Exhibit 4.2

                              MIKRON INFRARED, INC.

                              AMENDED AND RESTATED

                          OMNIBUS STOCK INCENTIVE PLAN


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                                TABLE OF CONTENTS

                                                                            Page

1. THE PLAN ...............................................................    1

   1.1  Introduction, Purpose; Coordination ...............................    1

        1.1.1  Introduction ...............................................    1

        1.1.2  Purpose ....................................................    1

        1.1.3  Coordination ...............................................    1

   1.2  Administration and Authorization; Power and Procedure;
        Indemnification ...................................................    1

        1.2.1  Committee ..................................................    1

        1.2.2  Plan Awards; Interpretation; Powers of Committee ...........    1

        1.2.3  Binding Determinations .....................................    3

        1.2.4  Reliance on Experts ........................................    3

        1.2.5  Committee Action; Delegation ...............................    3

        1.2.6  No Liability ...............................................    3

        1.2.7  Indemnification ............................................    3

   1.3  Participation .....................................................    4

   1.4  Shares Available for Awards; Share Limits .........................    4

        1.4.1  Shares Available ...........................................    4

        1.4.2  Share Limits ...............................................    4

        1.4.3  Share Reservation; Replenishment and Reissue of
               Unvested Awards ............................................    4

   1.5  Grant of Awards ...................................................    5

   1.6  Award Period ......................................................    5

   1.7  Limitations on Exercise and Vesting of Awards .....................    5

        1.7.1  Provisions for Exercise ....................................    5

        1.7.2  Procedure ..................................................    5

        1.7.3  Fractional Shares/Minimum Issue ............................    5

   1.8  No Transferability; Limited Exception to Transfer Restrictions ....    5

        1.8.1  Limit On Exercise and Transfer .............................    5

        1.8.2  Further Exceptions to Limits On Transfer.: .................    6

2. OPTIONS ................................................................    6

   2.1  Grants ............................................................    6

   2.2  Option Price ......................................................    6


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                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

        2.2.1  Pricing Limits .............................................    6

        2.2.2  Payment Provisions .........................................    6

        2.2.3  Acceptance of Notes to Finance Exercise ....................    7

   2.3  Limitations on Grant and Terms of Incentive Stock Options .........    8

        2.3.1  $100,000 Limit .............................................    8

        2.3.2  Other Code Limits ..........................................    8

        2.3.3  ISO Notice of Sale Requirement .............................    8

   2.4  Option Repricing/Cancellation and Regrant/Waiver of Restrictions ..    9

   2.5  Options and Rights in Substitution for Stock Options Granted by
        Other Corporations ................................................    9

   2.6  Limits on 10% Holders .............................................    9

   2.7  Restrictions on Transfer ..........................................    9

3. STOCK APPRECIATION RIGHTS (INCLUDING LIMITED STOCK APPRECIATION
   RIGHTS) ................................................................    9

   3.1  Grants ............................................................    9

   3.2  Exercise of Stock Appreciation Rights .............................   10

        3.2.1  Exercisability .............................................   10

        3.2.2  Effect on Available Shares .................................   10

        3.2.3  Stand-Alone SARs ...........................................   10

        3.2.4  Proportionate Reduction ....................................   10

   3.3  Payment ...........................................................   10

        3.3.1  Amount .....................................................   10

        3.3.2  Form of Payment ............................................   10

   3.4  Limited Stock Appreciation Rights .................................   11

4. RESTRICTED STOCK AWARDS ................................................   11

   4.1  Grants ............................................................   11

   4.2  Restrictions ......................................................   11

        4.2.1  Pre-Vesting Restraints .....................................   11

        4.2.2  Dividend and Voting Rights .................................   11

        4.2.3  Cash Payments ..............................................   12

   4.3  Return to the Company .............................................   12


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                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES .............................   12

   5.1  Grants of Performance Share Awards ................................   12

   5.2  Grants of Stock Bonuses ...........................................   12

   5.3  Deferred Payments .................................................   12

6. OTHER PROVISIONS .......................................................   13

   6.1  Rights of Eligible Persons, Participants and Beneficiaries ........   13

        6.1.1  Employment Status ..........................................   13

        6.1.2  No Employment Contract .....................................   13

        6.1.3  Plan Not Funded ............................................   13

        6.1.4  Charter Documents ..........................................   13

   6.2  Effects of Termination of Employment; Termination of Subsidiary
        Status; Discretionary Provisions ..................................   14

        6.2.1  Dismissal for Cause ........................................   14

        6.2.2  Resignation ................................................   14

        6.2.3  Layoff or Other Involuntary Termination ....................   14

        6.2.4  Death, Disability, or Retirement ...........................   14

        6.2.5  Events Not Deemed a Termination of Employment ..............   15

        6.2.6  Effect of Change of Subsidiary Status ......................   15

        6.2.7  Committee Discretion .......................................   15

        6.2.8  Termination of Consulting or Affiliate Services ............   15

   6.3  Adjustments; Acceleration .........................................   16

        6.3.1  Adjustments ................................................   16

        6.3.2  Acceleration of Awards Upon Change in Control ..............   16

        6.3.3  Possible Early Termination of Accelerated Awards ...........   17

        6.3.4  Possible Rescission of Acceleration ........................   17

        6.3.5  Golden Parachute Limitations ...............................   17

   6.4  Compliance with Laws ..............................................   18

        6.4.1  General ....................................................   18

        6.4.2  Compliance with Securities Laws ............................   18

        6.4.3  Required Consents and Legends ..............................   19


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                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

   6.5  Tax Withholding ...................................................   19

        6.5.1  Tax Withholding ............................................   19

   6.6  Plan Amendment, Termination and Suspension ........................   20

        6.6.1  Board Authorization ........................................   20

        6.6.2  Shareholder Approval .......................................   20

        6.6.3  Amendments to Awards .......................................   20

        6.6.4  Limitations on Amendments to Plan and Awards ...............   20

        6.6.5  Accounting Changes .........................................   21

   6.7  Privileges of Stock Ownership .....................................   21

   6.8  Effective Date of the Plan ........................................   21

   6.9  Term of the Plan ..................................................   21

   6.10 Governing Law/Construction/Severability ...........................   21

        6.10.1 Choice of Law ..............................................   21

        6.10.2 Severability ...............................................   21

   6.11 Captions ..........................................................   21

   6.12 Non-Exclusivity of Plan ...........................................   22

   6.13 No Restriction on Corporate Powers ................................   22

   6.14 Effect on Other Benefits ..........................................   22

7. DEFINITIONS ............................................................   22


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                              MIKRON INFRARED, INC.

                              AMENDED AND RESTATED

                          OMNIBUS STOCK INCENTIVE PLAN

1.    The Plan

1.1   Introduction, Purpose; Coordination.

      1.1.1       Introduction. The Board adopted the Company's Omnibus Stock
                  Incentive Plan on May 3, 1999, subject to the approval of the
                  Company's Shareholders. On August 20, 1999, the Company's
                  shareholders ratified the Board's action and the Plan became
                  effective on that date. This amendment and restatement of the
                  Plan was adopted by the Board on March 25, 2003 and will
                  become effective on the date the Company's shareholders ratify
                  such adoption.

      1.1.2       Purpose. The purpose of this Plan is to promote the success of
                  the Company and the interests of its shareholders by
                  attracting, motivating, retaining and rewarding certain
                  officers, employees, directors and other eligible persons with
                  awards and incentives for high levels of individual
                  performance and improved financial performance of the Company.
                  Capitalized terms used herein are defined in Section 7.

      1.1.3       Coordination. Subject to the provisions of Sections 6.6.3 and
                  6.6.4 of this Plan, all options granted pursuant to this Plan
                  prior to the Effective Date of the amendment and restatement
                  hereof shall be governed from and after such Effective Date by
                  the terms and conditions of this Plan as so amended and
                  restated.

1.2   Administration and Authorization; Power and Procedure; Indemnification.

      1.2.1       Committee. Except as otherwise provided herein, the Plan shall
                  be administered by the Committee. Notwithstanding anything to
                  the contrary contained herein, the Board may, in its sole
                  discretion, at any time and from time to time, grant Awards
                  (including grants to members of the Board who are not
                  employees of the Company) or administer the Plan, in which
                  case the Board shall have all of the authority and
                  responsibility granted to the Committee herein. To the extent
                  any Award is made to an "officer" (as defined for purposes of
                  Rule 16a-1(f) under the Exchange Act) or director of the
                  Company, the Award shall be made by the full Board or a
                  committee or subcommittee of the Board composed of at least
                  two non-employee directors (as defined in Rule 16b-3 under the
                  Exchange Act).

      1.2.2       Plan Awards; Interpretation; Powers of Committee. The
                  Committee will have the authority, subject to the express
                  provisions of this Plan and any express limitations on the
                  delegated authority of the Committee, unless otherwise
                  provided in an Award Agreement to:


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                  (a)   determine eligibility and the particular Eligible
                        Persons who will receive Awards;

                  (b)   grant Awards to Eligible Persons, determine the price at
                        which securities will be offered or awarded and the
                        amount of securities to be offered or awarded to any of
                        such persons, and determine the other specific terms and
                        conditions of Awards consistent with the express limits
                        of this Plan, establish the installments (if any) in
                        which such Awards will become exercisable or will vest,
                        or determine that no delayed exercisability or vesting
                        is required, and establish the events of termination or
                        reversion of such Awards;

                  (c)   approve the forms of Award Agreements, which need not be
                        identical either as to type of Award or among
                        Participants;

                  (d)   construe and interpret this Plan and any Award or other
                        agreements defining the rights and obligations of the
                        Company and Participants under this Plan, further define
                        the terms used in this Plan, and prescribe, amend and
                        rescind rules and regulations relating to the
                        administration of this Plan;

                  (e)   in its absolute discretion, subject to any required
                        consent under Section 6.6, (i) amend any outstanding
                        Award or Award Agreement in any respect, whether or not
                        the rights of the recipient of such Award are adversely
                        affected, including, without limitation, to accelerate
                        the time or times at which the Award becomes vested,
                        unrestricted or may be exercised, waive or amend any
                        goals, restrictions or conditions set forth in such
                        Award Agreement, or impose new goals, restrictions and
                        conditions, or reflect a change in the recipient's
                        circumstances and (ii) determine whether, to what extent
                        and under what circumstances and method or methods (A)
                        Awards may be (1) settled in cash, shares of Common
                        Stock, other securities, other Awards or other property
                        or (2) canceled, forfeited or suspended, (B) shares of
                        Common Stock, other securities, other Awards or other
                        property, and other amounts payable with respect to an
                        Award may be deferred either automatically or at the
                        election of the recipient thereof or of the Committee
                        and (C) Awards may be settled by the Company or any of
                        its designees, provided that the Committee may not amend
                        the terms of any outstanding Award without shareholder
                        approval, unless such amendment is a result of a
                        recipient's termination from employment due to
                        retirement, death, disability or a Change in Control
                        Event;

                  (f)   accelerate or extend the exercisability or extend the
                        term of any or all outstanding Awards within the maximum
                        ten-year term of Awards under Section 1.6; and

                  (g)   make all other determinations and take such other action
                        as contemplated


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                        by this Plan or as may be necessary or advisable for the
                        administration of this Plan and the effectuation of its
                        purposes.

      1.2.3       Binding Determinations. Any action taken by, or inaction of,
                  the Company, any Subsidiary, the Board or the Committee
                  relating or pursuant to this Plan will be within the absolute
                  discretion of that entity or body and will be conclusive and
                  binding upon all persons. Subject only to compliance with the
                  express provisions hereof, the Board and Committee may act in
                  their absolute discretion in matters within their authority
                  related to this Plan.

      1.2.4       Reliance on Experts. In making any determination or in taking
                  or not taking any action under this Plan, the Committee or the
                  Board, as the case may be, may obtain and may rely upon the
                  advice of experts, including employees of and professional
                  advisors to the Company.

      1.2.5       Committee Action; Delegation. Actions of the Committee may be
                  taken by the vote of a majority of its members. The Committee
                  may allocate among its members and delegate to any person who
                  is not a member of the Committee any of its administrative
                  responsibilities. The Committee may delegate ministerial,
                  non-discretionary functions to individuals who are officers or
                  employees of the Company.

      1.2.6       No Liability. No director, officer or agent of the Company
                  will be liable for any action, omission or decision under the
                  Plan taken, made or omitted in good faith.

      1.2.7       Indemnification. No member of the Board or the Committee or
                  any employee of the Company (each such person a "Covered
                  Person") shall have any liability to any person (including any
                  grantee) for any action taken or omitted to be taken or any
                  determination made in good faith with respect to the Plan or
                  any Award. Each Covered Person shall be indemnified and held
                  harmless by the Company against and from any loss, cost,
                  liability, or expense (including attorneys' fees) that may be
                  imposed upon or incurred by such Covered Person in connection
                  with or resulting from any action, suit or proceeding to which
                  such Covered Person may be a party or in which such Covered
                  Person may be involved by reason of any action taken or
                  omitted to be taken under the Plan or any Award Agreement and
                  against and from any and all amounts paid by such Covered
                  Person, with the Company's approval, in settlement thereof, or
                  paid by such Covered Person in satisfaction of any judgment in
                  any such action, suit or proceeding against such Covered
                  Person, provided that the Company shall have the right, at its
                  own expense, to assume and defend any such action, suit or
                  proceeding and, once the Company gives notice of its intent to
                  assume the defense, the Company shall have sole control over
                  such defense with counsel of the Company's choice. The
                  foregoing right of indemnification shall not be available to a
                  Covered Person to the extent that a court of competent
                  jurisdiction in a final judgment or other final adjudication,
                  in either case, not subject to further appeal, determines that
                  the acts or omissions of such Covered Person giving rise to
                  the indemnification claim resulted from such Covered Person's
                  bad faith, fraud or willful misconduct. The


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                  foregoing right of indemnification shall not be exclusive of
                  any other rights of indemnification to which Covered Persons
                  may be entitled under the Company's Restated Certificate of
                  Incorporation or Bylaws, as a matter of law, or otherwise, or
                  any other power that the Company may have to indemnify such
                  persons or hold them harmless.

1.3   Participation. Awards may be granted by the Committee only to those
      persons that the Committee determines to be Eligible Persons. An Eligible
      Person who has been granted an Award may, if otherwise eligible, be
      granted additional Awards if the Committee so determines.

1.4   Shares Available for Awards; Share Limits.

      1.4.1       Shares Available. Subject to the provisions of Section 6.3,
                  the capital stock that may be delivered under this Plan will
                  be shares of the Company's authorized but unissued Common
                  Stock and any of its shares of Common Stock held as treasury
                  shares. The shares may be delivered for any lawful
                  consideration.

      1.4.2       Share Limits. The maximum number of shares of Common Stock
                  that may be delivered pursuant to Awards granted under this
                  Plan will not exceed 978,000 shares (the "Share Limit"). The
                  maximum number of shares subject to those Options and Stock
                  Appreciation Rights that are granted during any calendar year
                  to any one individual will be limited to 50,000 shares and the
                  maximum individual limit on the number of shares in the
                  aggregate subject to all Awards that during any calendar year
                  are granted under this Plan to any one individual will be
                  50,000 shares. Each of the foregoing numerical limits will be
                  subject to adjustment as contemplated by this Section 1.4 and
                  Section 6.3.

      1.4.3       Share Reservation; Replenishment and Reissue of Unvested
                  Awards. No Award may be granted under this Plan unless, on the
                  date of grant, the sum of (a) the maximum number of shares of
                  Common Stock issuable at any time pursuant to such Award, plus
                  (b) the number of shares of Common Stock that have previously
                  been issued pursuant to Awards granted under this Plan, other
                  than reacquired shares available for reissue consistent with
                  any applicable legal limitations, plus (c) the maximum number
                  of shares of Common Stock that may be issued at any time after
                  such date of grant pursuant to Awards that are outstanding on
                  such date, does not exceed the Share Limit. Shares of Common
                  Stock that are subject to or underlie Awards that expire or
                  for any reason are canceled or terminated, are forfeited, fail
                  to vest, or for any other reason are not paid or delivered
                  under this Plan, as well as reacquired shares, will again,
                  except to the extent prohibited by law or the terms of this
                  Plan, be available for subsequent Awards under this Plan.
                  Shares of Common Stock issued pursuant to the terms hereof
                  (including shares of Common Stock offset in satisfaction of
                  applicable withholding taxes or the exercise price of an
                  Award) shall reduce on a share-for-share basis the number of
                  shares of Common Stock remaining available under this Plan.
                  Except as limited by law, if an Award is or may be settled
                  only in cash, such Award need not be counted against any of
                  the limits under this Section 1.4.


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1.5   Grant of Awards. Subject to the express provisions of this Plan, the
      Committee will determine the number of shares of Common Stock subject to
      each Award, the price (if any) to be paid for the shares or the Award and,
      in the case of performance share awards, in addition to matters addressed
      in Section 1.2.2, the specific objectives, goals and business criteria
      that further define the terms of the performance share award. Each Award
      will be evidenced by an Award Agreement signed by the Company and, if
      required by the Committee, by the Participant.

1.6   Award Period. Any Option, SAR, warrant or similar right shall expire and
      any other Award shall either vest or be forfeited not more than 10 years
      after the date of grant; provided, however, that any payment of cash or
      delivery of stock pursuant to an Award may be delayed until a future date
      if specifically authorized by the Committee in writing; provided further
      that each Award will be subject to earlier termination as provided in or
      pursuant to Sections 6.2 and 6.3 of this Plan.

1.7   Limitations on Exercise and Vesting of Awards.

      1.7.1       Provisions for Exercise. Unless the Committee otherwise
                  expressly provides, no Award will be exercisable or will vest
                  until at least six months after the initial Award Date, and
                  once exercisable an Award will remain exercisable until the
                  expiration or earlier termination of the Award.

      1.7.2       Procedure. Any exercisable Award will be deemed to be
                  exercised when the Company receives written notice of such
                  exercise from the Participant (on a form and in such manner as
                  may be required by the Committee), together with any required
                  payment made in accordance with Section 2.2.2 and Section 6.5
                  and any written statement required pursuant to Section 6.4 of
                  this Plan.

      1.7.3       Fractional Shares/Minimum Issue. Fractional share interests
                  will be disregarded, but may be accumulated. The Committee,
                  however, may determine in the case of Eligible Persons that
                  cash, other securities, or other property will be paid or
                  transferred in lieu of any fractional share interests. No
                  fewer than 100 shares may be purchased on exercise of any
                  Award at one time unless the number purchased is the total
                  number at the time available for purchase under the Award.

1.8   No Transferability; Limited Exception to Transfer Restrictions.

      1.8.1       Limit On Exercise and Transfer. Unless otherwise expressly
                  provided in (or pursuant to) this Section 1.8, by applicable
                  law and by the Award Agreement, as the same may be amended:

                  (a)   all Awards are non-transferable and will not be subject
                        in any manner to sale, transfer, anticipation,
                        alienation, assignment, pledge, encumbrance or charge;

                  (b)   Awards will be exercised only by the Participant; and


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                  (c)   amounts payable or shares issuable pursuant to an Award
                        will be delivered only to (or for the account of) the
                        Participant.

                  In addition, the shares shall be subject to the restrictions
                  in the applicable Award Agreement.

      1.8.2       Further Exceptions to Limits On Transfer. The exercise and
                  transfer restrictions in Section 1.8.1 will not apply to:

                  (a)   transfers to the Company;

                  (b)   the designation of a beneficiary to receive benefits if
                        the Participant dies or, if the Participant has died,
                        transfers to or exercises by the Participant's
                        beneficiary, or, in the absence of a validly designated
                        beneficiary, transfers by will or the laws of descent
                        and distribution;

                  (c)   if the Participant has suffered a disability, permitted
                        transfers or exercises on behalf of the Participant by
                        the Participant's duly authorized legal representative.

                  Notwithstanding anything else in this Section 1.8.2 to the
                  contrary, Incentive Stock Options and Restricted Stock Awards
                  will be subject to any and all transfer restrictions under the
                  Code applicable to such awards.

2.    Options.

2.1   Grants. One or more Options may be granted under this Plan to any Eligible
      Person. Each Option granted will be designated in the applicable Award
      Agreement, by the Committee, as either an Incentive Stock Option, subject
      to Section 2.3, or a Nonqualified Stock Option. To the extent required to
      satisfy applicable securities laws, no Option (except an Option granted to
      an officer or director of the Company) shall become vested at a rate of
      less than 20% per year over five years after the date the Option is
      granted.

2.2   Option Price.

      2.2.1       Pricing Limits. Subject to the following provisions of this
                  Section 2.2.1, the purchase price per share of the Common
                  Stock covered by each Option will be determined by the
                  Committee at the time of grant of the Award. In no case will
                  such purchase price be less than 85% of Fair Market Value of
                  the Common Stock on the date of grant. In the case of
                  Incentive Stock Options, the exercise price shall not be less
                  than 100% of the Fair Market Value of the Common Stock on the
                  Date of Grant. In the case of an Option (incentive or
                  nonqualified) granted to a Participant described in Section
                  2.6, the exercise price shall not be less than 110% of the
                  Fair Market Value of the Common Stock on the date of grant.

      2.2.2       Payment Provisions. The purchase price of any shares of Common
                  Stock purchased on exercise of an Option granted under this
                  Plan will be paid in full at the time of each purchase in one
                  or a combination of the following methods:


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                  (a)   in cash or by electronic funds transfer;

                  (b)   by certified or cashier's check payable to the order of
                        the Company;

                  (c)   by notice and third party payment in such manner as may
                        be authorized by the Committee;

                  (d)   subject to the proviso below, by the delivery of shares
                        of Common Stock already owned by the Participant,
                        provided the Committee may in its absolute discretion
                        limit the Participant's ability to exercise an Option by
                        delivering previously owned shares, and any shares of
                        Common Stock delivered that were initially acquired from
                        the Company upon exercise of a stock option must have
                        been owned by the Participant at least six (6) months as
                        of the date of delivery; or

                  (e)   if authorized by the Committee or specified in the
                        applicable Award Agreement, by a promissory note of the
                        Participant consistent with the requirements of Section
                        2.2.3.

                  Shares of Common Stock used to satisfy the exercise price of
                  an Option will be valued at their Fair Market Value on the
                  date of exercise. The Company will not be obligated to deliver
                  certificates for the shares unless and until it receives full
                  payment of the exercise price therefor, and all related
                  withholding obligations under Section 6.5 and other conditions
                  to exercise have been satisfied.

      2.2.3       Acceptance of Notes to Finance Exercise. The Company may, with
                  the Committee's approval in each specific case, accept one or
                  more notes from any Eligible Person in connection with the
                  exercise or receipt of any outstanding Award; provided that
                  any such note shall be subject to the following terms and
                  conditions:

                  (a)   The principal of the note shall not exceed the amount
                        required to be paid to the Company upon the exercise or
                        receipt of one or more Awards under the Plan and the
                        note shall be delivered directly to the Company in
                        consideration of such exercise or receipt.

                  (b)   The initial term of the note shall be determined by the
                        Committee; provided that the term of the note, including
                        extensions, shall not exceed a period of five years.

                  (c)   The note shall provide for full recourse to the
                        Participant and shall bear interest at a rate determined
                        by the Committee but not less than the interest rate
                        necessary to avoid the imputation of interest under the
                        Code.

                  (d)   If the employment of the Participant terminates, the
                        unpaid principal balance of the note shall become due
                        and payable on the 10th business day after such
                        termination; provided, however, that if a sale of such
                        shares would cause such Participant to incur liability
                        under Section 16(b) of the


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                        Exchange Act, the unpaid balance shall become due and
                        payable on the 10th business day after the first day on
                        which a sale of such shares could have been made without
                        incurring such liability assuming for these purposes
                        that there are no other transactions (or deemed
                        transactions in securities of this Company) by the
                        Participant subsequent to such termination.

                  (e)   If required by the Committee or by applicable law, the
                        note shall be secured by a pledge of any shares or
                        rights financed thereby in compliance with applicable
                        law.

                  (f)   The terms, repayment provisions, and collateral release
                        provisions of the note and the pledge securing the note
                        shall conform with applicable rules and regulations,
                        including those of the Federal Reserve Board and under
                        the New Jersey Business Corporation Act, as then in
                        effect.

2.3   Limitations on Grant and Terms of Incentive Stock Options.

      2.3.1       $100,000 Limit. To the extent that the aggregate "Fair Market
                  Value" of stock with respect to which incentive stock options
                  first become exercisable by a Participant in any calendar year
                  exceeds $100,000, taking into account both Common Stock
                  subject to Incentive Stock Options under this Plan and stock
                  subject to incentive stock options under all other plans of
                  the Company or any parent corporation, such options will be
                  treated as Nonqualified Stock Options. For this purpose, the
                  "Fair Market Value" of the stock subject to options will be
                  determined as of the date the options were awarded. In
                  reducing the number of options treated as incentive stock
                  options to meet the $100,000 limit, the most recently granted
                  options will be reduced first. To the extent a reduction of
                  simultaneously granted options is necessary to meet the
                  $100,000 limit, the Committee may, in the manner and to the
                  extent permitted by law, designate which shares of Common
                  Stock are to be treated as shares acquired pursuant to the
                  exercise of an Incentive Stock Option.

      2.3.2       Other Code Limits. Incentive Stock Options may only be granted
                  to employees of the Company or a Subsidiary that satisfies the
                  other eligibility requirements of the Code. There will be
                  imposed in any Award Agreement relating to Incentive Stock
                  Options such other terms and conditions as from time to time
                  are required in order that the Option be an "incentive stock
                  option" as that term is defined in Section 422 of the Code.

      2.3.3       ISO Notice of Sale Requirement. Any Participant who exercises
                  an Incentive Stock Option shall give prompt written notice to
                  the Company of any sale or other transfer of the shares of
                  Common Stock acquired within one year after the exercise date
                  or two years after the Award Date.

2.4   Option Repricing/Cancellation and Regrant/Waiver of Restrictions. Subject
      to Section 1.4 and Section 6.6 and the specific limitations on Awards
      contained in this Plan,


                                       8
<PAGE>

      the Committee from time to time may authorize, generally or in specific
      cases only, for the benefit of any Eligible Person any adjustment in the
      exercise or purchase price, the vesting schedule, the number of shares
      subject to, or the restrictions upon or the term of, an Award granted
      under this Plan by cancellation of an outstanding Option and a subsequent
      regranting of the Option, by amendment, by substitution of an outstanding
      Award, by waiver or by other legally valid means. Such amendment or other
      action may result among other changes in an exercise or purchase price
      that is higher or lower than the exercise or purchase price of the
      original or prior Award, provide for a greater or lesser number of shares
      of Common Stock subject to the Award, or provide for a longer or shorter
      vesting or exercise period.

2.5   Options and Rights in Substitution for Stock Options Granted by Other
      Corporations. Options and Stock Appreciation Rights may be granted to
      Eligible Persons under this Plan in substitution for employee stock
      options granted by other entities, in connection with a distribution,
      merger or reorganization by or with the granting entity or an affiliated
      entity, or the acquisition by the Company, directly or indirectly, of all
      or a substantial part of the stock or assets of the employing entity.

2.6   Limits on 10% Holders. No Option may be granted to any person who, at the
      time the Option is granted, owns (or is deemed to own under Section 424(d)
      of the Code) shares of outstanding stock of the Company (or a parent or
      subsidiary of the Company) possessing more than 10% of the total combined
      voting power of all classes of stock of the Company (or a parent or
      subsidiary of the Company), unless the exercise price of such Option is at
      least 110% of the Fair Market Value of the stock subject to the Option
      and, in the case of an Incentive Stock Option grated to such a person,
      such Option by its terms is not exercisable after the expiration of five
      years from the date such Option is granted.

2.7   Restrictions on Transfer. Any Shares issued upon exercise of an Option
      shall be subject to such rights of repurchase, rights of first refusal and
      other transfer restrictions as the Committee may determine. Such
      restrictions shall apply in addition to any restrictions that may apply to
      holders of Shares generally and shall also comply to the extent necessary
      with applicable law.

3.    Stock Appreciation Rights (Including Limited Stock Appreciation Rights).

3.1   Grants. The Committee may grant to any Eligible Person Stock Appreciation
      Rights either concurrently with the grant of another Award or in respect
      of an outstanding Award, in whole or in part, or independently of any
      other Award. Any Stock Appreciation Right granted in connection with an
      Incentive Stock Option will contain such terms as may be required to
      comply with the provisions of Section 422 of the Code and the regulations
      promulgated thereunder, unless the holder otherwise agrees.

3.2   Exercise of Stock Appreciation Rights.

      3.2.1       Exercisability. Unless the Award Agreement or the Committee
                  otherwise provides, a Stock Appreciation Right related to
                  another Award will be exercisable


                                       9
<PAGE>

                  at such time or times, and to the extent, that the related
                  Award will be exercisable.

      3.2.2       Effect on Available Shares. To the extent that a Stock
                  Appreciation Right is exercised, only the actual number of
                  delivered shares of Common Stock will be charged against the
                  maximum amount of Common Stock that may be delivered pursuant
                  to Awards under this Plan. The number of shares subject to the
                  Stock Appreciation Right and the related Option of the
                  Participant will, however, be reduced by the number of
                  underlying shares as to which the exercise related, unless the
                  Award Agreement otherwise provides.

      3.2.3       Stand-Alone SARs. A Stock Appreciation Right granted
                  independently of any other Award will be exercisable pursuant
                  to the terms of the Award Agreement but in no event earlier
                  than six months after the Award Date, except in the case of
                  death or Total Disability.

      3.2.4       Proportionate Reduction. If an SAR extends to less than all
                  the shares covered by the related Award and if a portion of
                  the related Award is thereafter exercised, the number of
                  shares subject to the unexercised SAR shall be reduced only if
                  and to the extent that the remaining number of shares covered
                  by such related Award is less than the remaining number of
                  shares subject to such SAR.

3.3   Payment.

      3.3.1       Amount. Unless the Committee otherwise provides, upon exercise
                  of a Stock Appreciation Right and the attendant surrender of
                  an exercisable portion of any related Award, the Participant
                  will be entitled to receive, subject to Section 6.5, payment
                  of an amount determined by multiplying:

                  (a)   the difference (which shall not be less than zero)
                        obtained by subtracting the exercise price per share of
                        Common Stock under the related Award (if applicable) or
                        the initial share value specified in the Award from the
                        Fair Market Value of a share of Common Stock on the date
                        of exercise of the Stock Appreciation Right, by

                  (b)   the number of shares with respect to which the Stock
                        Appreciation Right has been exercised.

      3.3.2       Form of Payment. The Committee, in its sole discretion, will
                  determine the form in which payment will be made of the amount
                  determined under Section 3.3.1 above, either solely in cash,
                  solely in shares of Common Stock (valued at Fair Market Value
                  on the date of exercise of the Stock Appreciation Right), or
                  partly in such shares and partly in cash, but the Committee
                  will have determined that such exercise and payment are
                  consistent with applicable law. If the Committee permits the
                  Participant to elect to receive cash or shares (or a
                  combination thereof) on such exercise, any such election will
                  be subject to such conditions as the Committee may impose.

3.4   Limited Stock Appreciation Rights. The Committee may grant to any Eligible
      Person


                                       10
<PAGE>

      Stock Appreciation Rights exercisable only upon or in respect of a change
      in control or any other specified event ("Limited SARs") and such Limited
      SARs may relate to or operate in tandem or combination with, or
      substitution for, Options, other SARs or other Awards (or any combination
      thereof), and may be payable in cash or shares based on the spread between
      the base price of the SAR and a price based upon or equal to the Fair
      Market Value of the Common Stock during a specified period or at a
      specified time within a specified period before, after or including the
      date of such event.

4.    Restricted Stock Awards.

4.1   Grants. The Committee may grant one or more Restricted Stock Awards to any
      Eligible Person. Each Restricted Stock Award Agreement will specify the
      number of shares of Common Stock to be issued to the Participant, the date
      of such issuance, the consideration for such shares (but not less than the
      minimum lawful consideration under applicable state law) to be paid by the
      Participant, the extent (if any) to which and the time (if ever) at which
      the Participant will be entitled to dividends, voting and other rights in
      respect of the shares prior to vesting, and the restrictions (which may be
      based on performance criteria, passage of time or other factors or any
      combination thereof) imposed on such shares and the conditions of release
      or lapse of such restrictions. Such restrictions will not lapse earlier
      than six months after the Award Date, except to the extent the Committee
      may otherwise provide. Stock certificates evidencing shares of Restricted
      Stock pending the lapse of the restrictions ("Restricted Shares") will
      bear a legend making appropriate reference to the restrictions imposed
      hereunder and will be held by the Company or by a third party designated
      by the Committee until the restrictions on such shares have lapsed and the
      shares have vested in accordance with the provisions of the Award and
      Section 1.7. Upon issuance of the Restricted Stock Award, the Participant
      may be required to provide such further assurances and documents as the
      Committee may require to enforce the restrictions.

4.2   Restrictions.

      4.2.1       Pre-Vesting Restraints. Except as provided in Sections 4.1 and
                  1.8, restricted shares comprising any Restricted Stock Award
                  may not be sold, assigned, transferred, pledged or otherwise
                  disposed of or encumbered, either voluntarily or
                  involuntarily, until the restrictions on such shares have
                  lapsed and the shares have become vested.

      4.2.2       Dividend and Voting Rights. Unless otherwise provided in the
                  applicable Award Agreement, a Participant receiving a
                  Restricted Stock Award will be entitled to cash dividend and
                  voting rights for all shares issued even though they are not
                  vested, but such rights will terminate immediately as to any
                  Restricted Shares which cease to be eligible for vesting.

      4.2.3       Cash Payments. If the Participant has paid or received cash
                  (including any dividends) in connection with the Restricted
                  Stock Award, the Award Agreement will specify whether and to
                  what extent such cash will be returned (with or without an
                  earnings factor) as to any restricted shares that cease to be
                  eligible for vesting.


                                       11
<PAGE>

4.3   Return to the Company. Unless the Committee otherwise expressly provides,
      Restricted Shares that remain subject to restrictions at the time of
      termination of employment, or are subject to other conditions to vesting
      that have not been satisfied by the time specified in the applicable Award
      Agreement, will not vest and will be returned to the Company in such
      manner and on such terms as the Committee provides.

5.    Performance Share Awards and Stock Bonuses.

5.1   Grants of Performance Share Awards. The Committee may grant Performance
      Share Awards to Eligible Employees based upon such factors as the
      Committee deems relevant in light of the specific type and terms of the
      award. An Award Agreement will specify the maximum number of shares of
      Common Stock (if any) subject to the Performance Share Award, the
      consideration (but not less than the minimum lawful consideration) to be
      paid for any such shares as may be issuable to the Participant, the
      duration of the Award and the conditions upon which delivery of any shares
      or cash to the Participant will be based. The amount of cash or shares or
      other property that may be deliverable pursuant to such Award will be
      based upon the degree of attainment over a specified period of not more
      than 10 years (a "performance cycle") as may be established by the
      Committee of such measure(s) of the performance of the Company (or any
      part thereof) or the Participant as may be established by the Committee.
      The Committee may provide for full or partial credit, prior to completion
      of such performance cycle or the attainment of the performance achievement
      specified in the Award, in the event of the Participant's death,
      Retirement, or Total Disability, a Change in Control Event or in such
      other circumstances as the Committee may determine.

5.2   Grants of Stock Bonuses. The Committee may grant a Stock Bonus to any
      Eligible Person to reward exceptional or special services, contributions
      or achievements in the manner and on such terms and conditions (including
      any restrictions on such shares) as determined from time to time by the
      Committee. The number of shares so awarded will be determined by the
      Committee. The Award may be granted independently or in lieu of a cash
      bonus.

5.3   Deferred Payments. The Committee may authorize for the benefit of any
      Eligible Person the deferral of any payment of cash or shares that may
      become due or of cash otherwise payable under this Plan, and provide for
      accredited benefits thereon based upon such deferment, at the election or
      at the request of such Participant, subject to the other terms of this
      Plan. Such deferral will be subject to such further conditions,
      restrictions or requirements as the Committee may impose, subject to any
      then vested rights of Participants.

6.    Other Provisions.

6.1   Rights of Eligible Persons, Participants and Beneficiaries.

      6.1.1       Employment Status. Status as an Eligible Person will not be
                  construed as a commitment that any Award will be granted under
                  this Plan to an Eligible Person


                                       12
<PAGE>

                  or to Eligible Persons generally.

      6.1.2       No Employment Contract. Nothing contained in this Plan (or in
                  any other documents under this Plan or in any Award) shall
                  confer upon any Eligible Person or Participant any right to
                  continue in the employ or other service of the Company,
                  constitute any contract or agreement of employment or other
                  service or affect an employee's status as an employee at will,
                  nor shall interfere in any way with the right of the Company
                  to change such person's compensation or other benefits, or to
                  terminate his or her employment or other service, with or
                  without cause. Nothing in this Section 6.1.2, however, is
                  intended to adversely affect any express independent right of
                  such person under a separate employment or service contract
                  other than an Award Agreement.

      6.1.3       Plan Not Funded. Awards payable under this Plan will be
                  payable in shares of Common Stock or from the general assets
                  of the Company, and (except as provided in Section 1.4.3) no
                  special or separate reserve, fund or deposit will be made to
                  assure payment of such Awards. No Participant, Beneficiary or
                  other person will have any right, title or interest in any
                  fund or in any specific asset (including shares of Common
                  Stock) of the Company by reason of any Award hereunder.
                  Neither the provisions of this Plan (or of any related
                  documents), nor the creation or adoption of this Plan, nor any
                  action taken pursuant to the provisions of this Plan will
                  create, or be construed to create, a trust of any kind or a
                  fiduciary relationship between the Company and any
                  Participant, Beneficiary or other person. To the extent that a
                  Participant, Beneficiary or other person acquires a right to
                  receive payment pursuant to any Award hereunder, such right
                  will be no greater than the right of any unsecured general
                  creditor of the Company.

      6.1.4       Charter Documents. The Certificate of Incorporation and
                  By-Laws of the Company, as either of them may lawfully be
                  amended from time to time, may provide for additional
                  restrictions and limitations with respect to the Common Stock
                  (including additional restrictions and limitations on the
                  voting or transfer of Common Stock) or priorities, rights and
                  preferences as to securities and interests prior in rights to
                  the Common Stock. To the extent that these restrictions and
                  limitations are greater than those set forth in this Plan or
                  any Award Agreement, such restrictions and limitations shall
                  apply to any shares of Common Stock acquired pursuant to the
                  exercise of Awards and are incorporated herein by this
                  reference.

6.2   Effects of Termination of Employment; Termination of Subsidiary Status;
      Discretionary Provisions.

      6.2.1       Dismissal for Cause. Unless otherwise provided in the Award
                  Agreement and subject to earlier termination pursuant to or as
                  contemplated by Section 1.6 or 6.3, if a Participant is
                  terminated by the Company for Cause, his or her Option will
                  terminate on the Severance Date, whether or not then vested
                  and/or exercisable.


                                       13
<PAGE>

      6.2.2       Resignation. Unless otherwise provided in the Award Agreement
                  (consistent with applicable securities laws) and subject to
                  earlier termination pursuant to or as contemplated by Section
                  1.6 or 6.3, if a Participant resigns (other than because of a
                  Total Disability or Retirement):

                  (a)   the Participant will have until the date that is 60 days
                        after the Severance Date to exercise his or her Option
                        (or portion thereof) to the extent that it was vested on
                        the Severance Date;

                  (b)   the Option, to the extent not vested on the Severance
                        Date, shall terminate on the Severance Date; and

                  (c)   the Option, to the extent not exercised, shall terminate
                        at the close of business on the last day of the 60-day
                        period.

      6.2.3       Layoff or Other Involuntary Termination. Unless otherwise
                  provided in the Award Agreement (consistent with applicable
                  securities laws) and subject to earlier termination pursuant
                  to or as contemplated by Section 1.6 or 6.3, if a Participant
                  is laid off or otherwise terminated at the will of the Company
                  (other than in circumstances constituting a termination
                  because of Total Disability, Retirement, or a termination by
                  the Company for Cause):

                  (a)   the Participant will have until the date which is three
                        (3) months after the Severance Date to exercise his or
                        her Option (or portion thereof) to the extent that it
                        was vested on the Severance Date;

                  (b)   the Option, to the extent not vested on the Severance
                        Date, shall terminate on the Severance Date; and

                  (c)   the Option, to the extent not exercised, shall terminate
                        at the close of business on the last day of the 3-month
                        period.

      6.2.4       Death, Disability, or Retirement. Unless otherwise provided in
                  the Award Agreement (consistent with applicable securities
                  laws) and subject to earlier termination pursuant to or as
                  contemplated by Section 1.6 or 6.3, if a Participant's
                  employment by the Company terminates as a result of Total
                  Disability or death, or the Participant's Retirement:

                  (a)   the Participant (or his or her Personal Representative
                        or Beneficiary, in the case of the Participant's Total
                        Disability or death, respectively), will have until the
                        date that is 12 months after the Severance Date to
                        exercise the Participant's Option (or portion thereof)
                        to the extent that it was vested on the Severance Date;

                  (b)   the Option, to the extent not vested on the Severance
                        Date, shall terminate on the Severance Date; and

                  (c)   the Option, to the extent not exercised, shall terminate
                        at the close of


                                       14
<PAGE>

                        business on the last day of the 12-month period.

      6.2.5       Events Not Deemed a Termination of Employment. Unless Company
                  policy or the Committee otherwise provides, a Participant's
                  employment relationship with the Company shall not be
                  considered terminated solely due to any sick leave, military
                  leave, or any other leave of absence, authorized by the
                  Company or the Committee. Any Award held by any Eligible
                  Person on approved leave of absence shall continue to vest,
                  unless the Committee or Company otherwise provides in
                  connection with the Award, the particular leave or by Company
                  policy. In no event shall an Option be exercised after the
                  expiration of the term set forth in the Award Agreement or the
                  termination of the Option in accordance with Section 6.3.

      6.2.6       Effect of Change of Subsidiary Status. For purposes of this
                  Plan and any Award hereunder, if an entity ceases to be a
                  Subsidiary, a termination of employment will be deemed to have
                  occurred with respect to each Eligible Person in respect of
                  such Subsidiary who does not continue as an Eligible Person in
                  respect of another entity within the Company.

      6.2.7       Committee Discretion. Notwithstanding the foregoing provisions
                  of this Section 6.2, in the event of, or in anticipation of, a
                  termination of employment with the Company for any reason,
                  other than a discharge for Cause, the Committee may increase
                  the portion of the Participant's Option available to the
                  Participant, or Participant's Beneficiary or Personal
                  Representative, as the case may be, or, subject to the
                  provisions of Sections 1.6 and 6.3, extend the exercisability
                  period upon such terms as the Committee determines and
                  expressly sets forth in or by amendment to the Award
                  Agreement.

      6.2.8       Termination of Consulting or Affiliate Services. If the
                  Participant is not an Eligible Employee or a director of the
                  Company, and provides services as an Other Eligible Person,
                  the Committee shall be the sole judge of whether the
                  Participant continues to render services to the Company,
                  unless a contract or the Award otherwise provides. If in these
                  circumstances the Committee notifies the Participant in
                  writing that a termination of services of the Participant for
                  purposes of this Plan has occurred, then (unless the contract
                  or Award otherwise expressly provides), the Participant's
                  termination of services for purposes of this Plan shall be the
                  date which is 10 days after the Committee's mailing of the
                  notice or, in the case of a termination for Cause, the date of
                  the mailing of the notice.

6.3   Adjustments; Acceleration.

      6.3.1       Adjustments. Upon or in contemplation of any reclassification,
                  recapitalization, stock split (including a stock split in the
                  form of a stock dividend) or reverse stock split; any merger,
                  combination, consolidation or other reorganization; any
                  split-up; spin-off, or similar extraordinary dividend
                  distribution ("spin-off") in respect of the Common Stock
                  (whether in the form of securities or property); any exchange
                  of Common Stock or other securities of the Company, or any
                  similar,


                                       15
<PAGE>

                  unusual or extraordinary corporate transaction in respect of
                  the Common Stock; or a sale of substantially all the assets of
                  the Company as an entirety ("asset sale"); then the Committee
                  shall, in such manner, to such extent (if any) and at such
                  time as it deems appropriate and equitable in the
                  circumstances:

                  (a)   in any of such events, proportionately adjust any or all
                        of (1) the number of shares of Common Stock or the
                        number and type of other securities that thereafter may
                        be made the subject of Awards (including the specific
                        maxima and numbers of shares set forth elsewhere in this
                        Plan), (2) the number, amount and type of shares of
                        Common Stock (or other securities or property) subject
                        to any or all outstanding Awards, (3) the grant,
                        purchase, or exercise price of any or all outstanding
                        Awards, (4) the securities, cash or other property
                        deliverable upon exercise of any outstanding Awards, or
                        (5) the performance standards appropriate to any
                        outstanding Awards, or

                  (b)   in the case of a reclassification, recapitalization,
                        merger, consolidation, combination, or other
                        reorganization, spin-off or asset sale, make provision
                        for a cash payment or for the substitution or exchange
                        of any or all outstanding Awards or the cash, securities
                        or property deliverable to the holder of any or all
                        outstanding Awards based upon the distribution or
                        consideration payable to holders of the Common Stock
                        upon or in respect of such event.

                  In this context, the Committee may not make adjustments that
                  would disqualify Options as Incentive Stock Options without
                  the written consent of holders of Incentive Stock Options
                  materially adversely affected thereby. In any of such events,
                  the Committee may take such action prior to such event to the
                  extent that the Committee deems the action necessary to permit
                  the Participant to realize the benefits intended to be
                  conveyed with respect to the underlying shares in the same
                  manner as is or will be available to shareholders generally.

      6.3.2       Acceleration of Awards Upon Change in Control. Subject to
                  Section 6.3.5, immediately prior to the occurrence of a Change
                  in Control Event:

                  (a)   each Option and Stock Appreciation Right shall
                        automatically accelerate and shall become immediately
                        vested and exercisable,

                  (b)   all issued and outstanding shares of Restricted Stock
                        shall immediately vest free of restrictions, and

                  (c)   each Performance Share Award shall become immediately
                        payable to the Participant.

                  However, an outstanding Option of Stock Appreciation Right
                  shall not become exercisable on such an accelerated basis, any
                  outstanding shares of Restricted Stock shall not immediately
                  vest free of restrictions and any Performance Share


                                       16
<PAGE>

                  Award shall not become immediately payable to the Participant,
                  if and to the extent: (i) such Award is to be assumed by the
                  successor corporation (or parent thereof) or is otherwise to
                  continue in full force and effect after the occurrence of the
                  Change in Control Event or (ii) such Award is to be replaced
                  with a cash incentive program of the successor corporation
                  which preserves the spread existing at the time of the Change
                  in Control Event on any shares underlying the Award which are
                  not otherwise at that time exercisable or issuable and which
                  provides for subsequent payout of that spread no later than
                  the same exercise/vesting schedule applicable to the Award or
                  (iii) the acceleration of such Award is subject to other
                  limitations imposed by the Committee at the time of the grant
                  thereof. Any acceleration of Awards will comply with
                  applicable legal requirements and, if necessary to accomplish
                  the purposes of the acceleration or if the circumstances
                  otherwise require, may be deemed by the Committee to occur
                  (subject to Sections 6.3.4 and 6.3.5) not greater than 30 days
                  before or only upon the consummation of the event.

      6.3.3       Possible Early Termination of Accelerated Awards. If any
                  Option or other right to acquire Common Stock under this Plan
                  has been fully accelerated as permitted by Section 6.3.2 but
                  is not exercised in connection with or prior to (a) a
                  dissolution of the Company, (b) an event described in Section
                  6.3.1 that the Company does not survive, or (c) the
                  consummation of a Change in Control Event approved by the
                  Board, the Option or right shall terminate if the Board or the
                  Committee has expressly provided through a plan of
                  reorganization or otherwise for the substitution, assumption,
                  exchange or other settlement of the Award. If the
                  exercisability of an Award has been timely accelerated in any
                  of the circumstances in (a) through (c) above but the Award is
                  not exercised and no provision has been made for a
                  substitution, assumption, exchange or other settlement, the
                  Award shall terminate upon the occurrence of the event.

      6.3.4       Possible Rescission of Acceleration. If the vesting of an
                  Option has been accelerated in anticipation of an event and
                  the Committee or the Board later determines that the event
                  will not occur, the Committee may rescind the effect of the
                  acceleration as to any then outstanding and unexercised or
                  otherwise unvested Options.

      6.3.5       Golden Parachute Limitations. Unless otherwise specified in an
                  Award Agreement or otherwise authorized by the Board in the
                  specific case, no Award will be accelerated under this Plan to
                  an extent or in a manner that would not be fully deductible by
                  the Company for federal income tax purposes because of Section
                  280G of the Code, nor will any payment hereunder be
                  accelerated if any portion of such accelerated payment would
                  not be deductible by the Company because of Section 280G of
                  the Code. If a holder would be entitled to benefits or
                  payments hereunder and under any other plan or program that
                  would constitute "parachute payments" as defined in Section
                  280G of the Code, then the holder may by written notice to the
                  Company designate the order in which such parachute payments
                  will be reduced or modified so that the Company is not denied
                  any federal income tax deductions for any "parachute payments"
                  because of Section 280G of the Code.


                                       17
<PAGE>

6.4   Compliance with Laws.

      6.4.1       General. This Plan, the granting and vesting of Awards under
                  this Plan and the offer, issuance and delivery of shares of
                  Common Stock, the acceptance of promissory notes and/or the
                  payment of money under this Plan or under Awards are subject
                  to compliance with all applicable federal and state laws,
                  rules and regulations (including but not limited to state and
                  federal securities laws, and federal margin requirements) and
                  to such approvals by any listing, regulatory or governmental
                  authority as may, in the opinion of counsel for the Company,
                  be necessary or advisable in connection therewith. In
                  addition, any securities delivered under this Plan may be
                  subject to any special restrictions that the Committee may
                  require to preserve a pooling of interests under generally
                  accepted accounting principles. The person acquiring any
                  securities under this Plan will, if requested by the Company,
                  provide such assurances and representations to the Company as
                  the Committee may deem necessary or desirable to assure
                  compliance with all applicable legal and accounting
                  requirements. The Company shall deliver annually to
                  Participants such financial statements of the Company as are
                  required to satisfy applicable securities laws.

      6.4.2       Compliance with Securities Laws. No Participant shall sell,
                  pledge or otherwise transfer shares of Common Stock acquired
                  pursuant to an Award or any interest in such shares except in
                  accordance with the express terms of this Plan and the
                  applicable Award Agreement. Any attempted transfer in
                  violation of this Section 6.4 shall be void and of no effect.
                  Without in any way limiting the provisions set forth above, no
                  Participant shall make any disposition of all or any portion
                  of shares of Common Stock acquired or to be acquired pursuant
                  to an Award, except in compliance with all applicable federal
                  and state securities laws and unless and until:

                  (a)   there is then in effect a registration statement under
                        the Securities Act covering such proposed disposition
                        and such disposition is made in accordance with such
                        registration statement; or

                  (b)   such disposition is made in accordance with Rule 144
                        under the Securities Act; or

                  (c)   such Participant notifies the Company of the proposed
                        disposition and furnishes the Company with a statement
                        of the circumstances surrounding the proposed
                        disposition, and, if requested by the Company, furnishes
                        to the Company an opinion of counsel acceptable to the
                        Company's counsel, that such disposition will not
                        require registration under the Securities Act and will
                        be in compliance with all applicable state securities
                        laws.

                  Notwithstanding anything else herein to the contrary, the
                  Company has no obligation to register the Common Stock or file
                  any registration statement under


                                       18
<PAGE>

                  either federal or state securities laws, nor does the Company
                  make any representation concerning the likelihood of a public
                  offering of the Common Stock or any other securities of the
                  Company.

      6.4.3       Required Consents and Legends. If the Committee shall at any
                  time determine that any Consent is necessary or desirable as a
                  condition of, or in connection with, the granting of any
                  Award, the delivery of shares of Common Stock or the delivery
                  of any cash, securities or other property under the Plan, or
                  the taking of any other action thereunder (each such action
                  being hereinafter referred to as a "Plan Action"), then such
                  Plan Action shall not be taken, in whole or in part, unless
                  and until such Consent shall have been effected or obtained to
                  the full satisfaction of the Committee. The Committee may
                  direct that any Certificate evidencing shares delivered
                  pursuant to the Plan shall bear a legend setting forth such
                  restrictions on transferability as the Committee may determine
                  to be necessary or desirable, and may advise the transfer
                  agent to place a stop transfer order against any legended
                  shares.

6.5   Tax Withholding.

      6.5.1       Tax Withholding. Upon any exercise, vesting, or payment of any
                  Option or upon the disposition of shares of Common Stock
                  acquired pursuant to the exercise of an Incentive Stock Option
                  prior to satisfaction of the holding period requirements of
                  Section 422 of the Code, the Company shall have the right at
                  its option to:

                  (a)   require the Participant (or Personal Representative or
                        Beneficiary, as the case may be) to pay or provide for
                        payment of the amount of any taxes which the Company may
                        be required to withhold with respect to such Option
                        event or payment;

                  (b)   deduct from any amount payable in cash the amount of any
                        taxes which the Company may be required to withhold with
                        respect to such cash payment; or

                  (c)   reduce the number of shares of Common Stock to be
                        delivered by (or otherwise reacquire) the appropriate
                        number of shares of Common Stock, valued at their then
                        Fair Market Value, to satisfy such withholding
                        obligation.

                  The Committee may in its sole discretion (subject to Section
                  6.4) grant (either at the time of grant of the Award or
                  thereafter) to the Participant the right to elect, pursuant to
                  such rules and subject to such conditions as the Committee may
                  establish, to have the Company utilize the withholding offset
                  under clause (c) above.

                  In no event will the vale of shares withheld under (c) above
                  exceed the minimum amount of required withholding under
                  applicable law.


                                       19
<PAGE>

      6.5.2       Tax Loans. If so provided in the Award Agreement or otherwise
                  authorized by the Committee, the Company may, to the extent
                  permitted by law, authorize a loan to an Eligible Person in
                  the amount of any taxes that the Company may be required to
                  withhold with respect to shares of Common Stock received (or
                  disposed of, as the case may be) pursuant to a transaction
                  described in Section 6.5.1. Such a loan will be for a term not
                  greater than nine months and at a rate of interest and
                  pursuant to such other terms and conditions as the Company,
                  under applicable law, may establish. Such a loan need not
                  otherwise comply with the provisions of Section 2.2.3.

6.6   Plan Amendment, Termination and Suspension.

      6.6.1       Board Authorization. The Board may, at any time, terminate or,
                  from time to time, amend, modify, restate and/or suspend this
                  Plan, in whole or in part. No Awards may be granted during any
                  suspension of this Plan or after termination of this Plan, but
                  the Committee will retain jurisdiction as to Awards then
                  outstanding in accordance with the terms of this Plan.

      6.6.2       Shareholder Approval. Any amendment to this Plan shall be
                  subject to shareholder approval to the extent then required
                  under Section 422 or 424 of the Code or any other applicable
                  law, or deemed necessary or advisable by the Board.

      6.6.3       Amendments to Awards. Without limiting any other express
                  authority of the Committee under but subject to the express
                  limits of this Plan, the Committee by agreement or resolution
                  (a) may waive conditions of or limitations on Awards to
                  Eligible Persons that the Committee in the prior exercise of
                  its discretion has imposed, without the consent of a
                  Participant, and (b) may make other changes to the terms and
                  conditions of Awards that do not affect in any manner
                  materially adverse to the Participant, the Participant's
                  rights and benefits under an Award, provided that changes
                  contemplated by Section 6.3 or Section 6.6.5 will not be
                  deemed to constitute changes or amendments for purposes of
                  this Section 6.6.

      6.6.4       Limitations on Amendments to Plan and Awards. No amendment,
                  suspension or termination of this Plan or change of or
                  affecting any outstanding Award will, without written consent
                  of the Participant, affect in any manner materially adverse to
                  the Participant any rights or benefits of the Participant or
                  obligations of the Company under any Award granted under this
                  Plan prior to the effective date of such change. Changes
                  contemplated by Section 6.3 or Section 6.6.5 will not be
                  deemed to constitute changes or amendments for purposes of
                  this Section 6.6.

      6.6.5       Accounting Changes. Notwithstanding the foregoing provisions
                  of this Section 6.6.3 or Section 6.6.4, if the accounting
                  treatment under generally accepted accounting principles of
                  any Options granted hereunder would be materially more adverse
                  to the Company than anticipated at the time of approval of
                  this Plan or the Options (including, without limitation, if
                  any Option(s) would render pooling accounting unavailable to
                  the Company with respect to any transaction that would, in the
                  absence of such Option(s), be accounted for as a pooling of
                  interests


                                       20
<PAGE>

                  transaction) because of a change in those principles or the
                  interpretation or application thereof by the Company's
                  independent accountants, the Committee may, in the exercise of
                  its discretion and without the consent of the Participant,
                  amend the terms of such Options to the extent the Committee
                  deems necessary to eliminate such effect.

6.7   Privileges of Stock Ownership. Except as otherwise expressly authorized by
      the Committee or this Plan, a Participant will not be entitled to any
      privilege of stock ownership as to any shares of Common Stock not actually
      delivered to and held of record by the Participant. No adjustment will be
      made for dividends or other rights as a shareholder for which a record
      date is prior to such date of delivery.

6.8   Effective Date of the Plan. This Amended and Restated Omnibus Stock
      Incentive Plan shall become effective on the date of its approval by the
      Company's shareholders (the Effective Date").

6.9   Term of the Plan. Unless earlier terminated by the Board, this Plan will
      terminate at the close of business on the day before the 10th anniversary
      of the Effective Date (the "Termination Date"). No Awards may be granted
      under this Plan after the Termination Date. Unless otherwise expressly
      provided in this Plan or in an applicable Award Agreement, any Award
      granted prior to the Termination Date may extend beyond such date, and all
      authority of the Committee with respect to Awards hereunder, including the
      authority to amend an Award, will continue during any suspension of this
      Plan and in respect of Awards outstanding on the Termination Date.

6.10  Governing Law/Construction/Severability.

      6.10.1      Choice of Law. This Plan, the Awards, all documents evidencing
                  Awards and all other related documents will be governed by,
                  and construed in accordance with, the laws of the state of New
                  Jersey.

      6.10.2      Severability. If a court of competent jurisdiction holds any
                  provision invalid and unenforceable, the remaining provisions
                  of this Plan will continue in effect provided that the
                  essential economic terms of this Plan and any Award can still
                  be enforced.

6.11  Captions. Captions and headings are given to the sections and subsections
      of this Plan solely as a convenience to facilitate reference. Such
      headings will not be deemed in any way material or relevant to the
      construction or interpretation of this Plan or any provision thereof.

6.12  Non-Exclusivity of Plan. Nothing in this Plan will limit or be deemed to
      limit the authority of the Board or the Committee to grant awards or
      authorize any other compensation, with or without reference to the Common
      Stock, under any other plan or authority.

6.13  No Restriction on Corporate Powers. The existence of the Plan and the
      Awards granted hereunder shall not affect or restrict in any way the right
      or power of the Board or


                                       21
<PAGE>

      the shareholders of the Company to make or authorize any adjustment,
      recapitalization, reorganization or other change in the Company's capital
      structure or its business, any merger or consolidation of the Company, any
      issue of bonds, debentures, preferred or prior preference stocks ahead of
      or affecting the Company's capital stock or the rights thereof, the
      dissolution or liquidation of the Company or any sale or transfer of all
      or any part of its assets or business, or any other corporate act or
      proceeding.

6.14  Effect on Other Benefits. Payments and other benefits received by a
      Participant under an Award made pursuant to this Plan shall not be deemed
      a part of a Participant's regular, recurring compensation for purposes of
      the termination, indemnity or severance pay law of any country or state
      and shall not be included in, nor have any effect on, the determination of
      benefits under any other employee benefit plan or similar arrangement
      provided by the Company or a Subsidiary unless expressly so provided by
      such other plan or arrangements. Awards under this Plan may be made in
      combination with or in tandem with, or as alternatives to, grants, awards
      or payments under any other Company or Subsidiary plan.

7.    Definitions.

"Award" means an award of any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, Performance Share Award, dividend equivalent or deferred
payment right or other right or security that would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.

"Award Agreement" means any writing setting forth the terms of an Award that has
been authorized by the Committee.

"Award Date" means the date upon which the Committee took the action granting an
Award or such later date as the Committee designates as the Award Date at the
time of the grant of the Award.

"Beneficiary" means the person, persons, trust or trusts designated by a
Participant, or, in the absence of a designation, entitled by will or the laws
of descent and distribution, to receive the benefits specified in the Award
Agreement and under this Plan if the Participant dies, and means the
Participant's executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.

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

"Cause" means:

      (a)   any act of theft, embezzlement, fraud, dishonesty, gross negligence,
            repeated failure to perform assigned duties, a breach of fiduciary
            duty to the Company or a breach of or deliberate disregard of the
            applicable law or Company policy;

      (b)   the unauthorized disclosure of any trade secrets or confidential
            information of the Company;


                                       22
<PAGE>

      (c)   unfair competition with the Company;

      (d)   inducement of any customer of the Company to break any contract with
            the Company; or

      (e)   inducement of any principal for whom the Company acts as agent to
            terminate such agency relationship.

      Solely for the purpose of this Plan, a termination of services for Cause
      shall be deemed to occur (subject to reinstatement upon a contrary final
      determination by the Board or Committee) only if the Company delivers
      notice to the Participant of Cause upon or before a termination of
      employment and shall be final in all respects on the date the
      Participant's service is terminated. For purposes of this definition, the
      Company includes any affiliate of the Company.

"Change in Control Event" means any of the following:

      (a)   Approval by the shareholders of the Company of the dissolution or
            liquidation of the Company;

      (b)   Consummation of a merger, consolidation, or other reorganization,
            with or into, or the sale of all or substantially all of the
            Company's business and/or assets as an entirety to, one or more
            entities that are not Subsidiaries or other affiliates of the
            Company (a "Business Combination"), unless (1) as a result of the
            Business Combination more than 50% of the outstanding voting power
            generally in the election of directors of the surviving or resulting
            entity or a parent thereof (the "Successor Entity") immediately
            after the reorganization are, or will be, owned, directly or
            indirectly, by holders of the Company's voting securities
            immediately before the Business Combination; and (2) no Person
            (excluding the Successor Entity or an Excluded Person) beneficially
            owns, directly or indirectly, more than 50% of the outstanding
            shares or the combined voting power of the outstanding voting
            securities of the Successor Entity, after giving effect to the
            Business Combination, except to the extent that such ownership
            existed prior to the Business Combination; and (3) at least 50% of
            the members of the board of directors of the entity resulting from
            the Business Combination were members of the Board at the time of
            the execution of the initial agreement, or of the action of the
            Board, providing for the Business Combination; or

      (c)   Any "person" (as such term is used in Sections 13(d) and 14(d) of
            the Exchange Act other than an Excluded Person becomes the
            beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
            directly or indirectly, of securities of the Company representing
            more than 50% of the combined voting power of the Company's then
            outstanding securities entitled to then vote generally in the
            election of directors of the Company, other than as a result of (1)
            an acquisition directly from the Company, (2) an acquisition by the
            Company, (3) an acquisition by any employee benefit plan (or related
            trust) sponsored or maintained by the


                                       23
<PAGE>

            Company or a Successor Entity, or (4) an acquisition by an entity
            pursuant to a transaction which is expressly excluded under clause
            (b) above.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Commission" means the Securities and Exchange Commission.

"Committee" means a committee of the Board to be drawn solely from members of
the Board who are "non-employee directors" (as defined in Rule 16b-3 under the
Exchange Act).

"Common Stock" means the shares of the Company's Common Stock, $0.003 per share,
and such other securities or property as may become the subject of Awards, or
become subject to Awards, pursuant to an adjustment made under Section 6.3 of
this Plan.

"Company" means Mikron Infrared, Inc., a New Jersey corporation, together with
its subsidiaries, and its successors.

"Consent" as used in Section 6.4.3 with respect to any Plan Action includes (a)
any and all listings, registrations or qualifications in respect thereof upon
any securities exchange or under any federal, state, or local law, or law, rule
or regulation of a jurisdiction outside the United States, (b) or any other
matter, which the Committee may deem necessary or desirable to comply with the
terms of any such listing, registration or qualification or to obtain an
exemption from the requirement that any such listing, qualification or
registration be made, (c) any and all other consents, clearances and approvals
in respect of a plan action by any governmental or other regulatory body or any
stock exchange or self-regulatory agency and (d) any and all consents required
by the Committee. Nothing herein shall require the Company to list, register or
qualify the shares of Common Stock on any securities exchange.

"Covered Person" shall have the meaning attributed to such term in Section 1.2.7
of this Plan.

"Eligible Employee" means an officer (whether or not a director) or employee of
the Company.

"Eligible Person" means an Eligible Employee, or any Other Eligible Person, as
determined by the Committee.

"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time.

"Excluded Person" means (a) any person described in and satisfying the
conditions of Rule 13d-1(b)(1) under the Exchange Act, (b) the Company, (c) an
employee benefit plan (or related trust) sponsored or maintained by the Company
or the Successor Entity, or (d) any person who is the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) of more than 25% of the Common
Stock on the Effective Date (or an affiliate, successor, heir, descendant, or
related party of or to such person).

"Fair Market Value" on any date means:

      (a)   if the stock is listed or admitted to trade on a national securities
            exchange, the closing price of the stock on the Composite Tape, as
            published in the New York


                                       24
<PAGE>

            City Edition of The Wall Street Journal, of the principal national
            securities exchange on which the stock is so listed or admitted to
            trade, on such date, or, if there is no trading of the stock on such
            date, then the closing price of the stock as quoted on such
            Composite Tape on the next preceding date on which there was trading
            in such shares;

      (b)   if the stock is not listed or admitted to trade on a national
            securities exchange, the last/closing price for the stock on such
            date, as furnished by the National Association of Securities
            Dealers, Inc. ("NASD") through the NASDAQ Stock Market or a similar
            organization if the NASD is no longer reporting such information;

      (c)   if the stock is not listed or admitted to trade on a national
            securities exchange and is not reported on the National Stock
            Market, the mean between the bid and asked price for the stock on
            such date, as furnished by the NASD or a similar organization; or

      (d)   if the stock is not listed or admitted to trade on a national
            securities exchange, is not reported on the National Stock Market
            and if bid and asked prices for the stock are not furnished by the
            NASD or a similar organization, the value as established by the
            Committee at such time for purposes of this Plan.

      Any determination as to fair market value made pursuant to this Plan shall
      be determined without regard to any restriction other than a restriction
      which, by its terms, will never lapse, and shall be conclusive and binding
      on all persons.

"Incentive Stock Option" means an Option that is designated and intended as an
incentive stock option within the meaning of Section 422 of the Code, the award
of that contains such provisions (including but not limited to the receipt of
shareholder approval of this Plan, if the award is made prior to such approval)
and is made under such circumstances and to such persons as may be necessary to
comply with that section.

"Nonqualified Stock Option" means an Option that is designated as a Nonqualified
Stock Option and will include any Option intended as an Incentive Stock Option
that fails to meet the applicable legal requirements thereof. Any Option granted
hereunder that is not designated as an incentive stock option will be deemed to
be designated a nonqualified stock option under this Plan and not an incentive
stock option under the Code.

"Option" means an option to purchase Common Stock granted under this Plan. The
Committee will designate any Option granted to an employee of the Company or a
Subsidiary as a Nonqualified Stock Option or an Incentive Stock Option.

"Other Eligible Person" means any director of, or any individual consultant or
advisor or agent who renders or has rendered bona fide services (other than
services in connection with the offering or sale of securities of the Company in
a capital raising transaction) to, the Company, and who (to the extent provided
in the next sentence) is selected to participate in this Plan by the Committee.
A person who is neither an employee, officer, nor director who provides bona
fide services to the Company may be selected as an Other Eligible Person only if
such person's


                                       25
<PAGE>

participation in this Plan would not adversely affect (a) the Company's
eligibility to use Form S-8 to register under the Securities Act, the offering
of shares issuable under this Plan by the Company, or (b) the Company's
compliance with any other applicable laws.

"Participant" means an Eligible Person who has been granted and holds an Award
under this Plan.

"Performance Share Award" means an Award of a right to receive shares of Common
Stock under Section 5.1, the issuance or payment of which is contingent upon,
among other conditions, the attainment of performance objectives specified by
the Committee.

"Personal Representative" means the person or persons who, upon the disability
or incompetence of a Participant, has acquired on behalf of the Participant, by
legal proceeding or otherwise, the power to exercise the rights or receive
benefits under this Plan by virtue of having become the legal representative of
the Participant.

"Plan" means this Mikron Infrared, Inc. Amended and Restated Omnibus Incentive
Plan, as it may hereafter be amended from time to time.

"Plan Action" shall have the meaning attributed to such term in Section 6.4.3 of
this Plan.

"Restricted Shares" or "Restricted Stock" means shares of Common Stock awarded
to a Participant under this Plan, subject to payment of such consideration, if
any, and such conditions on vesting (which may include, among others, the
passage of time, specified performance objectives or other factors) and such
transfer and other restrictions as are established in or pursuant to this Plan
and the related Award Agreement, for so long as such shares remain unvested
under the terms of the applicable Award Agreement.

"Retirement" means retirement with the consent of the Company or, from active
service as an employee or officer of the Company on or after attaining (a) age
60 with ten or more years of employment with the Company, or (b) age 65.

"Securities Act" means the Securities Act of 1933, as amended from time to time.

"Severance Date" means the date of a Participant's termination of employment
with the Company for any reason whatsoever.

"Stock Appreciation Right" or "SAR" means a right authorized under this Plan to
receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.

"Stock Bonus" means an Award of shares of Common Stock granted under this Plan
for no consideration other than past services and without restriction other than
such transfer or other restrictions as the Committee may deem advisable to
assure compliance with law.

"Subsidiary" means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.


                                       26
<PAGE>

"Total Disability" means a "total and permanent disability" within the meaning
of Section 22(e)(3) of the Code and, with respect to Awards other than Incentive
Stock Options, such other disabilities, infirmities, afflictions, or conditions
as the Committee may include.


                                       27