Document:

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                                                                   Exhibit 10.54

                             VODAVI TECHNOLOGY, INC.

                        2003 INCENTIVE COMPENSATION PLAN
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                                                                               .
                                                                               .
                                                                               .
                                TABLE OF CONTENTS

<TABLE>
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                                                                                     PAGE
<S>  <C>                                                                               <C>
1.   Purpose.........................................................................   1

2.   Administration..................................................................   1
     (a)    Authority of the Committee...............................................   1
     (b)    Manner of Exercise of Committee Authority................................   1
     (c)    Limitation of Liability..................................................   1

3.   Stock Subject to Plan...........................................................   2
     (a)    Limitation on Overall Number of Shares Subject to Awards.................   2
     (b)    Application of Limitations...............................................   2

4.   Eligibility; Per-Person Award Limitations.......................................   2

5.   Specific Terms of Awards........................................................   2
     (a)    General..................................................................   2
     (b)    Options..................................................................   2
     (c)    Stock Appreciation Rights................................................   3
     (d)    Restricted Stock.........................................................   4
     (e)    Bonus Stock and Awards in Lieu of Obligations............................   5
     (f)    Other Stock-Based Awards.................................................   5

6.   Certain Provisions Applicable to Awards.........................................   5
     (a)    Stand-Alone, Additional, Tandem, and Substitute Awards...................   5
     (b)    Term of Awards...........................................................   5
     (c)    Form and Timing of Payment Under Awards; Deferrals.......................   5
     (d)    Exemptions from Section 16(b) Liability..................................   6

7.   Change in Control...............................................................   6
     (a)    Effect of "Change in Control."...........................................   6
     (b)    Definition of "Change in Control.........................................   6
     (c)    Definition of "Change in Control Price.".................................   7

8.   Automatic Grant Program.........................................................   7
     (a)    Amount and Date of Grant.................................................   7
     (b)    Exercise Price...........................................................   8
     (c)    Vesting..................................................................   8
     (d)    Term of Automatic Options................................................   8
     (e)    Other Terms..............................................................   8

9.   General Provisions..............................................................   8
     (a)    Compliance With Legal and Other Requirements.............................   8
     (b)    Limits on Transferability; Beneficiaries.................................   8
     (c)    Adjustments..............................................................   9
     (d)    Taxes....................................................................  10
     (e)    Changes to the Plan and Awards...........................................  10
     (f)    Limitation on Rights Conferred Under Plan................................  10
     (g)    Unfunded Status of Awards; Creation of Trusts............................  10
     (h)    Nonexclusivity of the Plan...............................................  11
     (i)    Payments in the Event of Forfeitures; Fractional Shares..................  11
     (j)    Governing Law............................................................  11
     (k)    Plan Effective Date and Stockholder Approval; Termination of Plan........  11
</TABLE>

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<TABLE>
<CAPTION>
<S>  <C>                                                                              <C>
10.  Definitions.....................................................................  11
     (a)    "Automatic Options"......................................................  11
     (b)    "Award"..................................................................  11
     (c)    "Beneficiary"............................................................  11
     (d)    "Beneficial Owner", "Beneficially Owning" and "Beneficial Ownership".....  11
     (e)    "Board"..................................................................  11
     (f)    "Change in Control"......................................................  11
     (g)    "Change in Control Price"................................................  12
     (h)    "Code"...................................................................  12
     (i)    "Committee"..............................................................  12
     (j)    "Consultant".............................................................  12
     (k)    "Continuous Service".....................................................  12
     (l)    "Corporate Transaction"..................................................  12
     (m)    "Director"...............................................................  12
     (n)    "Dividend Equivalent"....................................................  12
     (o)    "Effective Date".........................................................  12
     (p)    "Eligible Person"........................................................  12
     (q)    "Employee"...............................................................  12
     (r)    "Exchange Act"...........................................................  12
     (s)    "Executive Officer"......................................................  13
     (t)    "Fair Market Value"......................................................  13
     (u)    "Incentive Stock Option".................................................  13
     (v)    "Incumbent Board"........................................................  13
     (w)    "Limited Stock Appreciation Right".......................................  13
     (x)    "Option".................................................................  13
     (y)    "Optionee"...............................................................  13
     (z)    "Other Stock-Based Awards"...............................................  13
     (aa)   "Parent".................................................................  13
     (bb)   "Participant"............................................................  13
     (cc)   "Person".................................................................  13
     (dd)   "Related Entity".........................................................  13
     (ee)   "Restricted Stock".......................................................  13
     (ff)   "Rule 16b-3" and "Rule 16a-1(c)(3)"......................................  13
     (gg)   "Stock"..................................................................  13
     (hh)   "Stock Appreciation Right"...............................................  13
     (ii)   "Subsidiary".............................................................  14
</TABLE>

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                             VODAVI TECHNOLOGY, INC.

                        2003 INCENTIVE COMPENSATION PLAN

       1.    PURPOSE. The purpose of this 2003 Incentive Compensation Plan (the
"PLAN") is to assist Vodavi Technology, Inc., a Delaware corporation (the
"COMPANY") and its Related Entities in attracting, motivating, retaining, and
rewarding high-quality executives and other Employees, officers, Directors, and
Consultants by enabling such persons to acquire or increase a proprietary
interest in the Company in order to strengthen the mutuality of interests
between such persons and the Company's stockholders, and providing such persons
with annual and long-term performance incentives to expend their maximum efforts
in the creation of stockholder value. The Plan is intended to qualify certain
compensation awarded under the Plan for tax deductibility under Section 162(m)
of the Code to the extent deemed appropriate by the applicable Committee (or any
successor committee) of the Board of Directors of the Company.

       2.    ADMINISTRATION.

             (a)  Authority of the Committee. The Plan shall be administered by
the Committee; Provided, However, that except as otherwise expressly provided in
this Plan or, during the period that the Company is a Publicly Held Corporation,
in order to comply with Code Section 162(m) or Rule 16b-3 under the Exchange
Act, the Board may exercise any power or authority granted to the Committee
under this Plan. The Committee or the Board shall have full and final authority,
in each case subject to and consistent with the provisions of the Plan, to
select Eligible Persons to become Participants, grant Awards, determine the
type, number, and other terms and conditions of, and all other matters relating
to, Awards, prescribe Award agreements (which need not be identical for each
Participant) and rules and regulations for the administration of the Plan,
construe and interpret the Plan and Award agreements and correct defects, supply
omissions, or reconcile inconsistencies therein, and to make all other decisions
and determinations as the Committee or the Board may deem necessary or advisable
for the administration of the Plan. In exercising any discretion granted to the
Committee or the Board under the Plan or pursuant to any Award, the Committee or
the Board shall not be required to follow past practices, act in a manner
consistent with past practices, or treat any Eligible Person in a manner
consistent with the treatment of other Eligible Persons.

             (b)  Manner of Exercise of Committee Authority. The Committee, and
not the Board, shall exercise sole and exclusive discretion on any matter
relating to a Participant then subject to Section 16 of the Exchange Act with
respect to the Company to the extent necessary in order that transactions by
such Participant shall be exempt under Rule 16b-3 under the Exchange Act. Any
action of the Committee or the Board shall be final, conclusive, and binding on
all persons, including the Company, its Related Entities, Participants,
Beneficiaries, transferees under Section 9(b) hereof, or other persons claiming
rights from or through a Participant, and stockholders. The express grant of any
specific power to the Committee or the Board, and the taking of any action by
the Committee or the Board, shall not be construed as limiting any power or
authority of the Committee or the Board. The Committee or the Board may delegate
to officers or managers of the Company or any Related Entity, or committees
thereof, the authority, subject to such terms as the Committee or the Board
shall determine, (i) to perform administrative functions, (ii) with respect to
Participants not subject to Section 16 of the Exchange Act, to perform such
other functions as the Committee or the Board may determine, and (iii) with
respect to Participants subject to Section 16, to perform such other functions
of the Committee or the Board as the Committee or the Board may determine to the
extent performance of such functions will not result in the loss of an exemption
under Rule 16b-3 otherwise available for transactions by such persons, in each
case to the extent permitted under applicable law. The Committee or the Board
may appoint agents to assist it in administering the Plan.

             (c)  Limitation of Liability. The Committee and the Board, and each
member thereof, shall be entitled to, in good faith, rely or act upon any report
or other information furnished to him or her by any Executive Officer, other
officer or Employee, the Company's independent auditors, Consultants or any
other agents assisting in the administration of the Plan. Members of the
Committee and the Board, and any officer or Employee acting at the direction or
on behalf of the Committee or the Board, shall not be personally liable for any
action or determination taken or made in good faith with respect to the Plan,
and shall, to the extent permitted by law, be fully indemnified and protected by
the Company with respect to any such action or determination.
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       3.    STOCK SUBJECT TO PLAN

             (a)  Limitation On Overall Number of Shares Subject to Awards.
Subject to adjustment as provided in Section 9(c) hereof, the total number of
shares of Stock reserved and available for delivery in connection with Awards
under the Plan shall be the sum of (i) 600,000 shares plus (ii) the number of
shares of Stock with respect to which any Awards previously granted under the
Plan terminated without being exercised, expire, are forfeited or canceled, do
not vest, or are surrendered in payment of any Awards or any tax withholding
with regard thereto. Any shares of Stock delivered under the Plan may consist,
in whole or in part, of authorized and unissued shares or treasury shares.
Subject to adjustment as provided in Section 9(c) hereof, the number of shares
of Stock that may be issued pursuant to Incentive Stock Options shall not exceed
500,000 shares.

             (b)  Application of Limitations. The limitation contained in
Section 3(a) shall apply not only to Awards that are settleable by the delivery
of shares of Stock but also to Awards relating to shares of Stock but settleable
only in cash (such as cash-only Stock Appreciation Rights). The Committee or the
Board may adopt reasonable counting procedures to ensure appropriate counting,
avoid double counting (as, for example, in the case of tandem or substitute
awards), and make adjustments if the number of shares of Stock actually
delivered differs from the number of shares previously counted in connection
with an Award.

       4.    Eligibility; Per-person Award Limitations. Awards may be
granted under the Plan only to Eligible Persons. In each fiscal year during any
part of which the Plan is in effect, an Eligible Person may not be granted
Awards relating to more than 200,000 shares of Stock, subject to adjustment as
provided in Section 9(c), under each of Sections 5(b), 5(c), 5(d), 5(e), and
5(f). Directors, who are not Employees, proposed directors, proposed employees,
and independent contractors shall be eligible to receive awards other than
Incentive Stock Options.

       5.    SPECIFIC TERMS OF AWARDS.

             (a)  General. Awards may be granted on the terms and conditions
set forth in this Section 5. In addition, the Committee or the Board may impose
on any Award or the exercise thereof, at the date of grant or thereafter
(subject to Section 9(e)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee or the Board
shall determine, including terms requiring forfeiture of Awards in the event of
termination of Continuous Service by the Participant and terms permitting a
Participant to make elections relating to his or her Award. The Committee or the
Board shall retain full power and discretion to accelerate, waive, or modify, at
any time, any term or condition of an Award that is not mandatory under the
Plan.

             (b)  Options. The Committee and the Board each is authorized to
grant Options to Participants on the following terms and conditions:

                  (i)     Exercise Price. The exercise price per share of Stock
             purchasable under an Option shall be determined by the Committee
             or the Board, provided that such exercise price shall not, in the
             case of Incentive Stock Options, be less than 100% of the Fair
             Market Value of the Stock on the date of grant of the Option and
             shall not, in any event, be less than the par value of a share of
             Stock on the date of grant of such Option. If an employee owns or
             is deemed to own (by reason of the attribution rules applicable
             under Section 424(d) of the Code) more than 10% of the combined
             voting power of all classes of stock of the Company or any Parent
             Corporation or Subsidiary and an Incentive Stock Option is granted
             to such employee, the option price of such Incentive Stock Option
             (to the extent required by the Code at the time of grant) shall be
             no less than 110% of the Fair Market Value of the Stock on the
             date such Incentive Stock Option is granted.

                 (ii)     Time and Method of Exercise. The Committee or the
             Board shall determine the time or times at which or the
             circumstances under which an Option may be exercised in whole or in
             part (including based on achievement of performance goals and/or
             future service requirements), the time or times at which Options
             shall cease to be or become exercisable following termination of
             Continuous Service or upon other conditions, the methods by which
             such exercise price may be

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             paid or deemed to be paid (including in the discretion of the
             Committee or the Board a cashless exercise procedure), the form of
             such payment, including, without limitation, cash, Stock, other
             Awards, or awards granted under other plans of the Company or a
             Related Entity, or other property (including notes or other
             contractual obligations of Participants to make payment on a
             deferred basis), and the methods by or forms in which Stock will be
             delivered or deemed to be delivered to Participants.

                (iii)     Incentive Stock Options. The terms of any Incentive
             Stock Option granted under the Plan shall comply in all respects
             with the provisions of Section 422 of the Code. Anything in the
             Plan to the contrary notwithstanding, no term of the Plan relating
             to Incentive Stock Options (including any Stock Appreciation Right
             in tandem therewith) shall be interpreted, amended or altered, nor
             shall any discretion or authority granted under the Plan be
             exercised, so as to disqualify either the Plan or any Incentive
             Stock Option under Section 422 of the Code, unless the Participant
             has first requested the change that will result in such
             disqualification. Thus, if and to the extent required to comply
             with Section 422 of the Code, Options granted as Incentive Stock
             Options shall be subject to the following special terms and
             conditions:

                        (A)  the Option shall not be exercisable more than ten
             years after the date such Incentive Stock Option is granted;
             Provided, However, that if a Participant owns or is deemed to own
             (by reason of the attribution rules of Section 424(d) of the Code)
             more than 10% of the combined voting power of all classes of stock
             of the Company or any Parent Corporation and the Incentive Stock
             Option is granted to such Participant, the term of the Incentive
             Stock Option shall be (to the extent required by the Code at the
             time of the grant) for no more than five years from the date of
             grant; and

                        (B)  The aggregate Fair Market Value (determined as of
             the date the Incentive Stock Option is granted) of the shares of
             stock with respect to which Incentive Stock Options granted
             under the Plan and all other option plans of the Company or its
             Parent Corporation during any calendar year exercisable for the
             first time by the Participant during any calendar year shall not
             (to the extent required by the Code at the time of the grant)
             exceed $100,000.

                 (iv)     Repurchase Rights. The Committee and the Board shall
             have the discretion to grant Options that are exercisable for
             unvested shares of Stock. Should the Optionee's Continuous Service
             cease while holding such unvested shares, the Company shall have
             the right to repurchase, at the exercise price paid per share, any
             or all of those unvested shares. The terms upon which such
             repurchase right shall be exercisable (including the period and
             procedure for exercise and the appropriate vesting schedule for the
             purchased shares) shall be established by the Committee or the
             Board and set forth in the document evidencing such repurchase
             right.

             (c)  Stock  Appreciation  Rights. The Committee and the Board each
is authorized to grant Stock  Appreciation  Right's to  Participants  on the
following terms and conditions:

                  (i)   Right to Payment. A Stock Appreciation Right shall
             confer on the Participant to whom it is granted a right to receive,
             upon exercise thereof, the excess of (A) the Fair Market Value of
             one share of stock on the date of exercise (or, in the case of a
             "Limited Stock Appreciation Right" that may be exercised only in
             the event of a Change in Control, the Fair Market Value determined
             by reference to the Change in Control Price, as defined under
             Section 7(c) hereof), over (B) the grant price of the Stock
             Appreciation Right as determined by the Committee or the Board. The
             grant price of a Stock Appreciation Right shall not be less than
             the Fair Market Value of a share of Stock on the date of grant
             except as provided under Section 6(a) hereof.

                 (ii)   Other Terms. The Committee or the Board shall
             determine at the date of grant or thereafter, the time or times at
             which and the circumstances under which a Stock Appreciation

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             Right may be exercised in whole or in part (including based on
             achievement of performance goals and/or future service
             requirements), the time or times at which Stock Appreciation Rights
             shall cease to be or become exercisable following termination of
             Continuous Service or upon other conditions, the method of
             exercise, method of settlement, form of consideration payable in
             settlement, method by or forms in which Stock will be delivered or
             deemed to be delivered to Participants, whether or not a Stock
             Appreciation Right shall be in tandem or in combination with any
             other Award, and any other terms and conditions of any Stock
             Appreciation Right. Limited Stock Appreciation Rights that may only
             be exercised in connection with a Change in Control or other event
             as specified by the Committee or the Board, may be granted on such
             terms, not inconsistent with this Section 5(c), as the Committee or
             the Board may determine. Stock Appreciation Rights and Limited
             Stock Appreciation Rights may be either freestanding or in tandem
             with other Awards.

             (d)  Restricted Stock. The Committee and the Board each is
authorized to grant Restricted Stock to Participants on the following terms and
conditions:

                  (i)     Grant and Restrictions. Restricted Stock shall be
             subject to such restrictions on transferability, risk of
             forfeiture, and other restrictions, if any, as the Committee or the
             Board may impose, or as otherwise provided in this Plan. The
             restrictions may lapse separately or in combination at such times,
             under such circumstances (including based on achievement of
             performance goals and/or future service requirements), in such
             installments, or otherwise, as the Committee or the Board may
             determine at the date of grant or thereafter. Except to the extent
             restricted under the terms of the Plan and any Award agreement
             relating to the Restricted Stock, a Participant granted Restricted
             Stock shall have all of the rights of a stockholder, including the
             right to vote the Restricted Stock and the right to receive
             dividends thereon (subject to any mandatory reinvestment or other
             requirement imposed by the Committee or the Board). During the
             restricted period applicable to the Restricted Stock, subject to
             Section 9(b) below, the Restricted Stock may not be sold,
             transferred, pledged, hypothecated, margined, or otherwise
             encumbered by the Participant.

                 (ii)    Forfeiture. Except as otherwise determined by the
             Committee or the Board at the time of the Award, upon termination
             of a Participant's Continuous Service during the applicable
             restriction period, the Participant's Restricted Stock that is at
             that time subject to restrictions shall be forfeited and reacquired
             by the Company; provided that the Committee or the Board may
             provide, by rule or regulation or in any Award agreement, or may
             determine in any individual case, that restrictions or forfeiture
             conditions relating to Restricted Stock shall be waived in whole or
             in part in the event of terminations resulting from specified
             causes, and the Committee or the Board may in other cases waive in
             whole or in part the forfeiture of Restricted Stock.

                (iii)     Certificates for Stock. Restricted Stock granted under
             the Plan may be evidenced in such manner as the Committee or the
             Board shall determine. If certificates representing Restricted
             Stock are registered in the name of the Participant, the Committee
             or the Board may require that such certificates bear an appropriate
             legend referring to the terms, conditions, and restrictions
             applicable to such Restricted Stock, that the Company retain
             physical possession of the certificates, and that the Participant
             deliver a stock power to the Company, endorsed in blank, relating
             to the Restricted Stock.

                 (iv)     Dividends and Splits. As a condition to the grant of
             an Award of Restricted Stock, the Committee or the Board may
             require that any cash dividends paid on a share of Restricted Stock
             be automatically reinvested in additional shares of Restricted
             Stock or applied to the purchase of additional Awards under the
             Plan. Unless otherwise determined by the Committee or the Board,
             Stock distributed in connection with a Stock split or Stock
             dividend, and other property distributed as a dividend, shall be
             subject to restrictions and a risk of forfeiture to the

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             same extent as the Restricted Stock with respect to which such
             Stock or other property has been distributed.

             (e)  Bonus Stock and Awards in Lieu of Obligations. The Committee
and the Board each is authorized to grant Stock as a bonus, or to grant Stock or
other Awards in lieu of Company obligations to pay cash or deliver other
property under the Plan or under other plans or compensatory arrangements,
provided that, in the case of Participants subject to Section 16 of the Exchange
Act, the amount of such grants remains within the discretion of the Committee to
the extent necessary to ensure that acquisitions of Stock or other Awards are
exempt from liability under Section 16(b) of the Exchange Act. Stock or Awards
granted hereunder shall be subject to such other terms as shall be determined by
the Committee or the Board.

             (f)  Other Stock-based Awards. The Committee and the Board each is
authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related to, Stock,
as deemed by the Committee or the Board to be consistent with the purposes of
the Plan, including, without limitation, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Stock, purchase rights
for Stock, Awards with value and payment contingent upon performance of the
Company or any other factors designated by the Committee or the Board, and
Awards valued by reference to the book value of Stock or the value of securities
of or the performance of specified Related Entities or business units. The
Committee or the Board shall determine the terms and conditions of such Awards.
Stock delivered pursuant to an Award in the nature of a purchase right granted
under this Section 5(f) shall be purchased for such consideration (including
without limitation loans from the Company or a Related Entity), paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Stock, other Awards, or other property, as the Committee or the Board shall
determine. The Committee and the Board shall have the discretion to grant such
other Awards that are exercisable for unvested shares of Stock. Should the
Optionee's Continuous Service cease while holding such unvested shares, the
Company shall have the right to repurchase, at the exercise price paid per
share, any or all of those unvested shares. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Committee or the Board and set forth in the document evidencing such
repurchase right. Cash awards, as an element of or supplement to any other Award
under the Plan, may also be granted pursuant to this Section 5(f).

       6.    CERTAIN PROVISIONS APPLICABLE TO AWARDS.

             (a)  Stand-alone, Additional, Tandem, and Substitute AWARDS. Awards
granted under the Plan may, in the discretion of the Committee or the Board, be
granted either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of the
Company, any Related Entity, or any business entity to be acquired by the
Company or a Related Entity, or any other right of a Participant to receive
payment from the Company or any Related Entity. Such additional, tandem, and
substitute or exchange Awards may be granted at any time. If an Award is granted
in substitution or exchange for another Award or award, the Committee or the
Board shall require the surrender of such other Award or award in consideration
for the grant of the new Award. In addition, Awards may be granted in lieu of
cash compensation, including in lieu of cash amounts payable under other plans
of the Company or any Related Entity, in which the value of Stock subject to the
Award is equivalent in value to the cash compensation (for example, Deferred
Stock or Restricted Stock), or in which the exercise price, grant price, or
purchase price of the Award in the nature of a right that may be exercised is
equal to the Fair Market Value of the underlying Stock minus the value of the
cash compensation surrendered (for example, Options granted with an exercise
price "discounted" by the amount of the cash compensation surrendered).

             (b)  Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee or the Board; provided that in no
event shall the term of any Option or Stock Appreciation Right exceed a period
of ten years (or such shorter term as may be required in respect of an Incentive
Stock Option under Section 422 of the Code).

             (c)  Form and Timing of Payment Under Awards; Deferrals. Subject to
the terms of the Plan and any applicable Award agreement, payments to be made to
the Company or a Related Entity upon the exercise of an Option or other Award or
settlement of an Award may be made in such forms as the Committee or the Board

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shall determine, including, without limitation, cash, other Awards or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The settlement of any Award may be accelerated, and cash
paid in lieu of Stock in connection with such settlement, in the discretion of
the Committee or the Board or upon occurrence of one or more specified events
(in addition to a Change in Control). Installment or deferred payments may be
required by the Committee or the Board (subject to Section 9(e) of the Plan) or
permitted at the election of the Participant on terms and conditions established
by the Committee or the Board. Payments may include, without limitation,
provisions for the payment or crediting of a reasonable interest rate on
installment or deferred payments or the grant or crediting of Dividend
Equivalents or other amounts in respect of installment or deferred payments
denominated in Stock.

             (d)  Exemptions From Section 16(B) Liability. It is the intent of
the Company that this Plan comply in all respects with applicable provisions of
Rule 16b-3 or Rule 16a-1(c)(3) to the extent necessary to ensure that neither
the grant of any Awards to nor other transaction by a Participant who is subject
to Section 16 of the Exchange Act is subject to liability under Section 16(b)
thereof (except for transactions acknowledged in writing to be non-exempt by
such Participant). Accordingly, if any provision of this Plan or any Award
agreement does not comply with the requirements of Rule 16b-3 or Rule
16a-1(c)(3) as then applicable to any such transaction, such provision will be
construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant shall
avoid liability under Section 16(b). In addition, the purchase price of any
Award conferring a right to purchase Stock shall be not less than any specified
percentage of the Fair Market Value of Stock at the date of grant of the Award
then required in order to comply with Rule 16b-3.

       7.    CHANGE IN CONTROL.

             (a)  Effect of "Change in Control." If and to the extent provided
in the Award, in the event of a "Change in Control," as defined in Section 7(b):

                  (i)     The Committee may, within its discretion, accelerate
             the vesting and exercisability of any Automatic Option or Award
             carrying a right to exercise that was not previously vested and
             exercisable as of the time of the Change in Control, subject to
             applicable restrictions set forth in Section 8(a) hereof;

                 (ii)     The Committee may, within its discretion, accelerate
             the exercisability of any limited Stock Appreciation Rights (and
             other Stock Appreciation Rights if so provided by their terms) and
             provide for the settlement of such Stock Appreciation Rights for
             amounts, in cash, determined by reference to the Change in Control
             Price; and

                (iii)     The Committee may, within its discretion, lapse the
             restrictions, deferral of settlement, and forfeiture conditions
             applicable to any other Award granted under the Plan and such
             Awards may be deemed fully vested as of the time of the Change in
             Control, except to the extent of any waiver by the Participant and
             subject to applicable restrictions set forth in Section 9(a)
             hereof.

             (b)  Definition of "Change in Control".  A "Change in Control"
shall be deemed to have occurred upon:

                  (i)     Approval by the stockholders of the Company of a
             reorganization, merger, consolidation, or other form of corporate
             transaction or series of transactions, in each case, with respect
             to which persons who were the stockholders of the Company
             immediately prior to such reorganization, merger, consolidation, or
             other transaction do not, immediately thereafter, own more than 50%
             of the combined voting power entitled to vote generally in the
             election of directors of the reorganized, merged, or consolidated
             company's then outstanding voting securities, or a liquidation or
             dissolution of the Company or the sale of all or substantially all
             of the assets of the Company (unless such reorganization, merger,
             consolidation or other corporate transaction, liquidation,
             dissolution or sale (any such event being referred to as a
             "Corporate Transaction") is subsequently abandoned);

                                        6
<PAGE>

                 (ii)     Individuals who, as of the date on which the Award is
             granted, constitute the Board (the "Incumbent Board") cease for any
             reason to constitute at least a majority of the Board, provided
             that any person becoming a director subsequent to the date on which
             the Award was granted whose election, or nomination for election by
             the Company's shareholders, was approved by a vote of at least a
             majority of the directors then comprising the Incumbent Board
             (other than an election or nomination of an individual whose
             initial assumption of office is in connection with an actual or
             threatened election contest relating to the election of the
             Directors of the Company) shall be, for purposes of this Agreement,
             considered as though such person were a member of the Incumbent
             Board; or

                (iii)     the acquisition (other than from the Company) by any
             person, entity, or "group", within the meaning of Section 13(d)(3)
             or 14(d)(2) of the Securities Exchange Act, of more than 50% of
             either the then outstanding shares of the Company's Stock or the
             combined voting power of the Company's then outstanding voting
             securities entitled to vote generally in the election of directors
             (hereinafter referred to as the ownership of a "Controlling
             Interest") excluding, for this purpose, any acquisitions by (1) the
             Company or a Related Entity, (2) any person, entity, or "group"
             that as of the date on which the Award is granted owns beneficial
             ownership (within the meaning of Rule 13d-3 promulgated under the
             Securities Exchange Act) of a Controlling Interest or (3) any
             employee benefit plan of the Company a Related Entity.

             (c)  Definition of "Change in Control Price." the "Change in
Control Price" means an amount in cash equal to the higher of (i) the amount of
cash and fair market value of property that is the highest price per share paid
(including extraordinary dividends) in any Corporate Transaction triggering the
Change in Control under Section 7(b)(i) hereof or any liquidation of shares
following a sale of substantially all of the assets of the Company, or (ii) the
highest Fair Market Value per share at any time during the 60-day period
preceding and the 60-day period following the Change in Control.

       8.    AUTOMATIC GRANT PROGRAM

             (a)  Amount and Date of Grant. During the period commencing on date
that is the earlier of (1) the expiration of the Company's Second Amended and
Restated 1994 Stock Option Plan (as amended through May 13, 2002) (the "1994
PLAN"); (2) the date upon which there are no shares available for grant pursuant
to Section 1.2(a) of the 1994 Plan; or (3) the date upon which the Company
voluntarily terminates the 1994 Plan, and continuing through the remainder of
the Plan (the "Automatic Grant Period"), the Company shall make automatic grants
of Options ("AUTOMATIC OPTIONS") to each Director who is not employed by the
Company, whether or not such person is a Non-Employee Director as referred to in
Section 2.2 as follows:

                  (i)     Annual Grants. Each year on the Annual Grant Date, an
             Automatic Option to acquire 5,000 shares of Stock shall be granted
             to each Director for as long as shares of Stock are available under
             Section 3(a) hereof. The "Annual Grant Date" shall be the date of
             the Company's annual stockholders meeting commencing as of the
             first annual meeting occurring during the Automatic Grant Period.
             Any Director that was granted an Automatic Option under Section
             8(a)(ii) within 90 days of an Annual Grant Date shall be ineligible
             to receive an Automatic Option pursuant to this Section 8(a)(i) on
             such Annual Grant Date.

                 (ii)     Initial New Director Grants. On the Initial Grant
             Date, every new member of the Board, who is an Director and has not
             previously received an Automatic Option under this Section 8(a)(ii)
             shall be granted an Automatic Option to acquire 5,000 shares of
             Stock for as long as shares of Stock are available under Section
             3(a) hereof. The "Initial Grant Date" shall be the date that a
             Director is first appointed or elected to the Board. Any Director
             who previously received an Automatic Option shall be ineligible to
             receive an Automatic Option pursuant to this Section 8(a)(ii).

                                       7
<PAGE>
             (b)  Exercise Price. The exercise price per share of Stock subject
to each Automatic Option granted under Section 8(a)(i) or (ii) shall be equal to
100 percent of the Fair Market Value per share of the Stock on the date such
Automatic Option was granted.

             (c)  Vesting. Each Automatic Option granted pursuant to Section
8(a)(i) shall vest and become exercisable on the earlier date of (i) the first
anniversary of the date of such grant or (ii) the day prior to the next
regularly held annual meeting of the Company's stockholders. Each Automatic
Option shall vest and become exercisable only if the optionholder has not ceased
serving as a Board member as of such vesting date.

             (d)  Term of Automatic Options. Each Automatic Option shall expire
on the tenth anniversary (the "Expiration Date") of the date on which such
Automatic Option was granted. Except as determined by the Plan Administrator,
should a Director's service as a Board member cease prior to the Expiration Date
for any reason while an Automatic Option remains outstanding and unexercised,
the Automatic Option term shall immediately be modified and the Automatic Option
shall terminate and cease to be outstanding in accordance with the following
provisions:

                  (i)     The Automatic Option shall immediately terminate and
             cease to be outstanding with respect to any shares that were not
             vested at the time of the optionholder's cessation of Board
             service.

                 (ii)     Should an optionholder cease, for any reason other
             than death, to serve as a member of the Board, then the
             optionholder shall have 90 days measured from the date of such
             cessation of Board service in which to exercise his or her
             Automatic Options that vested prior to the time of such cessation
             of Board service. In no event, however, may any Automatic Option be
             exercised after the Expiration Date of such Automatic Option.

                 (iii)    Should an optionholder die while serving as a Board
             member or within 90 days after cessation of Board service, then the
             personal representative of the optionholder's estate (or the person
             or persons to whom the Automatic Option is transferred pursuant to
             the optionholder's will or in accordance with the laws of descent
             and distribution) shall have a 90-day period measured from the date
             of the optionholder's cessation of Board service in which to
             exercise the Automatic Options that vested prior to the time of
             such cessation of Board service. In no event, however, may any
             Automatic Option be exercised after the Expiration Date of such
             Automatic Option.

             (e)  Other Terms. Except as expressly provided otherwise in this
SECTION 8, an Automatic Option shall be subject to all of the terms and
conditions of the Plan. Directors shall be entitled to receive other awards
under the Plan or other plans of the Company in accordance with the terms and
conditions thereof.

       9.    GENERAL PROVISIONS.

             (a)  Compliance With Legal and Other Requirements. The Company may,
to the extent deemed necessary or advisable by the ommittee or the Board,
postpone the issuance or delivery of Stock or payment of other benefits under
any Award until completion of such registration or qualification of such Stock
or other required action under any federal or state law, rule, or regulation,
listing, or other required action with respect to any stock exchange or
automated quotation system upon which the Stock or other Company securities are
listed or quoted, or compliance with any other obligation of the Company, as the
Committee or the Board, may consider appropriate, and may require any
Participant to make such representations, furnish such information and comply
with or be subject to such other conditions as it may consider appropriate in
connection with the issuance or delivery of Stock or payment of other benefits
in compliance with applicable laws, rules, and regulations, listing
requirements, or other obligations.

             (b)  Limits On Transferability; Beneficiaries. No Award or other
right or interest of a Participant under the Plan, including any Award or right
that constitutes a derivative security as generally defined in Rule 16a-1(c)
under the Exchange Act, shall be pledged, hypothecated, or otherwise encumbered
or subject to any

                                       8
<PAGE>
lien, obligation, or liability of such Participant to any party (other than the
Company or a Subsidiary), or assigned or transferred by such Participant
otherwise than by a qualified domestic relations order, by will or the laws of
descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the
lifetime of the Participant only by the Participant or his or her guardian or
legal representative, except that Awards and other rights (other than Incentive
Stock Options and Stock Appreciation Rights in tandem therewith) may be
transferred to one or more Beneficiaries or other transferees during the
lifetime of the Participant, and may be exercised by such transferees in
accordance with the terms of such Award, but only if and to the extent such
transfers and exercises are permitted by the Committee or the Board pursuant to
the express terms of an Award agreement (subject to any terms and conditions
which the Committee or the Board may impose thereon, and further subject to any
prohibitions or restrictions on such transfers pursuant to Rule 16b-3). A
Beneficiary, transferee, or other person claiming any rights under the Plan from
or through any Participant shall be subject to all terms and conditions of the
Plan and any Award agreement applicable to such Participant, except as otherwise
determined by the Committee or the Board, and to any additional terms and
conditions deemed necessary or appropriate by the Committee or the Board.

             (c)  Adjustments.

                  (i)     Adjustments to Awards. In the event that any dividend
             or other distribution (whether in the form of cash, Stock, or other
             property), recapitalization, forward or reverse split,
             reorganization, merger, consolidation, spin-off, combination,
             repurchase, share exchange, liquidation, dissolution, or other
             similar corporate transaction or event affects the Stock and/or
             such other securities of the Company or any other issuer such that
             a substitution, exchange, or adjustment is determined by the
             Committee or the Board to be appropriate, then the Committee or the
             Board shall, in such manner as it may deem equitable, substitute,
             exchange, or adjust any or all of (A) the number and kind of shares
             of Stock that may be delivered in connection with Awards granted
             thereafter, (B) the number and kind of shares of Stock by which
             annual per-person Award limitations are measured under Section 4
             hereof, (C) the number and kind of shares of Stock subject to or
             deliverable in respect of outstanding Awards, (D) the exercise
             price, grant price, or purchase price relating to any Award and/or
             make provision for payment of cash or other property in respect of
             any outstanding Award, and (E) any other aspect of any Award that
             the Committee or Board determines to be appropriate.

                 (ii)     Adjustments in Case of Certain Corporate Transactions.
             In the event of a proposed sale of all or substantially all of the
             Company's assets or any reorganization, merger, consolidation, or
             other form of corporate transaction in which the Company does not
             survive (except for a transaction the principal purposes of which
             is to change the state in which the Company is incorporated), or in
             which the shares of Stock are exchanged for or converted into
             securities issued by another entity, then the successor or
             acquiring entity or an affiliate thereof may, with the consent of
             the Committee or the Board, assume each outstanding Option or
             substitute an equivalent option or right. If the successor or
             acquiring entity or an affiliate thereof, does not cause such an
             assumption or substitution, then (A) each Option shall terminate
             upon the consummation of sale, merger, consolidation, or other
             corporate transaction, and (B) the Committee shall have the
             discretion and authority, consistent with Section 7, exercisable at
             any time, to provide for the automatic acceleration of vesting or
             exercisability of one or more Awards granted by it under the Plan.
             The Committee or the Board shall give written notice of any
             proposed transaction referred to in this Section 8(c)(ii) a
             reasonable period of time prior to the closing date for such
             transaction (which notice may be given either before or after the
             approval of such transaction), in order that Optionees may have a
             reasonable period of time prior to the closing date of such
             transaction within which to exercise any Options that are then
             exercisable (including any Options that may become exercisable upon
             the closing date of such transaction). An Optionee may condition
             his exercise of any Option upon the consummation of the
             transaction.

                (iii)     Other Adjustments. In addition, the Committee (and the
             Board if and only to the extent such authority is not required to
             be exercised by the Committee to comply with Code Section 162(m))
             is authorized to make adjustments in the terms and conditions of,
             and the criteria

                                       9
<PAGE>
             included in, Awards in recognition of unusual or nonrecurring
             events (including, without limitation, acquisitions and
             dispositions of businesses and assets) affecting the Company, any
             Related Entity, or any business unit, or the financial statements
             of the Company or any Related Entity, or in response to changes in
             applicable laws, regulations, accounting principles, tax rates and
             regulations, or business conditions or in view of the Committee's
             assessment of the business strategy of the Company, any Related
             Entity or business unit thereof, performance of comparable
             organizations, economic and business conditions, personal
             performance of a Participant, and any other circumstances deemed
             relevant; provided that no such adjustment shall be authorized or
             made if and to the extent that such authority or the making of such
             adjustment would cause Options, or Stock Appreciation Rights hereof
             to Participants designated by the Committee as Covered Employees
             and intended to qualify as "performance-based compensation" under
             Code Section 162(m) and the regulations thereunder to otherwise
             fail to qualify as "performance-based compensation" under Code
             Section 162(m) and regulations thereunder.

             (d)  Taxes. The Company and any Related Entity are authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Stock, or any payroll or other payment to
a Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Committee or the Board may deem advisable to enable the Company
and Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.

             (e)  Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan, or the Committee's authority to
grant Awards under the Plan, without the consent of stockholders or
Participants, except that any amendment or alteration to the Plan shall be
subject to the approval of the Company's stockholders not later than the next
annual meeting following such Board action if such stockholder approval is
required by any federal or state law or regulation (including, without
limitation, Rule 16b-3 or Code Section 162(m)) or the rules of any stock
exchange or automated quotation system on which the Stock may then be listed or
quoted, and the Board may otherwise, in its discretion, determine to submit
other such changes to the Plan to stockholders for approval; provided that,
without the consent of an affected Participant, no such Board action may
materially and adversely affect the rights of such Participant under any
previously granted and outstanding Award. The Committee or the Board may waive
any conditions or rights under, or amend, alter, suspend, discontinue, or
terminate any Award theretofore granted and any Award agreement relating
thereto, except as otherwise provided in the Plan; provided that, without the
consent of an affected Participant, no such Committee or the Board action may
materially and adversely affect the rights of such Participant under such Award.

             (f)  Limitation On Rights Conferred Under Plan. Neither the Plan
nor any action taken hereunder shall be construed as (i) giving any Eligible
Person or Participant the right to continue as an Eligible Person or Participant
or in the employ of the Company or a Related Entity; (ii) interfering in any way
with the right of the Company or a Related Entity to terminate any Eligible
Person's or Participant's Continuous Service at any time, (iii) giving an
Eligible Person or Participant any claim to be granted any Award under the Plan
or to be treated uniformly with other Participants and Employees, or (iv)
conferring on a Participant any of the rights of a stockholder of the Company
unless and until the Participant is duly issued or transferred shares of Stock
in accordance with the terms of an Award.

             (g)  Unfunded Status of Awards; Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant or
obligation to deliver Stock pursuant to an Award, nothing contained in the Plan
or any Award shall give any such Participant any rights that are greater than
those of a general creditor of the Company; provided that the Committee may
authorize the creation of trusts and deposit therein cash, Stock, other Awards,
or other property, or make other arrangements to meet the Company's obligations
under the Plan. Such trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan unless the Committee otherwise determines with the
consent of each affected Participant. The trustee of such trusts may be
authorized to dispose of trust assets and

                                     10
<PAGE>
reinvest the proceeds in alternative investments, subject to such terms and
conditions as the Committee or the Board may specify and in accordance with
applicable law.

             (h)  Nonexclusivity Of the Plan. Neither the adoption of the Plan
by the Board nor its submission to the stockholders of the Company for approval
shall be construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements as it may deem
desirable including incentive arrangements and awards which do not qualify under
Code Section 162(m).

             (i)  Payments in the Event of Forfeitures; Fractional Shares.
Unless otherwise determined by the Committee or the Board, in the event of a
forfeiture of an Award with respect to which a Participant paid cash or other
consideration, the Participant shall be repaid the amount of such cash or other
consideration. No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Award. The Committee or the Board shall determine
whether cash, other Awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

             (j)  Governing Law. The validity, construction and effect of the
Plan, any rules and regulations under the Plan, and any Award agreement shall be
determined in accordance with the laws of the state of Delaware without giving
effect to principles of conflicts of laws, and applicable federal law.

             (k)  Plan Effective Date and Stockholder Approval; Termination of
Plan. The Plan shall become effective on the Effective Date, subject to
subsequent approval within 12 months of its adoption by the Board by
stockholders of the Company eligible to vote in the election of directors, by a
vote sufficient to meet the requirements of Code Sections 162(m) (if applicable)
and 422, Rule 16b-3 under the Exchange Act (if applicable), or rules of any
stock exchange or automated quotation system on which the stock may be listed or
quoted, and other laws, regulations, and obligations of the Company applicable
to the Plan. Awards may be granted subject to stockholder approval, but may not
be exercised or otherwise settled in the event stockholder approval is not
obtained except with respect to Awards granted by the Company that are otherwise
in compliance with Treasury Regulations Section 1.162-27(f)(4)(iii). The Plan
shall terminate at such time as no shares of Stock remain available for issuance
under the Plan and the Company has no further rights or obligations with respect
to outstanding Awards under the Plan.

       10.   Definitions. For purposes of the Plan, the following terms shall
be defined as set forth below, in addition to such terms defined in

Section 1 hereof.

             (a)  "Automatic Options" means as defined in Section 8(a).

             (b)  "Award" means any Option, Automatic Option, Stock Appreciation
Right (including Limited Stock Appreciation Right), Restricted Stock, Stock
granted as a bonus or in lieu of another award, or Other Stock-Based Award,
together with any other right or interest, granted to a Participant under the
Plan.

             (c)  "Beneficiary" means the person, persons, trust, or trusts that
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or to which Awards or
other rights are transferred if and to the extent permitted under Section 10(b)
hereof. If, upon a Participant's death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means the person,
persons, trust, or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

             (d)  "Beneficial Owner", "Beneficially Owning" and "Beneficial
Ownership" shall have the meanings ascribed to such terms in Rule 13d-3 under
the Exchange Act and any successor to such Rule.

             (e)  "Board" means the Company's Board of Directors.

             (f)  "Change in Control" means a Change in Control as defined with
related terms in Section 7 of the Plan.

                                       11
<PAGE>
             (g)  "Change in Control Price" means the amount calculated in
accordance with Section 7(c) of the Plan.

             (h)  "Code" means the Internal Revenue Code of 1986, as amended
from time to time, including regulations thereunder and successor provisions and
regulations thereto.

             (i)  "Committee" means a committee designated by the Board to
administer the Plan. The Board may designate more than one committee to
administer the Plan as to various categories of Eligible Persons. The Committee
shall consist of at least two directors, and each member of which shall be (i) a
"non-employee director" within the meaning of Rule 16b-3 under the Exchange Act,
unless administration of the Plan by "non-employee directors" is not then
required in order for exemptions under Rule 16b-3 to apply to transactions under
the Plan, and (ii) an "outside director" within the meaning of Section 162(m) of
the Code, unless administration of the Plan by "outside directors" is not then
required in order to qualify for tax deductibility under Section 162(m) of the
Code, provided, when appropriate, a Committee shall satisfy the then
requirements of any stock exchange or automated quotation system upon which the
Stock or other Company securities are listed or quoted.

             (j)  "Consultant" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.

             (k)  "Continuous Service" means uninterrupted provision of services
to the Company in any capacity of Employee, Director, or Consultant. Continuous
Service shall not be considered to be interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any Related
Entities, or any successor entities, in any capacity of Employee Director, or
Consultant, or (iii) any change in status as long as the individual remains in
the service of the Company or a Related Entity in any capacity of Employee,
Director, or Consultant (except as otherwise provided in the Option Agreement).
An approved leave of absence shall include sick leave, military leave, or any
other authorized personal leave.

             (l)  "Corporate Transaction" means a Corporate Transaction as
defined in Section 7(b)(i) of the Plan.

             (m)  "Director" means a member of the Board or the board of
directors of any Related Entity.

             (n)  "Dividend Equivalent" means a right, granted to a Participant
under Section 6(c) hereof, to receive, cash, Stock, other Awards or other
property equal in value to dividends paid with respect to a specified number of
shares of Stock, or other periodic payments.

             (o)  "Effective Date" means the effective date of the Plan, which
shall be August 25, 2003.

             (p)  "Eligible Person" means each Executive Officer of the Company
(as defined under the Exchange Act) and other officers, Directors, and Employees
of the Company or of any Related Entity, and Consultants with the Company or any
Related Entity. The foregoing notwithstanding, only employees of the Company,
the Parent, or any Subsidiary shall be Eligible Persons for purposes of
receiving any Incentive Stock Options. An Employee on leave of absence may be
considered as still in the employ of the Company or a Related Entity for
purposes of eligibility for participation in the Plan.

             (q)  "Employee" means any person, including an officer or Director,
who is an employee of the Company or any Related Entity. The Payment of a
director's fee by the Company or a Related Entity shall not be sufficient to
constitute "employment" by the Company.

             (r)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor provisions
and rules thereto.

             (s)  "Executive Officer" means an executive officer of the Company
as defined under the Exchange Act.

                                       12
<PAGE>
             (t)  "Fair Market Value" means the fair market value of Stock,
Awards, or other property as determined by the Committee or the Board, or under
procedures established by the Committee or the Board. Unless otherwise
determined by the Committee or the Board, the Fair Market Value of Stock as of
any given date after which the Company is a Publicly Held Corporation shall be
the closing sale price per share reported on a consolidated basis for stock
listed on the principal stock exchange or market on which Stock is traded on the
date as of which such value is being determined or, if there is no sale on that
date, then on the last previous day on which a sale was reported.

             (u)  "Incentive Stock Option" means any Option intended to be
designated as an incentive stock option within the meaning of Section 422 of the
Code or any successor provision thereto.

             (v)  "Incumbent Board" means the Incumbent Board as defined in
Section 7(b)(ii) of the Plan.

             (w)  "Limited Stock Appreciation Right" means a right granted to a
Participant under Section 5(c) hereof.

             (x)  "Option" means a right granted to a Participant under Section
5(b) hereof, to purchase Stock or other Awards at a specified price during
specified time periods.

             (y)  "Optionee" means a person to whom an Option or Incentive Stock
Option is granted under this Plan or any person who succeeds to the rights of
such person under this Plan.

             (z)  "Other Stock-based Awards" means Awards granted to a
Participant under Section 5(f) hereof.

             (aa) "Parent" Means a "Parent Corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

             (bb) "Participant" means a person who has been granted an Award
under the Plan which remains outstanding, including a person who is no longer an
Eligible Person.

             (cc) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, and shall include a "group" as defined in Section 13(d) thereof.

             (dd) "Related Entity" means any entity that is directly or
indirectly controlled by the Company or any entity in which the Company has a
significant equity interest, as determined by the Board or the Committee.

             (ee) "Restricted Stock" means Stock granted to a Participant under
Section 5(d) hereof, that is subject to certain restrictions and to a risk of
forfeiture.

             (ff) "Rule 16b-3" and "Rule 16a-1(c)(3)" means Rule 16b-3 and Rule
16a-1(c)(3), as from time to time in effect and applicable to the Plan and
Participants, promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act.

             (gg) "Stock" means the Company's Common Stock, and such other
securities as may be substituted (or resubstituted) for Stock pursuant to
Section 9(c) hereof.

             (hh) "Stock Appreciation Right" means a right granted to a
Participant under Section 6(c) hereof.

             (ii) "Subsidiary" Means a "Subsidiary Corporation" whether now or
hereafter existing, as defined in Section 424(f) of the Code.

                                       13<PAGE>
                                                                   Exhibit 10.55

                              EMPLOYMENT AGREEMENT

               THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of October 1,
2003, to be effective as of October 1, 2003 (the "Effective Date") by and
between VODAVI TECHNOLOGY, INC., a Delaware corporation ("Employer") and GREGORY
K. ROEPER ("Employee").

                                    RECITALS

               Employer desires to employ Employee and Employee desires to
accept such employment, all on the terms and conditions hereinafter set forth.

                                    AGREEMENT

               NOW, THEREFORE, in consideration of the premises and of the
mutual covenants set forth in this Agreement, the parties hereto agree as
follows:

               1. EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts such employment, as President and Chief Executive Officer of
Employer and in such other executive capacities and for such other executive
duties and services as shall from time to time be mutually agreed upon by
Employer and Employee.

               2. FULL TIME OCCUPATION. Employee shall devote Employee's entire
business time, attention, and efforts to the performance of Employee's duties
under this Agreement, and shall serve Employer faithfully and diligently and
shall not engage in any other employment while employed by Employer.

               3. COMPENSATION AND OTHER BENEFITS.

                  (a)  SALARY. Employer shall pay to Employee, as compensation
for the services rendered by Employee during Employee's employment under this
Agreement, a base salary at a rate of (1) $182,500 during the period commencing
on the Effective Date until December 31, 2003; and (2) $200,000 per annum during
the period commencing on January 1, 2004 through the remainder of the term of
this Agreement (the "Base Salary"). Employer shall pay the Base Salary in
accordance with Employer's established payroll procedures.

                  (b)  BONUS. In addition to the Base Salary, Employee shall be
eligible to receive annual bonus compensation (the "Bonus") in an amount to be
set by the Compensation Committee of Employer's Board of Directors, at the
committee's sole and exclusive discretion.

                  (c)  REIMBURSEMENT. Employer shall reimburse Employee for all
travel and entertainment expenses and other ordinary and necessary business
expenses incurred by Employee in connection with the business of Employer and
Employee's duties under this Agreement. The term "business expenses" shall not
include any item not at least partially deductible by Employer for federal
income tax purposes. Reimbursements shall be made by Employer in accordance with
Employer's normal expense policies and procedures.
<PAGE>
                  (d)  FRINGE BENEFITS. Employee shall be entitled to
participate in any group insurance, pension, retirement, vacation, expense
reimbursement, and other plans, programs, and benefits approved by the Board of
Directors and made available from time to time to executive employees of
Employer generally during the term of Employee's employment hereunder. The
foregoing shall not obligate Employer to adopt or maintain any particular plan,
program, or benefit.

               4. TERM OF EMPLOYMENT.

                  (a)  EMPLOYMENT TERM. The term of Employee's employment
hereunder shall commence on the Effective Date and shall continue until
December 31, 2004. The term of Employee's employment hereunder shall
automatically renew for successive one-year terms, unless and until terminated
by either party giving written notice to the other not less than 30 days prior
to the end of the then-current term or as otherwise set forth in SECTION 4(B).

                  (b)  TERMINATION UNDER CERTAIN CIRCUMSTANCES. Notwithstanding
anything to the contrary herein contained:

                       (i)  DEATH. Employee's employment and this Agreement
shall be automatically terminated, without notice, effective upon the date of
Employee's death.

                      (ii)  DISABILITY. If Employee shall fail to perform any of
Employee's essential job duties under this Agreement as the result of illness or
other incapacity, with or without reasonable accommodation, for a period of more
than 12 consecutive weeks, or for more than 12 weeks within any 12-month period,
as determined by Employer for purposes of compliance with the Family and Medical
Leave Act, Employer may, at its option, and upon notice to Employee, terminate
Employee's employment and this Agreement effective on the date of that notice.

                       (iii) UNILATERAL DECISION OF EMPLOYER. Employer may, at
its option, upon notice to Employee, terminate Employee's employment and this
Agreement effective on the date of that notice. A reduction in Employee's
responsibilities, as such responsibilities are described in Section 1 of this
Agreement, by Employer shall constitute a termination under this Section
4(B)(iii). Employer's failure to renew this Agreement upon expiration of the
term shall constitute a termination under this Section 4(B)(iii).

                       (iv) UNILATERAL DECISION BY EMPLOYEE. Employee may, at
his option and upon notice to Employer, terminate Employee's employment and this
Agreement effective on the date of that notice.

                       (v) TERMINATION "FOR CAUSE". Employer may terminate
Employee's employment and this Agreement, and the rights and obligations of the
parties hereunder at any time, effective upon written notice to Employee, if the
termination of Employee's employment is "for cause." For purposes of this
SECTION 4(B)(V), "for cause" shall mean discharge resulting from a determination
by Employer that Employee: (A) has been convicted of a felony involving
dishonesty, fraud, theft, or embezzlement; (B) has performed an act or failed to
act, which if he were prosecuted and convicted, would constitute a crime or
offense involving money or property of Employer, or which would constitute a
felony in any

                                       2
<PAGE>
jurisdiction involved; (C) has violated Employer's policies prohibiting sexual
harassment or discrimination or harassment or discrimination of any other
protected basis under federal, state, or local law; or (D) has willfully and
persistently breached or violated any of the provisions of this Agreement, and
such breach or violation shall have continued for a period of 10 days after
Employer shall have given Employee written notice specifying the nature thereof
in reasonable detail.

                       (vi) CHANGE OF CONTROL. In the event of a Change of
Control (as defined below), Employer or Employee may, at their respective
option, upon notice to the other, terminate Employee's employment by providing
the other party with 30 days' written notice after the effective date of the
Change of Control. For the purposes of this Agreement, the term "Change of
Control" shall mean:

                            (1) The approval by a majority of Employer's Board
of Directors of (A) any merger or consolidation in which Employer is not the
surviving entity; (B) any reverse merger in which the Company is the surviving
entity; or (C) any transaction involving the sale of all or substantially all of
Employer's assets to any person other than a wholly or majority owned direct or
indirect subsidiary of Employer; or

                            (2) Individuals who, as of the Effective Date,
constitute the Board of Directors of the Company (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the Effective Date whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board.

                  (c)  RESULT OF TERMINATION. In the event of the termination of
Employee's employment pursuant to SECTIONS 4(B)(I), (IV), or (v) above, Employee
shall receive no further compensation under this Agreement and all of Employee's
unvested options shall be cancelled. In the event of the termination of
Employee's employment pursuant to SECTION 4(B)(II) or (III) above,

                       (i)  Employee shall receive his Base Salary plus benefits
for a one-year period following the date of termination of Employee's employment
pursuant to this Agreement. Such Base Salary payments will be payable in one
lump-sum amount within 10 days of the event of termination. Should Employee
become eligible for benefits in connection with a new employer during the
one-year period, Employers obligation for benefits shall cease;

                       (ii) Employee's vested options as of the date of
termination shall remain outstanding through the 120-day period following the
then-current term of this Agreement. All of Employee's unvested options as of
the date of termination shall be cancelled; and

                                       3
<PAGE>
                       (iii) Employer shall forgive any balance owed by Employee
pursuant to Employer's funding of Employee's Group Life Insurance policy.

                  (d)  RESULT OF CHANGE OF CONTROL. As incentive for Employee to
actively pursue the best interests of Employer's stockholders, in the event of a
Change of Control (as that term is defined in SECTION 4(B)(VI) of this
Agreement), then (i) Employee shall earn a minimum bonus of $100,000, which
shall be paid in one lump sum payment within ten business days from the
effective date of the Change of Control in the event of a Change of Control; and
(ii) any options held by Employee that remain unvested as of the effective date
of the Change of Control shall become fully vested and exercisable as of such
effective date.

In addition, in the event of the termination of Employee's employment pursuant
to SECTION 4(B)(VI) above Employee shall continue to receive his Base Salary and
benefits for a one-year period following the date of termination of Employee's
employment pursuant to this Agreement. Such Base Salary payments will be payable
in one lump-sum amount within 10 days of the event of termination. Should
Employee become eligible for benefits in connection with a new employer during
the one-year period, Employers obligation for benefits shall cease.

               5. COMPETITION AND CONFIDENTIAL INFORMATION.

                  (a)  INTERESTS TO BE PROTECTED. For purposes of this
Section 5, the term "Employer" shall include Vodavi Technology, Inc. and any
entity that is a direct or indirect subsidiary of Vodavi Technology, Inc. during
the term of this Agreement. The parties acknowledge that Employee will perform
essential services for Employer during the term of Employee's employment with
Employer. Employee will be exposed to, have access to, and be required to work
with a considerable amount of Confidential Information (as defined below). The
parties also expressly recognize and acknowledge that the personnel of Employer
have been trained by and are valuable to Employer and that Employer will incur
substantial expense in recruiting and training personnel if it must hire new
personnel or retrain existing personnel to fill vacancies. The parties also
expressly recognize that it could seriously impair the goodwill and diminish the
value of Employer's business should Employee compete with Employer in any manner
whatsoever. The parties acknowledge that this covenant has an extended duration;
however, they agree that this covenant is reasonable, and it is necessary for
the protection of Employer, its stockholders, and employees. For these and other
reasons, and the fact that there are many other employment opportunities
available to Employee if his employment with Employer is terminated, the parties
are in full and complete agreement that the following restrictive covenants are
fair and reasonable and are entered into freely, voluntarily, and knowingly.
Furthermore, each party was given the opportunity to consult with independent
legal counsel before entering into this Agreement.

                  (b)  NON-COMPETITION. During the term of Employee's employment
with Employer and for the period ending 12 months after the termination of
Employee's employment with Employer, or, in the alternative, in the event any
reviewing court finds 12 months to be overbroad or unenforceable, for a period
of nine months after the termination of Employee's employment with Employer, or,
in the alternative, in the event any reviewing court finds nine months to be
overbroad or unenforceable, for a period of six months after the termination of
Employee's employment with Employer, or, in the alternative, in the event any

                                       4
<PAGE>
reviewing court finds six months to be overbroad or unenforceable, for a period
of three months after the termination of Employee's employment with Employer,
regardless of the reason therefor, Employee shall not (whether directly or
indirectly, as owner, principal, agent, stockholder, director, officer, manager,
employee, partner, participant, or in any other capacity) engage in or become
financially interested in any competitive business conducted within the
Restricted Territory (as defined below). As used herein, the term "competitive
business" shall mean any business that designs, develops, markets, or supports
commercial telephone systems, commercial grade telephones, voice processing
systems (including, but not limited to, automated attendant, voice mail, or fax
mail), computer-telephony integration products, and related computer software
products; and the term "Restricted Territory" shall mean any area in which
Employer conducts its business during Employee's employment hereunder.

                  (c)  NON-SOLICITATION OF EMPLOYEES. During the term of
Employee's employment and for a period of 12 months after the termination of
Employee's employment with Employer, or, in the alternative, in the event any
reviewing court finds 12 months to be overbroad or unenforceable, for a period
of nine months after the termination of Employee's employment with Employer, or,
in the alternative, in the event any reviewing court finds nine months to be
overbroad or unenforceable, for a period of six months after the termination of
Employee's employment with Employer, or, in the alternative, in the event any
reviewing court finds six months to be overbroad or unenforceable, for a period
of three months after the termination of Employee's employment with Employer,
regardless of the reason therefor, Employee shall not directly or indirectly,
for himself, or on behalf of, or in conjunction with, any other person, company,
partnership, corporation, or other entity, seek to hire or hire any of
Employer's personnel or employees, with the exception of his Executive
Assistant, for the purpose of having such employee engage in services that are
the same, similar, or related to the services that such employee provided for
Employer.

                  (d)  CONFIDENTIAL INFORMATION. Employee shall maintain in
strict secrecy all confidential or trade secret information, whether patentable
or not, relating to the business of Employer (the "Confidential Information")
obtained by Employee in the course of Employee's employment, and Employee shall
not, unless first authorized in writing by Employer, disclose to, or use for
Employee's benefit or for the benefit of any person, firm, or entity at any time
either during or subsequent to the term of Employee's employment, any
Confidential Information, except as required in the performance of Employee's
duties on behalf of Employer. For purposes hereof, Confidential Information
shall include without limitation any technical plans and drawings or other
reproductions or materials of any kind; any financial information with respect
to Employer or its business; any trade secrets, knowledge, or information with
respect to products, processes, inventions, formulae, software, source codes,
object codes, algorithms, and services provided; any operating procedures,
techniques, or know-how; any business methods or forms; any names, addresses, or
data on suppliers or customers; and any business policies or other information
relating to or dealing with the purchasing, sales, advertising, promotional, or
distribution policies or practices of Employer.

                  (e)  RETURN OF BOOKS AND PAPERS. Upon the termination of
Employee's employment with Employer for any reason, Employee shall deliver
promptly to Employer all samples or demonstration models, catalogues, manuals,
memoranda, drawings, software, source or object code, formulae, and
specifications, and operating procedures; all cost,

                                       5
<PAGE>
pricing, and other financial data; all supplier and customer information; all
other written or printed materials that are the property of Employer (and any
copies of them); and all other materials which may contain Confidential
Information relating to the business of Employer, which Employee may then have
in his possession whether prepared by Employee or not.

                  (f)  DISCLOSURE OF INFORMATION. Employee shall disclose
promptly to Employer, or its nominee, any and all ideas, designs, processes, and
improvements of any kind relating to the business of Employer, whether
patentable or not, conceived or made by Employee, either alone or jointly with
others, during working hours or otherwise, during the entire period of
Employee's employment with Employer, or within six months thereafter.

                  (g)  ASSIGNMENT. Employee hereby assigns to Employer or its
nominee the entire right, title, and interest in and to all inventions,
discoveries, and improvements, whether patentable or not, that Employee may
conceive or make during Employee's employment with Employer, or within six
months thereafter, and which relate to the business of Employer. Whenever
requested to do so by Employer, whether during the period of Employee's
employment or thereafter, Employee shall execute any and all applications,
assignments, and other instruments that Employer shall deem necessary or
appropriate to apply for, obtain, or maintain Letters Patent of the United
States or of any foreign country, or to protect otherwise the interest of
Employer therein.

                  (h)  EQUITABLE RELIEF. In the event a violation of any of the
restrictions contained in this SECTION 5 is established, Employer shall be
entitled to preliminary and permanent injunctive relief as well as damages and
an equitable accounting of all earnings, profits, and other benefits arising
from such violation, which right shall be cumulative and in addition to any
other rights or remedies to which Employer may be entitled. In the event of a
violation of any provision of SECTIONS 5(B), 5(C), 5(F), or 5(G) of this
Agreement, the period for which those provisions would remain in effect shall be
extended for a period of time equal to that period beginning when such violation
commenced and ending when the activities constituting such violation shall have
been finally terminated in good faith.

                  (i)  RESTRICTIONS SEPARABLE. If the scope of any provision of
this Section 5 is found by a Court to be too broad to permit enforcement to its
full extent, then such provision shall be enforced to the maximum extent
permitted by law. The parties agree that the scope of any provision of this
Section 5 may be modified by a judge in any proceeding to enforce this
Agreement, so that such provision can be enforced to the maximum extent
permitted by law. Each and every restriction set forth in this Section 5 is
independent and severable from the others, and no such restriction shall be
rendered unenforceable by virtue of the fact that, for any reason, any other or
others of them may be unenforceable in whole or in part.

                  (j)  SURVIVAL. Employer and Employee acknowledge and agree
that the obligations and rights set forth in this SECTION 5 shall survive the
termination of this Agreement and Employee's employment by either Employer or
Employee under SECTION 4 of this Agreement.

               6. MISCELLANEOUS.

                                       6
<PAGE>
                  (a)  NOTICES. All notices, requests, demands, and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made, and received (i) if
personally delivered, on the date of delivery, (ii) if by facsimile
transmission, 24 hours after transmitter's confirmation of the receipt of such
transmission, (iii) if mailed, three days after deposit in the United States
mail, registered or certified, return receipt requested, postage prepaid and
addressed as provided below, or (iv) if by a courier delivery service providing
overnight or "next-day" delivery, on the next business day after deposit with
such service addressed as follows:

                       (1)  If to Employer:

                            Vodavi Technology, Inc.
                            4717 East Hilton Avenue
                            Suite 400
                            Phoenix, Arizona  85034
                            Attention:  Chairman of the Board
                            Fax: (480) 483-0144

                            with a copy given in the manner
                            prescribed above, to:

                            Greenberg Traurig, LLP
                            2375 E. Camelback Road, Suite 700
                            Phoenix, Arizona  85016
                            Attention:  Robert S. Kant, Esq.
                            Fax: (602) 445-8100

                       (2)  If to Employee:

                            Gregory K. Roeper
                            6249 N. 78th Street, Unit 21
                            Scottsdale, Arizona 85250

Either party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.

                  (b)  INDULGENCES; WAIVERS. Neither any failure nor any delay
on the part of either party to exercise any right, remedy, power, or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege preclude any other or
further exercise of the same or of any other right, remedy, power, or privilege,
nor shall any waiver of any right, remedy, power, or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power, or
privilege with respect to any other occurrence. No waiver shall be binding
unless executed in writing by the party making the waiver.

                  (c)  CONTROLLING LAW. This Agreement and all questions
relating to its validity, interpretation, performance, and enforcement shall be
governed by and construed in

                                       7
<PAGE>
accordance with the laws of the state of Arizona, notwithstanding any Arizona
or other conflict-of-interest provisions to the contrary.

                  (d)  BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors, and assigns;
provided that because the obligations of Employee hereunder involve the
performance of personal services, such obligations shall not be delegated by
Employee. For purposes of this Agreement, successors and assigns shall include,
but not be limited to, any individual, corporation, trust, partnership, or other
entity that acquires a majority of the stock or assets of Employer by sale,
merger, consolidation, liquidation, or other form of transfer. Employer will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or
assets of Employer to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that Employer would be required to
perform it if no such succession had taken place.

                  (e)  EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of the parties reflected hereon as the signatories.

                  (f)  PROVISIONS SEPARABLE. The provisions of this Agreement
are independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in whole or
in part.

                  (g)  ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings, inducements and conditions, express or implied, oral or
written, except as herein contained. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended other
than by an agreement in writing.

                  (h) PARAGRAPH HEADINGS. The paragraph headings in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.

                  (i)  NUMBER OF DAYS. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays, and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday, or holiday, then the final day shall be
deemed to be the next day that is not a Saturday, Sunday, or holiday.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       8
<PAGE>
               IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.

                                           VODAVI TECHNOLOGY, INC.

                                           By: /s/ William J. Hinz
                                              --------------------------------
                                              William J. Hinz
                                              Chairman of the Board

                                           EMPLOYEE

                                           /s/ Gregory K. Roeper
                                           --------------------------------
                                           Gregory K. Roeper

                                       9

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