exv10w4



 






EXHIBIT 10.4



ABM INDUSTRIES INCORPORATED

“1996 PRICE VESTED” PERFORMANCE STOCK OPTION PLAN

(as amended and restated as of January 11, 2005)


1. PURPOSE; DEFINITIONS




      The purpose of The Plan is to give ABM Industries Incorporated and its Affiliates a long-term
stock option plan to help in attracting, retaining and motivating senior executives, and to provide
the Company and its Affiliates with the ability to provide incentives more directly linked to the
profitability of the Company’s businesses and increases in stockholder value.



      For purposes of The Plan, the following terms are defined as set forth below:




	 	a.  	“Affiliate” or “Affiliates” means any and all subsidiary corporations or
other entities controlled by the Company and designated by The Committee from time
to time as such.






	 	b.  	“Board” or “The Board” means the board of directors (“Directors”) of the
Company.






	 	c.  	“Cause” means:






   (1) misconduct or any other willful or knowing violation of any Company policy or
employment agreement,




   (2) unsatisfactory performance such that the Company notifies the Optionee of the
Company’s intention not to renew the Optionee’s employment agreement with the
Company,




   (3) a material breach by The Optionee of his or her duties as an employee which is
committed in bad faith or without reasonable belief that such breach is in the best
interests of the Company and its affiliated companies (other than a breach arising
from the failure of The Optionee to work as a result of incapacity due to physical
or mental illness) and which is not remedied in a reasonable period of time after
receipt of written notice from the Company specifying such breach, or




   (4) the conviction of The Optionee of a felony that has been affirmed on appeal or
as to which the period in which an appeal can be taken has lapsed.



 








 






	 	d.  	“Change in Control” and “Change in Control Price” have the meanings
set forth in Sections 6b and 6c of The Plan, respectively.






	 	e.  	“Code” or “The Code” means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.






	 	f.  	“Commission” or “The Commission” means the Securities and Exchange
Commission or any successor agency.






	 	g.  	“Committee” or “The Committee” means the committee referred to in Section
2 of The Plan.






	 	h.  	“Company” or “The Company” means ABM Industries Incorporated, a Delaware
corporation.






	 	i.  	“Disability” means the inability of The Optionee to perform his or her
duties as an employee on an active full-time basis as a result of incapacity due to
mental or physical illness which continues for more than ninety (90) days after the
commencement of such incapacity, such incapacity to be determined by a physician
selected by the Company or its insurers and acceptable to The Optionee or the
Optionee’s legal representative (such agreement as to acceptability not to be
withheld unreasonably).






	 	j.  	“Eligible Person” has the meaning stated in Section 4 of The Plan.






	 	k.  	“Exchange Act” or “The Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, and any successor thereto.






	 	l.  	For the purposes of this Plan, the term “Fair Market Value,” when used in
reference to the date of grant of an option or the date of surrender of Stock in
payment for the purchase of shares pursuant to the exercise of an option, as the
case may be, shall refer to the closing price of the Stock as quoted in the
Composite Transactions Index for the New York Stock Exchange, on the day before such
date as published in the “Wall Street Journal,” or if no sale price was quoted in
any such Index on such date, then as of the next preceding date on which such a sale
price was quoted.






	 	m.  	“Non-Employee Director” shall mean a member of The Board who qualifies as
a disinterested person as defined in Rule 16b-3, as promulgated by The Commission
under The Exchange Act, or any successor definition adopted by The Commission, and
also qualifies as an “outside director” for the purposes of Section 162(m) of The
Code and the regulations promulgated thereunder.






	 	n.  	“Optionee” shall mean any Eligible Person who has been granted Stock
Options under The Plan.





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	 	o.	“Plan” or “The Plan” means the ABM Industries Incorporated “1996 Price
Vested” performance Stock Option Plan, as set forth herein and as hereinafter
amended from time to time.






	 	p.  	“Retirement” means retirement from active full-time employment with the
Company or any of its Affiliates at or after age sixty-four (64).






	 	q.  	“Rule 16b-3” means Rule 16b-3, as promulgated by The Commission under
Section 16(b) of The Exchange Act, as amended from time to time.






	 	r.  	“Stock” means common stock, par value $0.01 per share, of the Company.






	 	s.  	“Stock Option” or “Option” means an option granted under Section 5 of
The Plan.
	 
	 	t.  	“Termination of Employment” means the termination of an Optionee’s
employment with the Company or any of its Affiliates, excluding any
such termination where there is a simultaneous reemployment by the
Company or any of its Affiliates. An Optionee shall be deemed to have
terminated employment if he or she ceases to perform services for the
Company or any of its Affiliates on an active full-time basis,
notwithstanding the fact that such Optionee continues to receive
compensation or benefits pursuant to an employment contract or other
agreement or arrangement with the Company or any of its Affiliates. A
non-medical leave of absence shall, unless such leave of absence is
otherwise approved by The Committee, be deemed a Termination of
Employment. An Optionee employed by an Affiliate of the Company shall
also be deemed to incur a Termination of Employment if that Affiliate
ceases to be an Affiliate of the Company, as the case may be, and that
Optionee does not immediately thereafter become an employee of the
Company or any other Affiliate of the Company.




In addition, certain other terms have definitions given to them as they are used herein.



2. ADMINISTRATION




      The Plan shall be administered by the Executive Officer Compensation & Stock Option Committee
of The Board or such other committee of The Board, composed solely of not less than two
Non-Employee Directors, each of whom shall be appointed by and serve at the pleasure of The Board.
If at any time no such committee(s) shall be in office, the functions of The Committee specified in
The Plan shall be exercised by The Board.



      The Committee shall have all discretionary authority to administer the Plan and to grant Stock
Options pursuant to the terms of The Plan to senior executives of the Company and any of its
Affiliates.



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      Among other things, The Committee shall have the discretionary authority, subject to the terms
of The Plan:




	 	a.  	to select the Eligible Persons to whom Stock Options may from time to
time be granted;






	 	b.  	to determine the number of shares of Stock to be covered by each Stock
Option granted hereunder; and






	 	c.  	to determine the terms and conditions of any Stock Option granted
hereunder including, but not limited to, the option price (subject to Section 5a of
The Plan) and any vesting condition, restriction or limitation based on such factors
as The Committee shall determine.





      The Committee shall have the authority to adopt, alter and repeal such administrative 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 Stock Option issued under The Plan (and any
agreement relating thereto) and to otherwise supervise the administration of The Plan.



      The Committee may act only by a majority of its members then in office, except that the
members thereof may authorize any one or more of their number or any officer of the Company to
execute and deliver documents on behalf of The Committee.



      Any determination made by The Committee or pursuant to delegated authority pursuant to the
provisions of The Plan with respect to any Stock Option shall be made in the sole discretion of The
Committee or such delegate at the time of the grant of the Stock Option or, unless in contravention
of any express term of The Plan, at any time thereafter. All decisions made by The Committee or any
appropriately delegated officer pursuant to the provisions of The Plan shall be final and binding
on all persons, including the Company and Plan participants, and shall be given the maximum
deference permitted by law.


3. STOCK SUBJECT TO PLAN




      Subject to adjustment as provided herein, the total number of shares of Stock available for
grant under The Plan shall be three million (3,000,000). No individual shall be
eligible to receive Stock Options to purchase more than 200,000 shares of Stock under The Plan.
Shares subject to a Stock Option under The Plan may be authorized and unissued shares or may be
treasury shares.



      If any Stock Option terminates without being exercised, shares subject to such Stock Option
shall be available for further grants under The Plan.



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      In the event of any merger, reorganization, consolidation, recapitalization, stock dividend,
stock split, or extraordinary distribution with respect to the Stock or other change in corporate
structure affecting the Stock, The Committee or The Board may make such substitution or adjustments
in the number, kind and option price of shares authorized or outstanding as Stock Options, and/or
such other equitable substitution or adjustments as its may determine to be appropriate in its sole
discretion; provided, however, that the number of shares subject to any Stock Option shall always
be a whole number.


4. ELIGIBILITY




      Senior executives who are actively employed on a full-time basis by the Company or any of its
Affiliates, and who are responsible for or contribute to the management, growth and profitability
of the business of the Company or any of Affiliates, are eligible to be granted Stock Options under
The Plan (“Eligible Persons”).


5. STOCK OPTIONS




      Any Stock Option granted under The Plan shall be in the form attached hereto as Annex “A”,
which is incorporated herein and made a part of The Plan, with such changes as The Committee may
from time to time approve which are consistent with The Plan. None of the Stock Options granted
under The Plan shall be “incentive stock options” within the meaning of Section 422 of The Code.



      The grant of a Stock Option shall occur on the date The Committee selects a Senior Executive
of the Company or any of its Affiliates to receive any grant of a Stock Option, determines the
number of shares of Stock to be subject to such Stock Option to be granted to such Senior
Executive, and specifies the terms and provisions of said Stock Option. Such selection shall be
evidenced in the records of the Company whether in the minutes of the meetings of The Committee or
by their consent in writing. The Company shall notify an Optionee of any grant of a Stock Option,
and a written option agreement or agreements shall be duly executed and delivered by the Company to
the Optionee.



      Stock Options granted under The Plan shall be subject to the following terms and conditions
and shall contain such additional terms and conditions as The Committee shall deem desirable:




	 	a.  	OPTION PRICE. The option price per share of Stock purchasable under a
Stock Option shall be the greater of: (i) $10.00 per share, (ii) the Fair Market
Value per share of Stock on the grant date, or (iii) the Fair Market Value per share
of Stock on the date of Stockholder approval of The Plan .






	 	b.  	OPTION TERM. The term of each Stock Option shall be ten (10) years from
its date of grant, unless earlier terminated.





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	 	c.  	EXERCISABILITY. Except as otherwise provided herein, each Stock Option
shall be exercisable during its term only if such Stock Option has vested, and only
after the first (1st) anniversary of its date of grant.






	 	d.  	VESTING. Each Stock Option shall have assigned to it by The Committee a
vesting price (the “Vesting Price”) which will be used to provide for accelerated
vesting so that such Stock Option will vest immediately if, on or before the close
of business on the fourth (4th) anniversary of its date of grant, the Fair Market
Value of the Common Stock shall have been equal to or greater than the Vesting Price
with respect to such Stock Option for ten (10) trading days in any period of thirty
(30) consecutive trading days. Any Stock Option that has not vested on or before the
close of business on the fourth (4th) anniversary of its date of grant shall vest at
the close of business on the business day immediately preceding the eighth (8th)
anniversary of its date of grant, if such Option has not previously terminated.
Notwithstanding any inconsistent or contrary provision of the Plan, in the event an
Optionee who is at least age 64 dies while in the service of the Company or of a
subsidiary of the Company, the then unvested portion of such Optionee’s Stock
Options granted after April 19, 1999 shall immediately vest and become fully
exercisable as of the date of such death.






	 	e.  	METHOD OF EXERCISE. Subject to the provisions of this Section 5 of The
Plan, Stock Options may be exercised, in whole or in part, by giving written notice
of exercise to the Company specifying the number of shares of Stock subject to the
Stock Option to be purchased.






	 	   	The option price of Stock to be purchased upon exercise of any Option shall be paid
in full:






(1) in cash (by certified or bank check or such other instrument as the
Company may accept),




(2) in the discretion of The Committee, in the form of unrestricted Stock
already owned by The Optionee for six (6) months or more and based on the Fair
Market Value of the Stock on the date the Stock Option is exercised,




(3) in any other form approved in the discretion of The Committee, or




(4) by any combination thereof.




	 	   	In the discretion of The Committee, payment for any shares subject to a Stock
Option may also be made by delivering a properly executed exercise notice to the
Company, together with a copy of irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan





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	 	   	proceeds to pay the purchase price, and, if requested, the amount of any federal,
state, local or foreign withholding taxes. To facilitate the foregoing, the Company
may enter into agreements for coordinated procedures with one or more brokerage
firms.






	 	   	No shares of Stock shall be issued until full payment therefor has been made. The
Optionee shall have all of the rights of a stockholder of the Company holding the
Stock that is subject to such Stock Option (including, if applicable, the right to
vote the share and the right to receive dividends), only 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 9a of The Plan.






	 	f.  	NON-TRANSFERABILITY OF STOCK OPTIONS. No Stock Option shall be
transferable by The Optionee other than:






(1) to a beneficiary designation satisfactory to The Committee, or




(2) by will or by the laws of descent and distribution.




	 	   	All Stock Options shall be exercisable, during The Optionee’s lifetime, only by The
Optionee or by the guardian or legal representative of The Optionee, it being
understood that the terms “holder” and “Optionee” include the guardian and legal
representative of The Optionee named in the option agreement and any person to whom
an option is transferred by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order. The Committee may establish such
procedures as it deems appropriate for an Optionee to designate a beneficiary to
whom any amounts payable in the event of the Optionee’s death are to be paid or by
whom any rights of the Optionee, after the Optionee’s death, may be exercised.






	 	g.  	TERMINATION BY DEATH, DISABILITY, RETIREMENT OR BY THE COMPANY WITHOUT
CAUSE. If The Optionee’s employment terminates by reason of death, Disability or
Retirement, or if such employment is terminated by the Company without Cause, in
each case prior to the vesting of a Stock Option held by The Optionee, the following
provisions shall apply:






(1) if termination occurs by death or Disability, or by the Company without
Cause, such Stock Options shall be exercisable only within ninety (90) days of
such termination, and only if such Stock Options are then vested; and




(2) if termination occurs by Retirement or other “voluntary quit,” such Stock
Options shall terminate immediately.



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	 	h.  	TERMINATION BY THE COMPANY FOR CAUSE. If The Optionee’s employment is
terminated by the Company for Cause prior to the vesting of a Stock Option, such
Stock Options shall terminate immediately.






	 	i.  	TERMINATION AFTER VESTING. If The Optionee’s employment is terminated for
any reason after a Stock Option has vested, such Stock Options shall be exercisable
only within ninety (90) days of such termination.






	 	j.  	CHANGE IN CONTROL CASH OUT. Notwithstanding any other provision of The
Plan, upon the occurrence of a Change of Control all outstanding Stock Options shall
immediately vest and become fully exercisable, and during the ninety (90) day period
from and after such Change in Control (the “Exercise Period”), The Optionee shall
have the right, in lieu of the payment of the exercise price for the shares of Stock
being purchased under the Stock Option and by giving notice to the Company, to elect
(within the Exercise Period) to surrender all or part of the Stock Option to the
Company and to receive cash, within ninety (90) days of such notice, in an amount
equal to the amount by which the Change in Control Price per share of Stock on the
date of such election shall exceed the exercise price per share of Stock under the
Stock Option (the “Spread”), multiplied by the number of shares of Stock granted
under the Stock Option as to which the right granted under this Section 5j of The
Plan shall have been exercised.






	 	   	Notwithstanding the foregoing, if any right granted pursuant to this Section 5j of
The Plan would make a Change in Control transaction ineligible for pooling of
interests accounting under APB No. 16 than but for this Section 5j of The Plan
would otherwise be eligible for such accounting treatment, The Committee shall have
the authority to replace the cash payable pursuant to this Section 5j of The Plan
with Stock having a Fair Market Value equal to the cash that would otherwise be
payable hereunder. For purposes of this Section 5j only, the date of grant of any
Stock Option approved by The Committee on December 17, 1996 shall be deemed to be
the date on which The Plan is approved by the Company’s stockholders.




6. CHANGE IN CONTROL PROVISIONS





	 	a.  	IMPACT OF EVENT. Notwithstanding any other provision of The Plan to the
contrary, in the event of a Change in Control, any Stock Options outstanding as of
the date such Change in Control is determined to have occurred, and not then vested
and exercisable, shall become vested and exercisable to the full extent of the
original grant, provided that such




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	 	   	accelerated vesting shall occur only if The Optionee is an active full-time
employee of the Company or any of its Affiliates as of such date.






	 	b.  	DEFINITION OF CHANGE IN CONTROL. For purposes of The Plan, a “Change in
Control” shall mean the happening of any of the following events:






(i) the acquisition (other than by the Company or by an employee benefit plan
or related trust sponsored or maintained by the Company), directly or
indirectly, in one or more transactions, by any person or by any group of
persons, within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934 or any comparable successor provisions (the “Exchange
Act”), of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of twenty-five percent or more of either the outstanding shares
of common stock or the combined voting power of the Company’s outstanding
voting securities entitled to vote generally, if the acquisition was not
previously approved by the existing directors;




(ii) the acquisition (other than by the Company or by an employee benefit plan
or related trust sponsored or maintained by the Company), directly or
indirectly, in one or more transactions, by any such person or by any group of
persons of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of fifty percent or more of either the outstanding shares of
common stock or the combined voting power of the Company’s outstanding voting
securities entitled to vote generally, whether or not the acquisition was
approved by the existing directors, other than an acquisition that complies
with clause (x) and (y) of paragraph (iii) below;




(iii) consummation of a reorganization, merger or consolidation of the Company
or the sale or other disposition of all or substantially all of the Company’s
assets unless immediately following such event, (x) all or substantially all
of the stockholders of the Company immediately prior to such event own,
directly or indirectly, seventy-five percent or more of the then outstanding
voting securities entitled to vote generally of the resulting corporation
(including without limitation, a corporation which as a result of such event
owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership of the Company’s outstanding voting securities
entitled to vote generally immediately prior to such event, and (y) the
securities of the surviving or resulting corporation received or retained by
the stockholders of the Company are publicly traded;



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(iv) approval by the stockholders of the complete liquidation or dissolution
of the Company; or




(v) a greater than one-third change in the composition of the Board of
Directors within 24 months if not approved by a majority of the pre-existing
directors.




	 	   	provided, however, that, in respect of options outstanding as of September 22,
1999, a “Change of Control” shall also mean the happening at any of the following
events:






(1) An acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of The Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under The Exchange
Act) of thirty percent (30%) or more of either:




   (a) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”), or




   (b) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
Directors (the “Outstanding Company Voting Securities”),




   (c) excluding, however, the following acquisitions of Outstanding
Company Common Stock and Outstanding Company Voting Securities:




   (i) any acquisition directly from the Company (other than an
acquisition pursuant to the exercise of a conversion privilege),




   (ii) any acquisition by the Company,




   (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporate
controlled by the Company, or




   (iv) any acquisition by any Person pursuant to a
reorganization, merger or consolidation if, following such
reorganization, merger or consolidation, the conditions described in
Section 6b(3) of The Plan are satisfied; or




(2) Individuals who, as of the effective date of The Plan, constitute The
Board (the “Incumbent Board”) cease for any reason to constitute



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at least a majority of The Board; provided, however, that any individual who
becomes a member of The Board subsequent to such effective date, whose
election, or nomination for election by the Company’s shareholders, was
approved by:




   (a) a vote of at least a majority of Directors then comprising the
Incumbent Board, or




   (b) a vote of at least a majority of the Directors then constituting
the Executive Committee of The Board at a time when such Committee
comprised at least five members and all members of such Committee were
either members of the Incumbent Board of considered as being members of
the Incumbent Board, pursuant to Section 6b(2)(a),




shall be considered as though such individual were a member of the Incumbent
Board; but, provided further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under The Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than The Board shall
not be so considered as a member of the incumbent Board; or




(3) Approval by the shareholders of the Company of a reorganization, merger
or consolidation or sale or other disposition of all or substantially all of
the assets of the Company (“Business Combination”); excluding, however, such a
Business Combination pursuant to which:




   (a) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination own, directly or indirectly, more than sixty percent
(60%) of, respectively, the outstanding shares of common stock, and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be,



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   (b) no Person (other than the Company, any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or such corporation resulting from such Business
Combination and any Person beneficially owning, immediately prior to such
Business Combination, directly or indirectly, twenty percent (20%) or more
of the Outstanding Company Common Stock or Outstanding Company Voting
Securities, as the case may be) will beneficially own, directly or
indirectly, twenty (20%) or more of, respectively, the outstanding shares
of common stock of the corporation resulting from such Business
Combination or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election
of directors, and




   (c) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial agreement,
or of the action of The Board, providing for such Business Combination; or




(4) The approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.




	 	c.  	CHANGE IN CONTROL PRICE. For purposes of The Plan, “Change in Control
Price” means the higher of:






(1) the highest reported sales price, regular way, of a share of Stock in any
transaction reported on the New York Stock Exchange Composite Tape or other
national securities exchange on which such shares are listed or on NASDAQ, as
applicable, during the ninety (90) day period prior to and including the date
of a Change in Control, or




(2) if the Change in Control is the result of a tender or exchange offer or a
Business Combination, the highest price per share of Stock paid in such tender
or exchange offer or Business Combination; provided, however, that in the case
of a Stock Option which:




   (a) is held by an Optionee who is an officer of the Company and is
subject to Section 16(b) of The Exchange Act, and




   (b) was granted within two hundred and forty (240) days of the
Change in Control,




then the Change in Control Price for such Stock Option shall be the Fair
Market Value of the Stock on the date such Stock Option is



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exercised or canceled. To the extent that the consideration paid in any such
transaction described above consists all or in part of securities or other
non-cash consideration, the value of such securities or other non-cash
consideration shall be determined in the sole discretion of The Board.


7. TERM, AMENDMENT AND TERMINATION




      The Plan will terminate on December 17, 2006. Stock Options outstanding as of December 17,
2006 shall not be affected or impaired by the termination of The Plan.



      The Committee shall have authority to amend The Plan without the approval of the Company’s
stockholders to take into account changes in law and tax and accounting rules, including Rule 16b-3
and Section 162(m) of The Code; provided that no amendment shall be made without the Optionee’s
consent which would impair the rights of an Optionee under a Stock Option theretofore granted.


8. UNFUNDED STATUS OF PLAN




      It is presently intended that The Plan constitute an “unfunded” plan for incentive and
deferred compensation. The Committee may authorize the creation of trusts or other arrangements to
meet the obligations created under The Plan to deliver Stock or make payments; provided, however,
that, unless The Committee otherwise determines, the existence of such trusts or other arrangements
is consistent with the “unfunded” status of The Plan.


9. GENERAL PROVISIONS





	 	a.  	The Committee may require each person purchasing shares pursuant to a
Stock Option to represent to and agree with the Company in writing that such person
is acquiring the shares without a view to the distribution thereof. The certificates
for such shares may include any legend which The Committee deems appropriate to
reflect any restrictions on transfer.






	 	   	Notwithstanding any other provision of The Plan or agreements made pursuant
thereto, the Company shall not be required to issue or deliver any certificate or
certificates for shares of Stock under The Plan prior to fulfillment of all of the
following conditions:






(1) the listing or approval for listing,




(2) any registration or other qualification, and




(3) the obtaining of any other consent, approval, or permit from any state or
federal governmental agency which The Committee shall, in



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its absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable.




	 	b.  	Nothing contained in The Plan shall prevent the Company or any of its
Affiliates from adopting other or additional compensation arrangements for any
Optionee.






	 	c.  	The adoption of The Plan shall not confer upon any Optionee any right to
continued employment, nor shall it interfere in any way with the right of the
Company or any of its Affiliates to terminate the employment of any Optionee with or
without cause at any time whatsoever absent a written employment contract to the
contrary.






	 	d.  	No later than the date as of which an amount first becomes includable in
the gross income of the Optionee for federal income tax purposes with respect to any
Stock Option under The Plan, and prior to the delivery of any shares of Stock to any
Optionee, the Optionee shall pay to the Company, or make arrangements satisfactory
to the Company regarding the payment of, any federal, state, local or foreign taxes
of any kind required by law to be withheld by the Company with respect to such
amount. In the discretion of The Committee, withholding obligations may be settled
with Stock in an amount having a Fair Market Value not exceeding the minimum
withholding tax payable by the Optionee with respect to the income recognized,
including Stock that is subject to the Stock Option 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 any of its
Affiliates shall, to the extent permitted by law, have the right to deduct any such
taxes from any payment otherwise due to the Optionee. The Committee shall establish
such procedures as it deems appropriate, including the making of irrevocable
elections, for the settlement of withholding obligations with Stock.






	 	e.  	In the case of a grant of a Stock Option to any employee of a Company
Affiliate, the Company, may, if The Committee so directs, issue or
transfer the shares of Stock covered by the Stock Option to the Affiliate, for such lawful
consideration as The Committee may specify, upon the condition or understanding that
the Affiliate will transfer the shares of Stock to that Optionee in accordance with
the terms of the Stock Option specified by The Committee pursuant to the provisions
of The Plan.






	 	f.  	The Plan and all Stock Options made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of California,
without reference to principles of conflict of law.





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10. EFFECTIVE DATE OF PLAN




      Subject to approval by the Stockholders of the Company on March 18, 1997, The Plan shall be
effective on December 17, 1996.




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