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                                                                    Exhibit 10.1

                       ENDO PHARMACEUTICALS HOLDINGS INC.
                            2004 STOCK INCENTIVE PLAN

1. Establishment and Purpose.

         The purpose of the Endo Pharmaceuticals Holdings Inc. 2004 Stock
Incentive Plan (the "Plan") is to promote the interests of the Company and the
stockholders of the Company by providing directors, officers, employees and
consultants of the Company with appropriate incentives and rewards to encourage
them to enter into and continue in the employ or service of the Company, to
acquire a proprietary interest in the long-term success of the Company and to
reward the performance of individuals in fulfilling their personal
responsibilities for long-range achievements.

2. Administration of the Plan.

         The Plan shall be administered by a Committee appointed by the Board of
Directors. The Committee shall have the authority, in its sole discretion,
subject to and not inconsistent with the express terms and 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 Awards; to determine the persons to whom and the time or times at which
Awards shall be granted; to determine the type and number of Awards to be
granted; to determine the number of shares of stock to which an Award may relate
and the terms, conditions, restrictions and performance criteria relating to any
Award; to determine whether, to what extent, and under what circumstances an
Award may be settled, cancelled, forfeited, exchanged or surrendered; to make
adjustments in the performance goals in recognition of unusual or nonrecurring
events affecting the Company or the financial statements of the Company (to the
extent not inconsistent with Section 162(m) of the Code, if applicable), or in
response to changes in applicable laws, regulations, or accounting principles;
to construe and interpret the Plan and any Award; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms and
provisions of Agreements; and to make all other determinations deemed necessary
or advisable for the administration of the Plan.

         The Committee may, in its absolute discretion, without amendment to the
Plan, (a) accelerate the date on which any Option granted under the Plan becomes
exercisable, waive or amend the operation of Plan provisions respecting exercise
after termination of employment or otherwise adjust any of the terms of such
Option, and (b) accelerate the vesting date, or waive any condition imposed
hereunder, with respect to any share of Restricted Stock, or other Award or
otherwise adjust any of the terms applicable to any such Award. Notwithstanding
the foregoing, and subject to Sections 4(c) and 4(d), neither the Board of
Directors, the Committee nor their respective delegates shall have the authority
to reprice (or cancel and regrant) any Option or, if applicable, other Award at
a lower exercise, base or purchase price without first obtaining the approval of
the Company's stockholders.


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         Subject to Section 162(m) of the Code and except as required by Rule
16b-3 with respect to grants of Options to individuals who are subject to
Section 16 of the Exchange Act, or as otherwise required for compliance with
Rule 16b-3 or other applicable law, the Committee may delegate all or any part
of its authority under the Plan to an employee, employees or committee of
employees.

         Subject to Section 162(m) of the Code and Section 16 of the Exchange
Act, to the extent the Committee deems it necessary, appropriate or desirable to
comply with foreign law or practices and to further the purpose of the Plan, the
Committee may, without amending this Plan, establish special rules applicable to
Options granted to Participants who are foreign nationals, are employed outside
the United States, or both, including rules that differ from those set forth in
the Plan, and grant Options to such Participants in accordance with those rules.

3. Definitions.

                  (a) "Agreement" shall mean the written agreement between the
Company and a Participant evidencing an Award.

                  (b) "Award" shall mean any Option, Restricted Stock, Stock
Bonus award, Stock Appreciation Right or Performance Award granted pursuant to
the terms of the Plan.

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

                  (d) "Cause" shall mean a termination of a Participant's
employment by the Company or any of its Subsidiaries due to (i) the continued
failure, after written notice, by such Participant substantially to perform his
or her duties with the Company or any of its Subsidiaries (other than any such
failure resulting from incapacity due to reasonably documented physical illness
or injury or mental illness), (ii) the engagement by such Participant in serious
misconduct that causes, or in the good faith judgment of the Board of Directors
may cause, harm (financial or otherwise) to the Company or any of its
Subsidiaries including, without limitation, (A) the disclosure of material
secret or confidential information of the Company or any of its Subsidiaries (B)
the potential debarment of the Company or any of its Subsidiaries by the U.S.
Food and Drug Administration or any successor agency (the "FDA"), or (C) the
possibility that the registration of the Company or any of its Subsidiaries with
the U.S. Drug Enforcement Administration or any successor agency (the "DEA")
could be revoked or an application with the DEA could be denied, (iii) the
potential debarment of such Participant by the FDA, or (iv) the material breach
by the Participant of any agreement between such Participant, on the one hand,
and the Company or Kelso, on the other hand.

                  (e) A "Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:

                  (i)      any Person is or becomes the "Beneficial Owner" (as
                           defined in Rule 13d-3 under the Exchange Act),
                           directly or indirectly, of securities of the Company
                           (not including in the securities Beneficially Owned
                           by such Person any securities acquired directly from
                           the Company) representing 25% or more of the
                           Company's then outstanding securities, excluding any
                           Person who becomes such a Beneficial Owner in
                           connection with a transaction described in clause (A)
                           of paragraph (iii) below; or



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                  (ii)     the following individuals cease for any reason to
                           constitute a majority of the number of directors then
                           serving: individuals who, on the Effective Date,
                           constitute the Board of Directors 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
                           appointment or election by the Board of Directors or
                           nomination for election by the Company's stockholders
                           was approved or recommended by a vote of at least a
                           two-thirds of the directors then still in office who
                           either were directors on the Effective Date or whose
                           appointment, election or nomination for election was
                           previously so approved or recommended; or

                  (iii)    there is consummated a merger or consolidation of the
                           Company with any other corporation other than (A) a
                           merger or consolidation which would result in the
                           voting securities of the Company outstanding
                           immediately prior to such merger or consolidation
                           continuing to represent (either by remaining
                           outstanding or by being converted into voting
                           securities of the surviving entity or any parent
                           thereof) at least 50% of the combined voting power of
                           the voting securities of the Company or such
                           surviving entity or any parent thereof outstanding
                           immediately after such merger or consolidation, or
                           (B) a merger or consolidation effected to implement a
                           re-capitalization of the Company (or similar
                           transaction) in which no Person is or becomes the
                           Beneficial Owner, directly or indirectly, of
                           securities of the Company (not including in the
                           securities Beneficially Owned by such Person any
                           securities acquired directly from the Company)
                           representing 25% or more of the combined voting power
                           of the Company's then outstanding securities; or

                  (iv)     the stockholders of the Company approve a plan of
                           complete liquidation or dissolution of the Company or
                           there is consummated an agreement for the sale or
                           disposition by the Company of all or substantially
                           all of the Company's assets, other than a sale or
                           disposition by the Company of all or substantially
                           all of the Company's assets to an entity at least 75%
                           of the combined voting power of the voting securities
                           of which are owned by Persons in substantially the
                           same proportions as their ownership of the Company
                           immediately prior to such sale.



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                  Notwithstanding the foregoing, a Change in Control shall not
result from the transfer of the Company's then outstanding securities to current
members or future direct or indirect members of Endo Pharma LLC.

                  (f) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated thereunder.

                  (g) "Committee" shall mean, at the discretion of the Board of
Directors, a Committee of the Board of Directors, which shall consist of two or
more persons, each of whom, unless otherwise determined by the Board of
Directors, is an "outside director" within the meaning of Section 162(m) of the
Code and a "nonemployee director" within the meaning of Rule 16b-3.

                  (h) "Company" shall mean Endo Pharmaceuticals Holdings Inc., a
Delaware corporation, and, where appropriate, each of its Subsidiaries.

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

                  (j) "Disability" shall mean permanent disability as determined
pursuant to the Company's long-term disability plan or policy, in effect at the
time of such Disability.

                  (k) "Effective Date" shall mean the date as of which this Plan
is adopted by the Board of Directors.

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

                  (m) The "Fair Market Value" of a share of Company Stock, as of
a date of determination, shall mean (1) the closing sales price per share of
Company Stock on the national securities exchange on which such stock is
principally traded on the date of the grant of such Award, or (2) if the shares
of Company Stock are not listed or admitted to trading on any such exchange, the
closing price as reported by the Nasdaq Stock Market for the last preceding date
on which there was a sale of such stock on such exchange, or (3) if the shares
of Company Stock are not then listed on a national securities exchange or traded
in an over-the-counter market or the value of such shares is not otherwise
determinable, such value as determined by the Committee in good faith upon the
advice of a qualified valuation expert. In no event shall the fair market value
of any share of Company Stock, the Option exercise price of any Option, the
appreciation base per share of Company Stock under any Stock Appreciation Right,
or the amount payable per share of Company Stock under any other Award, be less
than the par value per share of Company Stock.

                  (n) "Kelso" shall mean Kelso Investment Associates V, L.P., a
Delaware limited partnership together with Kelso Equity Partners V, L.P., a
Delaware limited partnership.



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                  (o) "Incentive Stock Option" shall mean an Option that is an
"incentive stock option" within the meaning of Section 422 of the Code, or any
successor provision, and that is designated by the Committee as an Incentive
Stock Option.

                  (p) "Nonemployee Director" shall mean a member of the Board of
Directors who is not an employee of the Company.

                  (q) "Nonqualified Stock Option" shall mean an Option other
than an Incentive Stock Option.

                  (r) "Option" shall mean an option to purchase shares of
Company Stock granted pursuant to Section 6(b).

                  (s) "Participant" shall mean an employee, consultant or
director of the Company to whom an Award is granted pursuant to the Plan, and,
upon the death of the employee, consultant or director, his or her successors,
heirs, executors and administrators, as the case may be.

                  (t) "Performance Award" shall mean an Award granted to a
Participant pursuant to Section 6(f) hereof.

                  (u) "Person" shall have the meaning set forth in Section
3(a)(9) of the Exchange Act, except that such term shall not include (1) the
Company, (2) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company, (3) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (4) a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

                  (v) "Restricted Stock" shall mean a share of Company Stock
which is granted pursuant to the terms of Section 6(e) hereof.

                  (w) "Rule 16b-3" shall mean the Rule 16b-3 promulgated under
the Exchange Act, as amended from time to time.

                  (x) "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.

                  (y) "Stock Appreciation Right" shall mean the right, granted
to a Participant under Section 6(d), to be paid an amount measured by the
appreciation in the Fair Market Value of a share of Company Stock from the date
of grant to the date of exercise of the right, with payment to be made in cash
and/or a share of Company Stock, as specified in the Award or determined by the
Committee.

                  (z) "Stock Bonus" shall mean a bonus payable in shares of
Company Stock granted pursuant to Section 6(e) hereof.



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                  (aa) "Subsidiary" shall mean a "subsidiary corporation" within
the meaning of Section 424(f) of the Code.

4. Stock Subject to the Plan.

                  (a) Shares Available for Awards.

         The maximum number of shares of Company Stock reserved for issuance
under the Plan shall be [_______] shares (subject to adjustment as provided
herein). Such shares may be authorized but unissued Company Stock or authorized
and issued Company Stock held in the Company's treasury. The Committee may
direct that any stock certificate evidencing shares issued pursuant to the Plan
shall bear a legend setting forth such restrictions on transferability as may
apply to such shares pursuant to the Plan.

                  (b) Individual Limitation.

         To the extent required by Section 162(m) of the Code, the total number
of shares of Company Stock subject to Awards awarded to any Participant during
any tax year of the Company, shall not exceed [ ] shares (subject to adjustment
as provided herein).

                  (c) Adjustment for Change in Capitalization.

         In the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Company Stock, or other
property), re-capitalization, Company Stock split, reverse Company Stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, makes an
adjustment appropriate in order to prevent dilution or enlargement of the rights
of Participants under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of (1)
the number and kind of shares of Company Stock which may thereafter be issued in
connection with Awards, (2) the number and kind of shares of Company Stock
issued or issuable in respect of outstanding Awards, (3) the exercise price,
grant price or purchase price relating to any Award, and (4) the maximum number
of shares subject to Awards which may be awarded to any employee during any tax
year of the Company; provided that, with respect to Incentive Stock Options, any
such adjustment shall be made in accordance with Section 424 of the Code.

                  (d) Adjustment for Change or Exchange of Shares for Other
Consideration.

         In the event the outstanding shares of Company Stock shall be changed
into or exchanged for any other class or series of capital stock or cash,
securities or other property pursuant to a re-capitalization, reclassification,
merger, consolidation, combination or similar transaction ("Transaction"), then,
unless otherwise determined by the Committee, (1) each Option shall thereafter
become exercisable (in accordance with the applicable vesting schedule) for the
number and/or kind of capital stock, and/or the amount of cash, securities or
other property so distributed, into which the shares of Company Stock subject



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to the Option would have been changed or exchanged had the Option been exercised
in full prior to such transaction, provided that, if the kind or amount of
capital stock or cash, securities or other property received in such transaction
is not the same for each outstanding share, then the kind or amount of capital
stock or cash, securities or other property for which the Option shall
thereafter become exercisable shall be the kind and amount so receivable per
share by a plurality of the shares of Company Stock, and provided further that,
if necessary, the provisions of the Option shall be appropriately adjusted so as
to be applicable, as nearly as may reasonably be, to any shares of capital
stock, cash, securities or other property thereafter issuable or deliverable
upon exercise of the Option, and (2) each Award that is not an Option and that
is not automatically changed in connection with the Transaction shall represent
an Award with respect to the number and/or kind of shares of capital stock,
and/or the amount of cash, securities or other property so distributed, into
which the number of shares of Company Stock covered by the Award would have been
changed or exchanged had they been held by a stockholder.

                  (e) Reuse of Shares.

         If any shares subject to an Award are forfeited, cancelled, exchanged
or surrendered or if an Award terminates or expires without a distribution of
shares to the Participant, or if shares of stock are surrendered or withheld as
payment of either the exercise price of an Award and/or withholding taxes in
respect of an Award, the shares of stock with respect to such Award shall, to
the extent of any such forfeiture, cancellation, exchange, surrender,
withholding, termination or expiration, again be available for Awards under the
Plan. Notwithstanding the foregoing, upon the exercise of any Award granted in
tandem with any other Awards, such related Awards shall be cancelled to the
extent of the number of shares of Company Stock as to which the Award is
exercised and such number of shares shall no longer be available for Awards
under the Plan.

5. Eligibility.

         The persons who shall be eligible to receive Awards pursuant to the
Plan shall be such employees (including officers of the Company and its
Subsidiary, whether or not they are directors of the Company or its Subsidiary),
Nonemployee Directors, and consultants of the Company and its Subsidiaries as
the Committee shall select from time to time.

6. Awards Under the Plan.

                  (a) Agreement.

         The Committee may grant Awards in such amounts and with such terms and
conditions as the Committee shall determine, subject to the terms and provisions
of the Plan. Each Award granted under the Plan (except an unconditional Stock
Bonus) shall be evidenced by an Agreement as the Committee may in its sole
discretion deem necessary or desirable and unless the Committee determines
otherwise, such Agreement must be signed, acknowledged and returned by the
Participant to the Company. Unless the Committee determines otherwise, any
failure by the Participant to sign and return the Agreement shall cause such
Award to the Participant to be null and void. By accepting an Award or other
benefits under the Plan (including participation in the Plan), each Participant,
shall be conclusively deemed to have indicated acceptance and ratification of,
and consent to, all provisions of the Plan and the Agreement.



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                  (b) Stock Options.

                           (1) Grant of Stock Options. The Committee may grant
         Options under the Plan to purchase shares of Company Stock in such
         amounts and subject to such terms and conditions as the Committee shall
         from time to time determine in its sole discretion, subject to the
         terms and provisions of the Plan. Unless otherwise determined by the
         Committee, the exercise price of the share purchasable under an Option
         shall be the Fair Market Value per share on the grant date of such
         Option.

                           (2) Each Option shall be clearly identified in the
         applicable Agreement as either an Incentive Stock Option or a
         Nonqualified Stock Option.

                  (c) Special Requirements for Incentive Stock Options.

                           (1) To the extent that the aggregate Fair Market
         Value of shares of Company Stock with respect to which Incentive Stock
         Options are exercisable for the first time by a Participant during any
         calendar year under the Plan and any other stock option plan of the
         Company shall exceed $100,000, such Options shall be treated as
         Nonqualified Stock Options. Such Fair Market Value shall be determined
         as of the date on which each such Incentive Stock Option is granted.

                           (2) No Incentive Stock Option may be granted to an
         individual if, at the time of the proposed grant, such individual owns
         (or is deemed to own under the Code) stock possessing more than ten
         percent of the total combined voting power of all classes of stock of
         the Company unless (A) the exercise price of such Incentive Stock
         Option is at least 110 percent of the Fair Market Value of a share of
         Company Stock at the time such Incentive Stock Option is granted and
         (B) such Incentive Stock Option is not exercisable after the expiration
         of five years from the date such Incentive Stock Option is granted.

                  (d) Stock Appreciation Rights.

                           (1) The Committee may grant a related Stock
         Appreciation Right in connection with all or any part of an Option
         granted under the Plan, either at the time such Option is granted or at
         any time thereafter prior to the exercise, termination or cancellation
         of such Option, and subject to such terms and conditions as the
         Committee shall from time to time determine in its sole discretion,
         consistent with the terms and provisions of the Plan. The holder of a
         related Stock Appreciation Right shall, subject to the terms and
         conditions of the Plan and the applicable Agreement, have the right by
         exercise thereof to surrender to the Company for cancellation all or a
         portion of such related Stock Appreciation Right, but only to the
         extent that the related Option is then exercisable, and to be paid
         therefor an amount equal to the excess (if any) of (i) the aggregate
         Fair Market Value of the shares of Company Stock subject to the related
         Stock Appreciation Right or portion thereof surrendered (determined as
         of the exercise date), over (ii) the aggregate appreciation base of the
         shares of Company Stock subject to the Stock Appreciation Right or
         portion thereof surrendered. Upon any exercise of a related Stock
         Appreciation Right or any portion thereof, the number of shares of
         Company Stock subject to the related Option shall be reduced by the
         number of shares of Company Stock in respect of which such Stock
         Appreciation Right shall have been exercised.

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                           (2) The Committee may grant unrelated Stock
         Appreciation Rights in such amount and subject to such terms and
         conditions, as the Committee shall from time to time determine in its
         sole discretion, subject to the terms and provisions of the Plan. The
         holder of an unrelated Stock Appreciation Right shall, subject to the
         terms and conditions of the Plan and the applicable Agreement, have the
         right to surrender to the Company for cancellation all or a portion of
         such Stock Appreciation Right, but only to the extent that such Stock
         Appreciation Right is then exercisable, and to be paid therefor an
         amount equal to the excess (if any) of (i) the aggregate Fair Market
         Value of the shares of Company Stock subject to the Stock Appreciation
         Right or portion thereof surrendered (determined as of the exercise
         date), over (ii) the aggregate appreciation base of the shares of
         Company Stock subject to the Stock Appreciation Right or portion
         thereof surrendered.

                           (3) The grant or exercisability of any Stock
         Appreciation Right shall be subject to such conditions as the
         Committee, in its sole discretion, shall determine.

                  (e) Restricted Stock and Stock Bonus.

                           (1) The Committee may grant Restricted Stock awards,
         alone or in tandem with other Awards under the Plan, subject to such
         restrictions, terms and conditions, as the Committee shall determine in
         its sole discretion and as shall be evidenced by the applicable
         Agreements. The vesting of a Restricted Stock award granted under the
         Plan may be conditioned upon the completion of a specified period of
         employment or service with the Company or any Subsidiary, upon the
         attainment of specified performance goals, and/or upon such other
         criteria as the Committee may determine in its sole discretion.

                           (2) Each Agreement with respect to a Restricted Stock
         award shall set forth the amount (if any) to be paid by the Participant
         with respect to such Award and when and under what in circumstances
         such payment is required to be made.



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                           (3) The Committee may, upon such terms and conditions
         as the Committee determines, provide that a certificate or certificates
         representing the shares underlying a Restricted Stock award shall be
         registered in the Participant's name and bear an appropriate legend
         specifying that such shares are not transferable and are subject to the
         provisions of the Plan and the restrictions, terms and conditions set
         forth in the applicable Agreement, or that such certificate or
         certificates shall be held in escrow by the Company on behalf of the
         Participant until such shares become vested or are forfeited. Except as
         provided in the applicable Agreement, no shares underlying a Restricted
         Stock award may be assigned, transferred, or otherwise encumbered or
         disposed of by the Participant until such shares have vested in
         accordance with the terms of such Award.

                           (4) If and to the extent that the applicable
         Agreement may so provide, a Participant shall have the right to vote
         and receive dividends on the shares underlying a Restricted Stock award
         granted under the Plan. Unless otherwise provided in the applicable
         Agreement, any stock received as a dividend on or in connection with a
         stock split of the shares underlying a Restricted Stock award shall be
         subject to the same restrictions as the shares underlying such
         Restricted Stock award.

                           (5) The Committee may grant Stock Bonus awards, alone
         or in tandem with other Awards under the Plan, subject to such terms
         and conditions as the Committee shall determine in its sole discretion
         and as may be evidenced by the applicable Agreement.

                  (f) Performance Awards.

                           (1) The Committee may grant Performance Awards, alone
         or in tandem with other Awards under the Plan, to acquire shares of
         Company Stock in such amounts and subject to such terms and conditions
         as the Committee shall from time to time in its sole discretion
         determine, subject to the terms of the Plan.

                           (2) In the event that the Committee grants a
         Performance Award (other than Nonqualified Stock Option or Incentive
         Stock Option), that is intended to constitute qualified
         performance-based compensation within the meaning Section 162(m) of the
         Code, the following rules shall apply (as such rules may be modified by
         the Committee to conform with Code section 162(m) and the Treasury
         Regulations thereunder as may be in effect from time to time, and any
         amendments, revisions or successor provisions thereto): (a) payments
         under the Performance Award shall be made solely on account of the
         attainment of one or more objective performance goals established in
         writing by the Committee not later than 90 days after the commencement
         of the period of service to which the Performance Award relates (or if
         less, one-third of such period of service); (b) the performance goal(s)
         to which the Performance Award relates shall be based on one or more of
         the following business criteria applied to the Participant and/or a
         business unit or the Company and/or a Subsidiary: (1) return on total
         stockholder equity; (2) earnings per share of Company Stock; (3) net
         income (before or after taxes); (4) earnings before all or any
         interest, taxes, depreciation and/or amortization ("EBIT", "EBITA" or



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         "EBITDA"); (5) inventory goals; (6) return on assets; (7) market share;
         (8) cost reduction goals; (9) earnings from continuing operations;
         levels of expense, cost or liability; (10) any combination of, or a
         specified increase or decrease of one or more of the foregoing over a
         specified period; and (11) such other criteria as the stockholders of
         the Company may approve; in each case, as determined in accordance with
         generally accepted accounting principles; and (c) once granted, the
         Committee may not have discretion to increase the amount payable under
         such stock award, provided, however, that whether or not a Performance
         Award is intended to constitute qualified performance-based
         compensation within the meaning of Section 162(m) of the Code, the
         Committee shall have the authority to make appropriate adjustments in
         performance goals under an Award to reflect the impact of extraordinary
         items not reflected in such goals. For purposes of the Plan,
         extraordinary items shall be defined as (1) any profit or loss
         attributable to acquisitions or dispositions of stock or assets, (2)
         any changes in accounting standards that may be required or permitted
         by the Financial Accounting Standards Board or adopted by the Company
         after the goal is established, (3) all items of gain, loss or expense
         for the year related to restructuring charges for the Company, (4) all
         items of gain, loss or expense for the year determined to be
         extraordinary or unusual in nature or infrequent in occurrence or
         related to the disposal of a segment of a business, (5) all items of
         gain, loss or expense for the year related to discontinued operations
         that do not qualify as a segment of a business as defined in APB
         Opinion No. 30, and (6) such other items as may be prescribed by
         Section 162(m) of the Code and the Treasury Regulations thereunder as
         may be in effect from time to time, and any amendments, revisions or
         successor provisions and any changes thereto. The Committee shall,
         prior to making payment under any award under this Section 6(f),
         certify in writing that all applicable performance goals have been
         attained.

                  (g) Exercisability of Awards; Cancellation of Awards in
Certain Cases.

                           (1) Each Agreement with respect to an Option or Stock
         Appreciation Right shall set forth the period during which and the
         conditions subject to which the Option or Stock Appreciation Right
         evidenced thereby shall be exercisable, and each Agreement with respect
         to a Restricted Stock award or Performance Award shall set forth the
         period after which and the conditions subject to which the shares
         underlying such Award shall vest or be deliverable, all such periods
         and conditions to be determined by the Committee in its sole
         discretion.

                           (2) No Option or Stock Appreciation Right may be
         exercised and no shares of Company Stock underlying any other Award
         under the Plan may vest or become deliverable more than ten (10) years
         after the date of grant (the "Stated Expiration Date").

                           (3) An Option or Stock Appreciation Right shall be
         exercisable by the filing of a written notice of exercise or a notice
         of exercise in such other manner with the Company, on such form and in
         such manner as the Committee shall in its sole discretion prescribe,
         and by payment in accordance with Section 6(h) hereof.



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                           (4) Unless the applicable Agreement provides
         otherwise, in the case of an Option or Stock Appreciation Right, at any
         time after the Company's receipt of written notice of exercise of an
         Option or Stock Appreciation Right and prior to the Option or Stock
         Appreciation Right exercise date (as defined in subsection 5), and in
         the case of a stock award or Performance Award, at any time within the
         six (6) business days immediately preceding the otherwise applicable
         date on which the previously Restricted Stock, stock award or
         Performance Award would otherwise have become unconditionally vested or
         the shares subject thereto unconditionally deliverable, the Committee,
         in its sole discretion, shall have the right, by written notice to the
         Participant, to cancel such Award or any part thereof if the Committee,
         in its sole judgment, determines that legal or contractual restrictions
         and/or blockage and/or other market considerations would make the
         Company's acquisition of Company Stock from, and/or the Participant's
         sale of Company Stock to, the public markets illegal, impracticable or
         inadvisable. If the Committee determines to cancel all or any part of
         an Award, the Company shall pay to the Participant an amount equal to
         the excess of (i) the aggregate Fair Market Value of the shares of
         Company Stock subject to the Award or part thereof canceled (determined
         as of the Option or Stock Appreciation Right exercise date, or the date
         that shares would have been unconditionally vested or delivered in the
         case of Restricted Stock, Stock Bonus or Performance Award), over (ii)
         the aggregate Option exercise price or appreciation base of the Stock
         Appreciation Right or part thereof canceled (in the case of an Option
         or Stock Appreciation Right) or any amount payable as a condition of
         delivery of shares (in the case of Restricted Stock, Stock Bonus or
         Performance Award). Such amount shall be delivered to the Participant
         as soon as practicable after such Award or part thereof is canceled.

                           (5) Unless the applicable Agreement provides
         otherwise, the "Option exercise date" and the "Stock Appreciation Right
         exercise date" shall be the date that the written notice of exercise,
         together with payment, are received by the Company.

                  (h) Payment of Award Price.

                           (1) Unless the applicable Agreement provides
         otherwise or the Committee in its sole discretion otherwise determines,
         any written notice of exercise of an Option or Stock Appreciation Right
         must be accompanied by payment of the full Option or Stock Appreciation
         Right exercise price. If Section 6(g)(4) applies, and the six (6)
         business day delay for the Option exercise date or Stock Appreciation
         Right exercise date is applied, the Participant shall have no right to
         pay the Option or Stock Appreciation Right exercise price or to receive
         Company Stock with respect to the Option or Stock Appreciation Right
         exercise prior to the lapse of such six (6) business days.



                                       12
<PAGE>

                           (2) Payment of the Option exercise price and of any
         other payment required by the Agreement to be made pursuant to any
         other Award shall be made in any combination of the following: (a) by
         certified or official bank check payable to the Company (or the
         equivalent thereof acceptable to the Committee) and/or (b) with the
         consent of the Committee in its sole discretion, by personal check
         (subject to collection) which may in the Committee's discretion be
         deemed conditional; Payment in accordance with clause (a) of this
         Section 6(h)(2) may be deemed to be satisfied, if and to the extent
         that the applicable Agreement so provides or the Committee permits, by
         delivery to the Company of an assignment of a sufficient amount of the
         proceeds from the sale of Company Stock to be acquired pursuant to the
         Award to pay for all of the Company Stock to be acquired pursuant to
         the Award and an authorization to the broker or selling agent to pay
         that amount to the Company and to effect such sale at the time of
         exercise or other delivery of shares of Company Stock; provided that
         any such sale of Company Stock shall not occur prior to the six-month
         anniversary of the acquisition thereof.

7. Termination of Employment.

                  (a) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, upon termination of a
Participant's employment or service with the Company and its Subsidiaries by the
Company or its Subsidiary for Cause (or in the case of a Nonemployee Director
upon such Nonemployee Director's failure to be renominated as Nonemployee
Director of the Company), the portions of outstanding Options and Stock
Appreciation Rights granted to such Participant that are exercisable as of the
date of such termination of employment or service shall remain exercisable, and
any payment or notice provided for under the terms of any other outstanding
Award as respects the portion thereof that is vested as of the date of such
termination of employment or service, may be given, for a period of thirty (30)
days from and including the date of termination of employment or service (and
shall thereafter terminate). All portions of outstanding Options or Stock
Appreciation Rights granted to such Participant which are not exercisable as of
the date of such termination of employment or service, and any other outstanding
Award which is not vested as of the date of such termination of employment or
service shall terminate upon the date of such termination of employment or
service.

                  (b) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, upon termination of the
Participant's employment or service with the Company and its Subsidiaries for
any reason other than as described in subsection (a), (c), (d) or (e) hereof,
the portions of outstanding Options and Stock Appreciation Rights granted to
such Participant that are exercisable as of the date of such termination of
employment or service shall remain exercisable for a period of ninety (90) days
(and shall terminate thereafter), and any payment or notice provided for under
the terms of any other outstanding Award as respects the portion thereof vested
as of the date of termination of employment or service may be given, for a
period of ninety (90) days from and including the date of termination of
employment or service (and shall terminate thereafter). All additional portions
of outstanding Options or Stock Appreciation Rights granted to such Participant
which are not exercisable as of the date of such termination of employment or
service, and any other outstanding Award which is not vested as of the date of
such termination of employment or service shall terminate upon the date of such
termination of employment or service.



                                       13
<PAGE>

                  (c) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, if the Participant
voluntarily retires with the consent of the Company or the Participant's
employment or service terminates due to Disability, all outstanding Options,
Stock Appreciation Rights and all other outstanding Awards granted to such
Participant shall continue to vest in accordance with the terms of the
applicable Agreements. The Participant shall be entitled to exercise each such
Option or Stock Appreciation Right and to make any payment, give any notice or
to satisfy other condition under each such other Award, in each case, for a
period of one (1) year from and including the later of (i) date such entire
Award becomes vested or exercisable in accordance with the terms of such Award
and (ii) the date of termination of employment or retirement, and thereafter
such Awards or parts thereof shall be canceled. Notwithstanding the foregoing,
the Committee may in its sole discretion provide for a longer or shorter period
for exercise of an Option or Stock Appreciation Right or may permit a
Participant to continue vesting under an Option, Stock Appreciation Right or
Restricted Stock award or to make any payment, give any notice or to satisfy
other condition under any other Award. The Committee may in its sole discretion
determine (i) whether any termination of employment or service is a voluntary
retirement with the Company's consent or is due to Disability for purposes of
the Plan, (ii) whether any leave of absence (including any short-term or
long-term Disability or medical leave) constitutes a termination of employment
or service within the meaning of the Plan, (iii) the applicable date of any such
termination of employment or service, and (iv) the impact, if any, of any of the
foregoing on Awards under the Plan.

                  (d) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, if the Participant's
employment or service terminates by reason of death, or if the Participant's
employment or service terminates under circumstances providing for continued
rights under subsection (b), (c), or (e) of this Section 7 and during the period
of continued rights described in subsection (b), (c) or (e) the Participant
dies, all outstanding Options, Restricted Stock and Stock Appreciation Rights
granted to such Participant shall become fully exercisable, and any payment or
notice provided for under the terms of any other outstanding Award may be
immediately paid or given and any condition may be satisfied, by the person to
whom such rights have passed under the Participant's will (or if applicable,
pursuant to the laws of descent and distribution) for a period of one (1) year
from and including the date of the Participant's death and thereafter all such
Awards or parts thereof shall be canceled.

                  (e) Unless the applicable Agreement provides otherwise or the
Committee in its sole discretion determines otherwise, upon termination of a
Participant's employment or service with the Company and its Subsidiaries (i) by
the Company or its Subsidiaries without Cause (including, in case of a
Nonemployee Director, the failure to be elected as a Nonemployee Director) or
(ii) by the Participant for "good reason" or any like term as defined under any
employment agreement with the Company or a Subsidiary to which a Participant may
be a party to, the portions of outstanding Options and Stock Appreciation Rights
granted to such Participant which are exercisable as of the date of termination
of employment or service of such Participant shall remain exercisable, and any
payment or notice provided for under the terms of any other outstanding Award as
respects the portion thereof vested as of the date of termination of employment
or service may be given, for a period of one (1) year from and including the
date of termination of employment or service and shall terminate thereafter. Any
other outstanding Award shall terminate as of the date of such termination of
employment or service.



                                       14
<PAGE>

                  (f) Notwithstanding anything in this Section 7 to the
contrary, no Option or Stock Appreciation Right may be exercised and no shares
of Company Stock underlying any other Award under the Plan may vest or become
deliverable past the Stated Expiration Date.

8. Effect of Change in Control.

         Unless the applicable Agreement provides otherwise or the Committee in
its sole discretion determines otherwise, in the event of a Change of Control:

                  (a) any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and vested; and

                  (b) the restrictions, deferral limitations, payment
conditions, and forfeiture conditions applicable to any other Award granted
under the Plan shall lapse and such Awards shall be deemed fully vested, and any
performance goals imposed with respect to Awards shall be deemed to be fully
achieved.

9. Miscellaneous.

                  (a) Notwithstanding any other provision hereof, the Committee
shall have the right at any time to deny or delay a Participant's exercise of
Options, if such Participant is reasonably believed by the Committee (i) to be
engaged in material conduct adversely affecting the Company or (ii) to be
contemplating such conduct, unless and until the Committee shall have received
reasonable assurance that the Participant is not engaged in, and is not
contemplating, such material conduct adverse to the interests of the Company.

                  (b) Participants are and at all times shall remain subject to
the trading window policies adopted by the Company from time to time throughout
the period of time during which they may exercise Options, Stock Appreciation
Rights or sell shares of Company Stock acquired pursuant to the Plan.

10. No Special Employment Rights; No Right to Award.

                  (a) Nothing contained in the Plan or any Agreement shall
confer upon any Participant any right with respect to the continuation of
employment or service by the Company or interfere in any way with the right of
the Company, subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or service or to increase or
decrease the compensation of the Participant.



                                       15
<PAGE>

                  (b) No person shall have any claim or right to receive an
Award hereunder. The Committee's granting of an Award to a Participant at any
time shall neither require the Committee to grant any other Award to such
Participant or other person at any time or preclude the Committee from making
subsequent grants to such Participant or any other person.

11. Securities Matters.

                  (a) The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of any interests in the Plan or any
shares of Company Stock to be issued hereunder or to effect similar compliance
under any state laws. Notwithstanding anything herein to the contrary, the
Company shall not be obligated to cause to be issued or delivered any
certificates evidencing shares of Company Stock pursuant to the Plan unless and
until the Company is advised by its counsel that the issuance and delivery of
such certificates is in compliance with all applicable laws, regulations of
governmental authority and the requirements of any securities exchange on which
shares of Company Stock are traded. The Committee may require, as a condition of
the issuance and delivery of certificates evidencing shares of Company Stock
pursuant to the terms hereof, that the recipient of such shares make such
agreements and representations, and that such certificates bear such legends, as
the Committee, in its sole discretion, deems necessary or desirable.

                  (b) The transfer of any shares of Company Stock hereunder
shall be effective only at such time as counsel to the Company shall have
determined that the issuance and delivery of such shares is in compliance with
all applicable laws, regulations of governmental authority and the requirements
of any securities exchange on which shares of Company Stock are traded. The
Committee may, in its sole discretion, defer the effectiveness of any transfer
of shares of Company Stock hereunder in order to allow the issuance of such
shares to be made pursuant to registration or an exemption from registration or
other methods for compliance available under federal or state securities laws.
The Committee shall inform the Participant in writing of its decision to defer
the effectiveness of a transfer. During the period of such deferral in
connection with the exercise of an Award, the Participant may, by written
notice, withdraw such exercise and obtain the refund of any amount paid with
respect thereto.

12. Withholding Taxes.

                  (a) Whenever cash is to be paid pursuant to an Award, the
Company shall have the right to deduct therefrom an amount sufficient to satisfy
any federal, state and local withholding tax requirements related thereto.

                  (b) Whenever shares of Company Stock are to be delivered
pursuant to an Award, the Company shall have the right to require the
Participant to remit to the Company in cash an amount sufficient to satisfy any
federal, state and local withholding tax requirements related thereto. With the
approval of the Committee, a Participant may satisfy the foregoing requirement
by electing to have the Company withhold from delivery shares of Company Stock
having a value equal to the minimum amount of tax required to be withheld. Such
shares shall be valued at their Fair Market Value on the date of which the
amount of tax to be withheld is determined. Fractional share amounts shall be
settled in cash. Such a withholding election may be made with respect to all or
any portion of the shares to be delivered pursuant to an Award.



                                       16
<PAGE>


13. Notification of Election Under Section 83(b) of the Code.

         If any Participant shall, in connection with the acquisition of shares
of Company Stock under the Plan, make the election permitted under Section 83(b)
of the Code, such Participant shall notify the Company of such election within
10 days of filing notice of the election with the Internal Revenue Service.

14. Non-Competition and Confidentiality.

         By accepting Awards and as a condition to the exercise of Awards and
the enjoyment of any benefits of the Plan, including participation therein, each
Participant agrees to be bound by and subject to non-competition,
confidentiality and invention ownership agreements acceptable to the Committee
or any officer or director to whom the Committee elects to delegate such
authority.

15. Notification Upon Disqualifying Disposition Under Section 421(b) of the
Code.

         Each Agreement with respect to an Incentive Stock Option shall require
the Participant to notify the Company of any disposition of shares of Company
Stock issued pursuant to the exercise of such Option under the circumstances
described in Section 421(b) of the Code (relating to certain disqualifying
dispositions), within 10 days of such disposition.

16. Amendment or Termination of the Plan.

         The Board of Directors or the Committee may, at any time, suspend or
terminate the Plan or revise or amend it in any respect whatsoever; provided,
however, that the requisite stockholder approval shall be required if and to the
extent the Board of Directors or Committee determines that such approval is
appropriate or necessary for purposes of satisfying Sections 162(m) or 422 of
the Code or Rule 16b-3 or other applicable law. Awards may be granted under the
Plan prior to the receipt of such stockholder approval of the Plan but each such
grant shall be subject in its entirety to such approval and no Award may be
exercised, vested or otherwise satisfied prior to the receipt of such approval.
No amendment or termination of the Plan may, without the consent of a
Participant, adversely affect the Participant's rights under any outstanding
Award.

17. Transfers Upon Death; Nonassignability.

                  (a) Upon the death of a Participant, outstanding Awards
granted to such Participant may be exercised only by the executor or
administrator of the Participant's estate or by a person who shall have acquired
the right to such exercise by will or by the laws of descent and distribution.
No transfer of an Award by will or the laws of descent and distribution shall be
effective to bind the Company unless the Committee shall have been furnished
with written notice thereof and with a copy of the will and/or such evidence as
the Committee may deem necessary to establish the validity of the transfer and
an agreement by the transferee to comply with all the terms and conditions of
the Award that are or would have been applicable to the Participant and to be
bound by the acknowledgments made by the Participant in connection with the
grant of the Award.



                                       17
<PAGE>

                  (b) During a Participant's lifetime, the Committee may, in its
discretion, pursuant to the provisions set forth in this clause (b), permit the
transfer, assignment or other encumbrance of an outstanding Option unless such
Option is an Incentive Stock Option and the Committee and the Participant
intends that it shall retain such status. Subject to the approval of the
Committee and to any conditions that the Committee may prescribe, a Participant
may, upon providing written notice to the General Counsel of the Company, elect
to transfer any or all Options granted to such Participant pursuant to the Plan
to members of his or her immediate family, including, but not limited to,
children, grandchildren and spouse or to trusts for the benefit of such
immediate family members or to partnerships in which such family members are the
only partners; provided, however, that no such transfer by any Participant may
be made in exchange for consideration. Any such transferee must agree, in
writing, to be bound by all provisions of the Plan.

18. Effective Date and Term of Plan.

         The Plan shall become effective on the Effective Date, but the Plan
(and any grants of Awards made prior to stockholder approval of the Plan) shall
be subject to the requisite approval of the stockholders of the Company. In the
absence of such approval, such Awards shall be null and void. Unless earlier
terminated by the Board of Directors, the right to grant Awards under the Plan
shall terminate on the tenth anniversary of the Effective Date. Awards
outstanding at Plan termination shall remain in effect according to their terms
and the provisions of the Plan.

19. Applicable Law.

         Except to the extent preempted by any applicable federal law, the Plan
shall be construed and administered in accordance with the laws of the State of
Delaware, without reference to its principles of conflicts of law.

20. Participant Rights.

                  (a) No Participant shall have any claim to be granted any
award under the Plan, and there is no obligation for uniformity of treatment for
Participants. Except as provided specifically herein, a Participant or a
transferee of an Award shall have no rights as a stockholder with respect to any
shares covered by any award until the date of the issuance of a Company Stock
certificate to him or her for such shares.

                  (b) Determinations by the Committee under the Plan relating to
the form, amount and terms and conditions of grants and Awards need not be
uniform, and may be made selectively among persons who receive or are eligible
to receive grants and awards under the Plan, whether or not such persons are
similarly situated.



                                       18
<PAGE>

21. Unfunded Status of Awards.

         The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Agreement
shall give any such Participant any rights that are greater than those of a
general creditor of the Company.

22. No Fractional Shares.

         No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan. The Committee shall determine whether cash, other Awards,
or other property shall be issued or paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.

23. Interpretation.

         The Plan is designed and intended to the extent applicable, to comply
with Section 162(m) of the Code, and to provide for grants and other
transactions which are exempt under Rule 16b-3, and all provisions hereof shall
be construed in a manner to so comply.

                                    ********


 Approved and adopted by the Board of Directors this 26th day of May, 2004.




                                       19