresents the right to receive upon settlement any and all new, substituted oradditional securities or other property (other than normal cash dividends) towhich the Participant would entitled by reason of the shares of Stock issuableupon settlement of the Award, and all such new, substituted or additionalsecurities or other property shall be immediately subject to the same VestingConditions as are applicable to the Award.

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                  10.4     **Effectof Termination of Service.**  Unless otherwise provided by the Committee in the grant of a Restricted Stock Unit Award and setforth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (includingthe Participant’s death or disability), then the Participant shall forfeit to the Company any Restricted Stock Units pursuant tothe Award which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service.

                  10.5     **Settlementof Restricted Stock Unit Awards****.**  The Company shall issue to a Participant on the date on which Restricted StockUnits subject to the Participant’s Restricted Stock Unit Award vest or on such other date determined by the Committee, in itsdiscretion, and set forth in the Award Agreement one (1) share of Stock (and/or any other new, substituted or additional securitiesor other property pursuant to an adjustment described in Section 10.3) for each Restricted Stock Unit then becoming vested orotherwise to be settled on such date, subject to the withholding of applicable taxes.  Notwithstanding the foregoing, ifpermitted by the Committee and set forth in the Award Agreement, the Participant may elect in accordance with terms specified in theAward Agreement to defer receipt of all orany portion of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section.

                  10.6     **Nontransferabilityof Restricted Stock Unit Awards.**  Prior to the issuance of shares of Stock in settlement of a Restricted Stock Unit Award,the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance,or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws ofdescent and distribution.  All rights with respect to a Restricted Stock Unit Award granted to a Participant hereunder shall beexercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

          11.   **DEFERRED COMPENSATION AWARDS.**

                  11.1     **Establishmentof Deferred Compensation Award Programs.**  This Section 11 shall not be effective unless and until the Committeedetermines to establish a program pursuant to this Section.  The Committee, in its discretion and upon such terms and conditionsas it may determine, may establish one or more programs pursuant to the Plan under which:

                            (a)     Participants designated by the Committee who are Insiders or otherwise among a select group ofhighly compensated Employees may irrevocably elect, prior to a date specified by the Committee, to reduce such Participant’scompensation otherwise payable in cash (subject to any minimum or maximum reductions imposed by the Committee) and to be grantedautomatically at such time or times as specified by the Committee one or more Awards of Stock Units with respect to such numbers ofshares of Stock as determined in accordance with the rules of the program established by the Committee and having such other termsand conditions as established by the Committee.

                            (b)     Participants designated by the Committee who are Insiders or otherwise among a select group ofhighly compensated Employees may irrevocably elect, prior to a date specified by the Committee, to be granted automatically an Awardof Stock Units with respect to such number of shares of Stock and upon such other terms and conditions as established by theCommittee in lieu of:

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                                        (i)     shares of Stock otherwise issuable to such Participant upon the exercise of an Option;

                                        (ii)    cash or shares of Stock otherwise issuable to such Participant upon the exercise of an SAR; or

                                        (iii)   cash or shares of Stock otherwise issuable to such Participant upon the settlement of a Performance Award orPerformance Unit.

                  11.2     **Termsand Conditions of Deferred Compensation Awards.**  Deferred Compensation Awards granted pursuant to this Section 11 shallbe evidenced by Award Agreements in such form as the Committee shall from time to time establish.  No such Deferred CompensationAward or purported Deferred Compensation Award shall be a valid and binding obligation of the Company unless evidenced by a fullyexecuted Award Agreement.  Award Agreements evidencing Deferred Compensation Awards may incorporate all or any of the terms ofthe Plan by reference and shall comply with and be subject to the following terms and conditions:

                            (a)     ***Vesting Conditions***.  Deferred Compensation Awards shall not be subject to anyvesting conditions.

                            (b)     ***Terms and Conditions of Stock Units***.

                                        (i)     **Voting Rights; Dividend Equivalent Rightsand Distributions.**  Participants shall have no voting rights withrespect to shares of Stock represented by Stock Units until the date of theissuance of such shares (as evidenced by the appropriate entry on the books ofthe Company or of a duly authorized transfer agent of the Company). However, a Participant shall be entitled to receive Dividend Equivalents withrespect to the payment of cash dividends on Stock having a record date prior todate on which Stock Units held by such Participant are settled.  SuchDividend Equivalents shall be paid by crediting the Participant with additionalwhole and/or fractional Stock Units as of the date of payment of such cashdividends on Stock.  The method of determining the number of additionalStock Units to be so credited shall be specified by the Committee and set forthin the Award Agreement.  Such additional Stock Units shall be subject tothe same terms and conditions and shall be settled in the same manner and at thesame time (or as soon thereafter as practicable) as the Stock Units originallysubject to the Stock Unit Award.  In the event of a dividend ordistribution paid in shares of Stock or any other adjustment made upon a changein the capital structure of the Company as described in Section 4.2,appropriate adjustments shall be made in the Participant’s Stock Unit Awardso that it represent the right to receive upon settlement any and all new,substituted or additional securities or other property (other than normal cashdividends) to which the Participant would be entitled by reason of the shares ofStock issuable upon settlement of the Award.

                                        (ii)    **Settlement of Stock Unit Awards.**  A Participant electing to receive an Award of Stock Unitspursuant to this Section 11, shall specify at the time of such election a settlement date with respect to such Award.  TheCompany shall issue to the Participant as soon as practicable following the earlier of the settlement date elected by the 

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Participant or the date of termination of the Participant’s Service, a number of wholeshares of Stock equal to the number of whole Stock Units subject to the Stock Unit Award.  Such shares of Stock shall be fullyvested, and the Participant shall not be required to pay any additional consideration (other than applicable tax withholding) toacquire such shares.  Any fractional Stock Unit subject to the Stock Unit Award shall be settled by the Company by payment incash of an amount equal to the Fair Market Value as of the payment date of such fractional share.

                                        (iii)   **Nontransferability of Stock Unit Awards.**  Prior to their settlement in accordance with theprovision of the Plan, no Stock Unit Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer,assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, excepttransfer by will or by the laws of descent and distribution.  All rights with respect to a Stock Unit Award granted to aParticipant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian orlegal representative.

          12.   **OTHER STOCK-BASED AWARDS**.

          In addition to the Awards set forthin Sections 6 through 11 above, the Committee, in its sole discretion, may carry out the purpose of this Plan by awarding Stock-BasedAwards as it determines to be in the best interests of the Company and subject to such other terms and conditions as it deemsnecessary and appropriate.

**          13.   CHANGE INCONTROL.**

          Notwithstanding any otherprovision of the Plan, any unexercisable or unvested portion of each outstanding Award held by a Nonemployee Director or an officerand any shares acquired upon the exercise thereof shall be immediately exercisable and vested in full as of the date ten (10) daysprior to the date of a Change in Control but conditioned upon the consummation of the Change in Control.

                  **13.1     Effectof Change in Control on Options and SARs. **

                            (a)     ***Accelerated Vesting***.  Notwithstanding any other provision of the Plan to thecontrary except as provided in this Section 13, the Committee, in its sole discretion, may provide in any Award Agreement or, in theevent of a Change in Control, may take such actions as it deems appropriate to provide for the acceleration of the exercisability andvesting in connection with such Change in Control of any or all outstanding Options and SARs and shares acquired upon the exercise ofsuch Options and SARs upon such conditions and to such extent as the Committee shall determine.  

                            (b)     ***Assumption or Substitution***.  In the event of a Change in Control, the surviving,continuing, successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may, without theconsent of any Participant, either assume the Company’s rights and obligations under outstanding Options and SARs or substitutefor outstanding Options and SARs substantially equivalent options and SARs (as the case may be) for the Acquiror’s stock. Any Options or SARs which are not assumed by the Acquiror in connection with the Change in Control nor exercised as of the time ofconsummation of the Change in Control shall terminate and cease to be outstanding effective as of the time of consummation of theChange inControl.

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                            (c)     ***Cash-Out of Options***.  The Committee may, in its sole discretion and without theconsent of any Participant, determine that, upon the occurrence of a Change in Control, each or any Option or SAR outstandingimmediately prior to the Change in Control shall be canceled in exchange for a payment with respect to each vested share of Stocksubject to such canceled Option or SAR in (i) cash, (ii) stock of the Company or of a corporation or other business entity a party tothe Change in Control, or (iii) other property which, in any such case, shall be in an amount having a Fair Market Value equal to theexcess of the Fair Market Value of the consideration to be paid per share of Stock in the Change in Control over the exercise priceper share under suchOption or SAR (the “Spread”).  In the event such determination is made by the Committee, the Spread (reduced byapplicable withholding taxes, if any) shall be paid to Participants in respect of their canceled Options and SARs as soon aspracticable following the date of the Change in Control.

                  13.2     **Effectof Change in Control on Restricted Stock Awards**.  The Committee may, in its discretion, provide in any Award Agreementevidencing a Restricted Stock Award that, in the event of a Change in Control, the lapsing of the Restriction Period applicable tothe shares subject to the Restricted Stock Award held by a Participant whose Service has not terminated prior to the Change inControl shall be accelerated effective immediately prior to the consummation of the Change in Control to such extent as specified insuch Award Agreement.  Any acceleration of the lapsing of the Restriction Period that was permissible solely by reason of thisSection 13.2 and the provisions of such Award Agreement shall be conditioned upon the consummation of the Change inControl.

                  13.3     **Effectof Change in Control on Performance Awards**.  The Committee may, in its discretion, provide in any Award Agreement evidencinga Performance Award that, in the event of a Change in Control, the Performance Award held by a Participant whose Service has notterminated prior to the Change in Control or whose Service terminated by reason of the Participant’s death or Disability shallbecome payable effective as of the date of the Change in Control to such extent as specified in such Award Agreement.

                  13.4     **Effectof Change in Control on Restricted Stock Unit Awards**.  The Committee may, in its discretion, provide in any Award Agreementevidencing a Restricted Stock Unit Award that, in the event of a Change in Control, the Restricted Stock Unit Award held by aParticipant whose Service has not terminated prior to such date shall be settled effective as of the date of the Change in Control tosuch extent as specified in such Award Agreement.

                  13.5     **Effectof Change in Control on Deferred Compensation and Other Stock-Based Awards**.  The Committee may, in its discretion, providein any Award Agreement evidencing a Deferred Compensation Award or other Stock-Based Award that, in the event of a Change in Control,the amounts payable pursuant to such Award shall be settled effective as of the date of the Change in Control to such extent asspecified in such Award Agreement.

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          14.   **COMPLIANCE WITH SECURITIES LAW.**

                  Thegrant of Awards and the issuance of shares of Stock pursuant to any Award shallbe subject to compliance with all applicable requirements of federal, state andforeign law with respect to such securities and the requirements of any stockexchange or market system upon which the Stock may then be listed.  Inaddition, no Award may be exercised or shares issued pursuant to an Award unless(a) a registration statement under the Securities Act shall at the time ofsuch exercise or issuance be in effect with respect to the shares issuablepursuant to the Award or (b) in the opinion of legal counsel to theCompany, the shares issuable pursuant to the Award may be issued in accordancewith the terms of an applicable exemption from the registration requirements ofthe Securities Act.  The inability of the Company to obtain from anyregulatory body having jurisdiction the authority, if any, deemed by theCompany’s legal counsel to be necessary to the lawful issuance and sale ofany shares hereunder shall relieve the Company of any liability in respect ofthe failure to issue or sell such shares as to which such requisite authorityshall not have been obtained.  As a condition to issuance of any Stock, theCompany may require the Participant to satisfy any qualifications that may benecessary or appropriate, to evidence compliance with any applicable law orregulation and to make any representation or warranty with respect thereto asmay be requested by the Company.

          15.   **TAX WITHHOLDING.**

                  15.1     **TaxWithholding in General.**  The Company shall have the right to deductfrom any and all payments made under the Plan, or to require the Participant,through payroll withholding, cash payment or otherwise, including by means of aCashless Exercise or Net Exercise of an Option, to make adequate provision for,the federal, state, local and foreign taxes, if any, required by law to bewithheld by the Participating Company Group with respect to an Award or theshares acquired pursuant thereto.  The Company shall have no obligation todeliver shares of Stock, to release shares of Stock from an escrow establishedpursuant to an Award Agreement, or to make any payment in cash under the Planuntil the Participating Company Group’s tax withholding obligations havebeen satisfied by the Participant.

                  15.2     **Withholdingin Shares.**  The Company shall have the right, but not the obligation,to deduct from the shares of Stock issuable to a Participant upon the exerciseor settlement of an Award, or to accept from the Participant the tender of, anumber of whole shares of Stock having a Fair Market Value, as determined by theCompany, equal to all or any part of the tax withholding obligations of theParticipating Company Group.  The Fair Market Value of any shares of Stockwithheld or tendered to satisfy any such tax withholding obligations shall notexceed the amount determined by the applicable minimum statutory withholdingrates.

          16.   **AMENDMENT OR TERMINATION OF PLAN.**

                  The Board or theCommittee may amend, suspend or terminate the Plan at any time.  However, without the approval of the Company’sshareholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under thePlan (except by operation of the provisions of Section 4.2), (b) no change in the class of persons eligible to receive IncentiveStock Options, and (c) no other amendment of the Plan that would require approval of the Company’s shareholders under anyapplicable law, regulation or rule. 

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No amendment, suspension or termination of the Plan shall affect any then outstanding Awardunless expressly provided by the Board or the Committee.  In any event, no amendment, suspension or termination of the Plan mayadversely affect any then outstanding Award without the consent of the Participant unless necessary to comply with any applicablelaw, regulation or rule, including Section 409A of the Code.

          17.   **MISCELLANEOUS PROVISIONS.**

                  17.1     **RepurchaseRights*.***  Shares issued under the Plan may be subject to one or more repurchase options, or other conditions andrestrictions as determined by the Committee in its discretion at the time the Award is granted.  The Company shall have theright to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more personsas may be selected by the Company.  Upon request by the Company, each Participant shall execute any agreement evidencing suchtransfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and allcertificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencingany such transferrestrictions.

                  17.2     **Provisionof Information.**  Each Participant shall be given access to information concerning the Company equivalent to that informationgenerally made available to the Company’s common shareholders.

                  17.3     **Rightsas Employee, Consultant or Director.**  No person, even though eligible pursuant to Section 5, shall have a right to beselected as a Participant, or, having been so selected, to be selected again as a Participant.  Nothing in the Plan or any Awardgranted under the Plan shall confer on any Participant a right to remain an Employee, Consultant or Director or interfere with orlimit in any way any right of a Participating Company to terminate the Participant’s Service at any time.  To the extentthat an Employee of a Participating Company other than the Company receives an Award under the Plan, that Award shall in no event beunderstood or interpreted to mean that the Company is the Employee’s employer or that the Employee has an employmentrelationship with the Company.

                  17.4     **Rightsas a Shareholder.**  A Participant shall have no rights as a shareholder with respect to any shares covered by an Award untilthe date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorizedtransfer agent of the Company).  No adjustment shall be made for dividends, distributions or other rights for which the recorddate is prior to the date such shares are issued, except as provided in Section 4.2 or another provision of the Plan.

                  17.5     **FractionalShares.**  The Company shall not be required to issue fractional shares upon the exercise or settlement of anyAward.

                  17.6     **Severability**. If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in anyrespect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality andenforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impairedthereby.

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                  17.7     **BeneficiaryDesignation.**  Subject to local laws and procedures, each Participant may file with the Company a written designation of abeneficiary who is to receive any benefit under the Plan to which the Participant is entitled in the event of such Participant’sdeath before he or she receives any or all of such benefit.  Each designation will revoke all prior designations by the sameParticipant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing withthe Company during the Participant’s lifetime.  If a married Participant designates a beneficiary other than theParticipant’s spouse, the effectiveness of such designation may be subject to the consent of the Participant’sspouse.  If a Participant dies without aneffective designation of a beneficiary who is living at the time of the Participant’s death, the Company will pay any remainingunpaid benefits to the Participant’s legal representative.

                  17.8     **UnfundedObligation.**  Participants shall have the status of general unsecuredcreditors of the Company.  Any amounts payable to Participants pursuant tothe Plan shall be unfunded and unsecured obligations for all purposes,including, without limitation, Title I of the Employee Retirement IncomeSecurity Act of 1974.  No Participating Company shall be required tosegregate any monies from its general funds, or to create any trusts, orestablish any special accounts with respect to such obligations.  TheCompany shall retain at all times beneficial ownership of any investments,including trust investments, which the Company may make to fulfill its paymentobligations hereunder.  Any investments or the creation or maintenance ofany trust or any Participant account shall not create or constitute a trust orfiduciary relationship between the Committee or any Participating Company and aParticipant, or otherwise create any vested or beneficial interest in anyParticipant or the Participant’s creditors in any assets of anyParticipating Company.  The Participants shall have no claim against anyParticipating Company for any changes in the value of any assets which may beinvested or reinvested by the Company with respect to the Plan.  EachParticipating Company shall be responsible for making benefit payments pursuantto the Plan on behalf of its Participants or for reimbursing the Company for thecost of such payments, as determined by the Company in its solediscretion.  In the event the respective Participating Company fails tomake such payment or reimbursement, a Participant’s (or otherindividual’s) sole recourse shall be against the respective ParticipatingCompany, and not against the Company.  A Participant’s acceptance ofan Award pursuant to the Plan shall constitute agreement with thisprovision.

                  17.9     **Choiceof Law.**  Except to the extent governed by applicable federal law, the validity, interpretation, construction and performanceof the Plan and each Award Agreement shall be governed by the laws of the State of California, without regard to its conflict of lawrules.

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**ABAXIS, INC.****RESTRICTED STOCK UNITS AGREEMENT**

          Abaxis, Inc. has granted to the Participant named in the *Notice of Grant of Restricted Stock Units* (the *“**Notice**”*) to which this Restricted Stock Units Agreement (the *“**Agreement**”*) is attached an Award consisting of Restricted Stock Units subject to the terms and conditions set forth in the Notice and this Agreement.  The Award has been granted pursuant to the Abaxis, Inc. 2005 Equity Incentive Plan (the *“**Plan**”*), as amended to the Date of Grant, the provisions of which are incorporated herein by reference.  By signing the Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Notice, this Agreement, the Plan and a prospectus for the Plan in the form most recently registered with the Securities and Exchange Commission (the *“**PlanProspectus**”*), (b) accepts the Award subject to all of the terms and conditions of the Notice, this Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Notice, this Agreement or the Plan.

          1.       **DEFINITIONS AND CONSTRUCTION.**

                    1.1     **Definitions*.***  Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Notice or the Plan.

                              (a)     *“**Dividend Equivalent Units**”* mean additional Restricted Stock Units credited pursuant to Section 3.3.

                              (b)     *“**Units**”* mean the Restricted Stock Units originally granted pursuant to the Award and the Dividend Equivalent Units credited pursuant to the award, as both shall be adjusted from time to time pursuant to Section 9.

                    1.2     **Construction*.***  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

          2.       **ADMINISTRATION.**

                    All questions of interpretation concerning the Notice and this Agreement shall be determined by the Committee.  All determinations by the Committee shall be final and binding upon all persons having an interest in the Award.  Any officer of the Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the officer has apparent authority with respect to such matter, right, obligation, or election.

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          3.      **THE AWARD.**

                    3.1     **Grant of Restricted Stock Units.**  On the Date of Grant, the Participant shall acquire, subject to the provisions of this Agreement, the Number of Restricted Stock Units set forth in the Notice, subject to adjustment as provided in Section 3.3 and Section 9.  Each Unit represents a right to receive on a date determined in accordance with the Notice and this Agreement one (1) Share.

                    3.2     **No Monetary Payment Required.**  The Participant is not required to make any monetary payment (other than applicable tax withholding, if any) as a condition to receiving the Units or Shares issued upon settlement of the Units, the consideration for which shall be past services actually rendered and/or future services to be rendered to the Company and/or its Affiliates or for their benefit.  Notwithstanding the foregoing, if required by applicable state corporate law, the Participant shall furnish consideration in the form of cash or past services rendered to or for the benefit of the Company and/or its Affiliates having a value not less than the par value of the Shares issued pursuant to the Award.

                    3.3     **Dividend Equivalent Units.**  On the date that the Company pays a cash dividend to holders of Shares generally, the Participant shall be credited with a number of additional whole Dividend Equivalents Units determined by dividing (a) the product of (i) the dollar amount of the cash dividend paid per Share on such date and (ii) the total number of Restricted Stock Units and Dividend Equivalent Units previously credited to the Participant pursuant to the Award and which have not been settled or forfeited pursuant to the Company Reacquisition Right (as defined below) as of such date, by (b) the Fair Market Value per Share on such date.  Any resulting fractional Dividend Equivalent Unit shall be rounded to the nearest whole number.  Such additional Dividend Equivalent Units shall besubject to the same terms and conditions and shall be settled or forfeited in the same manner and at the same time as the Restricted Stock Units originally subject to the Award with respect to which they have been credited.

          4.       **PERIOD OF RESTRICTION/VESTING OF UNITS**.

                    The Units shall vest and become Vested Units as provided in the Notice.

          5.       **COMPANY REACQUISITION RIGHT.**

                    In the event that the Participant’s Service terminates for any reason or no reason, with or without cause, the Participant shall forfeit and the Company shall automatically reacquire all Units which are not, as of the time of such termination, Vested Units, and the Participant shall not be entitled to any payment therefor (the *“**Company Reacquisition Right**”*).

          6.       **SETTLEMENT OF THE AWARD.**

                    6.1     **Issuance of Shares*.***  Subject to the provisions of Section 6.3 below, the Company shall issue to the Participant on the Settlement Date with respect to each Unit to be settled on such date, one (1) Share; provided however, that if such Settlement Date is a date on 

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which a sale by the Participant of the Share to be issued in settlement of such Unit would violate the Insider Trading Policy of the Company, then the Settlement Date with respect to such Unit shall be the earlier of (a) the next day on which such sale would not violate the Insider Trading Policy or (b) the date that is two and one-half (21⁄2) months from the end of the calendar year in which such Unit became a Vested Unit.  For purposes of this Section, *“**Insider Trading Policy**”* means the written policy of the Company pertaining to the sale, transfer or other disposition of the Company’s equity securities by members of the Board, officers or other employees who may possess material, non-public information regarding the Company, as in effect at the time of a disposition of any Shares.  Shares issued in settlement of Units shall not be subject to any restriction on transfer other than any such restriction as may berequired pursuant to Section 6.3.

                    6.2     **Beneficial Ownership of Shares; Certificate Registration*.***  The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with any broker with which the Participant has an account relationship of which the Company has notice any or all Shares acquired by the Participant pursuant to the settlement of the Award.  Except as provided by the preceding sentence, a certificate for the Shares as to which the Award is settled shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

                    6.3     **Restrictionson Grant of the Award and Issuance of Shares*.***  The grant of theAward and issuance of Shares upon settlement of the Award shall be subject tocompliance with all applicable requirements of federal, state or foreign lawwith respect to such securities.  No Shares may be issued hereunder if theissuance of such Shares would constitute a violation of any applicable federal,state or foreign securities laws or other law or regulations or the requirementsof any stock exchange or market system upon which the Shares may then belisted.  The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’’slegal counsel to be necessary to the lawful issuance of any Shares subject tothe Award shall relieve the Company of any liability in respect of the failureto issue such Shares as to which such requisite authority shall not have beenobtained.  As a condition to the settlement of the Award, the Company mayrequire the Participant to satisfy any qualifications that may be necessary orappropriate, to evidence compliance with any applicable law or regulation and tomake any representation or warranty with respect thereto as may be requested bythe Company.

                    6.4     **Fractional Shares*.***  The Company shall not be required to issue fractional shares upon the settlement of the Award.

          7.       **TAX WITHHOLDING.**

                    7.1     **In General.**  At the time the Notice is executed, or at any time thereafter as requested by the Company and/or its Affiliates, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company and/or its Affiliates, if any, which arise in connection with the Award or the issuance of Shares in settlement thereof.  The Company shall have no obligation to deliver Shares until the tax withholding obligations of the Company have been satisfied by the Participant.

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                    7.2     **Withholding in Shares.**  The Company, it its discretion, shall have the right, but not the obligation, to permit or require the Participant to satisfy all or any portion of the Company’s and/or its Affiliates’ tax withholding obligations by withholding a number of whole Shares otherwise deliverable to the Participant in settlement of the Award having a fair market value, as determined by the Company as of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.  Any adverse consequences to the Participant resulting from the procedure permitted under this Section, including, without limitation, tax consequences, shall be the sole responsibility of theParticipant.

          8.       **EFFECT OF CHANGE IN CONTROL ON AWARD*.***

                    In the event of a Change in Control, the Award, with respect to those Units which are then Vested Units, shall be settled in accordance with Section 6 upon the consummation of the Change in Control.  Notwithstanding any other provision contained herein, any unvested portion of each outstanding Award held by a Nonemployee Director or an officer shall be vested in full as of the date ten (10) days prior to the date of a Change in Control and shall be settled upon the consummation of the Change in Control.  The provisions of this section are conditioned upon the consummation of the Change in Control.

          9.       **ADJUSTMENTS IN AUTHORIZED SHARES.**

                    In the event of any corporate event or transaction (including, but not limited to, a change in the Shares of the Company or the capitalization of the Company) such as a merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split, split up, spin-off, or other distribution of stock or property of the Company, combination of Shares, exchange of Shares, dividend in kind, or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, or any similar corporate event or transaction, the Committee, in its sole discretion, in order to prevent dilution or enlargement of Participants’ rights under this Award, shall make appropriate and proportionate adjustments in the number of Units subject to the Award and/or the number and kind ofShares to be issued in settlement of the Award.  Any fractional share resulting from an adjustment pursuant to this Section 9 shall be rounded down to the nearest whole number.  Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.

          10.      **RIGHTS AS A STOCKHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.**

                     The Participant shall have no rights as a stockholder with respect to any Shares which may be issued in settlement of this Award until the date of the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date the Shares are issued, except as provided in Section 3.3 and Section 9.  If the Participant is an Employee, the Participant understands and

4

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acknowledges that, except as otherwise provided in a separate, written employment agreement between the Company and/or its Affiliates and the Participant, the Participant’s employment is “at will” and is for no specified term.  Nothing in this Agreement shall confer upon the Participant any right to continue in the Service of the Company and/or its Affiliates or interfere in any way with any right of the Company and/or its Affiliates to terminate the Participant’s Service at any time.

          11.      **LEGENDS.**

                    The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing Shares issued pursuant to this Agreement.  The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing the Shares in the possession of the Participant in order to carry out the provisions of this Section.

          12.      **MISCELLANEOUS PROVISIONS.**

                     12.1     **Amendment.**  The Committee may amend this Agreement at any time; provided, however, that no such amendment may adversely affect the Participant’s rights under this Agreement without the consent of the Participant, except to the extent such amendment is necessary to comply with applicable law, including, but not limited to, Section 409A of the Code.  No amendment or addition to this Agreement shall be effective unless in writing.

                     12.2     **Nontransferability of the Award.**  Prior the issuance of Shares on the applicable Settlement Date, neither this Award nor any Units subject to this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  All rights with respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

                     12.3     **Further Instruments.**  The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

                     12.4     **Binding Effect.**  This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

                     12.5     **Deliveryof Documents and Notices.**  Any document relating to participation inthe Plan or any notice required or permitted hereunder shall be given in writingand shall be deemed effectively given (except to the extent that this Agreementprovides for effectiveness only upon actual receipt of such notice) uponpersonal delivery, electronic delivery at the e-mail address, if any, providedfor the Participant by the Company and/or its Affiliates, or upon deposit in theU.S. Post Office or foreign postal service, by registered or certified mail, orwith a nationally recognized overnight courier service, with postage and feesprepaid, addressed to the other party at the address shown below thatparty’s signature to the Notice or at such other address as such party maydesignate in writing from time to time to the other party.

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                                 (a)     **Description of Electronic Delivery*.***  The Plan documents, which may include but do not necessarily include: the Plan, the Notice, this Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically.  Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

                                  (b)     **Consent to Electronic Delivery.**  The Participant acknowledges that the Participant has read Section 12.5(a) of this Agreement and consents to the electronic delivery of the Plan documents as described in Section 12.5(a).  The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Chief Financial Officer of the Company by telephone or in writing.  The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails.  Similarly, the Participant understands that the Participant mustprovide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.  The Participant may revoke his or her consent to the electronic delivery of documents described in Section 12.5(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail.  Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 12.5(a).

                     12.6     **Integrated Agreement.**  The Notice, this Agreement and the Plan, together with the Superseding Agreement, if any, shall constitute the entire understanding and agreement of the Participant and the Company and/or its Affiliates with respect to the subject matter contained herein or therein and supersedes any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Company and/or its Affiliates with respect to such subject matter other than those as set forth or provided for herein or therein.  To the extent contemplated herein or therein, the provisions of the Notice and the Agreement shall survive any settlement of the Award and shall remain in full force and effect.

                     12.7     **Applicable Law.**  This Agreement shall be governed by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California.

                     12.8     **Counterparts.**  The Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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**ABAXIS, INC. NOTICE OF GRANT OF RESTRICTED STOCK UNITS**

The Participant has been granted an award of Restricted Stock Units (the *“**Award**”*) pursuant to the Abaxis, Inc. 2005 Equity Incentive Plan (the *“**Plan**”*), each of which represents the right to receive on the applicable Settlement Date one (1) Share of Abaxis, Inc., as follows:

| **Participant:**                         | ______________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Date of Grant:**                       | ______________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Number of Restricted    Stock Units:** | ______________________,   subject to adjustment as provided by the Restricted Stock Units Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Settlement Date:**                     | For each Restricted Stock Unit and any Dividend   Equivalent Unit received, except as set forth below or as otherwise provided   by the Restricted Stock Units Agreement, the first business day in which the   Participant is permitted to trade the securities to be acquired upon   settlement of this Award pursuant to the Abaxis, Inc. Insider Trading Policy   that occurs on or after the date on which such unit becomes a Vested Unit in   accordance with the vesting schedule set forth below.  Notwithstanding the above, the Settlement   Date for Vested Units shall be no later than 2 1/2 months after the later of   (i) the end of the calendar year in which the Vesting Date occurs; or (ii)   the end of the Company’s tax year in which the Vesting Date occurs.                 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Vested Units:**                        | Except as provided in the Restricted Stock Units   Agreement and provided that the Participant’s Service has not terminated   prior to the relevant vesting date, the number of Vested Units shall   cumulatively increase according to the time based vesting schedule set forth   below.  Vesting may be accelerated   until the Number of Restricted Stock Units granted hereunder and any Dividend   Equivalent Units received are 100% vested in accordance with the Performance   Based Accelerated Vesting Schedule set forth below; provided that the   Participant’s Service has not terminated prior to the relevant vesting   date.  At no point may more than the   Number of Restricted Stock Units set forth above plus any Dividend Equivalent   Units received become vested. |

| **Time Based VestingVesting Date**      | **No. Units Vesting** |
|-----------------------------------------|-----------------------|
| One year anniversary of Date of Grant   | __% of  Units    |
| Two year anniversary of Date of Grant   | __% of Units          |
| Three year anniversary of Date of Grant | __% of Units          |
| Four year anniversary of Date of Grant  | __% of Units          |

| **Performance Based Accelerated Vesting** |                                |             |
|-------------------------------------------|-------------------------------------|------------------|
|                                      |                                |             |   |
| **Performance Milestone**                 | **Vesting % if Milestone Achieved** | **Vesting Date** | **Settlement Date** |
|                                      |                                |             |   |
|                                      | __% of Units                        |             |   |
|                                      | __% of Units                        |             |   |

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By their signatures below, the Company and the Participant agree that the Award is governed by this Notice and by the provisions of the Plan and the Restricted Stock Units Agreement, both of which are attached to and made a part of this document.  The Participant acknowledges receipt of copies of the Plan, the Restricted Stock Units Agreement and the Plan Prospectus and represents that the Participant has read and is familiar with their provisions.  The Participant hereby accepts the Award subject to all of the terms and conditions of this Notice, the Restricted Stock Units Agreement and the Plan.

| ABAXIS, INC. |                   |                 | PARTICIPANT |
|--------------|------------------------|----------------------|-------------|
|         |                   |                 |        |   |
| By:          |                   |                 |        |   |
|         |                        |                 |             |
|         |                   |                 |        | Signature |
| Its:         |                   |                 |        |   |
|         |                        |                 |             |
|         |                   |                 |        | Date |
| Address:     | 3240 Whipple Road |                 |             |
|         |                   | Union City, CA 94587 |        | Address |
|         |                   |                 |        |  |

| ATTACHMENTS: | 2005 Equity Incentive Plan, as amended to the Date   of Grant; Restricted Stock Units Agreement and Plan Prospectus |
|--------------|---------------------------------------------------------------------------------------------------------------------|

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**ABAXIS, INC. NOTICE OF GRANT OF RESTRICTED STOCK UNITS**

The Participant has been granted an award of Restricted Stock Units (the *“**Award**”*) pursuant to the Abaxis, Inc. 2005 Equity Incentive Plan (the *“**Plan**”*), each of which represents the right to receive on the applicable Settlement Date one (1) Share of Abaxis, Inc., as follows:

| **Participant:**                      | ______________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **Vesting Commencement Date:**        | ______________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **Number of Restricted Stock Units:** | ______________________,   subject to adjustment as provided by the Restricted Stock Units Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **Settlement Date:**                  | For each Restricted Stock Unit and any Dividend   Equivalent Unit received, except as otherwise provided by the Restricted   Stock Units Agreement, the first business day in which the Participant is   permitted to trade the securities to be acquired upon settlement of this   Award pursuant to the Abaxis, Inc. Insider Trading Policy that occurs on or   after the date on which such unit becomes a Vested Unit in accordance with   the vesting schedule set forth below.    Notwithstanding the above, the Settlement Date for Vested Units shall   be no later than 2 1/2 months after the later of (i) the end of the calendar   year in which the Vesting Date occurs; or (ii) the end of the Company’s tax   year in which the Vesting Date occurs. |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| **Vested Units:**                     | Except as provided in the Restricted Stock Units   Agreement and provided that the Participant’s Service has not terminated   prior to the relevant date, the number of Vested Units shall be determined as   follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|                                  |             **Vesting Date**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **No. Units Vesting** |
|                                  | _____   anniversary of Date                    of Grant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |    ___% of Units |

By their signatures below, the Company and the Participant agree that the Award is governed by this Notice and by the provisions of the Plan and the Restricted Stock Units Agreement, both of which are attached to and made a part of this document.  The Participant acknowledges receipt of copies of the Plan, the Restricted Stock Units Agreement and the Plan Prospectus and represents that the Participant has read and is familiar with their provisions.  The Participant hereby accepts the Award subject to all of the terms and conditions of this Notice, the Restricted Stock Units Agreement, and the Plan.

| ABAXIS, INC. |                   |                 | PARTICIPANT |
|--------------|------------------------|----------------------|-------------|
|         |                   |                 |        |   |
| By:          |                   |                 |        |
|         |                        |                 |             |
|         |                   |                 | Signature   |
| Its:         |                   |                 |        |
|         |                        |                 |             |
|         |                   |                 | Date        |
| Address:     | 3240 Whipple Road |                 |             |
|         |                   | Union City, CA 94587 |        | Address |
|         |                   |                 |        |  |

| ATTACHMENTS: | 2005 Equity Incentive Plan, as amended to the Date   of Grant; Restricted Stock Units Agreement and Plan Prospectus |
|--------------|---------------------------------------------------------------------------------------------------------------------|