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                                                                    EXHIBIT 10.3

                           COLOR KINETICS INCORPORATED

                            2004 STOCK INCENTIVE PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

         The name of the plan is the Color Kinetics Incorporated 2004 Stock
Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable
officers and employees of, and other persons providing services to, Color
Kinetics Incorporated (the "Company") and its Affiliates to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company and its
shareholders, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.

         The following terms shall be defined as set forth below:

         "Affiliate" means a parent corporation, if any, and each subsidiary
corporation of the Company, as those terms are defined in Section 424 of the
Code.

         "Award" or "Awards", except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Statutory Stock
Options, Restricted Stock Awards, Unrestricted Stock Awards, Performance Share
Awards and Stock Appreciation Rights. Awards shall be evidenced by a written
agreement (which may be in electronic form and may be electronically
acknowledged and accepted by the recipient) containing such terms and conditions
not inconsistent with the provisions of this Plan as the Committee shall
determine.

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

         "Cause" shall mean, with respect to any Award holder, a determination
by the Company (including the Board) or any Affiliate that the Holder's
employment or other relationship with the Company or any such Affiliate should
be terminated as a result of (i) a material breach by the Award holder of any
agreement to which the Award holder and the Company (or any such Affiliate) are
parties, (ii) any act (other than retirement) or omission to act by the Award
holder that may have a material and adverse effect on the business of the
Company, such Affiliate or any other Affiliate or on the Award holder's ability
to perform services for the Company or any such Affiliate, including, without
limitation, the proven or admitted commission of any crime (other than an
ordinary traffic violation), or (iii) any material misconduct or material
neglect of duties by the Award holder in connection with the business or affairs
of the Company or any such Affiliate.

         "Change of Control" shall have the meaning set forth in Section 15.

         "Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

         "Committee" shall have the meaning set forth in Section 2.

         "Disability" means disability as set forth in Section 22(e)(3) of the
Code.

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         "Effective Date" means the date on which the Plan is approved by the
Board of Directors as set forth in Section 17.

         "Eligible Person" shall have the meaning set forth in Section 4.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         "Fair Market Value" on any given date means the closing price per share
of the Stock on such date as reported by such registered national securities
exchange on which the Stock is listed, or, if the Stock is not listed on such an
exchange, as quoted on NASDAQ; provided, that, if there is no trading on such
date, Fair Market Value shall be deemed to be the closing price per share on the
last preceding date on which the Stock was traded. If the Stock is not listed on
any registered national securities exchange or quoted on NASDAQ, the Fair Market
Value of the Stock shall be determined in good faith by the Committee.

         "Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.

         "Independent Director" means any director who meets the independence
requirement of NASDAQ Marketplace Rule 4200(a)(15).

         "Non-Employee Director" means any director who: (i) is not currently an
officer of the Company or an Affiliate, or otherwise currently employed by the
Company or an Affiliate, (ii) does not receive compensation, either directly or
indirectly, from the Company or an Affiliate, for services rendered as a
consultant or in any capacity other than as a director, except for an amount
that does not exceed the dollar amount for which disclosure would be required
pursuant to Rule 404(a) of Regulation S-K promulgated by the SEC, (iii) does not
possess an interest in any other transaction for which disclosure would be
required pursuant to Rule 404(a) of Regulation S-K, and (iv) is not engaged in a
business relationship for which disclosure would be required pursuant to Rule
404(b) of Regulation S-K.

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

         "Normal Retirement" means retirement in good standing from active
employment with the Company and its Affiliates in accordance with the retirement
policies of the Company and its Affiliates then in effect.

         "Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.

         "Outside Director" means any director who (i) is not an employee of the
Company or of any "affiliated group," as such term is defined in Section 1504(a)
of the Code, which includes the Company (an "Affiliated Group Member"), (ii) is
not a former employee of the Company or any Affiliated Group Member who is
receiving compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the Company's or any Affiliated Group
Member's taxable year, (iii) has not been an officer of the Company or any
Affiliated Group Member and (iv) does not receive remuneration from the Company
or any Affiliated Group Member, either directly or indirectly, in any capacity
other than as a director. "Outside Director" shall be determined in accordance
with Section 162(m) of the Code and the Treasury regulations issued thereunder.

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         "Performance Share Award" means an Award pursuant to Section 8.

         "Restricted Stock Award" means an Award granted pursuant to Section 6.

         "SEC" means the Securities and Exchange Commission or any successor
authority.

         "Stock" means the common stock, $.001 par value per share, of the
Company, subject to adjustments pursuant to Section 3.

         "Stock Appreciation Right" means an Award granted pursuant to Section
9.

         "Unrestricted Stock Award" means Awards granted pursuant to Section 7.

SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
           AND DETERMINE AWARDS.

         (a)      Committee. The Plan shall be administered by a committee of
the Board (the "Committee") consisting of not less than two (2) persons each of
whom qualifies as an Independent Director, an Outside Director and a
Non-Employee Director, but the authority and validity of any act taken or not
taken by the Committee shall not be affected if any person administering the
Plan is not an Independent Director, an Outside Director or a Non-Employee
Director. Except as specifically reserved to the Board under the terms of the
Plan, the Committee shall have full and final authority to operate, manage and
administer the Plan on behalf of the Company.

         (b)      Powers of Committee. The Committee shall have the power and
authority to grant and modify Awards consistent with the terms of the Plan,
including the power and authority:

                  (i)      to select the persons to whom Awards may from time to
time be granted;

                  (ii)     to determine the time or times of grant, and the
extent, if any, of Incentive Stock Options, Non-Statutory Stock Options,
Restricted Stock, Unrestricted Stock, Performance Shares and Stock Appreciation
Rights, or any combination of the foregoing, granted to any one or more
participants;

                  (iii)    to determine the number of shares to be covered by
any Award;

                  (iv)     to determine and modify the terms and conditions,
including restrictions, not inconsistent with the terms of the Plan, of any
Award, which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards; provided, however, that no such action shall adversely affect rights
under any outstanding Award without the participant's consent;

                  (v)      to accelerate the exercisability or vesting of all or
any portion of any Award;

                  (vi)     to extend the period in which any outstanding Stock
Option or Stock Appreciation Right may be exercised; and

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                  (vii)    to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and proceedings as
it shall deem advisable; to interpret the terms and provisions of the Plan and
any Award (including related written instruments); to make all determinations it
deems advisable for the administration of the Plan; to decide all disputes
arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.

         All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants. No member or former
member of the Committee or the Board shall be liable for any action or
determination made in good faith with respect to this Plan.

SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION.

         (a)      Shares Issuable. The maximum number of shares of Stock which
may be issued in respect of Awards (including Stock Appreciation Rights) granted
under the Plan, subject to adjustment upon changes in capitalization of the
Company as provided in this Section 3, shall be 2,000,000 shares which number
shall increase on each of the first five (5) anniversaries of the effective date
of this Plan by an amount, if any, equal to the lesser of: (i) 300,000 shares of
Stock or (ii) an amount determined by the Board. Notwithstanding the foregoing,
the maximum cumulative number of shares of Stock with respect to which Awards
may be granted under the Plan is 3,500,000 shares subject to adjustment upon
changes in capitalization of the Company as provided in this Section 3. For
purposes of this limitation, the shares of Stock underlying any Awards which are
forfeited, cancelled, reacquired by the Company or otherwise terminated (other
than by exercise), shares that are tendered in payment of the exercise price of
any Award and shares that are tendered or withheld for tax withholding
obligations shall be added back to the shares of Stock with respect to which
Awards may be granted under the Plan. Shares issued under the Plan may be
authorized but unissued shares or shares reacquired by the Company.

         (b)      Limitation on Awards. In no event may any Plan participant be
granted Awards (including Stock Appreciation Rights) with respect to more than
500,000 shares of Stock in any calendar year. The number of shares of Stock
relating to an Award granted to a Plan participant in a calendar year that is
subsequently forfeited, cancelled or otherwise terminated shall continue to
count toward the foregoing limitation in such calendar year. In addition, if the
exercise price of an Award is subsequently reduced, the transaction shall be
deemed a cancellation of the original Award and the grant of a new one so that
both transactions shall count toward the maximum shares issuable in the calendar
year of each respective transaction.

         (c)      Stock Dividends, Mergers, etc. In the event that after
approval of the Plan by the stockholders of the Company in accordance with
Section 17, the Company effects a stock dividend, stock split or similar change
in capitalization affecting the Stock, the Committee shall make appropriate
adjustments in (i) the number and kind of shares of stock or securities with
respect to which Awards may thereafter be granted (including without limitation
the limitations set forth in Sections 3(a) and (b) above), (ii) the number and
kind of shares remaining subject to outstanding Awards, and (iii) the option or
purchase price in respect of such shares. In the event

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of any merger, consolidation, dissolution or liquidation of the Company, the
Committee in its sole discretion may, as to any outstanding Awards, make such
substitution or adjustment in the aggregate number of shares reserved for
issuance under the Plan and in the number and purchase price (if any) of shares
subject to such Awards as it may determine and as may be permitted by the terms
of such transaction, or accelerate, amend or terminate such Awards upon such
terms and conditions as it shall provide (which, in the case of the termination
of the vested portion of any Award, shall require payment or other consideration
which the Committee deems equitable in the circumstances), subject, however, to
the provisions of Section 15.

         (d)      Substitute Awards. The Committee may grant Awards under the
Plan in substitution for stock and stock based awards held by employees of
another corporation who concurrently become employees of the Company or an
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or an Affiliate or the acquisition by the Company
or an Affiliate of property or stock of the employing corporation. The Committee
may direct that the substitute awards be granted on such terms and conditions as
the Committee considers appropriate in the circumstances.

SECTION 4. ELIGIBILITY.

         Awards may be granted to officers, directors and employees of, and
consultants and advisers to, the Company or its Affiliates ("Eligible Persons").

SECTION 5. STOCK OPTIONS.

         The Committee may grant to Eligible Persons options to purchase stock.

         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 either Incentive Stock
Options (subject to compliance with applicable law) or Non-Statutory Stock
Options. Unless otherwise so designated, an Option shall be a Non-Statutory
Stock Option. To the extent that any option does not qualify as an Incentive
Stock Option, it shall constitute a Non-Statutory Stock Option.

         No Incentive Stock Option shall be granted under the Plan after the
tenth anniversary of the date of adoption of the Plan by the Board.

         The Committee in its discretion may determine the effective date of
Stock Options, provided, however, that grants of Incentive Stock Options shall
be made only to persons who are, on the effective date of the grant, employees
of the Company or an Affiliate. Stock Options granted pursuant to this Section 5
shall contain such additional terms and conditions, not inconsistent with the
terms of the Plan, as the Committee shall deem desirable.

         (a)      Exercise Price. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5 shall be determined
by the Committee at the time of grant but shall be, in the case of incentive
stock options, not less than one hundred percent (100%) of Fair Market Value on
the date of grant. If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than ten

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percent (10%) of the combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price shall be not less than one hundred
ten percent (110%) of Fair Market Value on the date of grant.

         (b)      Option Term. The term of each Stock Option shall be fixed by
the Committee, but no Incentive Stock Option shall be exercisable more than ten
(10) years after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the Code)
more than ten percent (10%) of the combined voting power of all classes of stock
of the Company or any subsidiary or parent corporation and an Incentive Stock
Option is granted to such employee, the term of such option shall be no more
than five (5) years from the date of grant.

         (c)      Exercisability; Rights of a Shareholder. Stock Options shall
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Committee. The Committee may at any
time accelerate the exercisability of all or any portion of any Stock Option. An
optionee shall have the rights of a shareholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.

         (d)      Method of Exercise. Stock Options may be exercised in whole or
in part, by delivering written notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the purchase price may be made by
delivery of cash or bank check or other instrument acceptable to the Committee
in an amount equal to the exercise price of such Options, or, to the extent
provided in the applicable Option Agreement, by one or more of the following
methods:

                  (i)      by delivery to the Company of shares of Common Stock
of the Company that either have been purchased by the optionee on the open
market, or have been beneficially owned by the optionee for a period of at least
six months and are not then subject to restriction under any Company plan
("mature shares"); such surrendered shares shall have a fair market value equal
in amount to the exercise price of the Options being exercised; or

                  (ii)     a personal recourse note issued by the optionee to
the Company in a principal amount equal to such aggregate exercise price and
with such other terms, including interest rate and maturity, as the Company may
determine in its discretion; provided, however, that the interest rate borne by
such note shall not be less than the lowest applicable federal rate, as defined
in Section 1274(d) of the Code; or

                  (iii)    if the class of Common Stock is registered under the
Securities Exchange Act of 1934 at such time, by delivery to the Company of a
properly executed exercise notice along with irrevocable instructions to a
broker to deliver promptly to the Company cash or a check payable and acceptable
to the Company for the purchase price; provided that in the event that the
optionee chooses to pay the purchase price as so provided, the optionee and the
broker shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Committee shall prescribe as a condition
of such payment procedure (including, in the case of an optionee who is an
executive officer of the Company, such procedures and agreements as the
Committee deems appropriate in order to avoid any extension

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of credit in the form of a personal loan to such officer). The Company need not
act upon such exercise notice until the Company receives full payment of the
exercise price; or

                  (iv)     by reducing the number of Option shares otherwise
issuable to the optionee upon exercise of the Option by a number of shares of
Common Stock having a fair market value equal to such aggregate exercise price;
provided, however, that the optionee otherwise holds an equal number of mature
shares; or

                  (v)      by any combination of such methods of payment.

         The delivery of certificates representing shares of Stock to be
purchased pursuant to the exercise of a Stock Option will be contingent upon
receipt from the Optionee (or a purchaser acting in his stead in accordance with
the provisions of the Stock Option) by the Company of the full purchase price
for such shares and the fulfillment of any other requirements contained in the
Stock Option or imposed by applicable law.

         (e)      Non-transferability of Options. Except as the Committee may
provide with respect to a Non-Statutory Stock Option, no Stock Option shall be
transferable other than by will or by the laws of descent and distribution and
all Stock Options shall be exercisable, during the optionee's lifetime, only by
the optionee.

         (f)      Annual Limit on Incentive Stock Options. To the extent
required for "incentive stock option" treatment under Section 422 of the Code,
the aggregate Fair Market Value (determined as of the time of grant) of the
Stock with respect to which Incentive Stock Options granted under this Plan and
any other plan of the Company or its Affiliates become exercisable for the first
time by an optionee during any calendar year shall not exceed $100,000.

         (g)      Lockup Agreement. Each Option shall provide that the optionee
shall agree for a period of time (not to exceed 180 days) from the effective
date of any registration of securities of the Company (upon request of the
Company or the underwriters managing any underwritten offering of the Company's
securities) not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of, any shares issued pursuant to the exercise
of such Option, without the prior written consent of the Company or such
underwriters, as the case may be.

SECTION 6. RESTRICTED STOCK AWARDS.

         (a)      Nature of Restricted Stock Award. The Committee in its
discretion may grant Restricted Stock Awards to any Eligible Person, entitling
the recipient to acquire, for such purchase price, if any, as may be determined
by the Committee, shares of Stock subject to such restrictions and conditions as
the Committee may determine at the time of grant ("Restricted Stock"), including
continued employment and/or achievement of pre-established performance goals and
objectives.

         (b)      Acceptance of Award. A participant who is granted a Restricted
Stock Award shall have no rights with respect to such Award unless the
participant shall have accepted the Award within sixty (60) days (or such
shorter date as the Committee may specify) following the award date by making
payment to the Company of the specified purchase price, if any, of the

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shares covered by the Award and by executing and delivering to the Company a
written instrument that sets forth the terms and conditions applicable to the
Restricted Stock in such form as the Committee shall determine.

         (c)      Rights as a Shareholder. Upon complying with Section 6(b)
above, a participant shall have all the rights of a shareholder with respect to
the Restricted Stock, including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Restricted Award. Unless the Committee
shall otherwise determine, certificates evidencing shares of Restricted Stock
shall remain in the possession of the Company until such shares are vested as
provided in Section 6(e) below.

         (d)      Restrictions. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment by the
Company and its Affiliates for any reason (including death, Disability, Normal
Retirement and for Cause), the Company shall have the right, at the discretion
of the Committee, to repurchase shares of Restricted Stock which have not then
vested at their purchase price, or to require forfeiture of such shares to the
Company if acquired at no cost, from the participant or the participant's legal
representative. The Company must exercise such right of repurchase or forfeiture
within ninety (90) days following such termination of employment (unless
otherwise specified in the written instrument evidencing the Restricted Stock
Award).

         (e)      Vesting of Restricted Stock. The Committee at the time of
grant shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." The Committee at any time may
accelerate such date or dates and otherwise waive or, subject to Section 13,
amend any conditions of the Award.

         (f)      Waiver, Deferral and Reinvestment of Dividends. The written
instrument evidencing the Restricted Stock Award may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Stock.

SECTION 7. UNRESTRICTED STOCK AWARDS.

         (a)      Grant or Sale of Unrestricted Stock. The Committee in its
discretion may grant or sell to any Eligible Person shares of Stock free of any
restrictions under the Plan ("Unrestricted Stock") at a purchase price
determined by the Committee. Shares of Unrestricted Stock may be granted or sold
as described in the preceding sentence in respect of past services or other
valid consideration.

         (b)      Restrictions on Transfers. The right to receive unrestricted
Stock may not be sold, assigned, transferred, pledged or otherwise encumbered,
other than by will or the laws of descent and distribution.

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SECTION 8.  PERFORMANCE SHARE AWARDS.

     A Performance Share Award is an award entitling the recipient to acquire
shares of Stock upon the attainment of specified performance goals. The
Committee may make Performance Share Awards independent of or in connection
with the granting of any other Award under the Plan. Performance Share Awards
may be granted under the Plan to any Eligible Person. The Committee in its
discretion shall determine whether and to whom Performance Share Awards shall
be made, the performance goals applicable under each such Award (which may
include, without limitation, continued employment by the recipient or a
specified achievement by the recipient, the Company or any business unit of the
Company), the periods during which performance is to be measured, and all other
limitations and conditions applicable to the Award or the Stock issuable
thereunder.

SECTION 9.  STOCK APPRECIATION RIGHTS.

     The Committee in its discretion may grant Stock Appreciation Rights to any
Eligible Person (i) alone, or (ii) simultaneously with the grant of a Stock
Option and in conjunction therewith or in the alternative thereto. A Stock
Appreciation Right shall entitle the participant upon exercise thereof to
receive from the Company, upon written request to the Company at its principal
offices (the "Request"), a number of shares of Stock (with or without
restrictions as to substantial risk of forfeiture and transferability, as
determined by the Committee in its sole discretion), an amount of cash, or any
combination of Stock and cash, as specified in the Request (but subject to the
approval of the Committee in its sole discretion, at any time up to and
including the time of payment, as to the making of any cash payment), having an
aggregate Fair Market Value equal to the product of (a) the excess of Fair
Market Value, on the date of such Request, over the exercise price per share of
Stock specified in such Stock Appreciation Right or its related Option (which
exercise price shall be not less than one hundred percent (100%) of Fair Market
Value on the date of grant), multiplied by (b) the number of shares of Stock
for which such Stock Appreciation Right shall be exercised. Notwithstanding the
foregoing, the Committee may specify at the time of grant of any Stock
Appreciation Right that such Stock Appreciation Right may be exercisable solely
for cash and not for Stock.

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SECTION 10. TERMINATION OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.

         (a)      Incentive Stock Options:

                  (i)      Termination by Death. If any participant's employment
by the Company and its Affiliates terminates by reason of death, any Incentive
Stock Option owned by such participant may thereafter be exercised to the extent
exercisable at the date of death, by the legal representative or legatee of the
participant, for a period of one hundred eighty (180) days (or such longer
period as the Committee shall specify at any time) from the date of death, or
until the expiration of the stated term of the Incentive Stock Option, if
earlier.

                  (ii)     Termination by Reason of Disability or Normal
Retirement.

                  (A)      Any Incentive Stock Option held by a participant
whose employment by the Company and its Affiliates has terminated by reason of
Disability may thereafter be exercised, to the extent it was exercisable at the
time of such termination, for a period of ninety (90) days (or such longer
period as the Committee shall specify at any time) from the date of such
termination of employment, or until the expiration of the stated term of the
Option, if earlier.

                  (B)      Any Incentive Stock Option held by a participant
whose employment by the Company and its Affiliates has terminated by reason of
Normal Retirement may thereafter be exercised, to the extent it was exercisable
at the time of such termination, for a period of ninety (90) days (or such
longer period as the Committee shall specify at any time) from the date of such
termination of employment, or until the expiration of the stated term of the
Option, if earlier.

                  (C)      The Committee shall have sole authority and
discretion to determine whether a participant's employment has been terminated
by reason of Disability or Normal Retirement.

                  (iii)    Termination for Cause. If any participant's
employment by the Company and its Affiliates has been terminated for Cause, any
Incentive Stock Option held by such participant shall immediately terminate and
be of no further force and effect; provided, however, that the Committee may, in
its sole discretion, provide that such Option can be exercised for a period of
up to thirty (30) days from the date of termination of employment or until the
expiration of the stated term of the Option, if earlier.

                  (iv)     Other Termination. Unless otherwise determined by the
Committee, if a participant's employment by the Company and its Affiliates
terminates for any reason other than death, Disability, Normal Retirement or for
Cause, any Incentive Stock Option held by such participant may thereafter be
exercised, to the extent it was exercisable on the date of termination of
employment, for thirty (30) days (or such other period as the Committee shall
specify) from the date of termination of employment or until the expiration of
the stated term of the Option, if earlier.

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         (b)      Non-Statutory Stock Options and Stock Appreciation Rights. Any
Non-Statutory Stock Option or Stock Appreciation Right granted under the Plan
shall contain such terms and conditions with respect to its termination as the
Committee, in its discretion, may from time to time determine.

SECTION 11. TAX WITHHOLDING.

         (a)      Payment by Participant. Each participant shall, no later than
the date as of which the value of an Award or of any Stock or other amounts
received thereunder first becomes includable in the gross income of the
participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of any Federal,
state, local and/or payroll taxes of any kind required by law to be withheld
with respect to such income. The Company and its 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.

         (b)      Payment in Shares. A Participant may elect, with the consent
of the Committee, to have such tax withholding obligation satisfied, in whole or
in part, by (i) authorizing the Company to withhold from shares of Stock to be
issued pursuant to an Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due with respect to such Award, or (ii) delivering to
the Company a number of mature shares of Stock with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due.

         (c)      Notice of Disqualifying Disposition. Each holder of an
Incentive Option shall agree to notify the Company in writing immediately after
making a disqualifying disposition (as defined in Section 421(b) of the Code) of
any Stock purchased upon exercise of an Incentive Stock Option.

SECTION 12. TRANSFER AND LEAVE OF ABSENCE.

         For purposes of the Plan, the following events shall not be deemed a
termination of employment:

         (a)      a transfer to the employment of the Company from an Affiliate
or from the Company to an Affiliate, or from one Affiliate to another;

         (b)      an approved leave of absence for military service or sickness,
or for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.

SECTION 13. AMENDMENTS AND TERMINATION.

         The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were
then initially granted under this Plan) for the purpose of satisfying changes in
law or for any

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<PAGE>

other lawful purpose, but no such action shall adversely affect rights under any
outstanding Award without the holder's consent.

         This Plan shall terminate as of the tenth anniversary of its effective
date. The Board may terminate this Plan at any earlier time for any reason. No
Award may be granted after the Plan has been terminated. No Award granted while
this Plan is in effect shall be altered or impaired by termination of this Plan,
except upon the consent of the holder of such Award. The power of the Committee
to construe and interpret this Plan and the Awards granted prior to the
termination of this Plan shall continue after such termination.

SECTION 14. STATUS OF PLAN.

         With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.

SECTION 15. CHANGE OF CONTROL PROVISIONS.

         (a)      Upon the occurrence of a Change of Control as defined in this
Section 15:

                  (i)      subject to the provisions of clause (iii) below,
after the effective date of such Change of Control, each holder of an
outstanding Stock Option, Restricted Stock Award, Performance Share Award or
Stock Appreciation Right shall be entitled, upon exercise of such Award, to
receive, in lieu of shares of Stock (or consideration based upon the Fair Market
Value of Stock), shares of such stock or other securities, cash or property (or
consideration based upon shares of such stock or other securities, cash or
property) as the holders of shares of Stock received in connection with the
Change of Control;

                  (ii)     the Committee may accelerate, fully or in part, the
time for exercise of, and waive any or all conditions and restrictions on, each
unexercised and unexpired Stock Option, Restricted Stock Award, Performance
Share Award and Stock Appreciation Right, effective upon a date prior or
subsequent to the effective date of such Change of Control, as specified by the
Committee; or

                  (iii)    each outstanding Stock Option, Restricted Stock
Award, Performance Share Award and Stock Appreciation Right may be cancelled by
the Committee as of the effective date of any such Change of Control provided
that (x) prior written notice of such cancellation shall be given to each holder
of such an Award and (y) each holder of such an Award shall have the right to
exercise such Award to the extent that the same is then exercisable or, in full,
if the Committee shall have accelerated the time for exercise of all such
unexercised and unexpired Awards, during the thirty (30) day period preceding
the effective date of such Change of Control.

         (b)      "Change of Control" shall mean the occurrence of any one of
the following events:

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<PAGE>

                  (i)      any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act) becomes, after the Effective Date of this
Plan, a "beneficial owner" (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act) (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company's then outstanding
securities; or

                  (ii)     the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or other entity, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or

                  (iii)    the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.

SECTION 16. GENERAL PROVISIONS.

         (a)      No Distribution; Compliance with Legal Requirements. The
Committee may require each person acquiring shares pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.

         No shares of Stock shall be issued pursuant to an Award until all
applicable securities laws and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.

         (b)      Delivery of Stock Certificates. Delivery of stock certificates
to participants under this Plan shall be deemed effected for all purposes when
the Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.

         (c)      Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan or any
Award under the Plan does not confer upon any employee any right to continued
employment with the Company or any Affiliate.

                                      -13-
<PAGE>

SECTION 17. EFFECTIVE DATE OF PLAN.

         This Plan shall become effective upon (i) its adoption by the Company's
Board of Directors and (ii) its approval by the shareholders of the Company
within twelve months following the adoption of this Plan by the Board. If such
shareholder approval is not obtained within twelve months after the Board's
adoption of this Plan, this Plan shall terminate and be of no force or effect.

SECTION 18. GOVERNING LAW.

         This Plan shall be governed by, and construed and enforced in
accordance with, the substantive laws of The Commonwealth of Massachusetts
without regard to its principles of conflicts of laws.

                                      * * *

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