Exhibit 10.5a Incentive Stock Plan


    

      Exhibit
        10.5a

      


      


      


      MATTHEWS
        INTERNATIONAL CORPORATION

      


      1992
        STOCK INCENTIVE PLAN

      (as
        amended through November 15, 2005)

      


      


      The
        purposes of the 1992 Stock Incentive Plan (as amended, the "Plan") are to
        encourage eligible employees of Matthews International Corporation (the
        "Corporation") and its Subsidiaries to increase their efforts to make the
        Corporation and each Subsidiary more successful, to provide an additional
        inducement for such employees to remain with the Corporation or a Subsidiary,
        to
        reward such employees by providing an opportunity to acquire shares of the
        Class
        A Common Stock, par value $1.00 per share, of the Corporation (the "Class
        A
        Common Stock") and the Class B Common Stock, par value $1.00 per share, of
        the
        Corporation (the "Class B Common Stock") on favorable terms and to provide
        a
        means through which the Corporation may attract able persons to enter the
        employ
        of the Corporation or one of its Subsidiaries. As used herein, except where
        the
        context otherwise so requires, the term "Common Stock" shall mean both the
        Class
        A Common Stock and the Class B Common Stock. For the purposes of the Plan,
        the
        term "Subsidiary" means any corporation in an unbroken chain of corporations
        beginning with the Corporation if each of the corporations other than the
        last
        corporation in the unbroken chain owns stock possessing at least fifty percent
        (50%) or more of the total combined voting power of all classes of stock
        in one
        of the other corporations in the chain.

      


      


      SECTION
        1

      


      Administration

      


      The
        Plan
        shall be administered by a Committee (the "Committee") appointed by the Board
        of
        Directors of the Corporation (the "Board") and consisting of not less than
        two
        members of the Board, who, at the time of their appointment to the Committee
        and
        at all times during their service as members of the Committee, are
        (i) "Non-Employee Directors" as then defined under Rule 16b-3 under
        the Securities Exchange Act of 1934, as amended (the "1934 Act"), or any
        successor rule, and (ii) "outside directors" under
        Section 162(m)(4)(C) of the Internal Revenue Code of 1986 (the "Code"), or
        any successor provision.

      


      The
        Committee shall interpret the Plan and prescribe such rules, regulations
        and
        procedures in connection with the operations of the Plan as it shall deem
        to be
        necessary and advisable for the administration of the Plan consistent with
        the
        purposes of the Plan.

      


        The
        Committee shall keep records of action taken at its meetings. A majority
        of the
        Committee shall constitute a quorum at any meeting and the acts of a majority
        of
        the members present at any meeting at which a quorum is present, or acts
        approved in writing by all members of the Committee, shall be the acts of
        the
        Committee.

      


      


      SECTION
        2

      


      Eligibility

      


      Those
        employees of the Corporation or any Subsidiary (including, but not limited
        to,
        covered employees as defined in Section 162(m)(3) of the Code, or any
        successor provision) who share responsibility for the management, growth
        or
        protection of the business of the Corporation or any Subsidiary shall be
        eligible to be granted stock options (with or without cash payment rights)
        and
        to receive restricted share awards as described herein.

      


      Subject
        to the provisions of the Plan, the Committee shall have full and final
        authority, in its discretion, to grant stock options (with or without cash
        payment rights) and to award restricted shares as described herein, to determine
        whether Class A Common Stock or Class B Common Stock shall be issued, and
        to
        determine the employees to whom any such grant or award shall be made and
        the
        number of shares to be covered thereby. In determining the eligibility of
        any
        employee, as well as in determining the number of shares covered by each
        grant
        of a stock option or award of restricted shares and whether cash payment
        rights
        shall be granted in conjunction with a stock option, the Committee shall
        consider the position and the responsibilities of the employee being considered,
        the nature and value to the Corporation or a Subsidiary of his or her services,
        his or her present and/or potential contribution to the success of the
        Corporation or a Subsidiary and such other factors as the Committee may deem
        relevant.

      


      


      SECTION
        3

      


      Shares
        Available under the Plan

      


      The
        maximum aggregate number of shares of the Common Stock for which grants of
        stock
        options or awards of restricted shares may be made under the Plan on any
        given
        date shall be equal to 15% of the then aggregate issued and outstanding shares
        of the Common Stock (not including treasury shares, but including outstanding
        restricted shares), less the aggregate number of (i) all outstanding stock
        options granted at any time under the Plan since the initial date of adoption
        of
        the Plan, which remain unexercised and outstanding (and which have not expired)
        as of such date and (ii) all restricted shares granted at any time under
        the Plan which have not yet vested or been forfeited to the Corporation pursuant
        to their terms as of such date, subject to adjustment and substitution as
        set
        forth in Section 8, and shares of the Common Stock may be issued with respect
        to
        any such grants or awards, provided that the Corporation has authorized but
        unissued shares which are reserved at the time of any such grant or award
        and
        are available and unissued at the time of any such issuance equal to or greater
        than the number of shares to be so issued. Stated differently, as any
        outstanding stock options granted under the Plan are either exercised,
        cancelled, terminated or expire for any reason without being exercised, or
        any
        restricted shares granted under the Plan are either vested (all restrictions
        lapse) or forfeited for any reason, the number of shares subject or related
        to
        such stock options or restricted shares shall again be available for grant
        or
        award under the Plan.

      


      Notwithstanding
        the immediately prior paragraph, the maximum aggregate number of shares of
        the
        Common Stock which may be issued and as to which grants of incentive stock
        options or awards of restricted shares may be made under the Plan is 2,400,000
        shares and 500,000 shares, respectively, subject to adjustment and substitution
        as set forth in Section 8. If any such incentive stock option granted under
        the
        Plan and counted against such sub-limit is cancelled by mutual consent or
        terminates or expires for any reason without having been exercised, the number
        of shares subject thereto shall again be available for purposes of granting
        incentive stock options under the Plan. If any shares of the Common Stock
        are
        forfeited to the Corporation pursuant to the restrictions applicable to
        restricted shares awarded under the Plan and counted against such sub-limit,
        the
        number of shares so forfeited shall again be available for purposes of awarding
        restricted shares under the Plan. 

      


      To
        the
        extent that the Corporation has such shares available to it and can issue
        such
        shares without violating any law or regulation, including without limitation
        the
        By-laws of the National Association of Securities Dealers, Inc. concerning
        disenfranchisement of shareholders, the Corporation will reserve for issuance
        upon the grant of any option and issue when such option is exercised and
        will
        issue upon the award of restricted shares Class B Common Stock of the
        Corporation. To the extent Class B Common Stock is not available for
        reservation at the time of grant or issuance at the time of award, the
        Corporation retains the right to reserve for issuance and to issue Class A
        Common Stock and not Class B Common Stock. The shares which may be issued
        under the Plan may be either authorized but unissued shares or shares previously
        issued and thereafter acquired by the Corporation or partly each, as shall
        be
        determined from time to time by the Board.

      


      


      SECTION
        4

      


      Grant
        of Stock Options and Cash Payment Rights 

      and
        Awards of Restricted Shares

      


      The
        Committee shall have authority, in its discretion, (a) to grant "incentive
        stock
        options" pursuant to Section 422 of the Code, to grant "nonstatutory stock
        options" (i.e., stock options which do not qualify under Sections 422 or
        423 of
        the Code) or to grant both types of stock options (but not in tandem) and
        (b) to
        award restricted shares. The Committee also shall have the authority, in
        its
        discretion, to grant cash payment rights in conjunction with nonstatutory
        stock
        options with the effect provided in Section 5(D). Cash payment rights may
        not be
        granted in conjunction with incentive stock options. Cash payment rights
        granted
        in conjunction with a nonstatutory stock option may be granted either at
        the
        time the stock option is granted or at any time thereafter during the term
        of
        the stock option.

      


      The
        maximum number of shares as to which stock options may be granted and as
        to
        which shares may be awarded under the Plan to any one employee in any one
        calendar year is 250,000 shares, subject to adjustment and substitution as
        set
        forth in Section 8. For the purposes of this limitation, any adjustment or
        substitution made pursuant to Section 8 in a calendar year with respect to
        the maximum number of shares set forth in the preceding sentence shall also
        be
        made with respect to any shares subject to stock options or share awards
        previously granted under the Plan to such employee in the same calendar
        year.

      


        Notwithstanding
        any other provision contained in the Plan or in any stock option agreement
        or an
        amendment thereto, but subject to the possible exercise of the Committee's
        discretion contemplated in the last sentence of this Section 4, the aggregate
        fair market value, determined as provided in Section 5(H) on the date of
        grant
        of incentive stock options, of the shares with respect to which such incentive
        stock options are exercisable for the first time by an employee during any
        calendar year under all plans of the corporation employing such employee,
        any
        parent or subsidiary corporation of such corporation and any predecessor
        corporation of any such corporation shall not exceed $100,000. If the date
        on
        which one or more incentive stock options could first be exercised would
        be
        accelerated pursuant to any provision of the Plan or any stock option agreement
        or an amendment thereto, and the acceleration of such exercise date would
        result
        in a violation of the $100,000 restriction set forth in the preceding sentence,
        then, notwithstanding any such provision, but subject to the provisions of
        the
        next succeeding sentence, the exercise dates of such incentive stock options
        shall be accelerated only to the extent, if any, that does not result in
        a
        violation of such restriction and, in such event, the exercise dates of the
        incentive stock options with the lowest option prices shall be accelerated
        to
        the earliest such dates. The Committee may, in its discretion, authorize
        the
        acceleration of the exercise date of one or more incentive stock options
        even if
        such acceleration would violate the $100,000 restriction set forth in the
        first
        sentence of this paragraph and even if one or more such incentive stock options
        are thereby converted in whole or in part to nonstatutory stock options.
        

      


      SECTION
        5

      


      Terms
        and Conditions of Stock Options 

      and
        Cash Payment Rights

      


      Stock
        options and cash payment rights granted under the Plan shall be subject to
        the
        following terms and conditions: 

      


      (A)
        The
        purchase price at which each stock option may be exercised (the "option price")
        shall be such price as the Committee, in its discretion, shall determine
        but
        shall not be less than one hundred percent (100%) of the fair market value
        per
        share of the Common Stock covered by the stock option on the date of grant,
        except that in the case of an incentive stock option granted to an employee
        who,
        immediately prior to such grant, owns stock possessing more than ten percent
        (10%) of the total combined voting power of all classes of stock of the
        Corporation or any Subsidiary (a "Ten Percent Employee"), the option price
        shall
        not be less than one hundred ten percent (110%) of such fair market value
        on the
        date of grant. For purposes of this Section 5(A), the fair market value of
        the
        Common Stock shall be determined as provided in Section 5(H). For purposes
        of
        this Section 5(A), an individual (i) shall be considered as owning not only
        shares of stock owned individually but also all shares of stock that are
        at the
        time owned, directly or indirectly, by or for the spouse, ancestors, lineal
        descendants and brothers and sisters (whether by the whole or half blood)
        of
        such individual and (ii) shall be considered as owning proportionately any
        shares owned, directly or indirectly, by or for any corporation, partnership,
        estate or trust in which such individual is a stockholder, partner or
        beneficiary.

      


      (B)
        The
        option price for each stock option shall be paid in full upon exercise and
        shall
        be payable in cash in United States dollars (including check, bank draft
        or
        money order), which may include cash forwarded through a broker or other
        agent-sponsored exercise or financing program; provided, however, that in
        lieu
        of such cash the person exercising the stock option may (if authorized by
        the
        Committee at the time of grant in the case of an incentive stock option,
        or at
        any time in the case of a nonstatutory stock option) pay the option price
        in
        whole or in part by delivering to the Corporation shares of the Common Stock
        having a fair market value on the date of exercise of the stock option,
        determined as provided in Section 5(H), equal to the option price for the
        shares
        being purchased; except that (i) any portion of the option price representing
        a
        fraction of a share shall in any event be paid in cash and (ii) no shares
        of the
        Common Stock which have been held for less than one year may be delivered
        in
        payment of the option price of a stock option. If the person exercising a
        stock
        option participates in a broker or other agent-sponsored exercise or financing
        program, the Corporation will cooperate with all reasonable procedures of
        the
        broker or other agent to permit participation by the person exercising the
        stock
        option in the exercise or financing program. Notwithstanding any procedure
        of
        the broker or other agent-sponsored exercise or financing program, if the
        option
        price is paid in cash, the exercise of the stock option shall not be deemed
        to
        occur and no shares of the Common Stock will be issued until the Corporation
        has
        received full payment in cash (including check, bank draft or money order)
        for
        the option price from the broker or other agent. The date of exercise of
        a stock
        option shall be determined under procedures established by the Committee,
        and as
        of the date of exercise the person exercising the stock option shall be
        considered for all purposes to be the owner of the shares with respect to
        which
        the stock option has been exercised. Payment of the option price with shares
        shall not increase the number of shares of the Common Stock which may be
        issued
        under the Plan as provided in Section 3.

       

      (C)
        Unless the Committee, in its discretion, shall otherwise determine, stock
        options shall be exercisable by a grantee during employment commencing on
        the
        date of grant. Subject to the terms of Section 5(F) providing for earlier
        termination of a stock option, no stock option shall be exercisable after
        the
        expiration of ten years (five years in the case of an incentive stock option
        granted to a Ten Percent Employee) from the date of grant. Unless the Committee,
        in its discretion, shall otherwise determine, a stock option to the extent
        exercisable at any time may be exercised in whole or in part. 

      


      (D)
        Cash
        payment rights granted in conjunction with a nonstatutory stock option shall
        entitle the person who is entitled to exercise the stock option, upon exercise
        of the stock option or any portion thereof, to receive cash from the Corporation
        (in addition to the shares to be received upon exercise of the stock option)
        equal to such percentage as the Committee, in its discretion, shall determine
        not greater than one hundred percent (100%) of the excess of the fair market
        value of a share of the Common Stock covered by the stock option on the date
        of
        exercise of the stock option over the option price per share of the stock
        option
        times the number of shares covered by the stock option, or portion thereof,
        which is exercised. Payment of the cash provided for in this Section 5(D)
        shall be made by the Corporation as soon as practicable after the time the
        amount payable is determined. For purposes of this Section 5(D), the fair
        market value of the Common Stock shall be determined as provided in
        Section 5(H).

      


      (E)
        Unless the Committee, in its discretion, shall otherwise determine in the
        case
        of nonstatutory stock options, (i) no stock option shall be transferable by
        the grantee otherwise than by Will, or if the grantee dies intestate, by
        the
        laws of descent and distribution of the state of domicile of the grantee
        at the
        time of death, and (ii) all stock options shall be exercisable during the
        lifetime of the grantee only by the grantee.

      


      (F)
        Unless the Committee, in its discretion, shall otherwise determine but subject
        to the provisions of Section 4 in the case of incentive stock
        options:

      


      (i)
        If
        the employment of a grantee who is not disabled within the meaning of Section
        422(c)(6) of the Code (a "Disabled Grantee") is voluntarily terminated with
        the
        consent of the Corporation or a Subsidiary or a grantee retires under any
        retirement plan of the Corporation or a Subsidiary, any then outstanding
        incentive stock option held by such grantee shall be exercisable by the grantee
        (but only to the extent exercisable by the grantee immediately prior to the
        termination of employment) at any time prior to the expiration date of such
        incentive stock option or within three months after the date of termination
        of
        employment, whichever is the shorter period;

       

      (ii)
        If
        the employment of a grantee who is not a Disabled Grantee is voluntarily
        terminated with the consent of the Corporation or a Subsidiary or a grantee
        retires under any retirement plan of the Corporation or a Subsidiary, any
        then
        outstanding nonstatutory stock option held by such grantee shall be exercisable
        by the grantee (but only to the extent exercisable by the grantee immediately
        prior to the termination of employment) at any time prior to the expiration
        date
        of such nonstatutory stock option or within one year after the date of
        termination of employment, whichever is the shorter period;

       

      (iii)
        If
        the employment of a grantee who is a Disabled Grantee is voluntarily terminated
        with the consent of the Corporation or a Subsidiary, any then outstanding
        stock
        option held by such grantee shall be exercisable in full (whether or not
        so
        exercisable by the grantee immediately prior to the termination of employment)
        by the grantee at any time prior to the expiration date of such stock option
        or
        within one year after the date of termination of employment, whichever is
        the
        shorter period;

       

      (iv)
        Following the death of a grantee during employment, any outstanding stock
        option
        held by the grantee at the time of death shall be exercisable in full (whether
        or not so exercisable by the grantee immediately prior to the death of the
        grantee) by the person entitled to do so under the Will of the grantee, or,
        if
        the grantee shall fail to make testamentary disposition of the stock option
        or
        shall die intestate, by the legal representative of the grantee at any time
        prior to the expiration date of such stock option or within one year after
        the
        date of death, whichever is the shorter period;

       

      (v)
        Following the death of a grantee after termination of employment during a
        period
        when a stock option is exercisable, any outstanding stock option held by
        the
        grantee at the time of death shall be exercisable by such person entitled
        to do
        so under the Will of the grantee or by such legal representative (but only
        to
        the extent the stock option was exercisable by the grantee immediately prior
        to
        the death of the grantee) at any time prior to the expiration date of such
        stock
        option or within one year after the date of death, whichever is the shorter
        period; and

       

      (vi)
        Unless the exercise period of a stock option following termination of employment
        has been extended as provided in Section 9(C), if the employment of a grantee
        terminates for any reason other than voluntary termination with the consent
        of
        the Corporation or a Subsidiary, retirement under any retirement plan of
        the
        Corporation or a Subsidiary or death, all outstanding stock options held
        by the
        grantee at the time of such termination of employment shall automatically
        terminate.

      


      Whether
        termination of employment is a voluntary termination with the consent of
        the
        Corporation or a Subsidiary and whether a grantee is a Disabled Grantee shall
        be
        determined in each case, in its discretion, by the Committee and any such
        determination by the Committee shall be final and binding.

      


      If
        a
        grantee of a stock option engages in the operation or management of a business
        (whether as owner, partner, officer, director, employee or otherwise and
        whether
        during or after termination of employment) which is in competition with the
        Corporation or any of its Subsidiaries, the Committee may immediately terminate
        all outstanding stock options held by the grantee; provided, however, that
        this
        sentence shall not apply if the exercise period of a stock option following
        termination of employment has been extended as provided in Section 9(C).
        Whether a grantee has engaged in the operation or management of a business
        which
        is in competition with the Corporation or any of its Subsidiaries shall also
        be
        determined, in its discretion, by the Committee, and any such determination
        by
        the Committee shall be final and binding.

      


      (G)
        All
        stock options shall be confirmed by a written agreement or an amendment thereto
        in a form prescribed by the Committee, in its discretion. Each agreement
        or
        amendment thereto shall be executed on behalf of the Corporation by the Chief
        Executive Officer (if other than the President), the President or any Vice
        President and by the grantee. The agreement confirming a stock option shall
        specify whether the stock option is an incentive stock option or a nonstatutory
        stock option. The provisions of such agreements need not be
        identical.

      


      (H)
        Fair
        market value of the Common Stock shall be the mean between the following
        prices,
        as applicable, for the date as of which fair market value is to be determined
        as
        quoted in The Wall
        Street Journal
        (or in
        such other reliable publication as the Committee, in its discretion, may
        determine to rely upon): (a) if the Common Stock is listed on the New York
        Stock
        Exchange, the highest and lowest sales prices per share of the Common Stock
        as
        quoted in the NYSE-Composite Transactions listing for such date, (b) if the
        Common Stock is not listed on such exchange, the highest and lowest sales
        prices
        per share of Common Stock for such date on (or on any composite index including)
        the principal United States securities exchange registered under the 1934
        Act on
        which the Common Stock is listed or (c) if the Common Stock is not listed
        on any
        such exchange, the highest and lowest sales prices per share of the Common
        Stock
        for such date on the National Association of Securities Dealers Automated
        Quotations System or any successor system then in use ("NASDAQ"). If there
        are
        no such sale price quotations for the date as of which fair market value
        is to
        be determined but there are such sale price quotations within a reasonable
        period both before and after such date, then fair market value shall be
        determined by taking a weighted average of the means between the highest
        and
        lowest sales prices per share of the Common Stock as so quoted on the nearest
        date before and the nearest date after the date as of which fair market value
        is
        to be determined. The average should be weighted inversely by the respective
        numbers of trading days between the selling dates and the date as of which
        fair
        market value is to be determined. If there are no such sale price quotations
        on
        or within a reasonable period both before and after the date as of which
        fair
        market value is to be determined, then fair market value of the Common Stock
        shall be the mean between the bona fide bid and asked prices per share of
        Common
        Stock as so quoted for such date on NASDAQ, or if none, the weighted average
        of
        the means between such bona fide bid and asked prices on the nearest trading
        date before and the nearest trading date after the date as of which fair
        market
        value is to be determined, if both such dates are within a reasonable period.
        The average is to be determined in the manner described above in this Section
        5(H). If the fair market value of the Common Stock cannot be determined on
        the
        basis previously set forth in this Section 5(H) on the date as of which fair
        market value is to be determined, the Committee shall in good faith determine
        the fair market value of the Common Stock on such date. Fair market value
        shall
        be determined without regard to any restriction other than a restriction
        which,
        by its terms, will never lapse.

      


      Subject
        to the foregoing provisions of this Section and the other provisions of the
        Plan, any stock option granted under the Plan may be exercised at such times
        and
        in such amounts and be subject to such restrictions and other terms and
        conditions, if any, as shall be determined, in its discretion, by the Committee
        and set forth in the agreement referred to in Section 5(G) or an amendment
        thereto.

      


      


      SECTION
        6

      


      Terms
        and Conditions of

      Restricted
        Share Awards

      


      Restricted
        share awards shall be evidenced by a written agreement in a form prescribed
        by
        the Committee, in its discretion, which shall set forth the number of shares
        of
        the Common Stock awarded, the restrictions imposed thereon (including, without
        limitation, restrictions on the right of the grantee to sell, assign, transfer
        or encumber such shares while such shares are subject to other restrictions
        imposed under this Section 6), the duration of such restrictions, events
        (which
        may, in the discretion of the Committee, include performance-based events)
        the
        occurrence of which would cause a forfeiture of the restricted shares and
        such
        other terms and conditions as the Committee in its discretion deems appropriate.
        Restricted share awards shall be effective only upon execution of the applicable
        restricted share agreement on behalf of the Corporation by the Chief Executive
        Officer (if other than the President), the President or any Vice President,
        and
        by the awardee. The provisions of such agreements need not be identical.
        Awards
        of restricted shares shall be effective on the date determined, in its
        discretion, by the Committee. 

      


      Following
        a restricted share award and prior to the lapse or termination of the applicable
        restrictions, the share certificates representing the restricted shares shall
        be
        held by the Corporation in escrow together with related stock powers in blank
        signed by the grantee. Except as provided in Section 8, the Committee, in
        its discretion, may determine that dividends and other distributions on the
        shares held in escrow shall not be paid to the awardee until the lapse or
        termination of the applicable restrictions. Unless otherwise provided, in
        its
        discretion, by the Committee, any such dividends or other distributions shall
        not bear interest. Upon the lapse or termination of the applicable restrictions
        (and not before such time), the share certificates representing the restricted
        shares and unpaid dividends, if any, shall be delivered to the awardee. From
        the
        date a restricted share award is effective, the grantee shall be a shareholder
        with respect to all the shares represented by the share certificates for
        the
        restricted shares and shall have all the rights of a shareholder with respect
        to
        the restricted shares, including the right to vote the restricted shares
        and to
        receive all dividends and other distributions paid with respect to the
        restricted shares, subject only to the preceding provisions of this paragraph
        and the other restrictions imposed by the Committee.

      


      If
        an
        awardee of restricted shares engages in the operation or management of a
        business (whether as owner, partner, officer, director, employee or otherwise
        and whether during or after termination of employment) which is in competition
        with the Corporation or any of its Subsidiaries, the Committee may immediately
        declare forfeited all restricted shares held by the awardee as to which the
        restrictions have not yet lapsed. Whether an awardee has engaged in the
        operation or management of a business which is in competition with the
        Corporation or any of its Subsidiaries shall also be determined, in its
        discretion, by the Committee, and any such determination by the Committee
        shall
        be final and binding. 

      


      Neither
        this Section 6 nor any other provision of the Plan shall preclude an
        awardee from transferring or assigning restricted shares to (i) the trustee
        of a trust that is revocable by such awardee alone, both at the time of the
        transfer or assignment and at all times thereafter prior to such awardee's
        death
        or (ii) the trustee of any other trust to the extent approved in advance by
        the Committee in writing. A transfer or assignment of restricted shares from
        such trustee to any person other than such awardee shall be permitted only
        to
        the extent approved in advance by the Committee in writing, and restricted
        shares held by such trustee shall be subject to all of the conditions and
        restrictions set forth in the Plan and in the applicable agreement as if
        such
        trustee were a party to such agreement.

      


      SECTION
        7

      


      Issuance
        of Shares

      


      The
        obligation of the Corporation to issue shares of the Common Stock under the
        Plan
        shall be subject to (i) the effectiveness of a registration statement under
        the
        Securities Act of 1933, as amended, with respect to such shares, if deemed
        necessary or appropriate by counsel for the Corporation, (ii) the condition
        that
        the shares shall have been listed (or authorized for listing upon official
        notice of issuance) upon each stock exchange, if any, on which the shares
        of
        Common Stock may then be listed and (iii) all other applicable laws,
        regulations, rules and orders which may then be in effect.

      


      


      SECTION
        8

      


      Adjustment
        and Substitution of Shares

      


      If
        a
        dividend or other distribution shall be declared upon the Common Stock payable
        in shares of the Common Stock, the number of shares of the Common Stock then
        subject to any outstanding stock options, the maximum aggregate number of
        shares
        as to which incentive stock options may be granted and as to which restricted
        shares may be awarded under Section 3 of the Plan, and the maximum number
        of shares as to which stock options may be granted and as to which shares
        may be
        awarded to any employee under Section 4 of the Plan on the date fixed for
        determining the stockholders entitled to receive such stock dividend or
        distribution shall be adjusted by adding thereto the number of shares of
        the
        Common Stock which would have been distributable thereon if such shares had
        been
        outstanding on such date. Shares of Common Stock so distributed with respect
        to
        any restricted shares held in escrow, shall also be held by the Corporation
        in
        escrow and shall be subject to the same restrictions as are applicable to
        the
        restricted shares on which they were distributed.

      


      If
        the
        outstanding shares of the Common Stock shall be changed into or exchangeable
        for
        a different number or kind of shares of stock or other securities of the
        Corporation or another corporation, whether through reorganization,
        reclassification, recapitalization, stock split-up, combination of shares,
        merger or consolidation or otherwise, then there shall be substituted for
        each
        share of the Common Stock subject to any then outstanding stock option, for
        each
        share of the Common Stock set forth in the first sentence of Section 3 of
        the Plan, for the maximum aggregate number of shares as to which incentive
        stock
        options may be granted and as to which restricted shares may be awarded under
        Section 3 of the Plan, and for the maximum number of shares as to which
        stock options may be granted and as to which shares may be awarded to any
        employee under Section 4 of the Plan the number and kind of shares of stock
        or other securities into which each outstanding share of the Common Stock
        shall
        be so changed or for which each such share shall be exchangeable. Unless
        otherwise determined by the Committee, in its discretion, any such stock
        or
        securities, as well as any cash or other property, into or for which any
        restricted shares held in escrow shall be changed or exchangeable in any
        such
        transaction, shall also be held by the Corporation in escrow and shall be
        subject to the same restrictions as are applicable to the restricted shares
        in
        respect of which such stock, securities, cash or other property was issued
        or
        distributed.

      


      In
        case
        of any adjustment or substitution as provided for in this Section 8, the
        aggregate option price for all shares subject to each then outstanding stock
        option prior to such adjustment or substitution shall be the aggregate option
        price for all shares of stock or other securities (including any fraction)
        to
        which such shares shall have been adjusted or which shall have been substituted
        for such shares. Any new option price per share shall be carried to at least
        three decimal places with the last decimal place rounded upwards to the nearest
        whole number.

      


      If
        the
        outstanding shares of the Common Stock shall be changed in value by reason
        of
        any spin-off, split-off or split-up, or dividend in partial liquidation,
        dividend in property other than cash or extraordinary distribution to holders
        of
        the Common Stock, (i) the Committee shall make any adjustments to any then
        outstanding stock option which it determines are equitably required to prevent
        dilution or enlargement of the rights of grantees which would otherwise result
        from any such transaction, and (ii) unless otherwise determined by the
        Committee, in its discretion, any stock, securities, cash or other property
        distributed with respect to any restricted shares held in escrow or for which
        any restricted shares held in escrow shall be exchanged in any such transaction
        shall also be held by the Corporation in escrow and shall be subject to the
        same
        restrictions as are applicable to the restricted shares in respect of which
        such
        stock, securities, cash or other property was distributed or
        exchanged.

      


      No
        adjustment or substitution provided for in this Section 8 shall require the
        Corporation to issue or sell a fraction of a share or other security.
        Accordingly, all fractional shares or other securities which result from
        any
        such adjustment or substitution shall be eliminated and not carried forward
        to
        any subsequent adjustment or substitution. Owners of restricted shares held
        in
        escrow shall be treated in the same manner as owners of Common Stock not
        held in
        escrow with respect to fractional shares created by an adjustment or
        substitution of shares, except that, unless otherwise determined by the
        Committee, in its discretion, any cash or other property paid in lieu of
        a
        fractional share shall be subject to restrictions similar to those applicable
        to
        the restricted shares exchanged therefor.

      


      If
        any
        such adjustment or substitution provided for in this Section 8 requires the
        approval of shareholders in order to enable the Corporation to grant incentive
        stock options or to comply with Section 162(m) of the Code, then no such
        adjustment or substitution shall be made without the required shareholder
        approval. Notwithstanding the foregoing, in the case of incentive stock options,
        if the effect of any such adjustment or substitution would be to cause the
        stock
        option to fail to continue to qualify as an incentive stock option or to
        cause a
        modification, extension or renewal of such stock option within the meaning
        of
        Section 424 of the Code, the Committee may determine that such adjustment
        or
        substitution not be made but rather shall use reasonable efforts to effect
        such
        other adjustment of each then outstanding stock option as the Committee,
        in its
        discretion, shall deem equitable and which will not result in any
        disqualification, modification, extension or renewal (within the meaning
        of
        Section 424 of the Code) of such incentive stock option.

      


      Except
        as
        provided in this Section 8, a grantee shall have no rights by reason of any
        issue by the Corporation of stock of any class or securities convertible
        into
        stock of any class, any subdivision or consolidation of shares of stock of
        any
        class, the payment of any stock dividend or any other increase or decrease
        in
        the number of shares of stock of any class.

       

      SECTION
        9

      


      Additional
        Rights in Certain Events

      


      (A)
        Definitions.

      


      For
        purposes of this Section 9, the following terms shall have the following
        meaning:

      


      (1)
        The
        term "Person" shall be used as that term is used in Section 13(d) and 14(d)
        of
        the 1934 Act.

      


      (2)
        "Beneficial Ownership" shall be determined as provided in Rule 13d-3 under
        the
        1934 Act as in effect on the effective date of the Plan. 

      


      (3)
        "Voting Shares" shall mean all securities of a company entitling the holders
        thereof to vote in an annual election of Directors (without consideration
        of the
        rights of any class of stock other than the Common Stock to elect Directors
        by a
        separate class vote); and a specified percentage of "Voting Power" of a company
        shall mean such number of the Voting Shares as shall enable the holders thereof
        to cast such percentage of all the votes which could be cast in an annual
        election of directors (without consideration of the rights of any class of
        stock
        other than the Common Stock to elect Directors by a separate class
        vote).

      


      (4)
        "Tender Offer" shall mean a tender offer or exchange offer to acquire securities
        of the Corporation (other than such an offer made by the Corporation or any
        Subsidiary), whether or not such offer is approved or opposed by the Board.
        

      


      (5)
        "Section 9 Event" shall mean the date upon which any of the following events
        occurs:

      


      (a)
        The
        Corporation acquires actual knowledge that any Person other than the
        Corporation, a Subsidiary or any employee benefit plan(s) sponsored by the
        Corporation has acquired the Beneficial Ownership, directly or indirectly,
        of
        securities of the Corporation entitling such Person to 15% or more of the
        Voting
        Power of the Corporation;

       

      (b)(i)
        A
        Tender Offer is made to acquire securities of the Corporation entitling the
        holders thereof to 20% or more of the Voting Power of the Corporation; or
        (ii)
        Voting Shares are first purchased pursuant to any other Tender Offer;


       

      (c)
        At
        any time less than 60% of the members of the Board of Directors shall be
        individuals who were either (i) Directors on the effective date of the Plan
        or
        (ii) individuals whose election, or nomination for election, was approved
        by a
        vote (including a vote approving a merger or other agreement providing the
        membership of such individuals on the Board of Directors) of at least two-thirds
        of the Directors then still in office who were Directors on the effective
        date
        of the Plan or who were so approved;

      


      (d)
        The
        shareholders of the Corporation shall approve an agreement or plan providing
        for
        the Corporation to be merged, consolidated or otherwise combined with, or
        for
        all or substantially all its assets or stock to be acquired by, another
        corporation, as a consequence of which the former shareholders of the
        Corporation will own, immediately after such merger, consolidation, combination
        or acquisition, less than a majority of the Voting Power of such surviving
        or
        acquiring corporation or the parent thereof; or

       

      (e)
        The
        shareholders of the Corporation shall approve any liquidation of all or
        substantially all of the assets of the Corporation or any distribution to
        security holders of assets of the Corporation having a value equal to 10%
        or
        more of the total value of all the assets of the Corporation;

      


      provided,
        however, that (i) if securities beneficially owned by a grantee are
        included in determining the Beneficial Ownership of a Person referred to
        in
        paragraph 5(a) or (ii) a grantee is required to be named pursuant
        Item 2 of the Schedule 14D-1 (or any similar successor filing requirement)
        required to be filed by the bidder making a Tender Offer referred to in
        paragraph 5(b), then no Section 9 Event with respect to such grantee
        shall be deemed to have occurred by reason of such event. 

      


      (B)
        Acceleration of the Exercise Date of Stock Options.

      


      Subject
        to the provisions of Section 4 in the case of incentive stock options, unless
        the agreement referred to in Section 5(G), or an amendment thereto, shall
        otherwise provide, notwithstanding any other provision contained in the Plan,
        in
        case any Section 9 Event occurs all outstanding stock options shall become
        immediately and fully exercisable whether or not otherwise exercisable by
        their
        terms. 

       

      (C)
        Extension of the Expiration Date of Stock Options.

      


      Subject
        to the provisions of Section 4 in the case of incentive stock options, unless
        the agreement referred to in Section 5(G), or an amendment thereto, shall
        otherwise provide, notwithstanding any other provision contained in the Plan,
        all stock options held by a grantee whose employment with the Corporation
        or a
        Subsidiary terminates within one year of any Section 9 Event for any reason
        other than voluntary termination with the consent of the Corporation or a
        Subsidiary, retirement under any retirement plan of the Corporation or a
        Subsidiary or death shall be exercisable for a period of three months from
        the
        date of such termination of employment, but in no event after the expiration
        date of the stock option.

      


      (D)
        Lapse
        of Restrictions on Restricted Share Awards. 

      


      Unless
        the agreement referred to in Section 6, or an amendment thereto, shall otherwise
        provide, notwithstanding any other provision contained in the Plan, if any
        Section 9 Event occurs prior to the scheduled lapse of all restrictions
        applicable to restricted share awards under the Plan, all such restrictions
        shall lapse upon the occurrence of any such Section 9 Event regardless of
        the
        scheduled lapse of such restrictions.

      


      SECTION
        10

      


      Effect
        of the Plan on the Rights of Employees and Employer

      


      Neither
        the adoption of the Plan nor any action of the Board or the Committee pursuant
        to the Plan shall be deemed to give any employee any right to be granted
        a stock
        option (with or without cash payment rights) or to be awarded restricted
        shares
        under the Plan. Nothing in the Plan, in any stock option or cash payment
        rights
        granted under the Plan, in any restricted share award under the Plan or in
        any
        agreement providing for any of the foregoing or amendment thereto shall confer
        any right to any employee to continue in the employ of the Corporation or
        any
        Subsidiary or interfere in any way with the rights of the Corporation or
        any
        Subsidiary to terminate the employment of any employee at any time or adjust
        the
        compensation of any employee at any time.

      


      


      SECTION
        11

      


      Amendment
        or Termination

      


      The
        right
        to amend the Plan at any time and from time to time and the right to terminate
        the Plan are hereby specifically reserved to the Board; provided that no
        such
        amendment of the Plan shall, without shareholder approval (a) increase the
        maximum aggregate number of shares for which grants of stock options or awards
        of restricted shares may be made under the first sentence of Section 3 of
        the Plan, (b) increase the maximum aggregate number of shares as to which
        incentive stock options may be granted or as to which restricted shares may
        be
        awarded under Section 3 of the Plan, (c) make any changes in the class
        of employees eligible to receive options or awards under the Plan,
        (d) change the maximum number of shares as to which stock options may be
        granted and as to which shares may be awarded to any employee under
        Section 4 of the Plan, (e) change the option price permitted under
        Section 5(A) of the Plan, or (f) be made if shareholder approval of
        the amendment is at the time required for stock options or restricted shares
        under the Plan to qualify for the exemption from Section 16(b) of the 1934
        Act
        provided by Rule 16b-3 or by the rules of the NASDAQ National Market System
        or any stock exchange on which the Common Stock may then be listed. No amendment
        or termination of the Plan shall, without the written consent of the holder
        of a
        stock option, cash payment rights or restricted shares theretofore granted
        or
        awarded under the Plan, adversely affect the rights of such holder with respect
        thereto.

      


      


      SECTION
        12

      


      Effective
        Date and Duration of Plan

      


      The
        effective date and date of adoption of the Plan shall be May 8, 1992, the
        date of adoption of the Plan by the Board, and the effective date of the
        amendments to the Plan adopted by the Board on December 23, 1998 shall be
        December 23, 1998, provided that such amendments are approved by a majority
        of the votes cast at a meeting of shareholders duly called, convened and
        held on
        or prior to December 22, 1999, at which a quorom representing a majority
        of the
        outstanding voting stock of the Corporation is, either in person or by proxy,
        present and voting on the Plan. No stock option granted under the Plan on
        or
        after December 23, 1998 may be exercised until after such approval and any
        restricted shares awarded under the Plan shall be forfeited to the Corporation
        on December 22, 1999 if such approval has not been obtained on or prior to
        that
        date; provided,
        that
        the foregoing shall not apply to stock options granted or restricted shares
        awarded with shares which were available under the Plan prior to the amendment
        of the Plan on December 23, 1998. No stock option or cash payment rights
        may be granted and no restricted shares may be awarded under the Plan subsequent
        to December 22, 2008.