<PAGE>

                                                                    Exhibit 10.1

                                 NET2PHONE, INC.

            1999 AMENDED AND RESTATED STOCK OPTION AND INCENTIVE PLAN

                        (AS AMENDED ON NOVEMBER 6, 2000)

            ---------------------------------------------------------
         1.       Purpose; Types of Awards; Construction.

                  The purpose of the Amended and Restated Net2Phone, Inc. 1999
Stock Option and Incentive Plan (the "Plan") is to provide incentives to
executive officers, other key employees, directors and consultants of Net2Phone,
Inc. (the "Company"), or any parent or subsidiary of the Company which now
exists or here after is organized or acquired by the Company, to acquire a
proprietary interest in the Company, to continue as officers, employees,
directors or consultants, to increase their efforts on behalf of the Company and
to promote the success of the Company's business. The provisions of the Plan are
intended to satisfy the requirements of Section 16(b) of the Securities Exchange
Act of 1934, as amended, and of Section 162(m) of the Internal Revenue Code of
1986, as amended, and shall be interpreted in a manner consistent with the
requirements thereof.

         2.       Definitions.

                  As used in this Plan, the following words and phrases shall
have the meanings indicated:

                  (a) "Agreement" shall mean a written agreement entered into
between the Company and a Grantee in connection with an award under the Plan.

                  (b) "Board" shall mean the Board of Directors of the Company.

                  (c) "Change in Control" means a change in ownership or control
of the Company effected through either of the following:

                           (i) any "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than (A) the Company, (B) any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company, (C) any corporation or other entity owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of Common stock, or (D) any person who, immediately prior to the
Initial Public Offering, owned more than 25% of the combined voting power of the
Company's then outstanding voting securities), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding voting securities; or

                           (ii) during any period of not more than two
consecutive years, not including any period prior to the initial adoption of
this Plan by the Board, individuals who at the beginning of such period
constitute the Board, and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including, but not limited to a consent solicitation, relating to the
election of directors of the Company) whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof.


                                       1
<PAGE>

                  (d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

                  (e) "Committee" shall mean the Compensation Committee of the
Board or such other committee as the Board may designate from time to time to
administer the Plan.

                  (f) "Common Stock" shall mean shares of common stock, par
value $.01 per share, of the Company.

                  (g) "Company" shall mean Net2Phone Inc., a corporation
organized under the laws of the State of Delaware, or any successor corporation.

                  (h) "Continuous Service" means that the provision of services
to the Company or a Related Entity in any capacity of officer, employee,
director or consultant is not interrupted or terminated. Continuous Service
shall not be considered interrupted in the case of (i) any approved leave of
absence, (ii) transfers between locations of the Company or among the Company,
any Related Entity or any successor in any capacity of officer, employee,
director or consultant, or (iii) any change in status as long as the individual
remains in the service of the Company or a Related Entity in any capacity of
officer, employee, director or consultant (except as otherwise provided in the
applicable Agreement). An approved leave of absence shall include sick leave,
maternity leave, military leave or any other authorized personal leave. For
purposes of Incentive Stock Options, no such leave may exceed ninety (90) days
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.

                  (i) "Corporate Transaction" means any of the following
transactions:

                           (i) a merger or consolidation of the Company with any
other corporation or other entity, other than (A) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
parent entity) 80% or more of the combined voting power of the voting securities
of the Company or such surviving or parent entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as defined in the Exchange Act) acquired 25% or more of the combined
voting power of the Company's then outstanding securities; or


                                       2
<PAGE>

                           (ii) a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or substantially
all of its assets (or any transaction having a similar effect).

                  (j) "Disability" shall mean a Grantee's inability to perform
his or her duties with the Company or any of its affiliates by reason of any
medically determinable physical or mental impairment, as determined by a
physicians elected by the Grantee and acceptable to the Company.

                  (k) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.

                  (l) "Fair Market Value" per share as of a particular date
shall mean(i) the closing sale price per share of common stock on the national
securities exchange on which the common stock is principally traded for such
date or the last preceding date on which there was a sale of such common stock
on such exchange, as the Committee shall determine, or (ii) if the shares of
common stock are then traded in an over-the-counter market, the average of the
closing bid and asked prices for the shares of common stock in such
over-the-counter market for the last preceding date on which there was a sale of
such common stock in such market, or (iii) if the shares of common stock are not
then listed on a national securities exchange or traded in an over-the-counter
market, such value as the Committee, in its sole discretion, shall determine;
provided, however, that the Fair Market Value per share on the date of the
Initial Public Offering will equal the Initial Public Offering price per share
or such other price that the Committee determines in its sole discretion.

                  (m) "Grantee" shall mean a person who receives a grant of
Options, Stock Appreciation Rights, Limited Rights or Restricted Stock under the
Plan.

                  (n) "IDT" shall mean IDT Corporation, a Delaware corporation,
and any successor corporation thereto.

                  (o) "Incentive Stock Option" shall mean any option intended to
be, and designated as, an incentive stock option within the meaning of Section
422 of the Code.

                  (p) "Initial Public Offering" shall mean the underwritten
initial public offering of shares of common stock.

                  (q) "Insider" shall mean a Grantee who is subject to the
reporting requirements of Section 16(a) of the Exchange Act.


                                       3
<PAGE>

                  (r) "Limited Right" shall mean a limited stock appreciation
right granted pursuant to Section 10.

                  (s) "Non-Employee Director" means a member of the Board who is
not an employee of the Company or any Related Entity.

                  (t) "Nonqualified Stock Option" shall mean any option not
designated as an Incentive Stock Option.

                  (u) "Option" or "Options" shall mean a grant to a Grantee of
an option or options to purchase shares of common stock.

                  (v) "Option Agreement" shall have the meaning set forth in
Section 6.

                  (w) "Option Price" shall mean the exercise price of the shares
of common stock covered by an Option.

                  (x) "Parent" shall mean any company (other than the Company)
in an unbroken chain of companies ending with the Company if, at the time of
granting an award under the Plan, each of the companies other than the Company
owns stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other companies in such chain.

                  (y) "Plan" means this Net2Phone, Inc. 1999 Stock Option and
Incentive Plan, as amended from time to time.

                  (z) "Related Entity" means any Parent, Subsidiary or any
business, corporation, partnership, limited liability company or other entity in
which the Company, a Parent or a Subsidiary holds a controlling ownership
interest, directly or indirectly. IDT and each of its Subsidiaries shall be
deemed to be a Related Entity.

                  (aa) "Restricted Period" shall have the meaning set forth in
Section 11.

                  (bb) "Restricted Stock" means shares of common stock issued
under the Plan to a Grantee for such consideration, if any, and subject to such
restrictions on transfer, rights of refusal, repurchase provisions, forfeiture
provisions and other terms and conditions as shall be determined by the
Committee.

                  (cc) "Retirement" shall mean a Grantee's retirement in
accordance with the terms of any tax-qualified retirement plan maintained by the
Company or any of its affiliates in which the Grantee participates.

                  (dd) "Rule 16b-3" shall mean Rule 16b-3, as from time to time
in effect, promulgated under the Exchange Act, including any successor to such
Rule.


                                       4
<PAGE>

                  (ee) "Stock Appreciation Right" shall mean the right, granted
to a Grantee under Section 9, to be paid an amount measured by the appreciation
in the Fair Market Value of a share of common stock from the date of grant to
the date of exercise of the right, with payment to be made in cash or common
stock as specified in the award or determined by the Committee.

                  (ff) "Subsidiary" shall mean any company (other than the
Company) in an unbroken chain of companies beginning with the Company if, at the
time of granting an Option, each of the companies other than the last company in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
companies in such chain.

                  (gg) "Tax Event" shall have the meaning set forth in Section
17.

                  (hh) "Ten Percent Stockholder" shall mean a Grantee who, at
the time an Incentive Stock Option is granted, owns stock possessing more than
ten percent(10%) of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary.

         3.       Administration.

                  (a) The Plan shall be administered by the Committee, the
members of which shall, except as may otherwise be determined by the Board, be
"non-employee directors" under Rule 16b-3 and "outside directors" under Section
162(m) of the Code. Prior to the formation of the Committee, the Board shall
exercise all powers of the Committee set forth herein.

                  (b) The Committee shall have the authority in its discretion,
subject to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in the
administration of the Plan, including, without limitation, the authority to
grant Options, Stock Appreciation Rights, Limited Rights and Restricted Stock;
to determine which options shall constitute Incentive Stock Options and which
Options shall constitute Nonqualified Stock Options; to determine which Options
(if any) shall be accompanied by Limited Rights; to determine the purchase price
of the shares of common stock covered by each option; to determine the persons
to whom, and the time or times at which awards shall be granted; to determine
the number of shares to be covered by each award; to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the Agreements (which need not be
identical) and to cancel or suspend awards, as necessary; and to make all other
determinations deemed necessary or advisable for the administration of the Plan.

                  (c) All decisions, determinations and interpretations of the
Committee shall be final and binding on all Grantees of any awards under this
Plan. No member of the Board or Committee shall be liable for any action taken
or determination made in good faith with respect to the Plan or any award
granted hereunder.


                                       5
<PAGE>

         4.       Eligibility.

                  Awards may be granted to executive officers, other key
employees, directors and consultants of the Company or of any Related Entity. In
addition to any other awards granted to Non-Employee Directors hereunder, awards
shall be granted to Non-Employee Directors pursuant to Section 14 hereof. In
determining the persons to whom awards shall be granted and the number of shares
to be covered by each award, the Committee shall take into account the duties of
the respective persons, their present and potential contributions to the success
of the Company and such other factors as the Committee shall deem relevant in
connection with accomplishing the purposes of the Plan.

         5.       Stock.

                  (a) The maximum number of shares of common stock reserved for
the grant of awards under the Plan shall be 18,940,000, subject to adjustment as
provided in Section 12 hereof. Such shares may, in whole or in part, be
authorized but unissued shares or shares that shall have been or may be
reacquired by the Company.

                  (b) If any outstanding award under the Plan should, for any
reason expire, be canceled or be forfeited (other than in connection with the
exercise of a Stock Appreciation Right or a Limited Right), without having been
exercised in full, the shares of common stock allocable to the unexercised,
canceled or terminated portion of such award shall (unless the Plan shall have
been terminated) become available for subsequent grants of awards under the
Plan.

                  (c) Except as the Committee may otherwise determine, in no
event may a Grantee be granted during any calendar year Options to acquire more
than 750,000 shares of common stock or more than 750,000 shares of Restricted
Stock, in each case subject to adjustment as provided in Section 12 hereof.

         6.       Terms and Conditions of Options.

                  (a) Option Agreement. Each Option granted pursuant to the Plan
shall be evidenced by a written agreement between the Company and the Grantee
(the "Option Agreement"), in such form and containing such terms and conditions
as the Committee shall from time to time approve, which Option Agreement shall
comply with and be subject to the following terms and conditions, unless
otherwise specifically provided in such Option Agreement. For purposes of
interpreting this Section 6, a director's service as a member of the Board shall
be deemed to be employment with the Company.

                  (b) Number of Shares. Each Option Agreement shall state the
number of shares of common stock to which the Option relates.


                                       6
<PAGE>

                  (c) Type of Option. Each Option Agreement shall specifically
state that the Option constitutes an Incentive Stock Option or a Nonqualified
Stock Option. In the absence of such designation, the Option will be deemed to
be a Nonqualified Stock Option.

                  (d) Option Price. Each Option Agreement shall state the Option
Price, which, in the case of an Incentive Stock Option, shall not be less than
one hundred percent (100%) of the Fair Market Value of the shares of common
stock covered by the Option on the date of grant. The Option Price shall be
subject to adjustment as provided in Section 12 hereof.

                  (e) Medium and Time of Payment. The Option Price shall be paid
in full, at the time of exercise, in cash or in shares of common stock (whether
then owned by the Grantee or issuable upon exercise of the Option) having a Fair
Market Value equal to such Option Price or in a combination of cash and common
stock, including a cashless exercise procedure through a broker-dealer;
provided, however, that in the case of an Incentive Stock Option the medium of
payment shall be determined at the time of grant and set forth in the applicable
Option Agreement.

                  (f) Term and Exercisability of Options. Each Option Agreement
shall provide the exercise schedule for the Option as determined by the
Committee, provided, that, the Committee shall have the authority to accelerate
the exercisability of any outstanding option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. The exercise
period will be ten (10) years from the date of the grant of the option unless
otherwise determined by the Committee; provided, however, that in the case of an
Incentive Stock Option, such exercise period shall not exceed ten (10) years
from the date of grant of such Option. The exercise period shall be subject to
earlier termination as provided in Sections 6(g) and 6(h) hereof. An Option may
be exercised, as to any or all full shares of common stock as to which the
Option has become exercisable, by written notice delivered in person or by mail
to the Company's transfer agent or other administrator designated by the
Company, specifying the number of shares of common stock with respect to which
the Option is being exercised.

                  (g) Termination. Except as provided in this Section 6(g) and
in Section 6(h) hereof, an Option may not be exercised unless the Grantee is
then in the employ of or maintaining a director or consultant relationship with
the Company or a Related Entity (or a company or a Parent or Subsidiary of such
company issuing or assuming the Option in a transaction to which Section 424(a)
of the Code applies), and unless the Grantee has remained continuously so
employed or in the director or consultant relationship since the date of grant
of the Option. In the event that the employment or consultant relationship of a
Grantee shall terminate (other than by reason of death, Disability or
Retirement), all Options of such Grantee that are exercisable at the time of
Grantee's termination may, unless earlier terminated in accordance with their
terms, be exercised within three (3) months after the date of such termination
(or such different period as the Committee shall prescribe).


                                       7
<PAGE>

                  (h) Death, Disability or Retirement of Grantee. If a Grantee
shall die while employed by, or maintaining a director or consultant
relationship with, the Company or a Related Entity, or within thirty (30) days
after the date of termination of such Grantee's employment, director or
consultant relationship(or within such different period as the Committee may
have provided pursuant to Section 6(g) hereof), or if the Grantee's employment,
director or consultant relationship shall terminate by reason of Disability, all
Options theretofore granted to such Grantee (to the extent otherwise
exercisable) may, unless earlier terminated in accordance with their terms, be
exercised by the Grantee or by the Grantee's estate or by a person who acquired
the right to exercise such Options by bequest or inheritance or otherwise by
result of death or Disability of the Grantee, at any time within 180 days after
the death or Disability of the Grantee (or such different period as the
Committee shall prescribe). In the event that an Option granted hereunder shall
be exercised by the legal representatives of a deceased or former Grantee,
written notice of such exercise shall be accompanied by a certified copy of
letters testamentary or equivalent proof of the right of such legal
representative to exercise such Option. In the event that the employment or
consultant relationship of a Grantee shall terminate on account of such
Grantee's Retirement, all Options of such Grantee that are exercisable at the
time of such Retirement may, unless earlier terminated in accordance with their
terms, be exercised at any time within one hundred eighty (180) days after the
date of such Retirement (or such different period as the Committee shall
prescribe). Unless otherwise provided in the applicable Agreement, in the case
of awards granted to consultants who do not provide services to the Company or
to a Related Entity on an ongoing basis, for the purpose of determining the
rights of such consultant under the Plan, the Committee shall determine the
date, if any, upon which the consultant's relationship with the Company or the
Related Entity shall have been terminated.

                  (i) Other Provisions. The Option Agreements evidencing awards
under the Plan shall contain such other terms and conditions not inconsistent
with the Plan as the Committee may approve.

         7.       Nonqualified Stock Options.

                  Options granted pursuant to this Section 7 are intended to
constitute Nonqualified Stock Options and shall be subject only to the general
terms and conditions specified in Section 6 hereof.

         8.       Incentive Stock Options.

                  Options granted pursuant to this Section 8 are intended to
constitute Incentive Stock Options and shall be subject to the following special
terms and conditions, in addition to the general terms and conditions specified
in Section 6 hereof:

                  (a) Limitation on Value of Shares. To the extent that the
aggregate Fair Market Value of shares of common stock subject to Options
designated as Incentive Stock Options which become exercisable for the first
time by a Grantee during any calendar year (under all plans of the Company or
any Subsidiary) exceeds $100,000, such excess Options, to the extent of the
shares covered thereby in excess of the foregoing limitation, shall be treated
as Nonqualified Stock Options. For this purpose, Incentive Stock Options shall
be taken into account in the order in which they were granted, and the Fair
Market Value of the shares of common stock shall be determined as of the date
that the Option with respect to such shares was granted.


                                       8
<PAGE>

                  (b) Ten Percent Stockholder. In the case of an Incentive Stock
Option granted to a Ten Percent Stockholder, (i) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the shares
of common stock on the date of grant of such Incentive Stock Option, and (ii)
the exercise period shall not exceed five (5) years from the date of grant of
such Incentive Stock Option.

         9.       Stock Appreciation Rights.

                  The Committee shall have authority to grant a Stock
Appreciation Right to the Grantee of any Option under the Plan with respect to
all or some of the shares of common stock covered by such related Option. A
Stock Appreciation Right shall, except as provided in this Section 9 or as may
be determined by the Committee, be subject to the same terms and conditions as
the related Option. Each Stock Appreciation Right granted pursuant to the Plan
shall be evidenced by a written Agreement between the Company and the Grantee in
such form as the Committee shall from time to time approve, which Agreement
shall comply with and be subject to the following terms and conditions, unless
otherwise specifically provided in such Agreement:

                  (a) Time of Grant. A Stock Appreciation Right may be granted
either at the time of grant of the related option, or at any time thereafter
during the term of the Option; provided, however that Stock Appreciation Rights
related to Incentive Stock Options may only be granted at the time of grant of
the related Option.

                  (b) Payment. A Stock Appreciation Right shall entitle the
holder thereof, upon exercise of the Stock Appreciation Right or any portion
thereof, to receive payment of an amount computed pursuant to Section 9(d).

                  (c) Exercise. A Stock Appreciation Right shall be exercisable
at such time or times and only to the extent that the related Option is
exercisable, and will not be transferable except to the extent the related
option may be transferable. A Stock Appreciation Right granted in connection
with an Incentive Stock Option shall be exercisable only if the Fair Market
Value of a share of common stock on the date of exercise exceeds the purchase
price specified in the related Incentive Stock Option. Unless otherwise approved
by the Committee, no Grantee shall be permitted to exercise any Stock
Appreciation Right (i) until six (6) months have elapsed from the date of grant
or (ii) during the period beginning two weeks prior to the end of each of the
Company's fiscal quarters and ending on the second business day following the
day on which the Company releases to the public a summary of its fiscal results
for such period.


                                       9
<PAGE>

                  (d) Amount Payable. Upon the exercise of a Stock Appreciation
Right, the Optionee shall be entitled to receive an amount determined by
multiplying (i)the excess of the Fair Market Value of a share of common stock on
the date of exercise of such Stock Appreciation Right over the Option Price of
the related Option, by (ii) the number of shares of common stock as to which
such Stock Appreciation Right is being exercised.

                  (e) Treatment of Related Options And Stock Appreciation Rights
Upon Exercise. Upon the exercise of a Stock Appreciation Right, the related
Option shall be canceled to the extent of the number of shares of common stock
as to which the Stock Appreciation Right is exercised. Upon the exercise or
surrender of an option granted in connection with a Stock Appreciation Right,
the Stock Appreciation Right shall be canceled to the extent of the number of
shares of common stock as to which the Option is exercised or surrendered.

                  (f) Method of Exercise. Stock Appreciation Rights shall be
exercised by a Grantee only by a written notice delivered to the Company in
accordance with procedures specified by the Company from time to time. Such
notice shall state the number of shares of common stock with respect to which
the Stock Appreciation Right is being exercised. A Grantee may also be required
to deliver to the Company the underlying Agreement evidencing the Stock
Appreciation Right being exercised and any related Option Agreement so that a
notation of such exercise may be made thereon, and such Agreements shall then be
returned to the Grantee.

                  (g) Form of Payment. Payment of the amount determined under
Section 9(d)may be made solely in whole shares of common stock in a number based
upon their Fair Market Value on the date of exercise of the Stock Appreciation
Right or, alternatively, at the sole discretion of the Committee, solely in
cash, or in a combination of cash and shares of common stock as the Committee
deems advisable. If the Committee decides to make full payment in shares of
common stock, and the amount payable results in a fractional share, payment for
the fractional share will be made in cash.

         10.      Limited Stock Appreciation Rights.

                  The Committee shall have authority to grant a Limited Right to
the Grantee of any Option under the Plan with respect to all or some of the
shares of common stock covered by such related Option. Each Limited Right
granted pursuant to the Plan shall be evidenced by a written Agreement between
the Company and the Grantee, in such form as the Committee shall from time to
time approve, which Agreement shall comply with and be subject to the following
terms and conditions, unless otherwise specifically provided in such Agreement:

                  (a) Time Of Grant. A Limited Right granted in tandem with a
Nonqualified Stock Option may be granted either at the time of grant of the
related Option or any time thereafter during its term. A Limited Right granted
in tandem with an Incentive Stock Option may only be granted at the time of
grant of the related Option.


                                       10
<PAGE>

                  (b) Exercise. A Limited Right may be exercised only (i) during
the ninety-day period following the occurrence of a Change in Control or
(ii)immediately prior to the effective date of a Corporate Transaction. Each
Limited Right shall be exercisable only if, and to the extent that, the related
Option is exercisable and, in the case of a Limited Right granted in tandem with
an Incentive Stock Option, only when the Fair Market Value per share of common
stock exceeds the Option Price per share. Notwithstanding the provisions of the
two immediately preceding sentences (or unless otherwise approved by the
Committee), a Limited Right granted to a Grantee who is an Insider must be
(x)held by the Insider for at least six (6) months from the date of grant of the
Limited Right before it becomes exercisable and (y) automatically paid out in
cash to the Insider upon the occurrence of a Change in Control or a Corporate
Transaction (provided such six (6) month holding period requirement has been
met).

                  (c) Amount Payable. Upon the exercise of a Limited Right, the
Grantee thereof shall receive in cash whichever of the following amounts is
applicable:

                           (i) in the case of the realization of Limited Rights
by reason of an acquisition of common stock described in clause (i) of the
definition of "Change in Control" (Section 2(c) above), an amount equal to the
Acquisition Spread as defined in Section 10(d)(ii) below; or

                           (ii) in the case of the realization of Limited Rights
by reason of stockholder approval of an agreement or plan described in clause
(i) of the definition of "Corporate Transaction" (Section 2(j) above), an amount
equal to the Merger Spread as defined in Section 10(d)(iv) below; or

                           (iii) in the case of the realization of Limited
Rights by reason of the change in composition of the Board described in clause
(ii) of the definition of "Change in Control" or stockholder approval of a plan
or agreement described in clause (ii) of the definition of Corporate
Transaction, an amount equal to the Spread as defined in Section 10(d)(v) below.

         Notwithstanding the foregoing provisions of this Section 10(c) (or
unless otherwise approved by the Committee), in the case of a Limited Right
granted in respect of an Incentive Stock Option, the Grantee may not receive an
amount in excess of the maximum amount that will enable such option to continue
to qualify under the Code as an Incentive Stock Option.

                  (d) Determination of Amounts Payable. The amounts to be paid
to a Grantee pursuant to Section 10(c) shall be determined as follows:

                           (i) The term "Acquisition Price per Share" as used
herein shall mean, with respect to the exercise of any Limited Right by reason
of an acquisition of common stock described in clause (i) of the definition of
Change in Control, the greatest of (A) the highest price per share shown on the
Statement on Schedule 13D or amendment thereto filed by the holder of 25% or
more of the voting power of the Company that gives rise to the exercise of such
Limited Right, (B) the highest price paid in any tender or exchange offer which
is in effect at any time during the ninety-day period ending on the date of
exercise


                                       11
<PAGE>

                           (ii) of the Limited Right, or (C) the highest Fair
Market Value per share of common stock during the ninety-day period ending on
the date the Limited Right is exercised.

                           (iii) The term "Acquisition Spread" as used herein
shall mean an amount equal to the product computed by multiplying (A) the excess
of (1) the Acquisition Price per Share over (2) the Option Price per share of
common stock at which the related option is exercisable, by (B) the number of
shares of common stock with respect to which such Limited Right is being
exercised.

                           (iv) The term "Merger Price per Share" as used herein
shall mean, with respect to the exercise of any Limited Right by reason of
stockholder approval of an agreement described in clause (i) of the definition
of Corporate Transaction, the greatest of (A) the fixed or formula price for the
acquisition of shares of common stock specified in such agreement, if such fixed
or formula price is determinable on the date on which such Limited Right is
exercised, (B) the highest price paid in any tender or exchange offer which is
in effect at any time during the ninety- day period ending on the date of
exercise of the Limited Right, (C) the highest Fair Market Value per share of
common stock during the ninety-day period ending on the date on which such
Limited Right is exercised.

                           (v) The term "Merger Spread" as used herein shall
mean an amount equal to the product computed by multiplying (A) the excess of
(1) the Merger Price per Share over (2) the Option Price per share of common
stock at which the related Option is exercisable, by (B) the number of shares of
common stock with respect to which such Limited Right is being exercised.

                           (vi) The term "Spread" as used herein shall mean,
with respect to the exercise of any Limited Right by reason of a change in the
composition of the Board described in clause (ii) of the definition of Change in
Control or stockholder approval of a plan or agreement described in clause (ii)
of the definition of Corporate Transaction, an amount equal to the product
computed by multiplying (i) the excess of (A) the greater of (1) the highest
price paid in any tender or exchange offer which is in effect at any time during
the ninety-day period ending on the date of exercise of the Limited Right or (2)
the highest Fair Market Value per share of common stock during the ninety-day
period ending on the date the Limited Right is exercised over (B) the Option
Price per share of common stock at which the related Option is exercisable, by
(ii) the number of shares of common stock with respect to which the Limited
Right is being exercised.


                                       12
<PAGE>

                  (e) Treatment of Related Options and Limited Rights Upon
Exercise. Upon the exercise of a Limited Right, the related Option shall cease
to be exercisable to the extent of the shares of common stock with respect to
which such Limited Right is exercised but shall be considered to have been
exercised to that extent for purposes of determining the number of shares of
common stock available for the grant of further awards pursuant to this Plan.
Upon the exercise or termination of a related Option, the Limited Right with
respect to such related Option shall terminate to the extent of the shares of
common stock with respect to which the related Option was exercised or
terminated.

                  (f) Method of Exercise. To exercise a Limited Right, the
Grantee shall (i) deliver written notice to the Company specifying the number of
shares of common stock with respect to which the Limited Right is being
exercised, and(ii) if requested by the Committee, deliver to the Company the
Agreement evidencing the Limited Rights being exercised and, if applicable, the
Option Agreement evidencing the related Option; the Company shall endorse
thereon a notation of such exercise and return such Agreements to the Grantee.
The date of exercise of a Limited Right that is validly exercised shall be
deemed to be the date on which there shall have been delivered the instruments
referred to in the first sentence of this paragraph (f).

         11.      Restricted Stock.

                  The Committee may award shares of Restricted Stock to any
eligible employee or consultant. Each award of Restricted Stock under the Plan
shall be evidenced by a written Agreement between the Company and the Grantee,
in such form as the Committee shall from time to time approve, which Agreement
shall comply with and be subject to the following terms and conditions, unless
otherwise specifically provided in such Agreement:

                  (a) Number of Shares. Each Agreement shall state the number of
shares of Restricted Stock to be subject to an award.

                  (b) Restrictions. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of, except by
will or the laws of descent and distribution, for such period as the Committee
shall determine from the date on which the award is granted (the "Restricted
Period"). The Committee may also impose such additional or alternative
restrictions and conditions on the shares as it deems appropriate including the
satisfaction of performance criteria. Such performance criteria may include
sales, earnings before interest and taxes, return on investment, earnings per
share, any combination of the foregoing or rate of growth of any of the
foregoing, as determined by the Committee. Certificates for shares of stock
issued pursuant to Restricted Stock awards shall bear an appropriate legend
referring to such restrictions, and any attempt to dispose of any such shares of
stock in contravention of such restrictions shall be null and void and without
effect. During the Restricted Period, such certificates shall be held in escrow
by an escrow agent appointed by the Committee. In determining the Restricted
Period of an award, the Committee may provide that the foregoing restrictions
shall lapse with respect to specified percentages of the awarded shares on
successive anniversaries of the date of such award.


                                       13
<PAGE>

                  (c) Forfeiture. Subject to such exceptions as may be
determined by the Committee, if the Grantee's continuous employment or
consultant relationship with the Company or a Related Entity shall terminate for
any reason prior to the expiration of the Restricted Period of an award, any
shares remaining subject to restrictions (after taking into account the
provisions of Subsection (e) of this Section 11) shall thereupon be forfeited by
the Grantee and transferred to, and retired by, the Company without cost to the
Company or such Related Entity.

                  (d) Ownership. During the Restricted Period the Grantee shall
possess all incidents of ownership of such shares, subject to Subsection (b) of
this Section 11, including the right to receive dividends with respect to such
shares and to vote such shares.

                  (e) Accelerated Lapse of Restrictions. Upon the occurrence of
any of the events specified in Section 13 (and subject to the conditions set
forth therein), all restrictions then outstanding on any shares of Restricted
Stock awarded under the Plan shall lapse as of the applicable date set forth in
Section 13. The Committee shall have the authority (and the Agreement may so
provide) to cancel all or any portion of any outstanding restrictions prior to
the expiration of the Restricted Period with respect to any or all of the shares
of Restricted Stock awarded on such terms and conditions as the Committee shall
deem appropriate.

         12.      Effect of Certain Changes.

                  (a) Adjustments Upon Changes in Capitalization. In the event
of any extraordinary dividend, stock dividend (including a spin-off or split-off
of a Subsidiary), recapitalization, merger, consolidation, stock split, warrant
or rights issuance, or combination or exchange of such shares, or other similar
transactions, the Committee shall equitably adjust (i) the maximum number of
Options or shares of Restricted Stock that may be awarded to a Grantee in any
calendar year (as provided in Section 5 hereof), (ii) the number of shares of
common stock available for awards under the Plan, (iii) the number of such
shares covered by outstanding awards and/or (iv) the price per share of Options
or the applicable market value of Stock Appreciation Rights or Limited Rights,
in each such case so as to reflect such event and preserve the value of such
awards; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated.

                  (b) Change in Common Stock. In the event of a change in the
common stock of the Company as presently constituted that is limited to a change
of all of its authorized shares of common stock into the same number of shares
with a different par value or without par value, the shares resulting from any
such change shall be deemed to be the common stock within the meaning of the
Plan.


                                       14
<PAGE>

         13.      Corporate Transaction.

                  Unless otherwise provided in the applicable Agreement, in the
event of a Corporate Transaction, each award which is at the time outstanding
and unexercised under the Plan shall automatically terminate and, in the case of
an award of Restricted Stock, shall be released from any restrictions on
transfer and repurchase or forfeiture rights, immediately prior to the specified
effective date of such Corporate Transaction. However, all such awards shall not
terminate if the awards are, in connection with the Corporate Transaction,
assumed by the successor corporation or Parent thereof.

         14.      Non-Employee Director Options.

                  The provisions of this Section 14 shall apply only to certain
grants of Options to Non-Employee Directors, as provided below. Except as set
forth in this Section 14, the other provisions of the Plan shall apply to grants
of Options to Non-Employee Directors to the extent not inconsistent with this
Section. For purposes of interpreting Section 6 of the Plan, a Non-Employee
Director's service as a member of the Board shall be deemed to be employment
with the Company.

                  (a) General. Non-Employee Directors shall receive Nonqualified
Stock Options in accordance with this Section 14. The Option Price per share of
common stock purchasable under Options granted to Non-Employee Directors shall
be the Fair Market Value of a share on the date of grant. Options granted
pursuant to this Section 14 shall be subject to the terms of such section and
shall not be subject to discretionary acceleration of exercisability by the
Committee.

                  (b) Initial Grants. On the date of the Initial Public
Offering, each Non-Employee Director will be granted automatically, without
action by the Committee, an Option to purchase 10,000 shares of common stock.
The Option Price shall equal the offering price of the common stock in
connection with the Initial Public Offering.

                  (c) Subsequent Grants. Each person who, after the Initial
Public Offering, becomes a Non-Employee Director for the first time, will, at
the time such director is elected and duly qualified, be granted automatically,
without action by the Committee, an Option to purchase 10,000 shares of common
stock. The Option Price shall equal the Fair Market Value of the common stock as
of the date of grant.

                  (d) Annual Grants. On each anniversary date of a Non-Employee
Director's initial election to the Board, such Non-Employee Director will be
granted automatically, without action by the Committee, an Option to purchase
10,000 shares of common stock. The Option Price shall equal the Fair Market
Value of the common stock as of the date of grant.


                                       15
<PAGE>

                  (e) Vesting. Each option granted under this Section 14 shall
be fully exercisable on the date of grant. Sections 6(f), 6(g) and 6(h) hereof
shall not apply to Options granted to Non-Employee Directors.

                  (f) Duration. Each Option granted to a Non-Employee Director
shall expire on the first to occur of (i) the tenth anniversary of the date of
grant of the Option, (ii) the first anniversary of the Non-Employee Director's
termination of service as a member of the Board other than for Cause or (iii)
three months following the Non-Employee Director's removal from the Board for
Cause. The Committee may not provide for an extended exercise period beyond the
periods set forth in this Section 14.l

         (l) Definition of "cause." For purposes of this Section 14, "cause"
shall mean the termination of service as a member of the Board by a Non-Employee
Director due to any act of (i) fraud or intentional misrepresentation, (ii)
embezzlement, misappropriation or conversion of assets or opportunities of the
Company or any Subsidiary, or (iii) any other act deemed by the Board to be
detrimental to the Company.

         15.      Period During which Awards May Be Granted.

                  Awards may be granted pursuant to the Plan from time to time
within a period of ten (10) years from April 27, 1999, the date the Plan was
initially adopted by the Board.

         16.      Transferability of Awards.

                  (a) Incentive Stock Options (and any Stock Appreciation Rights
related thereto) may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by the laws of descent and distribution
and may be exercised, during the lifetime of the Grantee, only by the Grantee or
his or her guardian or legal representative.

                  (b) Nonqualified Stock Options (together with any Stock
Appreciation Rights or Limited Rights related thereto) shall be transferable in
the manner and to the extent acceptable to the Committee, as may be evidenced by
a writing signed by the Company and the Grantee, or in such other matter as the
Committee shall provide. Notwithstanding the transfer by a Grantee of a
Nonqualified Stock Option, the Grantee will continue to remain subject to the
withholding tax requirements set forth in Section 17 hereof.

                  (c) The terms of any award granted under the Plan, including
the transferability of any such award, shall be binding upon the executors,
administrators, heirs and successors of the Grantee.


                                       16
<PAGE>

         17.      Agreement by Grantee regarding Withholding Taxes.

                  If the Committee shall so require, as a condition of exercise
of an Option, Stock Appreciation Right or Limited Right or the expiration of a
Restricted Period (each, a "Tax Event"), each Grantee shall agree that no later
than the date of the Tax Event, the Grantee will pay to the Company or make
arrangements satisfactory to the Committee regarding payment of any federal,
state or local taxes of any kind required by law to be withheld upon the Tax
Event. Alternatively, the Committee may provide that a Grantee may elect, to the
extent permitted or required by law, to have the Company deduct federal, state
and local taxes of any kind required by law to be withheld upon the Tax Event
from any payment of any kind due to the Grantee. The withholding obligation may
be satisfied by the withholding or delivery of common stock.

         18.      Rights as a Stockholder.

                  Except as provided in Section 11(d) hereof, a Grantee or a
transferee of an award shall have no rights as a stockholder with respect to any
shares covered by the award until the date of the issuance of a stock
certificate to him or her for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distribution of other rights for which the record date is prior to
the date such stock certificate is issued, except as provided in Section 12(a)
hereof.

         19.      No Rights to Employment.

                  Nothing in the Plan or in any award granted or Agreement
entered into pursuant hereto shall confer upon any Grantee the right to continue
in the employ of, or in a consultant relationship with, the Company or any
Related Entity or to be entitled to any remuneration or benefits not set forth
in the Plan or such Agreement or to interfere with or limit in any way the right
of the Company or any such Related Entity to terminate such Grantee's
employment. Awards granted under the Plan shall not be affected by any change in
duties or position of a Grantee as long as such Grantee continues to be employed
by, or in a consultant relationship with, the Company or any Related Entity.

         20.      Beneficiary.

                  A Grantee may file with the Committee a written designation of
a beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Grantee, the executor or administrator of the Grantee's estate
shall be deemed to be the Grantee's beneficiary.


                                       17
<PAGE>

         21.      Stockholder Approval; Amendment and Termination of the Plan.

                  (a) Stockholder Approval. The Plan initially became effective
when adopted by the Board and stockholders of the Company on April 27, 1999 and
shall terminate on the tenth anniversary of such date. This amendment and
restatement of the Plan became effective upon its adoption by the Board on
November 6, 2000.

                  (b) Amendment and Termination of the Plan. The Board at any
time and from time to time may suspend, terminate, modify or amend the Plan;
however, unless otherwise determined by the Board, an amendment that requires
stockholder approval in order for the Plan to continue to comply with Rule 16b-3
or any other law, regulation or stock exchange requirement shall not be
effective unless approved by the requisite vote of stockholders. Except as
provided in Section 12(a) hereof, no suspension, termination, modification or
amendment of the Plan may adversely affect any award previously granted, unless
the written consent of the Grantee is obtained.

         22.      Governing Law.

                  The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware.

                                    * * * * *


                                       18