1996 STOCK OPTION AND INCENTIVE PLAN

                                     OF

                                  KFX INC.





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                             TABLE OF CONTENTS

                                                                                                    Page


                                 ARTICLE I

                                DEFINITIONS
<S>      <C>             <C>                                                                           <C>
         Section 1.01.   General.......................................................................1
         Section 1.02.   Gender and Number.............................................................3

                                 ARTICLE II

                           SHARES SUBJECT TO PLAN

         Section 2.01.   Shares Subject to Plan........................................................3
         Section 2.02.   Effect of Certain Exercises...................................................4

                                ARTICLE III

                            GRANTING OF OPTIONS

         Section 3.01.   Eligibility...................................................................4
         Section 3.02.   Disqualification for Stock Ownership..........................................4
         Section 3.03.   Qualification of Incentive Stock Options......................................4
         Section 3.04.   Granting of Options...........................................................4
         Section 3.05.   Non-Employee Directors........................................................5

                                 ARTICLE IV

                              TERMS OF OPTIONS

         Section 4.01.   Option Agreement..............................................................6
         Section 4.02.   Option Price..................................................................6
         Section 4.03.   Option Term...................................................................6
         Section 4.04.   Option Vesting................................................................6
         Section 4.05.   Exercise of Option After Termination of Employment............................7
         Section 4.06.   Consideration.................................................................7

                                 ARTICLE V

                            EXERCISE OF OPTIONS

         Section 5.01.   Partial Exercise..............................................................7
         Section 5.02.   Manner of Exercise............................................................8
         Section 5.03.   Transfer of Shares to an Employee.............................................8
         Section 5.04.   Certain Timing Requirements...................................................8
         Section 5.05.   Conditions to Issuance of Stock Certificates..................................9
         Section 5.06.   Rights as Stockholders........................................................9
         Section 5.07.   Transfer Restrictions.........................................................9
         Section 5.08.   Restrictions on Exercise of Option............................................9


                                 ARTICLE VI

                         AWARD OF RESTRICTED STOCK

         Section 6.01.   Eligibility Restricted........................................................9
         Section 6.02.   Award of Restricted Stock....................................................10

                                ARTICLE VII

                         TERMS OF RESTRICTED STOCK

         Section 7.01.   Restricted Stock Agreement...................................................10
         Section 7.02.   Consideration to the Company.................................................10
         Section 7.03.   Rights as Stockholders.......................................................10
         Section 7.04.   Restrictions.................................................................10
         Section 7.05.   Repurchase of Restricted Stock...............................................11
         Section 7.06.   Escrow.......................................................................11
         Section 7.07.   Legend.......................................................................11

                                ARTICLE VIII

                             PERFORMANCE AWARDS

         Section 8.01.   Eligibility..................................................................11
         Section 8.02.   Performance Awards...........................................................11
         Section 8.03.   Performance Award Agreement..................................................12
         Section 8.04.   Term.........................................................................12
         Section 8.05.   Exercise Upon Termination of Employment......................................12
         Section 8.06.   Payment on Exercise..........................................................12
         Section 8.07.   Consideration................................................................12

                                 ARTICLE IX

                               ADMINISTRATION

         Section 9.01.   Compensation Committee.......................................................12
         Section 9.02.   Duties and Powers of Committee...............................................12
         Section 9.03.   Majority Rule................................................................13
         Section 9.04.   Compensation; Professional Assistance; Good Faith Actions....................13
         Section 9.05.   No Liability.................................................................13
         Section 9.06.   Indemnification..............................................................13

                                 ARTICLE X

                          MISCELLANEOUS PROVISIONS

         Section 10.01.   Not Transferable............................................................13
         Section 10.02.   Amendment, Suspension or Termination of this Plan...........................14
         Section 10.03.   Changes in Common Stock or Assets of the Company............................14
         Section 10.04.   Merger of the Company.......................................................15
         Section 10.05.   Approval of Plan by Stockholders............................................15
         Section 10.06.   Tax Withholding.............................................................15
         Section 10.07.   Loans.......................................................................15
         Section 10.08.   Limitations Applicable to Section 16 Persons................................16
         Section 10.09.   Plan Designation and Status.................................................16
         Section 10.10.   Release of Restrictions.....................................................16
         Section 10.11.   Effect of Plan Upon Options and Compensation Plans..........................16
         Section 10.12.   Effect of Change of Subsidiary Status.......................................16
         Section 10.13.   Compliance with Laws........................................................17
         Section 10.14.   Titles......................................................................17
         Section 10.15    Governing Law...............................................................17
         Section 10.16.   Severability................................................................17
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                  1996 STOCK OPTION AND INCENTIVE PLAN OF
                                  KFX INC.

         KFx Inc., a Delaware corporation (the "Company"), has adopted this
1996 Stock Option and Incentive Plan of KFx Inc. (the "Plan"), effective
April 26, 1996, for the benefit of its eligible Employees.

         The purposes of this Plan are as follows:

                  (a) To provide an additional incentive for key Employees
         and other persons associated with the Company to further the
         growth, development and financial success of the Company by
         personally benefiting through the ownership of Common Stock and/or
         rights which recognize such growth, development and financial
         success.

                  (b) To enable the Company to obtain and retain the
         services of key Employees and other persons associated with the
         Company considered essential to the long-range success of the
         Company by offering them an opportunity to own stock in the
         Company and/or rights which will reflect the growth, development
         and financial success of the Company.


                                 ARTICLE I

                                DEFINITIONS

     Section 1.01. General. Wherever the following terms are used in this
Plan they shall have the meaning specified below, unless the context
clearly indicates otherwise.

         "Beneficiary" shall mean the person or persons properly designated
by the Optionee or Grantee, including his spouse or heirs at law, to
exercise such Optionee's or Grantee's rights under this Plan in the event
of the Optionee's or Grantee's death, or if the Optionee or Grantee has not
designated such person or persons, or such person or persons shall all have
pre-deceased the Optionee or Grantee, the executor or administrator of the
Optionee's or Grantee's estate. Designation, revocation and redesignation
of Beneficiaries must be made in writing in accordance with rules
established by the Committee and shall be effective upon delivery to the
Committee.

         "Board" shall mean the Board of Directors of the Company.

         "Bylaws" shall mean the Second Amended and Restated Bylaws of the
Company, as amended from time to time.

         "Certificate of Incorporation" shall mean the Company's Restated
Certificate of Incorporation on file with the Delaware Secretary of State.

         "Code" shall mean the Internal Revenue Cede of 1986, as amended.

         "Committee" shall mean the Compensation Committee of the Board,
appointed as provided in Section 9 and the Bylaws of the Company.

         "Common Stock" shall mean the common stock of the Company, par
value $.001 per share, as presently constituted and any equity security of
the Company issued or authorized to be issued in the future, but excluding
any warrants, options or other rights to purchase Common Stock, and
provided that debt securities of the Company convertible into Common Stock
shall be deemed equity securities of the Company.

         "Company" shall mean KFx Inc., a Delaware corporation.

         "Company Subsidiary" shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then
owns stock possessing 50 percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
"Company Subsidiary" shall also mean any partnership in which the Company
and/or any Company Subsidiary owns more than 50 percent of the capital or
profits interests.

         "Director" shall mean a member of the Board.

         "Employee" shall mean any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company, or of any
Company Subsidiary and, to the extent permitted by applicable law, any
persons associated with the Company.

         "Expiration Date" shall mean the last day of the term of the
Option as established in Section 4.03.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         "Fair Market Value" of a share of Common Stock as of a given date
shall be the average of the daily market price for the five (5) consecutive
trading days immediately preceding the valuation date. The market price for
each such trading day shall be: (i) if the shares of Common Stock are
listed or admitted to trading on any securities exchange or the
NASDAQ-National Market System, the closing price, regular way, on such day,
or if no such sale takes place on such day, the average of the closing bid
and asked prices on such day, (ii) if the shares of Common Stock are not
listed or admitted to trading on any securities exchange or the
NASDAQ-National Market System, the last reported sale price on such day or,
if no sale takes place on such day, the average of the closing bid and
asked prices on such day, as reported by a reliable quotation source
designated by the Company, or (iii) if the shares of Common Stock are not
listed or admitted to trading on any securities exchange or the
NASDAQ-National Market System and no such last reported sale price or
closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable
quotation source designated by the Company, or if there shall be no bid and
asked prices on such day, the average of the high bid and low asked prices,
as so reported, on the most recent day (not more than 10 days prior to the
date in question) for which prices have been so reported; provided that if
there are no bid and asked prices reported during the 10 days prior to the
date in question, the Fair Market Value of the shares of Common Stock shall
be determined by the Company acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable
judgment, appropriate.

         "Grantee" shall mean an Employee or other person associated with
the Company granted a Performance Award under this Plan.

         "Incentive Stock Option" shall mean an Option which conforms to
the applicable provisions of Section 422 of the Code and which is
designated as an Incentive Stock Option by the Committee.

         "Non-Employee Director" shall mean each person who is then a
member of the Board and who is not then an Employee of the Company or any
of its subsidiaries.

         "Non-Qualified Stock Option" shall mean an Option which is not an
Incentive Stock Option and which is designated as a Non-Qualified Stock
Option by the Committee.

         "Option" shall mean a stock option granted pursuant to this Plan.
An Option granted under this Plan shall, as determined by the Committee, be
either a Non-Qualified Stock Option or an Incentive Stock Option.

         "Optionee" shall mean an Employee, Non-Employee Director or person
associated with the Company and who is granted an Option under this Plan.

         "Participant" shall mean a person who has received any type of
award under this Plan.

         "Performance Award" shall mean a cash bonus, stock bonus or other
performance or incentive award that is paid in cash, stock or a combination
of both.

         "Plan" shall mean this 1996 Stock Option and Incentive Plan of KFx
Inc.

         "Restricted Stock" shall mean Common Stock awarded pursuant to
Article VII of this Plan.

         "Restricted Stockholder" shall mean an Employee to whom Restricted
Stock has been awarded under this Plan.

         "Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.

         "Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee, Grantee or Restricted
Stockholder and the Company or a Company Subsidiary is terminated for any
reason, including, but not by way of limitation, a termination by
resignation, discharge, death, permanent and total disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of an Optionee, Grantee or Restricted
Stockholder by the Company or a Company Subsidiary and (ii) at the
discretion of the Committee, terminations which result in a temporary
severance of the employee-employer relationship that do not exceed one
year. The Committee, in its absolute discretion, shall determine the effect
of all other matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a
Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations
of Employment; provided, however, that, with respect to Incentive Stock
Options, a leave of absence shall constitute a Termination of Employment
if, and to the extent that, such leave of absence interrupts employment for
the purposes of Section 422(a)(2) of the Code and the then applicable
regulations and revenue rulings under said Section. Notwithstanding any
other provision of this Plan, the Company or any Company Subsidiary has an
absolute and unrestricted right to terminate an Employee's employment at
any time for any reason whatsoever, with or without cause, except to the
extent expressly provided otherwise in writing.

         Section 1.02. Gender and Number. Wherever the masculine gender is
used it shall include the feminine and neuter, and wherever a singular
pronoun is used it shall include the plural, unless the context clearly
indicates otherwise.


                                 ARTICLE II

                           SHARES SUBJECT TO PLAN

         Section 2.01. Shares Subject to Plan. The shares subject to
Options, Restricted Stock Awards or Performance Awards shall initially be
shares of Common Stock, as presently constituted, and the aggregate number
of such shares which may be issued upon exercise of such options or rights
or upon any such awards shall not exceed 1,500,000 shares, which equals
approximately 7% of the Common Stock outstanding on April 26, 1996. The
shares of Common Stock issuable upon exercise or grant of an Option or
Performance Award, or as Restricted Stock, may be either previously
authorized but unissued shares or issued shares which have been repurchased
by the Company. If any equity securities of the Company, other than Common
Stock, are issued or authorized to be issued, the Committee shall
determine, on a fair and equitable basis, the appropriate number of shares
of the Company's present common stock to be deemed issued or issuable with
respect to such other equity securities for purposes of this Section 2.01.

         Section 2.02. Effect of Certain Exercises. If a Performance Award
based on the increased market value of a specified number of shares of
Common Stock is paid, the number of shares of Common Stock to which such
exercise or payment relates under such Performance Award shall be charged
against the maximum number of shares of Common Stock that may be issued
under this Plan. If any shares of Common Stock issuable pursuant to any
Option or other right to acquire shares of Common Stock provided for under
this Plan are surrendered to the Company as payment for the exercise price
of said Opion or other right to acquire shares of Common Stock, the number
of shares of Common Stock issuable but so surrendered shall be charged
against the maximum number of shares of Common Stock that may be issued
under this Plan. In the event the Company withholds shares of Common Stock
for tax withholding purposes pursuant to Section 10.06 hereof, the number
of shares that would have been issuable but that are withheld pursuant to
the provisions of Section 10.06 shall be charged against the maximum number
of shares of Common Stock that may be issued under this Plan.


                                ARTICLE III

                            GRANTING OF OPTIONS

     Section 3.01. Eligibility. Any Employee or person associated with the
Company and selected by the Committee pursuant to Section 3.04(a)(i) shall
be eligible to be granted an Option.

         Section 3.02. Disqualification for Stock Ownership. No person may
be granted an Incentive Stock Option under this Plan if such person, at the
time the Incentive Stock Option is granted, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any then existing Company Subsidiary unless such
Incentive Stock Option conforms to the applicable provisions of Section 422
of the Code.

         Section 3.03. Qualification of Incentive Stock Options. No
Incentive Stock Option shall be granted unless such Option, when granted,
qualifies as an Incentive Stock Option under Section 422 of the Code. Any
option purporting to constitute an Incentive Stock Option in violation of
the provisions of Section 422 of the Code shall constitute a Non-Qualified
Stock Option.

         Section 3.04.   Granting of Options.

                    (a) The Committee shall from time to time, in its
          absolute discretion:

                           (i) Determine which Employees or persons
                  associated with the Company are key Employees and select
                  from among the key Employees or such persons (including
                  Employees or persons to whom Options or Performance
                  Awards have previously been granted and/or shares of
                  Restricted Stock have previously been issued) such of
                  them as in its opinion should be granted Options;

                           (ii) Determine the number of shares to be
                  subject to such Options granted to the selected key
                  Employees or such persons;

                           (iii) Determine whether such Options are to be
                  Incentive Stock Options or Non-Qualified Stock Options;
                  and

                           (iv) Determine the terms and conditions of such
                  Options, consistent with this Plan.

                    (b) Upon the selection of a key Employee or persons
          associated with the Company to be granted an Option, the
          Committee shall instruct the Secretary of the Company to issue
          the Option and may impose such conditions on the grant of the
          Option as it deems appropriate. Without limiting the generality
          of the preceding sentence, the Committee may, in its discretion
          and on such terms as it deems appropriate, require as a condition
          on the grant of an Option to an Employee that the Employee
          surrender for cancellation some or all of the unexercised Options
          or Performance Awards or other rights which have been previously
          granted to him under this Plan. An Option, the grant of which is
          conditioned upon such surrender, tony have an option price lower
          (or higher) than the exercise price of such surrendered Option or
          Performance Award. may cover the same (or a lesser or greater)
          number of shares as such surrendered right, may contain such
          other terms as the Committee deems appropriate, and shall be
          exercisable in accordance with its terms, without regard to the
          number of shares, price, exercise period or any other term or
          condition of such surrendered right.

                  (c) Any Incentive Stock Option granted under this Plan
         may be modified by the Committee to disqualify such option from
         treatment as an Incentive Stock Option.

         Section 3.05. Non-Employee Directors. Notwithstanding anything in
this Plan to the contrary, Non-Employee Directors are only eligible to
receive Options under this Plan and such Options may only be granted
pursuant to the provisions contained in this Section 3.05.

                  (a) Each year on the third business day following the
         Company's Annual Meeting of Shareholders (the "Grant Date") each
         Non-Employee Director shall automatically, without fttrther action
         by the Board or the Committee, be granted a Non-Qualified Stock
         Option to purchase 10,000 shares of Common Stock.

                           (i) If on the Grant Date the Company is in
                  possession of material, undisclosed information that
                  would prevent it from issuing securities, then the grant
                  of the Options will be suspended until the third day
                  after the public dissemination of the information (or the
                  first trading day thereafter). Only the legal counsel to
                  the Company may suspend the Grant Date; the amount,
                  pricing and other terms of the grant will remain as set
                  forth in this Section 3.05.

                  (b) All Non-Qualified Stock Options granted pursuant to
         Section 3.05(a) above, shall vest immediately on the date of grant
         and be immediately exercisable upon grant; provided, however, that
         shares of Common Stock acquired upon exercise of the Non-Qualified
         Option are subject to repurchase by the Company at the exercise
         price if the Non-Employee Director ceases to serve as a Director
         of the Company prior to the first anniversary of the Grant Date,
         for any reason other than death.

                  (c) Only Non-Qualified Stock Options may be granted under
         this Section 3.05. The price per share of the Common Stock subject
         to each Option granted under the Plan shall not be less than 100%
         of the Fair Market Value of the Common Stock as of the date the
         Option is granted.

                  (d) In addition to the provisions contained in Section
         10.02 of this Plan, neither the Board nor the Committee may amend,
         more than once every six months, the provisions of the Plan
         regarding (i) the selection of the Non-Employee Directors to whom
         Options are to be granted, (ii) the timing of such grants, (iii)
         the number of shares subject to any Option, (iv) the exercise
         price of any Option, (v) the periods during which any Option may
         be exercised, and (vi) the term of any Option, other than to
         comport with changes in the Code, as amended, the Employee
         Retirement Income Security Act, as amended, or the rules and
         regulations thereunder.


                                 ARTICLE IV

                              TERMS OF OPTIONS

         Section 4.01. Option Agreement. Each Option shall be evidenced by
a written stock option agreement, which shall be executed by the Optionee
and an authorized officer of the Company and which shall contain such terms
and conditions as the Committee shall determine, consistent with this Plan.
Stock option agreements evidencing Incentive Stock Options shall contain
such terms and conditions as may be necessary to meet the applicable
provisions of Section 422 of the Code.

         Section 4.02. Option Price. The price per share of the shares
subject to each Option shall be set by the Committee; provided, however,
that such price shall be no less than the par value of a share of Common
Stock and in the case of Incentive Stock Options such price shall not be
less than 100% of the Fair Market Value of a share of Common Stock as of
the date the Option is granted: provided further, that in the case of
Incentive Stock Options such price shall be no less than 110% of the Fair
Market Value of a share of Common Stock as of the date the Option is
granted if such Option is granted to a person who owns ten percent (10%) or
more of the issued and outstanding Common Stock of the Company as of such
date.

         Section 4.03. Option Term. The term of an Option shall be set by
the Committee in its discretion; provided, however, that no such term shall
exceed a reasonable time period, and provided further that, in the case of
Incentive Stock Options, the term shall not be more than ten (10) years
from the date the Incentive Stock Option is granted. The last day of the
term of the Option shall be the Option's Expiration Date.

         Section 4.04.   Option Vesting.

                  (a) The period during which the right to exercise an
         Option in whole or in part vests in the Optionee shall be set by
         the Committee, and the Committee may determine that an Option may
         not be exercised in whole or in part for a specified period after
         it is granted; provided, however, that no Option shall be
         exercisable by any Optionee who is then subject to Section 16 of
         the Exchange Act within the period ending six months after the
         date the Option is granted. At any time after grant of an Option,
         the Committee may, in its sole discretion and subject to whatever
         terms and conditions it selects, accelerate the period during
         which an Option vests.

                  (b) No portion of an Option which is unexercisable at
         Termination of Employment shall thereafter become exercisable;
         provided, however, that provision may be made that such Option
         shall become exercisable, with the consent of the Committee, in
         the event of a Termination of Employment because of the Optionee's
         normal retirement or permanent and total disability (each as
         determined by the Committee in accordance with Company policies),
         death or early retirement.

                  (c) To the extent that the aggregate Fair Market Value of
         the Common Stock with respect to which Incentive Stock Options
         (without regard to Section 422(d) of the Code) are exercisable for
         the first time by an Optionee during any calendar year (under the
         Plan and all other incentive stock option plans of the Company or
         any Company Subsidiary) exceeds $100,000, such Options shall be
         treated as Non-Qualified Options to the extent required by Section
         422 of the Code. The rule set forth in the preceding sentence
         shall be applied by taking Options into account in the order in
         which they were granted. For purposes of this Section 4.04(c), the
         Fair Market Value of the Common Stock shall be determined as of
         the time the Option, with respect to such Common Stock, is
         granted.

          Section 4.05. Exercise of Option After Termination of Employment.
For those Participants who are Employees, an Option is exercisable by an
Optionee only while he is an Employee. The preceding notwithstanding, the
Committee may determine that an Option may be exercised subsequent to an
Optionee's Termination of Employment, subject to the following limitations:

                  (a) If the Optionee dies while an Option is exercisable
         under the terms of this Plan, the Optionee's Beneficiary may
         exercise such rights, to the extent the Optionee could have done
         so immediately preceding his death. Any such Option must be
         exercised within twelve (12) months after the Optionee's death,
         and the Committee may in its discretion extend the Expiration Date
         of such Option to accommodate such exercise; provided, however,
         that the term of an Incentive Stock Option may not be extended
         beyond ten (10) years from the date of grant.

                  (b) If the Optionee's employment is terminated due to his
         permanent and total disability, as defined in Section 22(e)(3) of
         the Code, the Optionee may exercise his Option, to the extent
         exercisable as of his Termination of Employment, within twelve
         (12) months after termination, but no later than the Option's
         Expiration Date.

                  (c) If the Oprionee's employment is terminated for any
         reason other than those set forth in subsection (a) or (b) above,
         the Optionee may exercise his Option, to the extent exercisable as
         of his Termination of Employment, within three (3) months after
         Termination of Employment, but not later than the Option's
         Expiration Date.

         Section 4.06. Consideration. In consideration of the granting of a
Non-Qualified Stock Option, the Optionee shall agree, in a written stock
option agreement, to remain in the employ of, or associated with, the
Company or a Company Subsidiary for a period of time to be determined by
the Committee after the Non- Qualified Stock Option is granted or upon such
other terms and conditions as deemed appropriate by the Committee. In
consideration of the granting of an Incentive Stock Option, the Optionee
shall agree, in a written stock option agreement, to remain in the employ
of the Company or a Company Subsidiary for a period of time to be
determined by the Committee after the Incentive Stock Option is granted or
upon those terms and conditions as deemed appropriate by the Committee. If
no period of time for employment by the Company is set in such written
stock option agreement, no time of employment shall be required. Nothing in
this Plan or in any stock option agreement hereunder shall confer upon any
Optionee any right to continue in the employ of the Company or any Company
Subsidiary.


                                 ARTICLE V

                            EXERCISE OF OPTIONS

         Section 5.01. Partial Exercise. An exercisable Option may be
exercised in whole or in part. However, an Option shall not be exercisable
with respect to fractional shares and the Committee may require that, by
the terms of the Option, a partial exercise be made with respect to a
minimum number of shares.

          Section 5.02. Manner of Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon:

                  (a) Delivery of all of the following to the Secretary of
         the Company or his office:

                           (i) A written notice complying with the
                  applicable rules established by the Committee or the
                  Company stating that the Option, or a portion thereof, is
                  exercised. The notice shall be signed by the Optionee or
                  other person then entitled to exercise the Option or such
                  portion;

                           (ii) Such representations and documents as the
                  Committee, in its absolute discretion, deems necessary or
                  advisable to effect compliance with all applicable
                  provisions of the Securities Act of 1933, as amended, and
                  any other federal or state securities laws or
                  regulations. The Committee may, in its absolute
                  discretion, also take whatever additional actions it
                  deems appropriate to effect such compliance, including,
                  without limitation, placing legends on share certificates
                  and issuing stop-transfer notices to agents and
                  registrars; and

                           (iii) In the event that the Option shall be
                  exercised pursuant to Section 4.05(a) by any person or
                  persons other than the Optionee, appropriate proof of the
                  right of such person or persons to exercise the Option;
                  and

                  (b) Full cash payment to the Secretary of the Company for
         the shares with respect to which the Option, or portion thereof,
         is exercised. However, at the discretion of the Committee, the
         terms of the Option may (i) allow a delay in payment up to thirty
         (30) days from the date the Option, or portion thereof, is
         exercised; (ii) allow payment, in whole or in part, through the
         delivery of shares of Common Stock owned by the Optionees; (iii)
         allow payment, in whole or in part, through the surrender of
         shares of Common Stock then issuable upon exercise of the Option;
         or (iv) allow payment, in whole or in part, through the delivery
         of property of any kind which constitutes good and valuable
         consideration.

         Section 5.03. Transfer of Shares to an Employee. As soon as
practicable after receipt by the Company, pursuant to Section 5.02(b), of
full cash payment for the shares with respect to which an Option, or
portion thereof, is exercised by an Optionee, with respect to each such
exercise, the Company shall transfer to the Optionee the number of shares
equal to the quotient of:

                  (a) The amount of the payment made by the Optionee to the
         Company pursuant to Section 5.02(b), and

                  (b) The price per share of the Common Stock subject to
         the Option as determined pursuant to Section 4.02.

         Section 5.04. Certain Timing Requirements. At the discretion of
the Committee, shares of Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the Option exercise price or
the tax withholding consequences of such exercise only (i) during such
periods in which trading of the Common Stock is permitted for Employees of
the Company under Company policy as in effect from time to time or (ii)
pursuant to an irrevocable written election by the Optionee to use shares
of Common Stock issuable to the Optionee upon exercise of the Option to pay
all or part of the Option price or the withholding taxes made at least six
months prior to the payment of such Option price or withholding taxes.

         Section 5.05. Conditions to Issuance of Stock Certificates. The
Company shall not be required to issue or to deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option
or portion thereof prior to fulfillment of all of the following conditions:

                  (a) The admission of such shares to listing on all stock
         exchanges or other contract markets on which such class of stock
         is then listed or traded;

                  (b) The completion of any registration or other
         qualification of such shares under any state or federal law, or
         under the rulings or regulations of the Securities and Exchange
         Commission or any other governmental regulatory body which the
         Committee shall, in its absolute discretion, deem necessary or
         advisable;

                  (c) Obtaining any approval or other clearance from any
         state or federal governmental agency which the Committee shall, in
         its absolute discretion, determine to be necessary or advisable;

                  (d) The lapse of such reasonable period of time following
         the exercise of the Option as the Committee may establish from
         time to time for reasons of administrative convenience; and

                  (e) The receipt by the Company of full payment for such
         shares, including payment of any applicable withholding tax.

         Section 5.06. Rights as Stockholders. The holders of Options shall
not be, nor have any of the rights or privileges of, stockholders of the
Company in respect of any shares purchasable upon the exercise of any part
of an Option unless and until certificates representing such shares have
been issued by the Company to such holders.

         Section 5.07. Transfer Restrictions. Shares acquired through the
exercise of an Option shall be subject to the restrictions on transfer set
forth in the Certificate of Incorporation. The Committee, in its absolute
discretion, may impose such additional restrictions on the transferability
of the shares purchasable upon the exercise of an Option as it deems
appropriate. Any such restriction shall be set forth in the respective
stock option agreement and may be referred to on the certificates
evidencing such shares. The Committee will require the Employee to give the
Company prompt notice of any disposition of shares of Common Stock acquired
by exercise of an Incentive Stock Option within (i) two years from the date
of granting such Option to such Employee or (ii) one year after the
transfer of such shares to such Employee. The Committee may direct that the
certificates evidencing shares acquired by exercise of an Option refer to
such requirement to give prompt notice of disposition.

         Section 5.08. Restrictions on Exercise of Option. An Option is not
exercisable if the exercise of such Option would likely result in the
Optionee's ownership of Common Stock being in violation of the Certificate
of Incorporation.


                                 ARTICLE VI

                         AWARD OF RESTRICTED STOCK

         Section 6.01. Eligibility. Restricted Stock may be awarded to any
Employee or person associated with the Company whom the Committee, pursuant
to Section 3.04(a)(i), determines is a key Employee or person associated
with the Company.

         Section 6.02.   Award of Restricted Stock.

                  (a) The Committee shall from time to time, in its
         absolute discretion:

                           (i) Select from among the key Employees
                  (including Employees to whom Options or Performance
                  Awards have previously been granted and/or shares of
                  Restricted Stock have previously been issued) or persons
                  associated with the Company such of them as in its
                  opinion should be awarded Restricted Stock; and

                           (ii) Determine the purchase price and other
                  terms and conditions applicable to such Restricted Stock,
                  consistent with this Plan.

                  (b) The Committee shall establish the purchase price and
         form of payment for Restricted Stock; provided, however, that such
         purchase price shall be no less than the par value of the Common
         Stock to be purchased. In all cases, legal consideration shall be
         required for each issuance of Restricted Stock.

                  (c) Upon the selection of a key Employee or persons
         associated with the Company to be awarded Restricted Stock, the
         Committee shall instruct the Secretary of the Company to issue
         such Restricted Stock and may impose such conditions on the
         issuance of such Restricted Stock as it deems appropriate.


                                ARTICLE VII

                         TERMS OF RESTRICTED STOCK

         Section 7.01. Restricted Stock Agreement. Restricted Stock shall
be issued only pursuant to a written Restricted Stock agreement, which
shall be executed by the selected key Employee or persons associated with
the Company and an authorized officer of the Company and which shall
contain such terms and conditions as the Committee shall determine,
consistent with this Plan.

         Section 7.02. Consideration to the Company. As consideration for
the issuance of Restricted Stock, in addition to payment of the purchase
price, the selected key Employee or persons associated with the Company
shall agree, in the written Restricted Stock agreement, to remain in the
employ of, or associated with, the Company or a Company Subsidiary for a
period of time after the Restricted Stock is issued as determined by the
Committee. Nothing in this Plan or in any Restricted Stock agreement
hereunder shall confer on any Restricted Stockholder any right to continue
in the employ of the Company or any Company Subsidiary.

         Section 7.03. Rights as Stockholders. Upon delivery of the shares
of Restricted Stock to the escrow holder pursuant to Section 7.06, the
Restricted Stockholder shall have all the rights of a stockholder with
respect to said shares, subject to the restrictions in his Restricted Stock
agreement, including the right to vote the shares and to receive all
dividends and other distributions paid or made with respect to the shares;
provided, however, that in the discretion of the Committee, any
extraordinary distributions with respect to the Common Stock shall be
subject to the restrictions set forth in Section 7.04.

         Section 7.04. Restrictions. All shares of Restricted Stock issued
under this Plan (including any shares received by holders thereof with
respect to shares of Restricted Stock as a result of stock dividends, stock
splits or any other form of recapitalization) shall, in the terms of each
individual Restricted Stock agreement, be subject to such restrictions as
the Committee shall provide, which restrictions may include, without
limitation, restrictions based on duration of employment with the Company,
Company performance and individual performance; provided, however, that by
a resolution adopted after the Restricted Stock is issued, the Committee
may, on such terms and conditions as it may determine to be appropriate,
remove any or all of the restrictions imposed by the terms of the
Restricted Stock agreement. Restricted Stock may not be sold or encumbered
until all restrictions are terminated or expire.

         Section 7.05. Repurchase of Restricted Stock. The Committee shall
provide in the terms of each individual Restricted Stock agreement that the
Company shall have the right to repurchase from the Restricted Stockholder
the Restricted Stock then subject to restrictions under the Restricted
Stock agreement immediately upon a Termination of Employment or otherwise
for any reason at a cash price per share equal to the price paid by the
Restricted Stockholder for such Restricted Stock; provided, however, that
provision may be made that no such right of repurchase shall exist in the
event of a Termination of Employment because of the Restricted
Stockholder's retirement at or after age fifty-five (55), death or
permanent and total disability.

         Section 7.06. Escrow. The Secretary of the Company or such other
escrow holder as the Committee may appoint shall retain physical custody of
each certificate representing Restricted Stock until all of the
restrictions imposed under the Restricted Stock agreement with respect to
the shares evidenced by such certificate expire or shall have been removed.

         Section 7.07. Legend. In order to enforce the restrictions imposed
upon shares of Restricted Stock hereunder, the Committee shall cause a
legend or legends to be placed on certificates representing all shares of
Restricted Stock that are still subject to restrictions under Restricted
Stock agreements, which legend or legends shall make appropriate reference
to the conditions imposed thereby.


                                ARTICLE VIII

                             PERFORMANCE AWARDS

         Section 8.01. Eligibility. One or more Performance Awards may be
granted to any key Employee or person associated with the Company.

         Section 8.02.   Performance Awards.

                  (a) The Committee shall from time to time, in its
         absolute discretion:

                           (i) Select from among key Employees or persons
                  associated with the Company (including Employees to whom
                  Options or Performance Awards have previously been
                  granted and/or shares of Restricted Stock have previously
                  been issued) such of them as in its opinion should be
                  granted a Performance Award; and

                           (ii) Determine the purchase price and other
                  terms and conditions applicable to such Performance
                  Award, consistent with this Plan.

                  (b) The value of such Performance Awards may be linked to
         the market value, book value or other measure of the value of
         Common Stock or other specific performance criteria determined
         appropriate by the Committee, in each case on a specified date or
         dates or over any period or periods determined by the Committee,
         or may be based upon the appreciation in the market value, book
         value or other measure of the value of a specified number of
         shares of Common Stock over a fixed period or periods determined
         by the Committee. In making such determinations, the Committee
         shall consider (among such other factors as it deems relevant in
         light of the specific type of award) the contributions,
         responsibilities and other compensation of the key Employee or
         person associated with the Company whose Performance Award is at
         issue.

         Section 8.03. Performance Award Agreement. Each Performance Award
shall be evidenced by a written agreement, which shall be executed by the
Grantee and an authorized officer of the Company and which shall contain
such terms and conditions as the Committee shall determine, consistent with
this Plan.

         Section 8.04. Term. The term of a Performance Award shall be set
by the Comniittab in its discretion.

         Section 8.05. Exercise Upon Termination of Employment. A
Performance Award is exercisable only while the Grantee is an Employee or
associated with the Company; provided that the Committee may determine that
the Performance Award may be exercised subsequent to Termination of
Employment to the extent permitted under Section 4.05 with respect to
Options.

         Section 8.06. Payment on Exercise. Payment of the amount
determined under Section 8.02 above shall be in cash, in Common Stock or a
combination of both, as determined by the Committee. To the extent such
payment is effected in Common Stock, it shall be made subject to
satisfaction of all provisions of Section 5.05 with respect to Options and
shall be no less than the par value of a share of Common Stock.

         Section 8.07. Consideration. In consideration of the granting of a
Performance Award, the Grantee shall agree, in a written agreement, to
remain in the employ of, or associated with, the Company or a Company
Subsidiary after such Performance Award is granted for a period of time as
determined by the Committee. Nothing in this Plan or in any agreement
hereunder shall confer on any Grantee any right to continue in the employ
of, or associate with, the Company or any Company Subsidiary.


                                 ARTICLE IX

                               ADMINISTRATION

         Section 9.01. Compensation Committee. The Compensation Committee
shall consist of two or more Directors who are "outside directors" as
defined under Section 162(m) of the Code and the regulations promulgated
thereunder, appointed by and holding office at the pleasure of the Board,
each of whom is not then an officer of the Company and each of whom is a
"disinterested person" as defined by Rule 16b-3. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee
members may resign at any time by delivering written notice to the Board.
Vacancies in the Committee may be filled by the Board.

         Section 9.02. Duties and Powers of Committee. It shall be the duty
of the Committee to conduct the general administration of this Plan in
accordance with its provisions. The Committee shall have the power to
interpret this Plan, the Options, the Performance Awards and the Restricted
Stock, and the agreements pursuant to which the Options, Performance Awards
and Restricted Stock are granted or awarded, and to adopt such rules for
the administration, interpretation and application of this Plan as are
consistent therewith and to interpret, amend or revoke any such rules. Any
such grant or award under this Plan need not be the same with respect to
each Optionee, Grantee or Restricted Stockholder. Any such interpretations
and rules with respect to Incentive Stock Options shall be consistent with
the provisions of Section 422 of the Code. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under this Plan except with respect to matters
which under Rule 16b-3 are required to be determined in the sole discretion
of the Committee.

         Section 9.03. Majority Rule. The Committee shall act by a majority
of its members in attendance at a meeting, or to the extent permitted by
law and the Bylaws, by telephonic meeting, at which a quorum is present or
by a memorandum or other written instrument signed by all members of the
Committee.

         Section 9.04. Compensation; Professional Assistance; Good Faith
Actions. Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee
may, with the approval of the Board, employ attorneys, consultants,
accountants, appraisers, brokers or other persons. The Committee, the
Company and the Company's officers and Directors shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Committee in
good faith shall be final and binding upon all Options, Grantees,
Restricted Stockholders, the Company and all other interested persons. No
members of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to this
Plan, any Option, any Performance Award or any Restricted Stock, and all
members of the Committee shall be fully protected by the Company in respect
of any such action, determination or interpretation.

         Section 9.05. No Liability. No member of the Board or the
Committee, or Director, officer or employee of the Company or any Company
Subsidiary shall be liable, responsible or accountable in damages or
otherwise for any determination made or other action taken or any failure
to act by such person so long as such person is not determined to be guilty
by a final adjudication of willful misconduct with respect to such
determination, action or failure to act.

         Section 9.06. Indemnification. To the fullest extent permitted by
law, each of the members of the Board and the Committee and each of the
Directors, officers and employees of the Company and any Company Subsidiary
shall be held harmless and be indemnified by the Company for any liability,
loss (including amounts paid in settlement), damages or expenses (including
reasonable attorneys' fees) suffered by virtue of any determinations, acts
or failures to act, or alleged acts or failures to act, in connection with
the administration of this Plan so long as such person is not determined by
a final adjudication to be guilty of willful misconduct with respect to
such determination, action or failure to act.


                                 ARTICLE X

                          MISCELLANEOUS PROVISIONS

         Section 10.01. Not Transferable. Options, Performance Awards and
Restricted Stock under this Plan may not be sold, pledged, assigned or
transferred in any manner other than by will or the laws of descent and
distribution; provided, however, that an Optionee or Grantee may designate
a Beneficiary to exercise his Option or other rights under this Plan after
his death. No Option, Performance Award or Restricted Stock or interest or
right therein shall be liable for the debts, contracts or engagements of
the Optionee, Grantee or Restricted Stockholder or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether
such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy). and any attempted disposition thereof
shall be null and void and of no effect; provided, however, that nothing in
this Section 10.01 shall prevent transfers by will or by the applicable
laws of descent and distribution. An Option shall be exercised during the
Optionee's lifetime only by the Optionee or his guardian or legal
representative. A Performance Award under this Plan shall be exercised
during the Grantee's lifetime only by the Grantee or his guardian or legal
representative.

         Section 10.02. Amendment, Suspension or Termination of this Plan.
Subject to the conditions contained in Section 3.05(d) herein, this Plan
may be wholly or partially amended or otherwise modified, suspended or
terminated at any time or from time to time by the Board. However, without
approval of the Company's stockholders given within twelve months before or
after the action by the Board or the Committee, no action of the Committee
or Board may, except as provided in Section 10.03, increase the limits
imposed in Section 2.01 on the maximum number of shares which may be issued
under this Plan, and no action of the Committee or Board may be taken that
would otherwise require stockholder approval as a matter of applicable law,
regulation or rule. No amendment, suspension or termination of this Plan
shall, without the consent of the holder of an Option, Performance Award or
Restricted Stock, alter or impair any rights or obligations under any
Option, Performance Award or Restricted Stock theretofore granted or
awarded. No Option, Performance Award or Restricted Stock may be granted or
awarded during any period of suspension nor after termination of this Plan,
and in no event may any Incentive Stock Option be granted under this Plan
after the first to occur of the following events:

                  (a) The expiration of ten years from the date the Plan is
         adopted by the Board; or

                  (b) The expiration of ten years from the date the Plan is
         approved by the Company's stockholders under Section 10.05.

         Section 10.03. Changes in Common Stock or Assets of the Company.
In the event that the outstanding shares of Common Stock are hereafter
changed into or exchanged for cash or a different number or kind of shares
or other securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification,
stock splitup, stock dividend or combination of shares, appropriate
adjustments shall be made by the Committee in the number and kind of shares
for the purchase of which Options or with respect to which the exercise of
Performance Awards may be granted, including adjustments of the limitation
in Section 2.01 on the maximum number and kind of shares which may be
issued.

         In the event of such a change or exchange, other than for shares
or securities of another corporation or by reason of reorganization, the
Committee shall also make an appropriate and equitable adjustment in the
number and kind of shares as to which all outstanding Options or
Performance Awards, or portions thereof then unexercised, shall be
exercisable. Such adjustment shall be made with the intent that after the
change or exchange of shares, each Optionee's and each Grantee's
proportionate interest shall be maintained as before the occurrence of such
event. Such adjustment in an outstanding Option or Performance Award may
include a necessary or appropriate corresponding adjustment in the Option
or Performance Award exercise price, but shall be made without change in
the total price applicable to the Option or Performance Award, or the
unexercised portion thereof (except for any change in the aggregate price
resulting from rounding off of share quantities or prices).

         Where an adjustment of the type described above is made to an
Incentive Stock Option under this Section, the adjustment will be made in a
manner which will not be considered a 'modification" under the provisions
of subsection 424(h)(3) of the Code.

         In the event of a "spin-off" or other substantial distribution of
assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Common Stock, the Committee may in its discretion make
an appropriate and equitable adjustment to the Option or Performance Award
exercise price to reflect such diminution.

         Section 10.04. Merger of the Company. In the event of the merger
or consolidation of the Company with or into another corporation, the
exchange of all or substantially all of the assets of the Company for the
securities of another corporation, the acquisition by another corporation
or person of all or substantially all of the Company's assets or the
acquisition of the Company's outstanding voting stock in an amount
sufficient for such person to control the Company, or the liquidation or
dissolution of the Company, the Compensation Committee shall have the
complete authority and discretion, but not the obligation, to accelerate
the vesting of outstanding Options or Performance Awards and the
termination of restrictions on Restricted Stock.

         Section 10.05. Approval of Plan by Stockholders. This Plan will be
submitted for the approval of the Company's stockholders within twelve
months after the date of the Board's initial adoption of this Plan. Options
or Performance Awards may be granted and Restricted Stock may be awarded
prior to such stockholder approval, provided that such Options or
Performance Awards shall not be exercisable and such Restricted Stock shall
not vest prior to the time when this Plan is approved by the stockholders,
and provided further that if such approval has not been obtained at the end
of said twelve-month period, all Options and Performance Awards previously
granted and all Restricted Stock previously awarded under this Plan shall
thereupon be cancelled and become null and void. The Company shall take
such actions with respect to the Plan as may be necessary to satisfy the
requirements of Rule 16b-3.

         Section 10.06. Tax Withholding. The Company shall be entitled to
require payment or deduction from other compensation payable to each
Optionee, Grantee or Restricted Stockholder of any sums required by
federal, state or local tax law to be withheld with respect to any Option,
Performance Award or Restricted Stock. The Committee may in its discretion
allow such Optionee, Grantee or Restricted Stockholder to elect to have the
Company withhold shares of Common Stock (or allow the return of shares of
Common Stock) having a Fair Market Value equal to the sums required to be
withheld. If the Optionee, Grantee or Restricted Stockholder elects to
advance such sums directly, written notice of that election shall be
delivered on or prior to such exercise and, whether pursuant to such
election or pursuant to a requirement imposed by the Company payment in
cash or by check of such sums for taxes shall be delivered within two days
after the date of exercise. If, as allowed by the Committee, the Optionee,
Grantee or Restricted Stockholder elects to have the Company withhold
Shares of Common Stock (or allow the return of shares of Common Stock)
having a Fair Market Value equal to the sums required to be withheld, the
value of the shares of Common Stock to be withheld (or returned as the case
may be) will be equal to the Fair Market Value of such shares as of the
date that the amount of tax to be withheld is to be determined (the "Tax
Date"). Elections by such persons to have shares of Common Stock withheld
for this purpose will be subject to the following restrictions: (a) the
election must be made on or prior to the Tax Date, (b) the election must be
irrevocable, (c) the election shall be subject to the disapproval of the
Committee, and (d) if the person is an officer of the Company within the
meaning of Section 16 of the Exchange Act, the election shall be subject to
such additional restrictions as the Committee may impose in an effort to
secure the benefits of any regulations thereunder. The Committee shall not
be obligated to issue shares and/or distribute cash to any person upon
exercise of any right until such payment has been received or shares have
been so withheld, unless withholding (or offset against a cash payment) as
of or prior to the date of such exercise is sufficient to cover all such
sums due or which may be due with respect to such exercise.

         Section 10.07. Loans. The Committee may, in its discretion, extend
one or more loans to key Employees in connection with the exercise or
receipt of outstanding Options or Performance Awards granted under this
Plan, or the issuance of Restricted Stock awarded under this Plan. The
terms and conditions of any such loan shall be set by the Committee.

         Section 10.08.   Limitations Applicable to Section 16 Persons.

                  (a) Notwithstanding any other provision of this Plan,
         this Plan, and any Option or Performance Award granted, or
         Restricted Stock awarded, to a key Employee who is then subject to
         Section 16 of the Exchange Act, shall be subject to any additional
         limitations set forth in any applicable exemptive rule under
         Section 16 of the Exchange Act (including any amendment to Rule
         16b-3 of the Exchange Act) that are requirements for the
         application of such exemptive rule. Any such additional limitation
         shall be set forth in an annex to this Plan, such annex to be
         incorporated herein by this reference and made part of this Plan.

                  (b) With respect to persons subject to Section 16 of the
         Exchange Act, transactions under this Plan are intended to comply
         with all applicable conditions of Rule 16b-3 or its successors
         under the Exchange Act. To the extent any provision of the Plan or
         action by the Committee fails to so comply, it shall be deemed
         null and void, to the extent permitted by law and deemed advisable
         by the Committee. Moreover, in the event the Plan does not include
         a provision required by Rule l6b-3 to be stated therein, such
         provision (other than one relating to eligibility requirements, or
         the price and amount of awards) shall be deemed automatically to
         be incorporated by reference into the Plan insofar as participants
         subject to Section 16 are concerned.

         Section 10.09. Plan Designation and Status. Notwithstanding the
designation of this document as a Plan for convenience of reference and to
standardize certain provisions applicable to all types of Options,
Performance Awards and Restricted Stock issuances authorized, each of the
Option, Performance Award and Restricted Stock shall be deemed to be a
separate "plan" for purposes of Section 16 of the Exchange Act and any
applicable state securities laws.

         Section 10.10. Release of Restrictions. Any or all of the
foregoing limitations in Sections 10.08 and 10.09 on Options or Performance
Awards granted to key Employees and Restricted Stock awarded to key
Employees shall be suspended if, to the extent, as to such persons, and for
so long as the Securities and Exchange Commission by regulation or official
staff interpretation or a no-action letter issued to the Company determines
that such limitation is not necessary to secure the benefits otherwise
available with respect to a "plan" or particular award, as the case may be,
under any applicable exemptive rule under Section 16 of the Exchange Act.

         Section 10.11. Effect of Plan Upon Options and Compensation Plans.
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Company Subsidiary.
Nothing in this Plan shall be construed to limit the right of the Company
(a) to establish any other forms of incentives or compensation for
employees of the Company or any Company Subsidiary or (b) to grant or
assume options or other rights otherwise than under this Plan in connection
with any proper corporate or partnership purpose including but not by way
of limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, firm or
association or the performance of services for the benefit of the Company.

         Section 10.12. Effect of Change of Subsidiary Status. For purposes
of this Plan and any Options or Performance Awards granted, or Restricted
Stock awarded hereunder, if an entity ceases to be a Company Subsidiary the
employment of all Optionees, Grantees or Restricted Stockholders who are
employed by such entity shall be deemed to have terminated, except any such
Optionees, Grantees or Restricted Stockholders who continue to be employees
of another entity within the Company.

         Section 10.13. Compliance with Laws. This Plan, the granting and
vesting of Options, Performance Awards or Restricted Stock under this Plan
and the issuance and delivery of shares of Common Stock and the payment of
money under this Plan or under Options or Performance Awards granted or
Restricted Stock awarded hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations (including but not
limited to state and federal securities law and federal margin
requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company,
be necessary or advisable in connection therewith. Any securities delivered
under this Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Company, provide such
assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the Plan, Options,
Performance Awards and Restricted Stock granted or awarded hereunder shall
be deemed amended to the extent necessary to conform to such laws, rules
and regulations.

         Section 10.14. Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of
this Plan.

         Section 10.15. Governing Law. This Plan and any agreements
hereunder shall be administered, interpreted and enforced under the
internal laws of the State of Delaware without regard to conflicts of laws
thereof.

         Section 10.16. Severability. If any portion of this Plan is
declared by a court of competent jurisdiction to be invalid or
unenforceable after all appeals have either been exhausted or the time for
any appeals to be taken has expired, the remainder of the terms,
provisions, covenants and restrictions of this Plan shall remain in full
force and effect and in no way be affected, impaired or invalidated.