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                                                                    EXHIBIT 10.1


                     BRIGHT HORIZONS FAMILY SOLUTIONS, INC.

                              AMENDED AND RESTATED
                            1998 STOCK INCENTIVE PLAN

SECTION 1.        PURPOSE; DEFINITIONS.

         The purpose of the Bright Horizons Family Solutions, Inc. Amended and
Restated 1998 Stock Incentive Plan (the "Plan") is to enable Bright Horizons
Family Solutions, Inc. (the "Company") to attract, retain and reward key
employees of and consultants to the Company and its Subsidiaries and Affiliates,
and directors who are not also employees of the Company, and to strengthen the
mutuality of interests between such key employees, consultants, and directors by
awarding such key employees, consultants, and directors performance-based stock
incentives and/or other equity interests or equity-based incentives in the
Company, as well as performance-based incentives payable in cash. The creation
of the Plan shall not diminish or prejudice other compensation programs approved
from time to time by the Board.

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

         A. "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Company directly or indirectly owns at least 20% of
the combined voting power of all classes of stock of such entity or at least 20%
of the ownership interests in such entity.

         B. "Board" means the Board of Directors of the Company.

         C. "Cause" has the meaning provided in Section 5(j) of the Plan.

         D. "Change in Control" has the meaning provided in Section 9(b) of the
Plan.

         E. "Change in Control Price" has the meaning provided in Section 9(d)
of the Plan.

         F. "Common Stock" means the Company's Common Stock, par value $.01 per
share.

         G. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.

         H. "Committee" means the Committee referred to in Section 2 of the
Plan.

         I. "Company" means Bright Horizons Family Solutions, Inc., a
corporation organized under the laws of the State of Delaware or any successor
corporation.

         J. "Disability" means disability as determined under the Company's
Group Long Term Disability Insurance Plan.

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         K. "Early Retirement" means retirement, for purposes of this Plan with
the express consent of the Company at or before the time of such retirement,
from active employment with the Company and any Subsidiary or Affiliate prior to
age 65, in accordance with any applicable early retirement policy of the Company
then in effect or as may be approved by the Committee.

         L. "Effective Date" has the meaning provided in Section 13 of the Plan.

         M. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

         N. "Fair Market Value" means with respect to the Common Stock, as of
any given date or dates, unless otherwise determined by the Committee in good
faith, the reported closing price of a share of Common Stock on the
NASDAQ-National Market or such other market or exchange as is the principal
trading market for the Common Stock, or, if no such sale of a share of Common
Stock is reported on the NASDAQ-National Market or other exchange or principal
trading market on such date, the fair market value of a share of Common Stock as
determined by the Committee in good faith.

         O. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.

         P. "Immediate Family" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
adoptive relationships.

         Q. "Non-Employee Director" means a member of the Board who is a
Non-Employee Director within the meaning of Rule 16b-3(b)(3) promulgated under
the Exchange Act and an outside director within the meaning of Treasury
Regulation Sec. 162-27(e)(3) promulgated under the Code.

         R. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.

         S. "Normal Retirement" means retirement from active employment with the
Company and any Subsidiary or Affiliate on or after age 65.

         T. "Other Stock-Based Award" means an award under Section 7 below that
is valued in whole or in part by reference to, or is otherwise based on, the
Common Stock.

         U. "Outside Director" means a member of the Board who is not an officer
or employee of the Company or any Subsidiary or Affiliate of the Company.

         V. "Outside Director Option" means an award to an Outside Director
under Section 8 below.



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         W. "Plan" means this Bright Horizons Family Solutions, Inc. 1998 Stock
Incentive Plan, as amended from time to time.

         X. "Restricted Stock" means an award of shares of Common Stock that is
subject to restrictions under Section 6 of the Plan.

         Y. "Restriction Period" has the meaning provided in Section 6 of the
Plan.

         Z. "Retirement" means Normal or Early Retirement.

         AA. "Section 162(m) Maximum" has the meaning provided in Section 3(a)
hereof.

         BB. "Stock Option" or "Option" means any option to purchase shares of
Common Stock (including Restricted Stock, if the Committee so determines)
granted pursuant to Section 5 below.

         CC. "Subsidiary" means any company (other than the Company) in an
unbroken chain of companies beginning with the Company if each of the companies
(other than the last company in the unbroken chain) owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other companies in the chain.

SECTION 2.        ADMINISTRATION.

         The Plan shall be administered by a Committee of not less than two
Non-Employee Directors, who shall be appointed by the Board and who shall serve
at the pleasure of the Board. The functions of the Committee specified in the
Plan may be exercised by an existing Committee of the Board composed exclusively
of Non-Employee Directors. The initial Committee shall be the Compensation
Committee of the Board. In the event there are not at least two Non-Employee
Directors on the Board, the Plan shall be administered by the Board and all
references herein to the Committee shall refer to the Board.

         The Committee shall have authority to grant, pursuant to the terms of
the Plan, to officers, other key employees, Outside Directors and consultants
eligible under Section 4: (i) Stock Options, (ii) Restricted Stock, and/or (iii)
Other Stock-Based Awards; provided, however, that the power to grant and
establish the terms and conditions of awards to Outside Directors under the Plan
other than pursuant to Section 8 shall be reserved to the Board.

         In particular, the Committee, or the Board, as the case may be, shall
have the authority, consistent with the terms of the Plan:

                  (a) to select the officers, key employees and Outside
         Directors of and consultants to the Company and its Subsidiaries and
         Affiliates to whom Stock Options, Restricted Stock, and/or Other
         Stock-Based Awards may from time to time be granted hereunder;



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                  (b) to determine whether and to what extent Stock Options,
         Restricted Stock, and/or Other Stock-Based Awards, or any combination
         thereof, are to be granted hereunder to one or more eligible persons;

                  (c) to determine the number of shares to be covered by each
         such award granted hereunder;

                  (d) to determine the terms and conditions, not inconsistent
         with the terms of the Plan, of any award granted hereunder (including,
         but not limited to, the share price and any restriction or limitation,
         or any vesting acceleration or waiver of forfeiture restrictions
         regarding any Stock Option or other award and/or the shares of Common
         Stock relating thereto, based in each case on such factors as the
         Committee shall determine, in its sole discretion); and to amend or
         waive any such terms and conditions to the extent permitted by Section
         10 hereof;

                  (e) to determine whether and under what circumstances a Stock
         Option may be settled in cash or Restricted Stock under Section 5(k) or
         (l), as applicable, instead of Common Stock;

                  (f) to determine whether, to what extent, and under what
         circumstances Option grants and/or other awards under the Plan are to
         be made, and operate, on a tandem basis vis-a-vis other awards under
         the Plan and/or cash awards made outside of the Plan, or on an additive
         basis;

                  (g) to determine whether, to what extent, and under what
         circumstances shares of Common Stock and other amounts payable with
         respect to an award under this Plan shall be deferred either
         automatically or at the election of the participant (including
         providing for and determining the amount (if any) of any deemed
         earnings on any deferred amount during any deferral period);

                  (h) to determine whether to require payment of tax withholding
         requirements in shares of Common Stock subject to the award; and

                  (i) to impose any holding period required to satisfy Section
         16 under the Exchange Act.

         The Committee shall have the authority to adopt, alter, and repeal such
rules, guidelines, and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.

         All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Company and Plan participants.



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SECTION 3.        SHARES OF COMMON STOCK SUBJECT TO PLAN.

                  (a) As of the Effective Date, the aggregate number of shares
         of Common Stock that may be issued under the Plan shall be 2,250,000
         shares. Of the total number of shares that may be issued under the
         Plan, an aggregate of 100,000 shares shall be reserved for issuance
         under Section 8 hereof, subject to increases at the discretion of the
         Board. The shares of Common Stock issuable under the Plan may consist,
         in whole or in part, of authorized and unissued shares or treasury
         shares. No officer of the Company or other person whose compensation
         may be subject to the limitations on deductibility under Section 162(m)
         of the Code shall be eligible to receive awards pursuant to this Plan
         relating to in excess of 200,000 shares of Common Stock in any fiscal
         year (the "Section 162(m) Maximum").

                  (b) If any shares of Common Stock that have been optioned
         cease to be subject to a Stock Option, or if any shares of Common Stock
         that are subject to any Restricted Stock or Other Stock-Based Award
         granted hereunder are forfeited prior to the payment of any dividends,
         if applicable, with respect to such shares of Common Stock, or any such
         award otherwise terminates without a payment being made to the
         participant in the form of Common Stock, such shares shall again be
         available for distribution in connection with future awards under the
         Plan.

                  (c) In the event of any merger, reorganization, consolidation,
         recapitalization, extraordinary cash dividend, stock dividend, stock
         split or other change in corporate structure affecting the Common
         Stock, an appropriate substitution or adjustment shall be made in the
         maximum number of shares that may be awarded under the Plan, in the
         number and option price of shares subject to outstanding Options
         granted under the Plan, in the number of shares underlying Outside
         Director Options to be granted under Section 8 hereof, the Section
         162(m) Maximum and in the number of shares subject to other outstanding
         awards granted under the Plan as may be determined to be appropriate by
         the Committee, in its sole discretion, provided that the number of
         shares subject to any award shall always be a whole number.


SECTION 4.        ELIGIBILITY.

         Officers, other key employees and Outside Directors of and consultants
to the Company and its Subsidiaries and Affiliates who are responsible for or
contribute to the management, growth and/or profitability of the business of the
Company and/or its Subsidiaries and Affiliates are eligible to be granted awards
under the Plan. Outside Directors are eligible to receive awards pursuant to
Section 8 and as otherwise determined by the Board.



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SECTION 5.        STOCK OPTIONS.

         Stock Options may be granted alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the Plan.
Any Stock Option granted under the Plan shall be in such form as the Committee
may from time to time approve.

         Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options. Incentive Stock Options may
be granted only to individuals who are employees of the Company or any
Subsidiary of the Company.

         Subject to the foregoing, the Committee shall have the authority to
grant to any optionee Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options.

         Options granted to officers, key employees, Outside Directors and
consultants under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.

                  (a) Option Price. The option price per share of Common Stock
         purchasable under a Stock Option shall be determined by the Committee
         at the time of grant but shall be not less than 100% (or, in the case
         of any employee who owns stock possessing more than 10% of the total
         combined voting power of all classes of stock of the Company or of any
         of its Subsidiaries, not less than 110%) of the Fair Market Value of
         the Common Stock at grant, in the case of Incentive Stock Options, and
         not less than 50% of the Fair Market Value of the Common Stock at
         grant, in the case of Non-Qualified Stock Options. The Committee may
         not decrease the option price on any outstanding Stock Option.

                  (b) Option Term. The term of each Stock Option shall be fixed
         by the Committee, but no Stock Option shall be exercisable more than
         ten years (or, in the case of an employee who owns stock possessing
         more than 10% of the total combined voting power of all classes of
         stock of the Company or any of its Subsidiaries or parent companies,
         more than five years) after the date the Option is granted.

                  (c) Exercisability. Stock Options shall be exercisable at such
         time or times and subject to such terms and conditions as shall be
         determined by the Committee at or after grant; provided, however, that
         except as provided in Section 5(f) and (g), Section 8 and Section 9,
         unless otherwise determined by the Committee at or after grant, no
         Stock Option shall be exercisable prior to the first anniversary date
         of the granting of the Option. The Committee may provide that a Stock
         Option shall vest over a period of future service at a rate specified
         at the time of grant, or that the Stock Option is exercisable only in
         installments. If the Committee provides, in its sole discretion, that
         any Stock Option is exercisable only in installments, the Committee may
         waive such installment exercise provisions at any time at or after
         grant, in whole or in part, based on such factors as the Committee
         shall determine in its sole discretion.



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                  (d) Method of Exercise. Subject to whatever installment
         exercise restrictions apply under Section 5(c), Stock Options may be
         exercised in whole or in part at any time during the option period, by
         giving written notice of exercise to the Company specifying the number
         of shares to be purchased. Such notice shall be accompanied by payment
         in full of the purchase price, either by check, note, or such other
         instrument as the Committee may accept. As determined by the Committee,
         in its sole discretion, at or (except in the case of an Incentive Stock
         Option) after grant, payment in full or in part may also be made in the
         form of shares of Common Stock already owned by the optionee and held
         by the optionee for at least six months or, in the case of a
         Non-Qualified Stock Option, shares of Restricted Stock or shares
         subject to such Option or another award hereunder (in each case valued
         at the Fair Market Value of the Common Stock on the date the Option is
         exercised). If payment of the exercise price is made in part or in full
         with Common Stock, the Committee may award to the employee a new Stock
         Option to replace the Common Stock which was surrendered. If payment of
         the option exercise price of a Non-Qualified Stock Option is made in
         whole or in part in the form of Restricted Stock, such Restricted Stock
         (and any replacement shares relating thereto) shall remain (or be)
         restricted in accordance with the original terms of the Restricted
         Stock award in question, and any additional Common Stock received upon
         the exercise shall be subject to the same forfeiture restrictions,
         unless otherwise determined by the Committee, in its sole discretion,
         at or after grant. No shares of Common Stock shall be issued until full
         payment therefor has been made. An optionee shall generally have the
         rights to dividends or other rights of a shareholder with respect to
         shares subject to the Option when the optionee has given written notice
         of exercise, has paid in full for such shares, and, if requested, has
         given the representation described in Section 12(a).

                  (e) Transferability of Options. Except as provided by the
         Committee, no Non-Qualified Stock Option shall be transferable by the
         optionee other than (i) transfers by the Optionee to a member of his or
         her Immediate Family or a trust for the benefit of the optionee or a
         member of his or her Immediate Family, or (ii) transfers by will or by
         the laws of descent and distribution. No Incentive Stock Option shall
         be transferable by the optionee otherwise than by will or by the laws
         of descent and distribution and all Incentive Stock Options shall be
         exercisable, during the optionee's lifetime, only by the optionee.

                  (f) Termination by Death. Subject to Section 5(j), if an
         optionee's employment by the Company and any Subsidiary or (except in
         the case of an Incentive Stock Option) Affiliate terminates by reason
         of death, any Stock Option held by such optionee may thereafter be
         exercised, to the extent such option was exercisable at the time of
         death or (except in the case of an Incentive Stock Option) on such
         accelerated basis as the Committee may determine at or after grant (or
         except in the case of an Incentive Stock Option, as may be determined
         in accordance with procedures established by the Committee) by the
         legal representative of the estate or by the legatee of the optionee
         under the will of the optionee, for a period of one year (or such other
         period as the Committee may specify at or after grant) from the date of
         such death or until the expiration of the stated term of such Stock
         Option, whichever period is the shorter.



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                  (g) Termination by Reason of Disability. Subject to Section
         5(j), if an optionee's employment by the Company and any Subsidiary or
         (except in the case of an Incentive Stock Option) Affiliate terminates
         by reason of Disability, any Stock Option held by such optionee may
         thereafter be exercised by the optionee, to the extent it was
         exercisable at the time of termination or (except in the case of an
         Incentive Stock Option) on such accelerated basis as the Committee may
         determine at or after grant (or, except in the case of an Incentive
         Stock Option, as may be determined in accordance with procedures
         established by the Committee), for a period of (i) two years (or such
         other period as the Committee may specify at or after grant) from the
         date of such termination of employment or until the expiration of the
         stated term of such Stock Option, whichever period is the shorter, in
         the case of a Non-Qualified Stock Option and (ii) one year from the
         date of termination of employment or until the expiration of the stated
         term of such Stock Option, whichever period is shorter, in the case of
         an Incentive Stock Option; provided however, that, if the optionee dies
         within the period specified in (i) above (or other such period as the
         committee shall specify at or after grant), any unexercised
         Non-Qualified Stock Option held by such optionee shall thereafter be
         exercisable to the extent to which it was exercisable at the time of
         death for a period of twelve months from the date of such death or
         until the expiration of the stated term of such Stock Option, whichever
         period is shorter. In the event of termination of employment by reason
         of Disability, if an Incentive Stock Option is exercised after the
         expiration of the exercise period applicable to Incentive Stock
         Options, but before the expiration of any period that would apply if
         such Stock Option were a Non-Qualified Stock Option, such Stock Option
         will thereafter be treated as a Non-Qualified Stock Option.

                  (h) Termination by Reason of Retirement. Subject to Section
         5(j), if an optionee's employment by the Company and any Subsidiary or
         (except in the case of an Incentive Stock Option) Affiliate terminates
         by reason of Normal or Early Retirement, any Stock Option held by such
         optionee may thereafter be exercised by the optionee, to the extent it
         was exercisable at the time of such Retirement or (except in the case
         of an Incentive Stock Option) on such accelerated basis as the
         Committee may determine at or after grant (or, except in the case of an
         Incentive Stock Option, as may be determined in accordance with
         procedures established by the Committee), for a period of (i) one year
         (or such other period as the Committee may specify at or after grant)
         from the date of such termination of employment or the expiration of
         the stated term of such Stock Option, whichever period is the shorter,
         in the case of a Non-Qualified Stock Option and (ii) three months from
         the date of such termination of employment or the expiration of the
         stated term of such Stock Option, whichever period is the shorter, in
         the event of an Incentive Stock Option; provided however, that, if the
         optionee dies within the period specified in (i) above (or other such
         period as the Committee shall specify at or after grant), any
         unexercised Non-Qualified Stock Option held by such optionee shall
         thereafter be exercisable to the extent to which it was exercisable at
         the time of death for a period of twelve months from the date of such
         death or until the expiration of the stated term of such Stock Option,
         whichever period is shorter. In the event of termination of employment
         by reason of Retirement, if an Incentive Stock Option is exercised
         after the expiration of the exercise period applicable to Incentive
         Stock Options, but before the



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         expiration of the period that would apply if such Stock Option were a
         Non-Qualified Stock Option, the option will thereafter be treated as a
         Non-Qualified Stock Option.

                  (i) Other Termination. Subject to Section 5(j), unless
         otherwise determined by the Committee (or pursuant to procedures
         established by the Committee) at or (except in the case of an Incentive
         Stock Option) after grant, (a) if an optionee's employment by the
         Company and any Subsidiary or (except in the case of an Incentive Stock
         Option) Affiliate is involuntarily terminated for any reason other than
         death, Disability or Normal or Early Retirement, or (b) if an optionee
         voluntarily terminates employment (except for Disability, Normal or
         Early Retirement) with the Company and any Subsidiary or (except in the
         case of an Incentive Stock Option) Affiliate, the Stock Option shall
         thereupon terminate, except that such Stock Option may be exercised, to
         the extent otherwise then exercisable, for the lesser of three months
         or the balance of such Stock Option's term, but with respect to an
         involuntary termination, only if the involuntary termination is without
         Cause. For purposes of this Plan, "Cause" means (i) a felony conviction
         of a participant or the failure of a participant to contest prosecution
         for a felony, or (ii) a participant's willful misconduct or dishonesty,
         which is directly and materially harmful to the business or reputation
         of the Company or any Subsidiary or Affiliate.

                  (j) Incentive Stock Options. Anything in the Plan to the
         contrary notwithstanding, no term of this Plan relating to Incentive
         Stock Options shall be interpreted, amended, or altered, nor shall any
         discretion or authority granted under the Plan be so exercised, so as
         to disqualify the Plan under Section 422 of the Code, or, without the
         consent of the optionee(s) affected, to disqualify any Incentive Stock
         Option under such Section 422. No Incentive Stock Option shall be
         granted to any participant under the Plan if such grant would cause the
         aggregate Fair Market Value (as of the date the Incentive Stock Option
         is granted) of the Common Stock with respect to which all Incentive
         Stock Options are exercisable for the first time by such participant
         during any calendar year (under all such plans of the Company and any
         Subsidiary) to exceed $100,000. To the extent permitted under Section
         422 of the Code or the applicable regulations thereunder or any
         applicable Internal Revenue Service pronouncement:

                           (i) if (x) a participant's employment is terminated
                  by reason of death, Disability, or Retirement and (y) the
                  portion of any Incentive Stock Option that is otherwise
                  exercisable during the post-termination period specified under
                  Section 5(f), (g) or (h), applied without regard to the
                  $100,000 limitation contained in Section 422(d) of the Code,
                  is greater than the portion of such Option that is immediately
                  exercisable as an "Incentive Stock Option" during such
                  post-termination period under Section 422, such excess shall
                  be treated as a Non-Qualified Stock Option; and

                           (ii) if the exercise of an Incentive Stock Option is
                  accelerated by reason of a Change in Control, any portion of
                  such Option that is not exercisable as an Incentive Stock
                  Option by reason of the $100,000 limitation contained in
                  Section 422(d) of the Code shall be treated as a Non-Qualified
                  Stock Option.



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                  (k) Buyout Provisions. The Committee may at any time offer to
         buy out for a payment in cash, Common Stock, or Restricted Stock an
         Option previously granted, based on such terms and conditions as the
         Committee shall establish and communicate to the optionee at the time
         that such offer is made.

                  (l) Settlement Provisions. If the option agreement so provides
         at grant or (except in the case of an Incentive Stock Option) is
         amended after grant and prior to exercise to so provide (with the
         optionee's consent), the Committee may require that all or part of the
         shares to be issued with respect to the spread value of an exercised
         Option take the form of Restricted Stock, which shall be valued on the
         date of exercise on the basis of the Fair Market Value (as determined
         by the Committee) of such Restricted Stock determined without regards
         to the forfeiture restrictions involved.

                  (m) Termination of Consultant. The Committee shall have
         discretion in determining when a termination under Sections 5(f), (g),
         (h) or (i) above shall occur with respect to a consultant's
         relationship with the Company.

SECTION 6.        RESTRICTED STOCK.

                  (a) Administration. Shares of Restricted Stock may be issued
         either alone, in addition to, or in tandem with other awards granted
         under the Plan and/or cash awards made outside the Plan. The Committee
         shall determine the eligible persons to whom, and the time or times at
         which, grants of Restricted Stock will be made, the number of shares of
         Restricted Stock to be awarded to any person, the price (if any) to be
         paid by the recipient of Restricted Stock (subject to Section 6(b)),
         the time or times within which such awards may be subject to
         forfeiture, and the other terms, restrictions and conditions of the
         awards in addition to those set forth in Section 6(c). The Committee
         may condition the grant of Restricted Stock upon the attainment of
         specified performance goals or such other factors as the Committee may
         determine, in its sole discretion. The provisions of Restricted Stock
         awards need not be the same with respect to each recipient.

                  (b) Awards and Certificates. The prospective recipient of a
         Restricted Stock award shall not have any rights with respect to such
         award, unless and until such recipient has executed an agreement
         evidencing the award and has delivered a fully executed copy thereof to
         the Company, and has otherwise complied with the applicable terms and
         conditions of such award.

                           (i) The purchase price for shares of Restricted Stock
                  shall be established by the Committee and may be zero.

                           (ii) Awards of Restricted Stock must be accepted
                  within a period of 60 days (or such shorter period as the
                  Committee may specify at grant) after the award date, by
                  executing a Restricted Stock Award Agreement and paying
                  whatever price (if any) is required under Section 6(b)(i).



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                           (iii) Each participant receiving a Restricted Stock
                  award shall be issued a stock certificate in respect of such
                  shares of Restricted Stock. Such certificate shall be
                  registered in the name of such participant, and shall bear an
                  appropriate legend referring to the terms, conditions, and
                  restrictions applicable to such award.

                           (iv) The Committee shall require that the stock
                  certificates evidencing such shares be held in custody by the
                  Company until the restrictions thereon shall have lapsed, and
                  that, as a condition of any Restricted Stock award, the
                  participant shall have delivered a stock power, endorsed in
                  blank, relating to the shares of Common Stock covered by such
                  award.

                  (c) Restrictions and Conditions. The shares of Restricted
         Stock awarded pursuant to this Section 6 shall be subject to the
         following restrictions and conditions:

                           (i) In accordance with the provisions of this Plan
                  and the award agreement, during a period set by the Committee
                  commencing with the date of such award (the "Restriction
                  Period"), the participant shall not be permitted to sell,
                  transfer, pledge, assign, or otherwise encumber shares of
                  Restricted Stock awarded under the Plan. Within these limits,
                  the Committee, in its sole discretion, may provide for the
                  lapse of such restrictions in installments and may accelerate
                  or waive such restrictions, in whole or in part, based on
                  service, performance, such other factors or criteria as the
                  Committee may determine in its sole discretion.

                           (ii) Except as provided in this paragraph (ii) and
                  Section 6(c)(i), the participant shall have, with respect to
                  the shares of Restricted Stock, all of the rights of a
                  shareholder of the Company, including the right to vote the
                  shares, and the right to receive any cash dividends. The
                  Committee, in its sole discretion, as determined at the time
                  of award, may permit or require the payment of cash dividends
                  to be deferred and, if the Committee so determines,
                  reinvested, subject to Section 12(e), in additional Restricted
                  Stock to the extent shares are available under Section 3, or
                  otherwise reinvested. Pursuant to Section 3 above, stock
                  dividends issued with respect to Restricted Stock shall be
                  treated as additional shares of Restricted Stock that are
                  subject to the same restrictions and other terms and
                  conditions that apply to the shares with respect to which such
                  dividends are issued. If the Committee so determines, the
                  award agreement may also impose restrictions on the right to
                  vote and the right to receive dividends.

                           (iii) Subject to the applicable provisions of the
                  award agreement and this Section 6, upon termination of a
                  participant's employment with the Company and any Subsidiary
                  or Affiliate for any reason during the Restriction Period, all
                  shares still subject to restriction will vest, or be
                  forfeited, in accordance with the terms and conditions
                  established by the Committee at or after grant.



                                       11
<PAGE>

                           (iv) If and when the Restriction Period expires
                  without a prior forfeiture of the Restricted Stock subject to
                  such Restriction Period, certificates for an appropriate
                  number of unrestricted shares shall be delivered to the
                  participant promptly.

                  (d) Minimum Value Provisions. In order to better ensure that
         award payments actually reflect the performance of the Company and
         service of the participant, the Committee may provide, in its sole
         discretion, for a tandem performance-based or other award designed to
         guarantee a minimum value, payable in cash or Common Stock to the
         recipient of a restricted stock award, subject to such performance,
         future service, deferral, and other terms and conditions as may be
         specified by the Committee.

SECTION 7.        OTHER STOCK-BASED AWARDS.

                  (a) Administration. Other Stock-Based Awards, including,
         without limitation, performance shares, convertible preferred stock,
         convertible debentures, exchangeable securities and Common Stock awards
         or options valued by reference to earnings per share or Subsidiary
         performance, may be granted either alone, in addition to, or in tandem
         with Stock Options, or Restricted Stock granted under the Plan and cash
         awards made outside of the Plan; provided that no such Other
         Stock-Based Awards may be granted in tandem with Incentive Stock
         Options if that would cause such Stock Options not to qualify as
         Incentive Stock Options pursuant to Section 422 of the Code. Subject to
         the provisions of the Plan, the Committee shall have authority to
         determine the persons to whom and the time or times at which such
         awards shall be made, the number of shares of Common Stock to be
         awarded pursuant to such awards, and all other conditions of the
         awards. The Committee may also provide for the grant of Common Stock
         upon the completion of a specified performance period. The provisions
         of Other Stock-Based Awards need not be the same with respect to each
         recipient.

                  (b) Terms and Conditions. Other Stock-Based Awards made
         pursuant to this Section 8 shall be subject to the following terms and
         conditions:

                           (i) Shares subject to awards under this Section 7 and
                  the award agreement referred to in Section 7(b)(v) below, may
                  not be sold, assigned, transferred, pledged, or otherwise
                  encumbered prior to the date on which the shares are issued,
                  or, if later, the date on which any applicable restriction,
                  performance, or deferral period lapses.

                           (ii) Subject to the provisions of this Plan and the
                  award agreement and unless otherwise determined by the
                  Committee at grant, the recipient of an award under this
                  Section 7 shall be entitled to receive, currently or on a
                  deferred basis, interest or dividends or interest or dividend
                  equivalents with respect to the number of shares covered by
                  the award, as determined at the time of the award by the
                  Committee, in its sole discretion, and the Committee may
                  provide that such



                                       12
<PAGE>

                  amounts (if any) shall be deemed to have been reinvested in
                  additional shares of Common Stock or otherwise reinvested.

                           (iii) Any award under Section 7 and any shares of
                  Common Stock covered by any such award shall vest or be
                  forfeited to the extent so provided in the award agreement, as
                  determined by the Committee in its sole discretion.

                           (iv) In the event of the participant's Retirement,
                  Disability, or death, or in cases of special circumstances,
                  the Committee may, in its sole discretion, waive in whole or
                  in part any or all of the remaining limitations imposed
                  hereunder (if any) with respect to any or all of an award
                  under this Section 7.

                           (v) Each award under this Section 7 shall be
                  confirmed by, and subject to the terms of, an agreement or
                  other instrument by the Company and the participant.

                           (vi) Common Stock (including securities convertible
                  into Common Stock) issued on a bonus basis under this Section
                  7 may be issued for no cash consideration. Common Stock
                  (including securities convertible into Common Stock) purchased
                  pursuant to a purchase right awarded under this Section 7
                  shall be priced at least 85% of the Fair Market Value of the
                  Common Stock on the date of grant.

SECTION 8.        AWARDS TO OUTSIDE DIRECTORS.

                  (a) The provisions of this Section 8 shall apply only to
         awards to Outside Directors in accordance with this Section 8. The
         Committee shall have no authority to determine the timing of or the
         terms or conditions of any award under this Section 8.

                  (b) Each Outside Director who is serving on the Board of
         Directors on the date of the first meeting of the Board of Directors on
         or after the Effective Date of this Plan or who is first elected to the
         Board of Directors thereafter, will receive an automatic grant of a
         non-qualified stock option to purchase 5,000 shares of Common Stock on
         the earlier of the date of the first meeting of the Board of Directors
         after the Effective Date of this Plan or the date of election. On the
         date of each Annual Meeting of Stockholders of the Company, each
         Outside Director will receive an automatic grant of a non-qualified
         stock option to purchase 1,000 shares of Common Stock, but only if such
         Outside Director failed to attend no more than one regularly scheduled
         meeting of the Board of Directors in the preceding twelve (12) months.
         The exercise price of each option granted pursuant to this Section 8(b)
         shall equal the Fair Market Value of such Common Stock on the date of
         grant.

                  (c) Each Outside Director Option shall vest and become
         exercisable with respect to one-third of such shares on the first
         anniversary of the date of grant, with respect to one-third on the
         second anniversary of the date of grant, and with respect to



                                       13
<PAGE>

         one-third on the third anniversary of the date of grant. Each Outside
         Director Option shall expire, if unexercised, on the tenth anniversary
         of the date of grant. The exercise price may be paid in cash or in
         shares of Common Stock, including shares of Common Stock subject to the
         Outside Director Option.

                  (d) Outside Director Options shall not be transferable without
         the prior written consent of the Board other than (i) transfers by the
         optionee to a member of his or her Immediate Family or a trust for the
         benefit of optionee or a member of his or her Immediate Family, or (ii)
         transfers by will or by the laws of descent and distribution.

                  (e) Grantees of Outside Director Options shall enter into a
         stock option agreement with the Company setting forth the exercise
         price and other terms as provided herein.

                  (f) The termination of Outside Director Options shall be
         governed by the provisions of Sections 5(f), 5(h) and 5(i) hereof as if
         Outside Directors were employees of the Company, except that any
         determination to accelerate the vesting of an Outside Director Option
         will be made by the Board and not by the Committee.

                  (g) Outside Director Options shall be subject to Section 9.
         The number of shares and the exercise price per share of each Outside
         Director Option shall be adjusted automatically in the same manner as
         the number of shares and the exercise price for Stock Options under
         Section 3 hereof at any time that Stock Options are adjusted as
         provided in Section 3.

                  (h) Any applicable withholding taxes shall be paid in shares
         of Common Stock subject to the Outside Director Option valued as the
         Fair Market Value of such shares unless the Company agrees to accept a
         payment in cash in the amount of such withholding taxes.

SECTION 9.        CHANGE IN CONTROL PROVISIONS.

                  (a) Impact of Event. In the event of:

                           (1) a "Change in Control" as defined in Section 9(b);
                  or

                           (2) a "Potential Change in Control" as defined in
                  Section 9(c), but only if and to the extent so determined by
                  the Committee or the Board at or after grant (subject to any
                  right of approval expressly reserved by the Committee or the
                  Board at the time of such determination),

                           (i) Subject to the limitations set forth below in
                  this Section 9(a), the following acceleration provisions shall
                  apply to Stock Options, Restricted Stock, Outside Director
                  Options, and Other Stock-Based Awards granted on or prior to
                  April 16, 2001:



                                       14
<PAGE>
                                    (a) the Plan not previously exercisable and
                           vested shall become fully exercisable and vested.

                                    (b) The restrictions applicable to any
                           Restricted Stock and Other Stock-Based Awards, in
                           each case to the extent not already vested under the
                           Plan, shall lapse and such shares and awards shall be
                           deemed fully vested.

                           (ii) The acceleration provisions set forth in Section
                  9(a)(i) above shall not apply, unless otherwise determined by
                  the Board or the Committee, to Stock Options, Restricted
                  Stock, Outside Director Options, or Other Stock-Based Awards
                  granted after April 16, 2001.

                           (iii) Subject to the limitations set forth below in
                  this Section 9(a), the value of all outstanding Stock Options,
                  Restricted Stock, Outside Director Options and Other
                  Stock-Based Awards, in each case to the extent vested, shall,
                  unless otherwise determined by the Board or by the Committee
                  in its sole discretion prior to any Change in Control, be
                  cashed out on the basis of the "Change in Control Price" as
                  defined in Section 9(d) as of the date such Change in Control
                  or such Potential Change in Control is determined to have
                  occurred or such other date as the Board or Committee may
                  determine prior to the Change in Control.

                           (iv) The Board or the Committee may impose additional
                  conditions on the acceleration or valuation of any award in
                  the award agreement.

                  (b) Definition of Change in Control. For purposes of Section
         9(a), a "Change in Control" means the happening of any of the
         following:

                           (i) any person or entity, including a "group" as
                  defined in Section 13(d)(3) of the Exchange Act, other than
                  the Company or a wholly-owned subsidiary thereof or any
                  employee benefit plan of the Company or any of its
                  Subsidiaries, becomes the beneficial owner of the Company's
                  securities having 35% or more of the combined voting power of
                  the then outstanding securities of the Company that may be
                  cast for the election of directors of the Company (other than
                  as a result of an issuance of securities initiated by the
                  Company in the ordinary course of business); or

                           (ii) as the result of, or in connection with, any
                  cash tender or exchange offer, merger or other business
                  combination, sales of assets or contested election, or any
                  combination of the foregoing transactions, less than 40% of
                  the combined voting power of the then outstanding securities
                  of the Company or any successor Company or entity entitled to
                  vote generally in the election of the directors of the Company
                  or such other company or entity after such transaction are
                  held in the aggregate by the holders of the Company's
                  securities entitled to vote generally in the election of
                  directors of the Company immediately prior to such
                  transaction; or



                                       15
<PAGE>

                           (iii) during any period of two consecutive years,
                  individuals who at the beginning of any such period constitute
                  the Board cease for any reason to constitute at least a
                  majority thereof, unless the election, or the nomination for
                  election by the Company's stockholders, of each director of
                  the Company first elected during such period was approved by a
                  vote of at least two-thirds of the directors of the Company
                  then still in office who were directors of the Company at the
                  beginning of any such period.

                  (c) Definition of Potential Change in Control. For purposes of
         Section 9(a), a "Potential Change in Control" means the happening of
         any one of the following:

                           (i) The approval by stockholders of an agreement by
                  the Company, the consummation of which would result in a
                  Change in Control of the Company as defined in Section 9(b);
                  or

                           (ii) The acquisition of beneficial ownership,
                  directly or indirectly, by any entity, person or group (other
                  than the Company or a Subsidiary or any Company employee
                  benefit plan (including any trustee of such plan acting as
                  such trustee)) of securities of the Company representing 5% or
                  more of the combined voting power of the Company's outstanding
                  securities and the adoption by the Committee of a resolution
                  to the effect that a Potential Change in Control of the
                  Company has occurred for purposes of this Plan.

                  (d) Change in Control Price. For purposes of this Section 9,
         "Change in Control Price" means the highest price per share paid in any
         transaction reported on the NASDAQ-National Market or such other
         exchange or market as is the principal trading market for the Common
         Stock, or paid or offered in any bona fide transaction related to a
         Potential or actual Change in Control of the Company at any time during
         the 60 day period immediately preceding the occurrence of the Change in
         Control (or, where applicable, the occurrence of the Potential Change
         in Control event), in each case as determined by the Committee except
         that, in the case of Incentive Stock Options, such price shall be based
         only on transactions reported for the date on which a cash out occurs
         under Section 9(a)(ii).


SECTION 10.       AMENDMENTS AND TERMINATION.

         The Board may at any time amend, alter or discontinue the Plan;
provided, however, that, without the approval of the Company's stockholders, no
amendment or alteration may be made which would (a) except as a result of the
provisions of Section 3(c) of the Plan, increase the maximum number of shares
that may be issued under the Plan or increase the Section 162(m) Maximum, (b)
change the provisions governing Incentive Stock Options except as required or
permitted under the provisions governing incentive stock options under the Code,
(c) make any change for which applicable law or regulatory authority (including
the regulatory authority of the NYSE or any other market or exchange on which
the Common Stock is traded) would require



                                       16
<PAGE>

shareholder approval or for which shareholder approval would be required to
secure full deductibility of compensation received under the Plan under Section
162(m) of the Code, or (d) permit decreasing the option price on any outstanding
Stock Option. No amendment, alteration, or discontinuation shall be made which
would impair the rights of an optionee or participant under a Stock Option,
Restricted Stock, Other Stock-Based Award or Outside Director Option theretofore
granted, without the participant's consent.

         Subject to the provisions of the Plan, the Committee may amend the
terms of any Stock Option or other award theretofore granted, prospectively or
retroactively, but, subject to Section 3 above, no such amendment shall impair
the rights of any holder without the holder's consent.

SECTION 11.       UNFUNDED STATUS OF PLAN.

         The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or payments in lieu of or with respect to
awards hereunder; provided, however, that, unless the Committee otherwise
determines with the consent of the affected participant, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.

SECTION 12.       GENERAL PROVISIONS.

                  (a) The Committee may require each person purchasing shares
         pursuant to a Stock Option or other award under the Plan to represent
         to and agree with the Company in writing that the optionee or
         participant is acquiring the shares without a view to distribution
         thereof. The certificates for such shares may include any legend which
         the Committee deems appropriate to reflect any restrictions on
         transfer. All certificates for shares of Common Stock or other
         securities delivered under the Plan shall be subject to such
         stock-transfer orders and other restrictions as the Committee may deem
         advisable under the rules, regulations, and other requirements of the
         Commission, any stock exchange upon which the Common Stock is then
         listed, and any applicable Federal or state securities law, and the
         Committee may cause a legend or legends to be put on any such
         certificates to make appropriate reference to such restrictions.

                  (b) Nothing contained in this Plan shall prevent the Board
         from adopting other or additional compensation arrangements, subject to
         shareholder approval if such approval is required; and such
         arrangements may be either generally applicable or applicable only in
         specific cases.

                  (c) The adoption of the Plan shall not confer upon any
         employee of the Company or any Subsidiary or Affiliate any right to
         continued employment with the



                                       17
<PAGE>

         Company or a Subsidiary or Affiliate, as the case may be, nor shall it
         interfere in any way with the right of the Company or a Subsidiary or
         Affiliate to terminate the employment of any of its employees at any
         time.

                  (d) No later than the date as of which an amount first becomes
         includible in the gross income of the participant for Federal income
         tax purposes with respect to any award under the Plan, the participant
         shall pay to the Company, or make arrangements satisfactory to the
         Committee regarding the payment of, any Federal, state, or local taxes
         of any kind required by law to be withheld with respect to such amount.
         The Committee may require withholding obligations to be settled with
         Common Stock, including Common Stock that is part of the award that
         gives rise to the withholding requirement. The obligations of the
         Company under the Plan shall be conditional on such payment or
         arrangements and the Company and its Subsidiaries or Affiliates shall,
         to the extent permitted by law, have the right to deduct any such taxes
         from any payment of any kind otherwise due to the participant.

                  (e) The actual or deemed reinvestment of dividends or dividend
         equivalents in additional Restricted Stock (or other types of Plan
         awards) at the time of any dividend payment shall only be permissible
         if sufficient shares of Common Stock are available under Section 3 for
         such reinvestment (taking into account then outstanding Stock Options
         and other Plan awards).

                  (f) The Plan and all awards made and actions taken thereunder
         shall be governed by and construed in accordance with the laws of the
         State of Delaware.

                  (g) The members of the Committee and the Board shall not be
         liable to any employee or other person with respect to any
         determination made hereunder in a manner that is not inconsistent with
         their legal obligations as members of the Board. In addition to such
         other rights of indemnification as they may have as directors or as
         members of the Committee, the members of the Committee shall be
         indemnified by the Company against the reasonable expenses, including
         attorneys' fees actually and necessarily incurred in connection with
         the defense of any action, suit or proceeding, or in connection with
         any appeal therein, to which they or any of them may be a party by
         reason of any action taken or failure to act under or in connection
         with the Plan or any option granted thereunder, and against all amounts
         paid by them in settlement thereof (provided such settlement is
         approved by independent legal counsel selected by the Company) or paid
         by them in satisfaction of a judgment in any such action, suit or
         proceeding, except in relation to matters as to which it shall be
         adjudged in such action, suit or proceeding that such Committee member
         is liable for negligence or misconduct in the performance of his
         duties; provided that within 60 days after institution of any such
         action, suit or proceeding, the Committee member shall in writing offer
         the Company the opportunity, at its own expense, to handle and defend
         the same.

                  (h) In addition to any other restrictions on transfer that may
         be applicable under the terms of this Plan or the applicable award
         agreement, no Stock Option, Restricted Stock award, or Other
         Stock-Based Award or other right issued under this Plan



                                       18
<PAGE>

         is transferable by the participant without the prior written consent of
         the Committee, or, in the case of an Outside Director, the Board, other
         than (i) transfers by an optionee to a member of his or her Immediate
         Family or a trust for the benefit of the optionee or a member of his or
         her Immediate Family or (ii) transfers by will or by the laws of
         descent and distribution. The designation of a beneficiary will not
         constitute a transfer.

                  (i) The Committee may, at or after grant, condition the
         receipt of any payment in respect of any award or the transfer of any
         shares subject to an award on the satisfaction of a six-month holding
         period, if such holding period is required for compliance with Section
         16 under the Exchange Act.

SECTION 13.       EFFECTIVE DATE OF PLAN.

         The Plan shall be effective as of July 27, 1998.

SECTION 14.       TERM OF PLAN.

         No Stock Option, Restricted Stock award, Other Stock-Based Award or
Outside Director Option award shall be granted pursuant to the Plan on or after
the tenth anniversary of the Effective Date of the Plan, but awards granted
prior to such tenth anniversary may be extended beyond that date.







                                       19