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                                                                    EXHIBIT 10.7

                         AMERICAN REPROGRAPHICS COMPANY

                                 2005 STOCK PLAN

                             ADOPTED _______________
                   APPROVED BY SHAREHOLDERS _________________
                      TERMINATION DATE: __________________

1. PURPOSES.

      (a) ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to receive Stock
Awards are Employees, Directors and Consultants. Only Non-Employee Directors are
eligible to receive Options under Section 8.

      (b) AVAILABLE STOCK AWARDS. The Plan provides for the grant of the
following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii), Stock Appreciation Rights, (iv) Restricted Stock Purchase
Awards, (v) Restricted Stock Awards, and (v) Restricted Stock Unit Awards.

      (c) GENERAL PURPOSE. The Company, by means of the Plan, seeks to secure
and retain the services of the group of persons eligible to receive Stock
Awards, to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Affiliates and to provide a means by which
eligible recipients of Stock Awards may be given an opportunity to benefit from
increases in the value of the Common Stock.

2. DEFINITIONS.

      (a) "AFFILIATE" means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

      (b) "ANNUAL MEETING" means the annual meeting of the stockholders of the
Company.

      (c) "BOARD" means the Board of Directors of the Company.

      (d) "CAPITALIZATION ADJUSTMENT" has the meaning ascribed to that term in
Section 12(a).

      (e) "CAUSE" means, with respect to a Participant, the occurrence of any of
the following: (i) such Participant's commission of any felony or any crime
involving fraud, dishonesty or moral turpitude under the laws of the United
States or any state thereof; (ii) such Participant's attempted commission of, or
participation in, a fraud or act of dishonesty against the Company; (iii) such
Participant's intentional and material violation of any contract or agreement
between the Participant and the Company or any statutory duty owed to the
Company; (iv) such Participant's unauthorized use or disclosure of the Company's
confidential information or trade secrets or (v) such Participant's gross
misconduct. The determination that a termination is for Cause shall be made by
the Company in its discretion. Any determination by the Company that

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the Continuous Service of a Participant was terminated by reason of dismissal
without Cause for the purposes of outstanding Stock Awards held by such
Participant shall have no impact upon any determination of the rights or
obligations of the Company or such Participant for any other purpose.

      (f) "CHANGE IN CONTROL" means the occurrence, in a single transaction or
in a series of related transactions, of any one or more of the following events:

            (i) any Exchange Act Person becomes the Owner, directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company's then outstanding securities
other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
(A) on account of the acquisition of securities of the Company by an investor,
any affiliate thereof or any other Exchange Act Person from the Company in a
transaction or series of related transactions the primary purpose of which is to
obtain financing for the Company through the issuance of equity securities or
(B) solely because the level of Ownership held by any Exchange Act Person (the
"SUBJECT PERSON") exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after
such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding voting securities
Owned by the Subject Person over the designated percentage threshold, then a
Change in Control shall be deemed to occur;

            (ii) there is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the
shareholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
Entity in such merger, consolidation or similar transaction or (B) more than
fifty percent (50%) of the combined outstanding voting power of the parent of
the surviving Entity in such merger, consolidation or similar transaction, in
each case in substantially the same proportions as their Ownership of the
outstanding voting securities of the Company immediately prior to such
transaction;

            (iii) there is consummated a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, other than a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
shareholders of the Company in substantially the same proportions as their
Ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease, license or other disposition; or

            (iv) individuals who, on the date this Plan is adopted by the Board,
are members of the Board (the "INCUMBENT BOARD") cease for any reason to
constitute at least a

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majority of the members of the Board; provided, however, that if the appointment
or election (or nomination for election) of any new Board member was approved or
recommended by a majority vote of the members of the Incumbent Board then still
in office, such new member shall, for purposes of this Plan, be considered as a
member of the Incumbent Board.

      Notwithstanding the foregoing or any other provision of this Plan, the
definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Participant shall
supersede the foregoing definition with respect to Stock Awards subject to such
agreement (it being understood, however, that if no definition of Change in
Control or any analogous term is set forth in such an individual written
agreement, the foregoing definition shall apply).

      (g) "CODE" means the Internal Revenue Code of 1986, as amended.

      (h) "COMMITTEE" means a committee of one (1) or more members of the Board
appointed by the Board in accordance with Section 3(c).

      (i) "COMMON STOCK" means the common stock of the Company.

      (j) "COMPANY" means American Reprographics Company, a Delaware
corporation.

      (k) "CONSULTANT" means any person, including an advisor, who (i) is
engaged by the Company or an Affiliate to render consulting or advisory services
and is compensated for such services or (ii) is serving as a member of the Board
of Directors of an Affiliate and is compensated for such services. However,
service solely as a Director, or payment of a fee for such services, shall not
cause a Director to be considered a "Consultant" for purposes of the Plan.

      (l) "CONTINUOUS SERVICE" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant's service with the Company or an Affiliate, shall not terminate a
Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or to a Director shall
not constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave. Notwithstanding the foregoing, a leave of absence
shall be treated as Continuous Service for purposes of vesting in a Stock Award
only to such extent as may be provided in the Company's leave of absence policy
or in the written terms of the Participant's leave of absence.

      (m) "CORPORATE TRANSACTION" means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following
events:

            (i) a sale or other disposition of all or substantially all, as
determined by the Board in its discretion, of the consolidated assets of the
Company and its Subsidiaries;

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            (ii) a sale or other disposition of at least ninety percent (90%) of
the outstanding securities of the Company;

            (iii) a merger, consolidation or similar transaction following which
the Company is not the surviving corporation; or

            (iv) a merger, consolidation or similar transaction following which
the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger, consolidation or similar
transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash
or otherwise.

      (n) "COVERED EMPLOYEE" means the chief executive officer and the four (4)
other highest compensated officers of the Company for whom total compensation is
required to be reported to shareholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.

      (o) "DIRECTOR" means a member of the Board.

      (p) "DISABILITY" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

      (q) "EMPLOYEE" means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services,
shall not cause a Director to be considered an "Employee" for purposes of the
Plan.

      (r) "ENTITY" means a corporation, partnership or other entity.

      (s) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

      (t) "EXCHANGE ACT PERSON" means any natural person, Entity or "group"
(within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that
"Exchange Act Person" shall not include (i) the Company or any Subsidiary of the
Company, (ii) any employee benefit plan of the Company or any Subsidiary of the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any Subsidiary of the Company, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) an Entity Owned, directly or indirectly, by the shareholders
of the Company in substantially the same proportions as their Ownership of stock
of the Company.

      (u) "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock determined as follows:

            (i) If the Common Stock is listed on any established stock exchange
or traded on the New York Stock Exchange, the Fair Market Value of a share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange (or the exchange or
market with the greatest volume of trading in the Common Stock) on the last
market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable.

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            (ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined by the Board in good faith.

      (v) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

      (w) "IPO DATE" means the effective date of the initial public offering of
the Common Stock.

      (x) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current Employee or Officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or an Affiliate
for services rendered as a consultant or in any capacity other than as a
Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
("REGULATION S-K")), does not possess an interest in any other transaction for
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
"non-employee director" for purposes of Rule 16b-3.

      (y) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as
an Incentive Stock Option.

      (z) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

      (aa) "OPTION" means an option to purchase shares of Common Stock granted
pursuant to the Plan.

      (bb) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionholder evidencing the terms and conditions of an Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan.

      (cc) "OPTIONHOLDER" means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding
Option.

      (dd) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" who receives
compensation for prior services (other than benefits under a tax-qualified
retirement plan) during the taxable year, has not been an officer of the Company
or an "affiliated corporation", and does not receive remuneration from the
Company or an "affiliated corporation," either directly or indirectly, in any
capacity other than as a Director or (ii) is otherwise considered an "outside
director" for purposes of Section 162(m) of the Code.

      (ee) "OWN," "OWNED," "OWNER," "OWNERSHIP" A person or Entity shall be
deemed to "Own," to have "Owned," to be the "Owner" of, or to have acquired
"Ownership" of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding,

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relationship or otherwise, has or shares voting power, which includes the power
to vote or to direct the voting, with respect to such securities.

      (ff) "PARTICIPANT" means a person to whom a Stock Award is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.

      (gg) "PLAN" means this American Reprographics Company 2005 Stock Plan, as
amended and restated.

      (hh) "RESTRICTED STOCK AWARD" means an award of shares of Common Stock
which is granted pursuant to the terms and conditions of Section 7(c).

      (ii) "RESTRICTED STOCK AWARD AGREEMENT" means a written agreement between
the Company and a holder of a Stock Bonus Award evidencing the terms and
conditions of a Stock Bonus Award grant. Each Stock Bonus Award Agreement shall
be subject to the terms and conditions of the Plan.

      (jj) "RESTRICTED STOCK PURCHASE AWARD" means an award of shares of Common
Stock which is granted pursuant to the terms and conditions of Section 7(b).

      (kk) "RESTRICTED STOCK PURCHASE AWARD AGREEMENT" means a written agreement
between the Company and a holder of a Restricted Stock Purchase Award evidencing
the terms and conditions of a Restricted Stock Purchase Award grant. Each
Restricted Stock Purchase Award Agreement shall be subject to the terms and
conditions of the Plan.

      (ll) "RESTRICTED STOCK UNIT AWARD" means a right to receive shares of
Common Stock which is granted pursuant to the terms and conditions of Section
7(d).

      (mm) "RESTRICTED STOCK UNIT AWARD AGREEMENT" means a written agreement
between the Company and a holder of a Restricted Stock Unit Award evidencing the
terms and conditions of a Restricted Stock Unit Award grant. Each Restricted
Stock Unit Award Agreement shall be subject to the terms and conditions of the
Plan.

      (nn) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.

      (oo) "SECURITIES ACT" means the Securities Act of 1933, as amended.

      (pp) "STOCK APPRECIATION RIGHT" means a right to receive the appreciation
of Common Stock that is granted pursuant to the terms and conditions of Section
7(a).

      (qq) "STOCK APPRECIATION RIGHT AGREEMENT" means a written agreement
between the Company and a holder of a Stock Appreciation Right evidencing the
terms and conditions of a Stock Appreciation Right grant. Each Stock
Appreciation Right Agreement shall be subject to the terms and conditions of the
Plan.

      (rr) "STOCK AWARD" means any right granted under the Plan, including an
Option, a Stock Appreciation Right, a Restricted Stock Purchase Award, or a
Restricted Stock Unit Award.

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      (ss) "STOCK AWARD AGREEMENT" means a written agreement between the Company
and a Participant evidencing the terms and conditions of a Stock Award grant.
Each Stock Award Agreement shall be subject to the terms and conditions of the
Plan.

      (tt) "SUBSIDIARY" means, with respect to the Company, (i) any corporation
of which more than fifty percent (50%) of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, Owned
by the Company, and (ii) any partnership in which the Company has a direct or
indirect interest (whether in the form of voting or participation in profits or
capital contribution) of more than fifty percent (50%).

      (uu) "TEN PERCENT SHAREHOLDER" means a person who Owns (or is deemed to
Own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates.

3. ADMINISTRATION.

      (a) ADMINISTRATION BY BOARD. The Board shall administer the Plan unless
and until the Board delegates administration of the Plan to a Committee, as
provided in Section 3(c).

      (b) POWERS OF BOARD. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

            (i) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; what type or combination of types of Stock Award shall be
granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive Common Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such
person.

            (ii) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

            (iii) To effect, at any time and from time to time, with the consent
of any adversely affected Optionholder, (1) the reduction of the exercise price
of any outstanding Option under the Plan, (2) the cancellation of any
outstanding Option under the Plan and the grant in substitution therefor of (A)
a new Option under the Plan or another equity plan of the Company covering the
same or a different number of shares of Common Stock, (B) a Stock Appreciation
Right, (C) a Restricted Stock Purchase Award (D) a Restricted Stock Award, (E) a
Restricted Stock Unit Award, (F) cash and/or (G) other valuable consideration
(as determined by the Board, in its discretion), or (3) any other action that is
treated as a repricing under generally accepted accounting principles.

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            (iv) To amend the Plan or a Stock Award as provided in Section 13.

            (v) To terminate or suspend the Plan as provided in Section 14.

            (vi) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the Plan.

            (vii) To adopt such procedures and sub-plans as are necessary or
appropriate to permit participation in the Plan by Employees who are foreign
nationals or employed outside the United States.

      (c) DELEGATION TO COMMITTEE.

            (i) GENERAL. The Board may delegate some or all of the
administration of the Plan to a Committee or Committees of one (1) or more
members of the Board, and the term "COMMITTEE" shall apply to any person or
persons to whom such authority has been delegated. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board that
have been delegated to the Committee, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may retain the authority to concurrently administer
the Plan with the Committee and may, at any time, revest in the Board some or
all of the powers previously delegated.

            (ii) SECTION 162(m) AND RULE 16b-3 COMPLIANCE. In the discretion of
the Board, the Committee may consist solely of two or more Outside Directors, in
accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. In addition, the Board or
the Committee, in its discretion, may (1) delegate to a committee of one or more
members of the Board who need not be Outside Directors the authority to grant
Stock Awards to eligible persons who are either (a) not then Covered Employees
and are not expected to be Covered Employees at the time of recognition of
income resulting from such Stock Award, or (b) not persons with respect to whom
the Company wishes to comply with Section 162(m) of the Code, and/or (2)
delegate to a committee of one or more members of the Board who need not be
Non-Employee Directors the authority to grant Stock Awards to eligible persons
who are not then subject to Section 16 of the Exchange Act.

      (d) DELEGATION TO AN OFFICER. The Board may delegate to one or more
Officers of the Company the authority to do one or both of the following: (i)
designate Officers and Employees of the Company or any of its Subsidiaries to be
recipients of Stock Awards and (ii) determine the number of shares of Common
Stock to be subject to such Stock Awards granted to such Officers and Employees
of the Company; provided, however, that the Board resolutions regarding such
delegation shall specify the total number of shares of Common Stock that may be
subject to the Stock Awards granted by such Officer and that such Officer may
not grant a Stock Award to himself or herself. Notwithstanding anything to the
contrary in this Section 3(d), the Board may

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not delegate to an Officer authority to determine the Fair Market Value of the
Common Stock pursuant to Section 2(u)(ii) above.

      (e) EFFECT OF BOARD'S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

4. SHARES SUBJECT TO THE PLAN.

      (a) SHARE RESERVE. Subject to the provisions of Section 12(a) relating to
Capitalization Adjustments, the shares of Common Stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate five million
(5,000,000) shares of Common Stock plus an automatic annual increase to be added
on the first day of the fiscal year of the Company for a period beginning on the
first day of the fiscal year that begins on January 1, 2006, and ending on (and
including) the first day of the fiscal year that begins on January 1, 2010,
equal to the least of the following amounts: (i) one percent (1%) of the
Company's outstanding shares of Common Stock on the day preceding the first day
of the applicable Company fiscal year (rounded to the nearest whole share), (ii)
three hundred thousand (300,000) shares of Common Stock, or (iii) an amount as
may be determined by the Board.

      (b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, or if any shares of Common Stock issued to a Participant
pursuant to a Stock Award are forfeited to or repurchased by the Company,
including, but not limited to, any repurchase or forfeiture caused by the
failure to meet a contingency or condition required for the vesting of such
shares, then the shares of Common Stock not issued under such Stock Award, or
forfeited to or repurchased by the Company, shall revert to and again become
available for issuance under the Plan. If any shares subject to a Stock Award
are not delivered to a Participant because such shares are withheld for the
payment of taxes or the Stock Award is exercised through a reduction of shares
subject to the Stock Award (i.e., "net exercised"), the number of shares that
are not delivered to the Participant shall remain available for issuance under
the Plan. If the exercise price of any Stock Award is satisfied by tendering
shares of Common Stock held by the Participant (either by actual delivery or
attestation), then the number of shares so tendered shall remain available for
issuance under the Plan. For purposes of qualification under Section 422 of the
Code, notwithstanding anything to the contrary in this Section 4(b) and subject
to the provisions of Section 12(a) relating to Capitalization Adjustments, the
aggregate maximum number of shares of Common Stock that may be issued as
Incentive Stock Options shall be six million five hundred thousand (6,500,000)
shares of Common Stock. In addition, the aggregate maximum number of shares of
Common Stock that may be issued as Restricted Stock Awards shall be ten percent
(10%) of the total of the Company's outstanding shares of Common Stock, as
determined with respect to each Restricted Stock Award at the time such award is
granted.

      (c) SOURCE OF SHARES. The shares of Common Stock subject to the Plan may
be unissued shares or reacquired shares, bought on the market or otherwise.

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5. ELIGIBILITY.

      (a) ELIGIBILITY FOR SPECIFIC STOCK AWARDS. Incentive Stock Options may be
granted only to Employees. Stock Awards other than Incentive Stock Options may
be granted to Employees, Directors and Consultants.

      (b) TEN PERCENT SHAREHOLDERS. A Ten Percent Shareholder shall not be
granted an Incentive Stock Option unless the exercise price of such Option is at
least one hundred ten percent (110%) of the Fair Market Value of the Common
Stock on the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant.

      (c) SECTION 162(m) LIMITATION ON ANNUAL GRANTS. Subject to the provisions
of Section 12(a) relating to Capitalization Adjustments, at such time as the
Company may be subject to the applicable provisions of Section 162(m) of the
Code, no Employee shall be eligible to be granted Options or Stock Appreciation
Rights covering more than five hundred thousand (500,000) shares of Common Stock
during any calendar year.

      (d) CONSULTANTS. A Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under
the Securities Act ("FORM S-8") is not available to register either the offer or
the sale of the Company's securities to such Consultant because of the nature of
the services that the Consultant is providing to the Company, because the
Consultant is not a natural person, or because of any other rule governing the
use of Form S-8.

6. OPTION PROVISIONS.

      Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
shall be issued for shares of Common Stock on exercise of each type of Option.
The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:

      (a) TERM. The Board shall determine the term of an Option; provided
however that, subject to the provisions of Section 5(b) regarding Ten Percent
Shareholders, no Incentive Stock Option shall be exercisable after the
expiration of ten (10) years from the date on which it was granted.

      (b) EXERCISE PRICE OF AN INCENTIVE STOCK OPTION. Subject to the provisions
of Section 5(b) regarding Ten Percent Shareholders, the exercise price of each
Incentive Stock Option shall be not less than one hundred percent (100%) of the
Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may
be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

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      (c) EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. The Board, in its
discretion, shall determine the exercise price of each Nonstatutory Stock
Option.

      (d) CONSIDERATION. The purchase price of Common Stock acquired pursuant to
an Option shall be paid, to the extent permitted by applicable law, either (i)
in cash at the time the Option is exercised or (ii) at the discretion of the
Board at the time of the grant of the Option (or subsequently in the case of a
Nonstatutory Stock Option) (1) by delivery to the Company (either by actual
delivery or attestation) of other Common Stock at the time the Option is
exercised, (2) by a "net exercise" of the Option (as further described below),
(3) pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from
the sales proceeds or (4) in any other form of legal consideration that may be
acceptable to the Board. Unless otherwise specifically provided in the Option,
the purchase price of Common Stock acquired pursuant to an Option that is paid
by delivery to the Company of other Common Stock acquired, directly or
indirectly from the Company, shall be paid only by shares of the Common Stock of
the Company that have been held for more than six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes). At any time that the Company is incorporated in Delaware,
payment of the Common Stock's "par value," as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.

      In the case of a "net exercise" of an Option, the Company will not require
a payment of the exercise price of the Option from the Participant but will
reduce the number of shares of Common Stock issued upon the exercise by the
largest number of whole shares that has a Fair Market Value that does not exceed
the aggregate exercise price. With respect to any remaining balance of the
aggregate exercise price, the Company shall accept a cash payment from the
Participant. Shares of Common Stock will no longer be outstanding under an
Option (and will therefore not thereafter be exercisable) following the exercise
of such Option to the extent of (i) shares used to pay the exercise price of an
Option under the "net exercise", (ii) shares actually delivered to the
Participant as a result of such exercise and (iii) shares withheld for purposes
of tax withholding.

      (e) TRANSFERABILITY OF AN INCENTIVE STOCK OPTION. An Incentive Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form provided by or otherwise
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

      (f) TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory Stock
Option shall be transferable to the extent provided in the Option Agreement. If
the Nonstatutory Stock Option does not provide for transferability, then the
Nonstatutory Stock Option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime of
the Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form

                                       11
<PAGE>

provided by or otherwise satisfactory to the Company, designate a third party
who, in the event of the death of the Optionholder, shall thereafter be entitled
to exercise the Option.

      (g) VESTING GENERALLY. The total number of shares of Common Stock subject
to an Option may vest and therefore become exercisable in periodic installments
that may be equal. The Option may be subject to such other terms and conditions
on the time or times when it may be exercised (which may be based on performance
or other criteria) as the Board may deem appropriate. The vesting provisions of
individual Options may vary. The provisions of this Section 6(g) are subject to
any Option provisions governing the minimum number of shares of Common Stock as
to which an Option may be exercised.

      (h) TERMINATION OF CONTINUOUS SERVICE. In the event that an Optionholder's
Continuous Service terminates (for reasons other than Cause or upon the
Optionholder's death or Disability), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option
as of the date of termination of Continuous Service) but only within such period
of time ending on the earlier of (i) the expiration of the term of the Option as
set forth in the Option Agreement or (ii) the date three (3) months following
the termination of the Optionholder's Continuous Service (or such longer or
shorter period specified in the Option Agreement). If, after termination of
Continuous Service, the Optionholder does not exercise his or her Option within
the time specified herein or in the Option Agreement (as applicable), the Option
shall terminate.

      (i) EXTENSION OF TERMINATION DATE. An Optionholder's Option Agreement may
provide that if the exercise of the Option following the termination of the
Optionholder's Continuous Service (for reasons other than Cause or upon the
Optionholder's death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the Option
Agreement or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.

      (j) DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination of Continuous
Service), but only within such period of time ending on the earlier of (i) the
expiration of the term of the Option as set forth in the Option Agreement or
(ii) the date twelve (12) months following such termination of Continuous
Service (or such longer or shorter period specified in the Option Agreement).
If, after termination of Continuous Service, the Optionholder does not exercise
his or her Option within the time specified herein or in the Option Agreement
(as applicable), the Option shall terminate.

      (k) DEATH OF OPTIONHOLDER. In the event that (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the

                                       12
<PAGE>

Optionholder's estate, by a person who acquired the right to exercise the Option
by bequest or inheritance or by a person designated to exercise the option upon
the Optionholder's death pursuant to Section 6(e) or 6(f), but only within the
period ending on the earlier of (i) the expiration of the term of such Option as
set forth in the Option Agreement or (ii) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the
Option Agreement). If, after the Optionholder's death, the Option is not
exercised within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.

      (l) TERMINATION FOR CAUSE. In the event that an Optionholder's Continuous
Service is terminated for Cause, the Option shall terminate upon the termination
date of such Optionholder's Continuous Service, and the Optionholder shall be
prohibited from exercising his or her Option from and after the time of such
termination of Continuous Service.

      (m) EARLY EXERCISE. The Option may include a provision whereby the
Optionholder may elect at any time before the Optionholder's Continuous Service
terminates to exercise the Option as to any part or all of the shares of Common
Stock subject to the Option prior to the full vesting of the Option. Any
unvested shares of Common Stock so purchased may be subject to a repurchase
option in favor of the Company or to any other restriction the Board determines
to be appropriate. The Company shall not be required to exercise its repurchase
option until at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have
elapsed following exercise of the Option unless the Board otherwise specifically
provides in the Option.

7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

      (a) STOCK APPRECIATION RIGHTS. Each Stock Appreciation Right Agreement
shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. The terms and conditions of Stock Appreciation Right
Agreements may change from time to time, and the terms and conditions of
separate Stock Appreciation Right Agreements need not be identical, provided,
however, that each Stock Appreciation Right Agreement shall include (through
incorporation of the provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:

            (i) STRIKE PRICE AND CALCULATION OF APPRECIATION. Each Stock
Appreciation Right will be denominated in shares of Common Stock equivalents.
The appreciation distribution payable on the exercise of a Stock Appreciation
Right will be not greater than an amount equal to the excess of (A) the
aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number of
shares of Common Stock equivalents in which the Participant is vested under such
Stock Appreciation Right, and with respect to which the Participant is
exercising the Stock Appreciation Right on such date, over (B) an amount (the
strike price) that will be determined by the Board at the time of grant of the
Stock Appreciation Right.

            (ii) VESTING. At the time of the grant of a Stock Appreciation
Right, the Board may impose such restrictions or conditions to the vesting of
such Stock Appreciation Right as it, in its discretion, deems appropriate.

                                       13
<PAGE>

            (iii) EXERCISE. To exercise any outstanding Stock Appreciation
Right, the Participant must provide written notice of exercise to the Company in
compliance with the provisions of the Stock Appreciation Right Agreement
evidencing such Stock Appreciation Right.

            (iv) PAYMENT. The appreciation distribution in respect to a Stock
Appreciation Right may be paid in Common Stock, in cash, in any combination of
the two or in any other form of consideration as determined by the Board and
contained in the Stock Appreciation Right Agreement evidencing such Stock
Appreciation Right.

            (v) TERM. The Board shall determine the term of a Stock Appreciation
Right; provided however that no Stock Appreciation Right shall be exercisable
after the expiration of ten (10) years from the date on which it was granted.

            (vi) TERMINATION OF CONTINUOUS SERVICE. In the event that a
Participant's Continuous Service terminates, the Participant may exercise his or
her Stock Appreciation Right (to the extent that the Participant was entitled to
exercise such Stock Appreciation Right as of the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Participant's Continuous Service (or
such longer or shorter period specified in the Stock Appreciation Right
Agreement) or (ii) the expiration of the term of the Stock Appreciation Right as
set forth in the Stock Appreciation Right Agreement. If, after termination, the
Participant does not exercise his or her Stock Appreciation Right within the
time specified herein or in the Stock Appreciation Right Agreement (as
applicable), the Stock Appreciation Right shall terminate.

      (b) RESTRICTED STOCK PURCHASE AWARDS. Each Restricted Stock Purchase Award
Agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. At the Board's election, shares of Common
Stock may be (i) held in book entry form subject to the Company's instructions
until any restrictions relating to the Restricted Stock Purchase Award lapse; or
(ii) evidenced by a certificate, which certificate shall be held in such form
and manner as determined by the Board. The terms and conditions of Restricted
Stock Purchase Award Agreements may change from time to time, and the terms and
conditions of separate Restricted Stock Purchase Award Agreements need not be
identical, provided, however, that each Restricted Stock Purchase Award
Agreement shall include (through incorporation of the provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions:

            (i) PURCHASE PRICE. At the time of the grant of a Restricted Stock
Purchase Award, the Board will determine the price to be paid by the Participant
for each share subject to the Restricted Stock Purchase Award. To the extent
required by applicable law, the price to be paid by the Participant for each
share of the Restricted Stock Purchase Award will not be less than the par value
of a share of Common Stock.

            (ii) CONSIDERATION. At the time of the grant of a Restricted Stock
Purchase Award, the Board will determine the consideration permissible for the
payment of the purchase price of the Restricted Stock Purchase Award. The
purchase price of Common Stock acquired pursuant to the Restricted Stock
Purchase Award shall be paid either: (i) in cash at the time of

                                       14
<PAGE>

purchase or (ii) in any other form of legal consideration that may be acceptable
to the Board and permissible under the Delaware General Corporation Law.

            (iii) VESTING. Shares of Common Stock acquired under a Restricted
Stock Purchase Award may be subject to a share repurchase right or option in
favor of the Company in accordance with a vesting schedule to be determined by
the Board.

            (iv) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event
that a Participant's Continuous Service terminates, the Company shall have the
right, but not the obligation, to repurchase or otherwise reacquire, any or all
of the shares of Common Stock held by the Participant that have not vested as of
the date of termination under the terms of the Restricted Stock Purchase Award
Agreement. At the Board's election, the repurchase right may be at the least of:
(i) the Fair Market Value on the relevant date or (ii) the Participant's
original cost. The Company shall not be required to exercise its repurchase
option until at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have
elapsed following the purchase of the restricted stock unless otherwise
determined by the Board or provided in the Restricted Stock Purchase Award
Agreement.

            (v) TRANSFERABILITY. Rights to purchase or receive shares of Common
Stock granted under a Restricted Stock Purchase Award shall be transferable by
the Participant only upon such terms and conditions as are set forth in the
Restricted Stock Purchase Award Agreement, as the Board shall determine in its
discretion, and so long as Common Stock awarded under the Restricted Stock
Purchase Award remains subject to the terms of the Restricted Stock Purchase
Award Agreement.

      (c) RESTRICTED STOCK AWARDS. Each Restricted Stock Award Agreement shall
be in such form and shall contain such terms and conditions as the Board shall
deem appropriate. At the Board's election, shares of Common Stock may be (i)
held in book entry form subject to the Company's instructions until any
restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by
a certificate, which certificate shall be held in such form and manner as
determined by the Board. The terms and conditions of Restricted Stock Award
Agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Award Agreements need not be identical, but each
Restricted Stock Award Agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

            (i) CONSIDERATION. A Restricted Stock Award may be awarded in
consideration for past services actually rendered to the Company or an
Affiliate.

            (ii) VESTING. Shares of Common Stock awarded under the Restricted
Stock Award Agreement may be subject to forfeiture to the Company in accordance
with a vesting schedule to be determined by the Board.

            (iii) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event
a Participant's Continuous Service terminates, any or all of the shares of
Common Stock held by

                                       15
<PAGE>

the Participant which have not vested as of the date of termination of
Continuous Service shall be forfeited under the terms of the Restricted Stock
Award Agreement.

            (iv) TRANSFERABILITY. Rights to acquire shares of Common Stock under
the Restricted Stock Award Agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the Restricted Stock
Award Agreement, as the Board shall determine in its discretion, so long as
Common Stock awarded under the Restricted Stock Award Agreement remains subject
to the terms of the Restricted Stock Award Agreement.

      (d) RESTRICTED STOCK UNIT AWARDS. A Restricted Stock Unit Award shall be
denominated in units equivalent to a number of shares of Common Stock and shall
represent a promise to pay the value of such units upon vesting. Each Restricted
Stock Unit Award Agreement shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. The terms and conditions of
Restricted Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award Agreements need not
be identical, provided, however, that each Restricted Stock Unit Award Agreement
shall include (through incorporation of the provisions hereof by reference in
the agreement or otherwise) the substance of each of the following provisions:

            (i) VESTING. At the time of the grant of a Restricted Stock Unit
Award, the Board shall impose such restrictions or conditions to the vesting of
the Restricted Stock Unit Award as it, in its discretion, deems appropriate.

            (ii) PAYMENT. A Restricted Stock Unit Award, net of any withholding
obligations, may, to the extent vested, be settled by the delivery of shares of
Common Stock, their cash equivalent, any combination thereof or in any other
form of consideration as determined by the Board and contained in the Restricted
Stock Unit Award Agreement.

            (iii) ADDITIONAL RESTRICTIONS. At the time of the grant of a
Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such
restrictions or conditions that delay the delivery of the shares of Common Stock
(or their cash equivalent) subject to a Restricted Stock Unit Award after the
vesting of such Restricted Stock Unit Award.

            (iv) DIVIDEND EQUIVALENTS. Dividend equivalents may be credited in
respect of shares of Common Stock covered by a Restricted Stock Unit Award, as
determined by the Board and contained in the Restricted Stock Unit Award
Agreement. At the discretion of the Board, such dividend equivalents may be
converted into additional shares of Common Stock covered by the Restricted Stock
Unit Award in such manner as determined by the Board. Any additional shares
covered by the Restricted Stock Unit Award credited by reason of such dividend
equivalents will be subject to all the terms and conditions of the underlying
Restricted Stock Unit Award Agreement to which they relate.

8. NON-EMPLOYEE DIRECTORS' NONSTATUTORY STOCK OPTION PROGRAM.

      Without any further action by the Board, automatic Option grants shall be
made under the Plan in accordance with this Section 8 to Non-Employee Directors
who meet the criteria specified in Section 8(a). All Options granted under this
Section 8 shall be Nonstatutory Stock

                                       16
<PAGE>

Options and shall be in such form as may be approved by the Board, subject to
the provisions of the Plan and Section 8.

      (a) NON-DISCRETIONARY GRANTS. Without any further action of the Board, on
the date of each Annual Meeting, commencing with the first Annual Meeting on or
after the IPO Date, each person who is then a Non-Employee Director shall be
automatically granted a Nonstatutory Option having a value (on the date of
grant) equal to $50,000 of the annual cash compensation (excluding Committee
fees) then payable by the Company to such Non-Employee Director, for his or her
service as Non-Employee Director since the later of: (i) the last preceding
Annual Meeting, or (ii) the date on which such person is elected or appointed
for the first time to be a Non-Employee Director. For this purpose, the value of
an Option, and thus the number of shares of Common Stock granted under such
Option, shall be determined under the Black-Scholes option pricing formula, and
any fractional shares shall be rounded to the nearest whole number of shares.

      (b) OPTION PROVISIONS. Each Option granted under this Section 8 shall
include (through incorporation by reference in the Option or otherwise) the
substance of each of the provisions of Section 6, except that no Option granted
under this Section 8 shall be exercisable after the expiration of ten (10) years
after the date on which it was granted and the exercise price of each Option
granted under this Section 8 shall be one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Option on the date the Option is
granted.

9. COVENANTS OF THE COMPANY.

      (a) AVAILABILITY OF SHARES. During the terms of the Stock Awards, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards.

      (b) SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Stock Awards and to issue and sell shares of Common
Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards unless and until
such authority is obtained.

10. USE OF PROCEEDS FROM STOCK.

      Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

11. MISCELLANEOUS.

      (a) ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have the
power to accelerate the time at which a Stock Award may first be exercised or
the time during which a

                                       17
<PAGE>

Stock Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Stock Award stating the time at which it
may first be exercised or the time during which it will vest.

      (b) SHAREHOLDER RIGHTS. No Participant shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares of
Common Stock subject to such Stock Award unless and until such Participant has
satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

      (c) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan, any Stock
Award Agreement or other instrument executed thereunder or any Stock Award
granted pursuant thereto shall confer upon any Participant any right to continue
to serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an Affiliate
to terminate (i) the employment of an Employee with or without notice and with
or without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultant's agreement with the Company or an Affiliate or (iii) the service of
a Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.

      (d) INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof that exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of the applicable Option Agreement(s).

      (e) INVESTMENT ASSURANCES. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to
give written assurances satisfactory to the Company as to the Participant's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.

                                       18
<PAGE>

      (f) WITHHOLDING OBLIGATIONS. To the extent provided by the terms of a
Stock Award Agreement, the Company may in its discretion, satisfy any federal,
state or local tax withholding obligation relating to a Stock Award by any of
the following means (in addition to the Company's right to withhold from any
compensation paid to the Participant by the Company) or by a combination of such
means: (i) causing the Participant to tender a cash payment; (ii) withholding
shares of Common Stock from the shares of Common Stock issued or otherwise
issuable to the Participant in connection with the Stock Award; or (iii) by such
other method as may be set forth in the Stock Award Agreement.

12. ADJUSTMENTS UPON CHANGES IN STOCK.

      (a) CAPITALIZATION ADJUSTMENTS. If any change is made in, or other event
occurs with respect to, the Common Stock subject to the Plan or subject to any
Stock Award without the receipt of consideration by the Company through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company (each a "CAPITALIZATION ADJUSTMENT"), then (i) the Plan will be
appropriately adjusted in the class(es) and maximum number of securities subject
to the Plan pursuant to Sections 4(a) and 4(b) and the maximum number of
securities subject to award to any person pursuant to Section 5(c) and (ii) the
outstanding Stock Awards will be appropriately adjusted in the class(es) and
number of securities and price per share of Common Stock subject to such
outstanding Stock Awards. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. (Notwithstanding the
foregoing, the conversion of any convertible securities of the Company shall not
be treated as a transaction "without receipt of consideration" by the Company.)

      (b) DISSOLUTION OR LIQUIDATION. In the event of a dissolution or
liquidation of the Company, all outstanding Stock Awards (other than Stock
Awards consisting of vested Common Stock not subject to the Company's right of
repurchase) shall terminate immediately prior to the completion of such
dissolution or liquidation, and Common Stock subject to the Company's repurchase
option may be repurchased by the Company notwithstanding the fact that the
holder of such stock is still in Continuous Service; provided however that, the
Board may, in its discretion, cause some or all Stock Awards to be fully vested,
exercisable and/or no longer subject to repurchase (to the extent such Stock
Awards have not previously expired or terminated) before the dissolution or
liquidation is completed but contingent on its completion.

      (c) CORPORATE TRANSACTION. In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may assume or continue any or all
Stock Awards outstanding under the Plan or may substitute similar stock awards
for Stock Awards outstanding under the Plan (including but not limited to,
awards to acquire the same consideration paid to the shareholders of the
Company, as the case may be, pursuant to the Corporate Transaction), and any
reacquisition or repurchase rights held by the Company in respect of Common
Stock issued pursuant to Stock Awards may be assigned by the Company to the
successor of the Company (or the successor's parent company), if any, in
connection with such Corporate Transaction. In the event that any surviving
corporation or acquiring corporation does not assume or continue all such
outstanding Stock Awards or substitute similar stock awards for all such
outstanding Stock Awards, then with respect to Stock Awards that have been not
assumed, continued or substituted

                                       19
<PAGE>

and that are held by Participants whose Continuous Service has not terminated
prior to the effective time of the Corporate Transaction, the vesting of such
Stock Awards (and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall
not determine such a date, to the date that is five (5) days prior to the
effective time of the Corporate Transaction), and such Stock Awards shall
terminate if not exercised (if applicable) at or prior to such effective time
and any reacquisition or repurchase rights held by the Company with respect to
such Stock Awards shall (contingent upon the effectiveness of the Corporate
Transaction) lapse. With respect to any other Stock Awards outstanding under the
Plan that have not been assumed, continued or substituted, the vesting of such
Stock Awards (and, if applicable, the time at which such Stock Award may be
exercised) shall not be accelerated, unless otherwise provided in a written
agreement between the Company or any Affiliate and the holder of such Stock
Award, and such Stock Awards shall terminate if not exercised (if applicable)
prior to the effective time of the Corporate Transaction.

      (d) CHANGE IN CONTROL. A Stock Award may be subject to additional
acceleration of vesting and exercisability upon or after a Change in Control as
may be provided in the Stock Award Agreement for such Stock Award or as may be
provided in any other written agreement between the Company or any Affiliate and
the Participant, but in the absence of such provision, no such acceleration
shall occur.

13. AMENDMENT OF THE PLAN AND STOCK AWARDS.

      (a) AMENDMENT OF PLAN. Subject to the limitations, if any, of applicable
law, the Board at any time, and from time to time, may amend the Plan. However,
except as provided in Section 12(a) relating to Capitalization Adjustments, no
amendment shall be effective unless approved by the shareholders of the Company
to the extent shareholder approval is necessary to satisfy applicable law.

      (b) SHAREHOLDER APPROVAL. The Board, in its discretion, may submit any
other amendment to the Plan for shareholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to Covered Employees.

      (c) CONTEMPLATED AMENDMENTS. It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.

      (d) NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.

                                       20
<PAGE>

      (e) AMENDMENT OF STOCK AWARDS. The Board at any time, and from time to
time, may amend the terms of any one or more Stock Awards, including, but not
limited to, amendments to provide terms more favorable than previously provided
in the agreement evidencing a Stock Award, subject to any specified limits in
the Plan that are not subject to Board discretion; provided, however, that the
rights under any Stock Award shall not be impaired by any such amendment unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.

14. TERMINATION OR SUSPENSION OF THE PLAN.

      (a) PLAN TERM. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the date the Plan is adopted by the Board or approved by
the shareholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.

      (b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan shall
not impair rights and obligations under any Stock Award granted while the Plan
is in effect except with the written consent of the Participant.

15. EFFECTIVE DATE OF PLAN.

      The Plan shall become effective immediately upon the date on which
membership units of American Reprographics Holdings, L.L.C., a California
limited liability company, are contributed to the Company, but no Stock Award
shall be exercised (or, in the case of Restricted Stock Awards, shall be
granted) unless and until the Plan has been approved by the shareholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.

16. CHOICE OF LAW.

      The law of the State of California shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.

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