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                                                                     EXHIBIT 4.3

                           METRETEK TECHNOLOGIES, INC.

                            1998 STOCK INCENTIVE PLAN
                    AMENDED AND RESTATED AS OF JUNE 14, 2004

      SECTION 1. PURPOSES. The purposes of the Metretek Technologies, Inc. 1998
Stock Incentive Plan (the "Plan") are to promote the long-term interests of
Metretek Technologies, Inc. and its Subsidiaries by (i) attracting, retaining
and rewarding high-quality executives and other key employees and directors of,
and advisors and consultants to, the Company and its Subsidiaries, (ii)
motivating such persons by enabling them to acquire or increase a proprietary
interest in the Company in order to align the interests of such persons with the
Company's stockholders, and (iii) providing such persons with incentives to
pursue and participate in the long-term growth, profitability and financial
success of the Company.

      SECTION 2. DEFINITIONS. In addition to the terms defined elsewhere in the
Plan, the following terms as used in the Plan shall have the meanings set forth
below:

      (a) "Award" means any Option, SAR (including Limited SAR), Restricted
Stock, Deferred Stock, Performance Award, Dividend Equivalent or Other
Stock-Based Award, together with any other right or interest granted to a
Participant under the Plan.

      (b) "Award Agreement" means any written agreement, contract or other
instrument or document evidencing any Award which may, but need not, be executed
or acknowledged by a Participant.

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

      (d) "Change in Control" has the meaning given to such term in Section
9(b)(i) of the Plan.

      (e) "Change in Control Price" has the meaning given to such term in
Section 9(b)(ii) of the Plan.

      (f) "Code" means the Internal Revenue Code of 1986, as amended from time
to time, together with the rules, regulations and interpretations promulgated
thereunder, and any successor provisions, rules, regulations and
interpretations.

      (g) "Committee" means a committee of directors designated by the Board, in
its discretion, to administer the Plan; provided, however, that, unless
otherwise determined by the Board, the Committee shall consist of two or more
directors, each of whom 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" as defined under 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.

      (h) "Company" means Metretek Technologies, Inc., a Delaware corporation,
together with any successor thereto.

      (i) "Covered Employee" means any individual who is or, in the
determination of the Board, is likely to be a "covered employee" within the
meaning of Section 162(m) of the Code.

      (j) "Deferred Stock" means a right, granted to a Participant under Section
6(e) hereof, to receive cash, Shares, other Awards or other property equal in
value to dividends paid with respect to a specified number of Shares, or other
periodic payments.

      (k) "Director" means any individual who is a member of the Board.

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      (l) "Director Option" means a Non-Qualified Stock Option automatically
granted to each Non-Employee Director pursuant to Section 6(b)(v) of the Plan
without any action by the Board.

      (m) "Dividend Equivalent" means a right granted to a Participant under
Section 6(g) hereof to receive cash, Shares, other Awards or other property
equal in value to dividends paid with respect to a specific number of Shares, or
other periodic payments.

      (n) "Effective Date" means June 12, 1998.

      (o) "Eligible Person" means an officer, employee or director of, or an
advisor or consultant to, the Company or a Subsidiary.

      (p) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, together with the rules, regulations and interpretations
promulgated thereunder, and any successor provisions, rules, regulations and
interpretations.

      (q) "Fair Market Value" means the fair market value of the property or
other item being valued, as determined by the Board in its sole discretion or by
procedures established by the Board; provided, however, that the fair market
value of Shares as of any date means the closing sale price of the Shares on
such date or, if there are no sales on such date, then the closing sale price of
the Shares on the most recent date prior to such date on which there was a sale
of Shares, as reported on the Nasdaq Stock Market, on any other quotation system
approved by the National Association of Securities Dealers, Inc. or on any
national securities exchange on which Shares are then listed or quoted, which
constitutes the primary trading market for the Shares.

      (r) "Incentive Stock Option" or "ISO" means an Option that is intended to
meet the requirements of Section 422 of the Code or any successor provision
thereto and is expressly designated as an Incentive Stock Option.

      (s) "Limited SAR" means a right granted to a Participant under Section
6(c) hereof.

      (t) "Non-Employee Director" means a Director who is not an officer or
employee of the Company or any of its Subsidiaries on the applicable date.

      (u) "Non-Qualified Stock Option" or "NQSO" means an Option that is not
intended to be an Incentive Stock Option.

      (v) "Option" means a right granted under Section 6(b) hereof to purchase
Shares or other Awards at a specific price during a specific time.

      (w) "Other Stock-Based Awards" means Awards granted to a Participant under
Section 6(h) hereof.

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

      (y) "Performance Award" means a right granted under Section 8 hereof to
receive Awards based upon performance criteria specified by the Board.

      (z) "Person" means any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.

      (aa) "Plan" means the Metretek Technologies, Inc. 1998 Stock Incentive
Plan, as amended from time to time in accordance with the provisions hereof.

      (bb) "Restricted Stock" means any Shares granted under Section 6(d)
hereof.

      (cc) "Related Party" has the meaning given to such term in Section
9(b)(iii) hereof.

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      (dd) "Rule 16b-3" means Rule 16b-3 as from time to time in effect and
applicable to the Plan and the Participants, as promulgated and interpreted by
the SEC under Section 16 of the Exchange Act, including any successor rule
thereto.

      (ee) "SEC" means the Securities and Exchange Commission or any successor
thereto and shall include the staff thereof.

      (ff) "Shares" means shares of common stock, par value $.01 per share, of
the Company, or such other securities of the Company as may be designated by the
Board from time to time.

      (gg) "Stock Appreciation Right" or "SAR" means a right granted to a
Participant under Section 6(c) hereof, to be paid an amount measured by the
appreciation in the Fair Market Value of shares from the date of grant to the
date of exercise.

      (hh) "Subsidiary" means any corporation (whether now or hereafter
existing) which, on the date of determination, qualifies as a subsidiary
corporation of the Company under Section 425(f) of the Code, and any successor
thereto.

      (ii) "Voting Securities" has the meaning given to such term in Section
9(b)(iv) hereof.

      SECTION 3. ADMINISTRATION.

            (a) Authority of the Board. The Plan shall be administered by the
Board. Subject to the terms of the Plan and applicable law, and in addition to
other express powers and authorizations conferred on the Board by the Plan, the
Board shall have full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to an Eligible Person; (iii)
determine the number of Awards to be granted, the number of Shares or amount of
cash or other property to which an Award will relate, the terms and conditions
of any Award (including, but not limited to, any exercise price, grant price or
purchase price, any exercise or vesting periods, any limitation or restriction,
any schedule for lapse of limitations, forfeiture restrictions or restrictions
on exercisability or transferability, and any accelerations or waivers thereof,
based in each case on such considerations as the Board shall determine), and all
other matters to be determined in connection with an Award; (iv) determine
whether, to what extent and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property, or
Awards may be accumulated, vested, exchanged, surrendered, canceled, forfeited
or suspended; (v) determine whether, to what extent and under what circumstances
cash, Shares, other securities, other Awards, other property and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the Participant or of the Committee; (vi) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (vii) prescribe the form of each Award Agreement, which need
not be identical for each Participant; (viii) adopt, amend, suspend, waive or
rescind such rules and regulations and appoint such agents as it shall deem
necessary or desirable for the administration of the Plan; (ix) correct any
defect or supply any omission or reconcile any inconsistency, and to construe
and interpret the Plan, the rules and regulations, any Award Agreement or other
instrument entered into or Award made under the Plan; and (x) make any other
determinations and decisions and take any other action that the Board deems
necessary or desirable for the administration of the Plan. Notwithstanding
anything else contained in the Plan to the contrary, neither the Committee, if
any, nor the Board shall have any discretion regarding whether an Non-Employee
Director shall receive a Director Option pursuant to Section 6(b)(v) hereof or
regarding the terms of any Director Option which are set forth in Section
6(b)(v) hereof.

            (b) Exercise of Authority. Unless otherwise expressly provided in
the Plan, all designations, determinations, interpretations and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Board, may be made at any time and shall be final, conclusive
and binding upon all Persons, including the Company, its Subsidiaries, Eligible
Persons, Participants, holders or beneficiaries of Awards, and stockholders. The
express grant of any specific power to the Board, and the taking of any action
by the Board, shall not be construed as limiting any power or authority of the
Board. The Board may delegate to officers or managers of the Company or any
Subsidiary, or committees thereof, the authority, subject to such terms as the
Board shall determine, to perform such functions, including administrative
functions, as the Board may determine, to the extent that such delegation will
not result in the loss of an exemption under Rule 16b-3 for Awards granted to
Participants subject to Section 16 of the Exchange Act in respect of the Company
and will not cause Awards intended to qualify as "performance-based
compensation" under Section 162(m) of the Code of the Code to fail to so
qualify. The Board may appoint agents to assist it in administering the Plan.

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            (c) Delegation to a Committee. Notwithstanding anything to the
contrary contained herein, the Board may at any time, or from time to time,
appoint a Committee and delegate to such Committee the authority of the Board to
administer the Plan, including to the extend provided by the Board, the power to
further delegate such authority. Upon such appointment and delegation, any such
Committee shall have all the powers, privileges and duties of the Board in the
administration of the Plan to the extent provided in such delegation, except for
the power to appoint members of the Committee and to terminate, modify or amend
the Plan. The Board may from time to time appoint members of any such Committee
in substitution for or in addition to members previously appointed, may fill
vacancies in such Committee and may discharge such Committee. Any such Committee
shall hold its meetings at such times and places as it shall deem advisable. A
majority of members shall constitute a quorum and all determinations shall be
made by a majority of such quorum. Any determination reduced to writing and
signed by all of the members shall be fully as effective as if it had been made
by a majority vote at a meeting duly called and held.

            (d) Limitation of Liability. The Board, the Committee, if any, and
each member of each 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 of the Company or a Subsidiary, the Company's
independent auditors, legal counsel, other consultants or any other agents
assisting in the administration of the Plan. Members of the Board and of the
Committee, if any, and any officer or employee of the Company or a Subsidiary
acting at the direction or on behalf of the Board and of the Committee, if any,
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.

      SECTION 4. SHARES AVAILABLE FOR AWARDS.

            (a) Shares Available. Subject to adjustment as provided in Section
4(b) hereof, the total number of Shares with respect to which Awards may be
granted under the Plan shall be 2,750,000. If any Shares covered by an Award
granted under the Plan, or to which such an Award relates, are forfeited, or if
an Award otherwise terminates or is canceled without the delivery of Shares, or
if payment is made to the Participant in the form of cash or other property
other than Shares, then the Shares covered by such Award, or to which such Award
relates, or the number of Shares otherwise counted against the aggregate number
of Shares with respect to which Awards may be granted, to the extent of any such
settlement, forfeiture, termination or cancellation, shall again be, or shall
become, Shares with respect to which Awards may be granted, to the extent
permissible under Rule 16b-3. In the event that any Option or other Award
granted hereunder is exercised through the delivery of Shares, the number of
Shares available for Awards under the Plan shall be increased by the number of
Shares surrendered, to the extent permissible under Rule 16b-3. For purposes of
this Section 4(a), the number of Shares to which an Award relates shall be
counted against the number of Shares reserved and available under the Plan at
the time of grant of the Award, unless such number of Shares cannot be
determined at that time, in which case the number of Shares actually distributed
pursuant to the Award shall be counted against the number of Shares reserved and
available under the Plan at the time of distribution; provided, however, that
Awards related to or retroactively added to, or granted in tandem with,
substituted for or converted into, other Awards shall be counted or not counted
against the number of Shares reserved and available under the Plan in accordance
with procedures adopted by the Committee so as to ensure appropriate counting
but avoid double counting; and provided, further, that the number of Shares
deemed to be issued under the Plan upon exercise of an Option or an Other
Stock-Based Award in the nature of a stock purchase right shall be reduced by
the number of Shares surrendered by the Participant in payment of the exercise
or purchase price of the Award.

            (b) Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), recapitalization, forward or reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, exchange of Shares or other securities of the Company, or other
similar corporate transaction or event affects the Shares such that an
adjustment is necessary or determined by the Board to be appropriate in order to
prevent dilution or enlargement of the Participants' rights under the Plan, then
the Board shall proportionately adjust any or all of (i) the number and kind of
Shares or other securities of the Company (or number and kind of other
securities or property) which may thereafter be issued in connection with
Awards; (ii) the number and kind of Shares or other securities of the Company
(or number and kind of other securities or property) issued or issuable with
respect to outstanding Awards; and (iii) the grant, exercise or purchase price
with respect to any Award; provided, in each case, that with respect to Awards
of Incentive Stock Options, no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section 422(b)(1) of the
Code, as from time to time amended. If, pursuant to the preceding sentence, an
adjustment is made to outstanding Options held by Participants, a corresponding
adjustment shall be made to outstanding Director Options and if, pursuant to the
preceding sentence, an

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adjustment is made to the number of Shares authorized for issuance under the
Plan, a corresponding adjustment shall be made to the number of Shares subject
to each Director Option thereafter granted pursuant to Section 6(b)(v).

            (c) Sources of Shares. Any Shares delivered pursuant to an Award may
consist, in whole or in part, of authorized and unissued Shares or of treasury
Shares, including Shares repurchased by the Company for purposes of the Plan.

      SECTION 5. ELIGIBILITY. Awards may be granted under the Plan only to
Eligible Persons, except that (a) only Eligible Persons who are employees of the
Company or a Subsidiary shall be eligible for the grant of Incentive Stock
Options, and (b) only Non-Employee Directors shall receive Director Options in
accordance with Section 6(b)(v) hereof.

      SECTION 6. SPECIFIC TERMS OF AWARDS.

            (a) General. Subject to the provisions of the Plan and any
applicable Award Agreement, Awards may be granted as set forth in this Section
6. In addition, the Board may impose on any Award or the exercise thereof, at
the date of grant or thereafter (subject to the terms of Section 10 hereof),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Board shall determine, including terms requiring forfeiture of
Awards in the event of termination of employment by the Participant and terms
permitting a Participant to make elections pertaining to his Award. Subject to
the provisions of the Plan, the Board shall have the right to accelerate the
vesting or exercising of any Award granted under the Plan. Except as provided in
Section 7(a) hereof, or as required by applicable law, Awards shall be granted
for no consideration other than prior and future services.

            (b) Options. Subject to the provisions of the Plan, the Board is
authorized to grant Options to Eligible Persons on the following terms and
conditions:

                  (i) Exercise Price. The exercise price per Share of an Option
shall be determined by the Board; provided, however, that, except as provided in
Section 7(a), such exercise price shall not be less than the Fair Market Value
of a Share on the date of grant of such Option.

                  (ii) Option Term. The term of each Option shall be determined
by the Board.

                  (iii) Methods of Exercise. 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
service requirements), the methods by which such exercise price may be paid or
deemed to be paid, and the form of such payment, including, without limitation,
cash, Shares, other outstanding Awards or other property (including notes or
other contractual obligations of Participants to make payment on a deferred
bases, to the extent permitted by law) or any combination thereof, having a Fair
Market Value equal to the exercise price.

                  (iv) Incentive Stock Options. The terms of any Incentive Stock
Option granted under the Plan shall comply in all material respects with the
provisions of Section 422 of the Code or any successor provision thereto.
Incentive Stock Options may only be issued to employees of the Company or a
Subsidiary. Anything in the Plan to the contrary notwithstanding, no term of the
Plan relating to ISOs (including any SAR 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 ISO
under Section 422, unless the Participant has first requested the change that
will result in such disqualification.

                  (v) Director Options.

                        (A) Annual Grants. Notwithstanding any other provision
in the Plan to the contrary, each Non-Employee Director shall be automatically
granted, without action on the part of the Company, the Board, the Committee or
any other person, a Director Option to purchase 10,000 Shares on the date of
each annual meeting of stockholders of the Company beginning with the 1998
Annual Meeting of Stockholders; provided, however, that Director Options shall
not be granted to a Non-Employee Director in a given year if, during the 6-month
period prior to and including the date the Director Option would otherwise be
granted pursuant to this Section 6(b)(v), such Non-Employee Director was granted
a Director Option pursuant to clause (B) below.

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                        (B) Grant Upon Initial Election. A Director Option to
purchase 20,000 Shares shall be automatically granted to each individual who is
first elected or appointed to serve as a member of the Board after the Effective
Date and who, as of the time of such election or appointment, is a Non-Employee
Director.

                        (C) Terms. All Director Options shall be NQSOs which
shall be granted for no consideration other than services. The exercise price
per Share purchasable under a Director Option shall be equal to the Fair Market
Value of the Shares on the date of grant of the Director Option. Each Director
Option shall be exercised by giving written notice of exercise to the Company
accompanied by payment in full of the Exercise price in cash (including by
check) or by surrender of Shares acquired by the Director at least six months
prior to the Exercise Date, which Shares have a Fair Market Value at the time of
delivery equal to the Exercise price, or a combination of a cash payment and
such a surrender of Shares.

                        (D) Exercisability. A Director Option shall be
exercisable and fully vested immediately upon grant and shall continue to be
exercisable until the earlier of (1) 10 years after the date of grant, (2) a
number of years after the Non-Employee Director ceases to serve as a member of
the Board equal to the number of years (including any partial years) the
Non-Employee Director served as a member of the Board, if a Non-Employee
Director ceases to serve as a member of the Board for any reason other than
dismissal for cause, and (3) at the time the Non-Employee Director ceases to
serve as a member of the Board, if he is dismissed for cause; provided, however,
that, if a Non-Employee Director ceases serving as a member of the Board and,
immediately thereafter, he is employed by the Company or a Subsidiary, then,
solely for purposes of this Section 6(b)(v), he shall not be deemed to have
ceased to serve as a member of the Board at any time, and his continued
employment by the Company or any Subsidiary shall be deemed to be continued
service as a member of the Board for purposes of the Plan (except that such
former Board member shall not be eligible for additional grants and Director
Options under the Plan); and provided, further, that a Director Option shall be
exercisable after the date a Non-Employee Director ceases to serve as a member
of the Board (unless the Non-Employee Director continues to be employed by the
Company or a Subsidiary under the preceding proviso) only to the extent such
Director Option was exercisable at such date.

                        (E) Non-Exclusivity. The automatic grant of Director
Options under this Section 6(b)(v) shall not be exclusive and, in addition
thereto, additional Options or other Awards may be granted to such Non-Employee
Director in the discretion of the Board or the Committee of such kinds, in such
amounts and at such times as the Board or the Committee shall decide in its sole
discretion.

            (c) Stock Appreciation Rights. The Board is authorized to grant
Stock Appreciation Rights to Eligible Persons 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 a Share on the date of
exercise (or, in the case of a Limited SAR, the Fair Market Value determined by
reference to the Change in Control Price), or, if the Board shall so determine
in the case of any such right other than one related to any Incentive Stock
Option, at any time during a specified period before or after the date of
exercise, over (B) the grant price of the Stock Appreciation Right as determined
by the Board as of the date of grant of the Stock Appreciation Right, which,
except as provided in Section 7(a) hereof, shall not be less than the Fair
Market Value of a Share on the date of grant.

                  (ii) Other Terms. The term, methods of exercise, methods of
settlement and any other terms and conditions of any Stock Appreciation Right
shall be determined by the Board. Limited SARs that may only be exercised in
connection with a Change in Control or other event as specified by the Board may
be granted on such terms, not inconsistent with this Section 6(c), as the Board
may determine. SARs and Limited SARs may be awarded either on a free-standing
basis or in tandem with other Awards.

            (d) Restricted Stock. The Board is authorized to grant Restricted
Stock to Eligible Persons 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 as the Board may impose (including, without limitation, limitations
on the right to vote Restricted Stock or the right to receive dividends
thereon), which restrictions may lapse separately or in combination at such
times, under such circumstances (including based on the achievement of
performance goals and/or future service requirements), in such installments, or
otherwise, as the Board shall determine at the time of grant or thereafter.
Except to the extent restricted under the terms of the Plan and any Award
Agreement relating to the Restricted

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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 Board). During the restricted period applicable to
the Restricted Stock, subject to Section 11 hereof, 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 at the time of grant or thereafter, upon termination of employment or
service on the Board (as determined under criteria established by the Board)
during the applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited and reacquired by the Company;
provided, however, that restrictions on Restricted Stock shall be waived in
whole or in part in the event of terminations resulting from specified causes,
and the Committee may in other cases waive in whole or in part restrictions on
or the forfeiture of Restricted Stock.

                  (iii) Certificates for Shares. Restricted Stock granted under
the Plan may be evidenced in such manner as the Board shall determine,
including, without limitation, issuance of certificates representing Shares.
Certificates representing Shares of Restricted Stock shall be registered in the
name of the Participant and shall bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such Restricted Stock, and the
Board may require 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 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 Board, Shares 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 same extent as
the Restricted Stock with respect to which such Shares or other property has
been distributed.

            (e) Deferred Stock. The Board is authorized to grant Deferred Stock
to Eligible Persons on the following terms and conditions:

                  (i) Issuance and Limitations. Delivery of Shares shall occur
upon expiration of the deferral period specified for the Award of Deferred Stock
by the Board. In addition, an Award of Deferred Stock shall be subject to such
limitations (including a risk of forfeiture) as the Committee may impose (if
any), which limitations may lapse at the expiration of the deferral period or at
other specified times (including based on achievement of performance goals
and/or future service requirements, separately or in combination, in
installments or otherwise, as the Committee shall determine at the time of grant
or thereafter. A Participant awarded Deferred Stock shall have no voting rights
and shall have no rights to receive dividends in respect of Deferred Stock,
unless and only to the extent that the Committee shall award Dividend
Equivalents in respect of such Deferred Stock.

                  (ii) Forfeiture. Except as otherwise determined by the Board
upon termination of employment with or service to the Company (as determined
under criteria established by the Board) during the applicable deferral period
or portion thereof to which forfeiture conditions apply, Deferred Stock that is
at that time subject to deferral (other than a deferral at the election of the
Participant) shall be forfeited; provided, however, that the Board may provide,
by rule or regulation or in any Award Agreement or may determine in any
individual case, that restriction or forfeiture conditions relating to Deferred
Stock shall be waived in whole or in part in the event of terminations resulting
from specified causes, and the Board may in other cases waive in whole or in
part the forfeiture of Deferred Stock.

            (f) Bonus Shares and Awards in Lieu of Obligations. The Board is
authorized to grant Shares or other Awards as a bonus to Eligible Persons or in
lieu of obligations to pay cash or deliver other property under the Plan or
under other plans or compensatory arrangements (including salary requirements),
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 Board to the
extent necessary to ensure that acquisitions of Shares or other Awards are
exempt from liability under Section 16(b) of the Exchange Act. Shares or Awards
granted hereunder shall be subject to such other terms as shall be determined by
the Board.

            (g) Dividend Equivalents. The Board is authorized to grant Dividend
Equivalents to a Participant. Dividend Equivalents shall confer upon the
Participant rights to receive, currently or on a deferred basis, cash, Shares,
other Awards or other property equal in value to dividends paid with respect to
a specified number of Shares, or otherwise, as determined by the Board. The
Board may provide that Dividend Equivalents shall be paid or distributed when
accrued or

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shall be deemed to have been reinvested in additional Shares or Awards or other
investment vehicles, and subject to such restrictions or transferability and
risk of forfeiture, as the Board may specify. Dividend Equivalents may be
awarded on a free-standing basis or with another Award.

            (h) Other Stock-Based Awards. The Board is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that are denominated or payable in, valued in whole or in part by reference to,
or otherwise based on, or related to, Shares, as deemed by the Board to be
consistent with the purposes of the Plan, including, without limitation,
purchase rights for Shares, Shares awarded which are not subject to any
restrictions or conditions, convertible or exchangeable debt securities or other
rights convertible or exchangeable into Shares, Awards with value and payment
contingent upon performance of the Company or any other factors designated by
the Board, and Awards valued by reference to the book value of Shares or the
value of securities of or the performance of specified Subsidiaries as the Board
determines. The Board shall determine the terms and conditions of such awards.
Except as provided in Section 7(a) hereof, Shares or securities delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 6(h) shall be purchased for such consideration, paid for at such times,
by such methods and in such forms, including, without limitation, cash, Shares,
other outstanding Awards or other property or any combination thereof, as the
Committee shall determine. Cash awards, as an element of or supplement to any
other Award under the Plan, may also be granted pursuant to this Section 6(h).

            (i) Exchange Provisions. The Board may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Shares, another
Award or other property, based on such terms and conditions as the Board shall
determine and communicate to the Participant at the time that such offer is
made.

      SECTION 7. GENERAL TERMS OF AWARDS.

            (a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Board, be granted either
alone or in addition to, in tandem with or in substitution or exchange for, any
other Award granted under the Plan or any award granted under any other plan of
the Company or any Subsidiary (subject to the terms of Section 10 hereof), or
any other right of a Participant to receive payment from the Company or any
Subsidiary. Such additional, tandem, 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 Board shall require the surrender of such other
Award or award in consideration for the grant of the new Award. The exercise
price of any Option, the grant price of any Stock Appreciation Right or the
purchase price of any other Award conferring a right to purchase Share
retroactively granted in tandem with an outstanding Award or award shall be
either not less than the Fair Market Value of Shares at the date of grant of the
later Award or equal to the Fair Market Value of Shares at the date of grant of
the earlier Award or award. Notwithstanding the foregoing, the exercise price of
any Option, grant price of any Stock Appreciation Right or purchase price of any
other Award conferring a right to purchase Shares which is granted in exchange
or substitution for an option, stock appreciation right or other award granted
by the Company (other than in connection with a transaction described in Section
9(a) hereof) shall not be less than the exercise price, grant price or purchase
price of the exchanged or substituted Option, Stock Appreciation Right or other
Award, and outstanding Awards shall not be amended (other than in connection
with a transaction described in Section 4(b) hereof to reduce the exercise
price, grant price or purchase price of any such Award.

            (b) Decisions Required to be Made by the Board. Other provisions of
the Plan and any Award Agreement notwithstanding, if any decision regarding an
Award or the exercise of any right by a Participant, at any time such
Participant is subject to Section 16 of the Exchange Act or is a Covered
Employee under Section 162(m) of the Code, is required to be made or approved by
the Board in order that a grant to or transaction by such Participant will be
exempt under Rule 16b-3 or qualify as "qualified performance-based compensation"
for purposes of Section 162(m) of the Code then the Board shall retain full and
exclusive power and authority to make such decision or to approve or disapprove
any such decision by the Participant.

            (c) Term of Awards. The term of each Award shall be for such period
as may be determined by the Board; provided, however, that in no event shall the
term of any Incentive Stock Option, or a Stock Appreciation Right granted in
tandem therewith, exceed a period of ten years from the date of its grant.

            (d) Form and Timing of Payment of Awards. Subject to the terms of
the Plan and any applicable Award Agreement, payments or substitutions to be
made by the Company or a Subsidiary upon the grant, exercise or settlement of an
Award may be made in such forms as the Board shall determine at the time of
grant or thereafter (subject to the terms of Section 10 hereof), including,
without limitation, cash, Shares, other Awards or other property or any
combination thereof, and may be made in a single payment or substitution, in
installments or on a deferred basis, in each

                                       8

<PAGE>

case in accordance with rules and procedures established by the Board. Such
rules and procedures may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents in respect of installment or deferred
payments. The settlement of any Award may be accelerated, and cash paid in lieu
of Shares in connection with such settlement, in the discretion of the Board or
upon occurrence of one or more specified events (in addition to a Change in
Control).

            (e) Exemptions from Section 16(b) Liability. It is the intent of the
Company that the grant of any Awards to or other transaction by a Participant
who is subject to Section 16 of the Exchange Act shall be exempt under Rule
16b-3 (except for transactions acknowledged in writing to be non-exempt by such
Participant). Accordingly, if any provision of the Plan or any Award Agreement
does not comply with the requirements of Rule 16b-3 as then applicable to any
such transaction, such provision shall be construed or deemed amended to the
extent necessary to conform to the applicable requirements of Rule 16b-3 so that
such Participant shall avoid liability under Section 16(b).

            (f) Share Certificates. All certificates for Shares delivered under
the terms of the Plan shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under federal or state
securities laws, rules and regulations thereunder, and the rules of any national
securities exchange, the Nasdaq Stock Market or any other automated quotation
system on which Shares are listed or quoted. The Board may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions or any other restrictions or limitations that may be
applicable to Shares. In addition, during any period in which Awards or Shares
are subject to restrictions or limitations under the terms of the Plan or any
Award Agreement, or during any period during which delivery or receipt of an
Award or Shares has been deferred by the Board or a Participant, the Board may
require any Participant to enter into an agreement providing that certificates
representing Shares issuable or issued pursuant to an Award shall remain in the
physical custody of the Company or such other Person as the Committee may
designate.

      SECTION 8. PERFORMANCE AWARDS.

            (a) Performance Conditions. The right of a Participant to exercise
or receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance conditions as may be specified by the Board. The
Board may use such business criteria and other measures of performance as it may
deem appropriate in establishing any performance conditions, and may exercise
its discretion to reduce or increase the amounts payable under any Award subject
to performance conditions, except as limited under Section 8(b) hereof in the
case of a Performance Award intended to qualify under Section 162(m) of the
Code.

            (b) Performance Awards Granted to Designated Covered Employees. If
the Board determines that a Performance Award to be granted to an Eligible
Person who is designated by the Board as likely to be a Covered Employee should
qualify as "performance-based compensation" for purposes of Section 162(m) of
the Code, the Board shall comply with the pre-established performance goals and
other terms set forth in this Section 8(b).

                  (i) Performance Goals Generally. The performance goals for
such Performance Awards shall consist of one or more business criteria and a
targeted level or levels of performance with respect to each of such criteria,
as specified by the Board consistent with this Section 8(b). Performance goals
shall be objective and shall otherwise meet the requirements of Section 162(m)
of the Code, including the requirement that the level or levels of performance
targeted by the Board result in the achievement of performance goals being
"substantially uncertain." The Board may determine that such achievement of
performance be granted, exercised and/or settled upon achievement of any one
performance goal or that two or more of the performance goals must be achieved
as a condition to grant, exercise and/or settlement of such Performance Awards.
Performance goals may differ for Performance Awards granted to anyone
Participant or to different Participants.

                  (ii) Business Criteria. One or more of the following business
criteria for the Company, on a consolidated basis, and/or for specified
Subsidiaries or business units of the Company (except with respect to the total
stockholder return and earnings per share criteria), shall be used by the Board
in establishing performance goals for such Performance Awards: (1) earnings per
share; (2) revenues; (3) cash flow; (4) return on investment; (5) return on net
assets, assets, capital or equity; (6) economic value added; (7) operating
margin; (8) net income; (9) pretax earnings; (10) pretax earnings before
interest, depreciation and amortization; (11) pretax operating earnings after
interest expense and before extraordinary or special items; (12) operating
earnings; (13) total stockholder return; (14) price of the shares (and changes
thereof); and (15) any of the above goals as compared to the performance of a
published or special index deemed applicable by the Board including, but not
limited to, the Standard & Poor's 500 Stock Index or a group of comparable
companies.

                                       9

<PAGE>

                  (iii) Performance Period; Timing for Establishing Performance
Goals. Achievement of performance goals in respect of such Performance Awards
shall be measured over a performance period of up to 10 years, a specified by
the Board. Performance goals shall be established not later than 90 days after
the beginning of any performance period applicable to such Performance Awards or
at such other date as may be required or permitted for "performance-based
compensation" under Section 162(m) of the Code.

                  (iv) Performance Award Pool. The Board may establish a
Performance Award pool, which shall be an unfunded pool for purposes of
measuring performance of the Company in connection with Performance Awards. The
amount of such Performance Award pool shall be based upon the achievement of a
performance goal or goals based on one or more of the business criteria set
forth in Section 8(b)(ii) hereof during the given performance period, as
specified by the Board in accordance with Section 8(b)(iii) hereof. The Board
may specify the amount of the Performance Award pool as a percentage of any such
business criteria, a percentage thereof in excess of a threshold amount, or as
another amount which need not bear a strictly mathematical relationship to such
business criteria.

                  (v) Settlement of Performance Awards; Other Terms. Settlement
of such Performance Awards shall be in cash, Stock, other Awards or other
property, in the discretion of the Board. The Board may, in its discretion,
reduce the amount of a settlement otherwise to be made in connection with such
Performance Awards, but may not exercise discretion to increase any such amount
payable to a Covered Employee in respect of a Performance Award subject to this
Section 8(b). The Board shall specify the circumstances in which such
Performance Awards shall be paid or forfeited in the event of termination of
employment by the Participant prior to the end of a performance period or
settlement of Performance Awards.

            (c) Written Determinations. All determinations by the Board as to
the establishment of performance goals, the amount of any Performance Award pool
or potential individual Performance Awards and as to the achievement of
performance goals relating to Performance Awards under Section 8(b) hereof shall
be made in writing in the case of any Award intended to qualify under Section
162(m) of the Code. The Board may not delegate any responsibility relating to
such Performance Awards.

            (d) Status of Section 8(b) Awards under Section 162(m) of the Code.
It is the intent of the Company that Performance Awards under Section 8(b)
granted to persons who are designated by the Committee as likely to be Covered
Employees within the meaning of Section 162(m) of the Code and the regulations
thereunder shall, if so designated by the Board, constitute "performance-based
compensation" within the meaning of Section 162(m) of the Code of the Code and
the regulations thereunder. The foregoing notwithstanding, because the Board
cannot determine with certainty whether a given participant will be a Covered
Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the
Committee, at the time of grant of Performance Awards or an Annual Incentive
Award, as likely to be a Covered Employee with respect to that fiscal year. If
any provision of the Plan as in effect on the date of adoption or any agreements
relating to performance Awards or Annual Incentive Awards that are designated as
intended to comply with Section 162(m) of the Code does not comply or is
inconsistent with the requirements of Section 162(m) of the Code, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements.

      SECTION 9. CHANGE IN CONTROL.

            (a) Acceleration of Exercisability and Lapse of Restrictions and
Cash-Out of Awards upon "Change in Control". In the event of a Change in
Control, subject only to the applicable restrictions set forth in Section 11(a)
hereof, the following provisions shall apply unless otherwise provided in the
Award Agreement, and:

                  (i) All outstanding Awards, pursuant to which the Participant
may have a right to exercise which was not previously exercisable and vested,
shall become fully exercisable and vested as of the time of the Change in
Control and shall remain exercisable and vested for the balance of the stated
term of such Award without regard to any termination of employment or services
by the Participant.

                  (ii) Unless the right to lapse of restrictions or limitations
is waived or deferred by a Participant prior to such lapse, all restrictions
(including risks of forfeiture and deferrals) on outstanding Awards subject to
restrictions or limitations under the Plan shall lapse and such Awards shall be
deemed fully vested as of the time of the Change in Control.

                                       10

<PAGE>

                  (iii) All performance criteria, goals and other conditions to
payment of Awards under which payments of cash, Shares or other property are
subject to conditions shall be deemed to be achieved or fulfilled as of the time
of the Change in Control.

                  (iv) For a period of 60 days following a Change in Control,
each Participant may elect to surrender any outstanding Award and to receive, in
full satisfaction therefor, a cash payment equal to the value of such Award
calculated on the basis of the Change in Control Price of any Shares or the Fair
Market Value of any property other than Shares relating to such Award; provided,
however, that in the case of an Incentive Stock Option, or a Stock Appreciation
Right granted in tandem therewith, the payment shall be based upon the Fair
Market Value of Shares on the date which the Change in Control occurred;
provided further, however, that in the case of a Change in Control described in
Section 9(b)(i)(C) or (D) hereof, the payment described in this sentence shall
not necessarily be made in cash but instead shall be made in the same form
(i.e., cash, Shares, other securities or combination thereof) as holders of
Shares receive in exchange for their Shares in the transaction that results in
the Change in Control. In the event that an Award is granted in tandem with
another Award such that the Participant's right to payment for such Award is an
alternative to payment of another Award, the Participant electing to surrender
any such tandem Award shall surrender all alternative Awards related thereto and
receive payment for the Award which produces the highest payment to the
Participant.

            (b) Definition of Certain Terms. For purposes of this Section 9, the
following definitions, in addition to those set forth in Section 2, shall apply:

                  (i) "Change in Control" means and shall be deemed to have
occurred if:

                        (A) any Person, other than the Company or a Related
Party, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a Person shall be deemed to be the beneficial owner of
all Shares that such Person has the right to acquire pursuant to any agreement
or arrangement or upon exercise, conversation rights, warrants, options or
otherwise, without regard to the 60 day period referred to in Rule 13d-3 under
the Exchange Act), directly or indirectly, of Voting Securities representing 25%
or more of the total voting power of all the then outstanding Voting Securities,
except that there shall be excluded from the number of Voting Securities deemed
to be beneficially owned by a Person a number of Voting Securities representing
not more than 10 percent of the then outstanding voting power if such Person is
(1) eligible to file a Schedule 13G pursuant to Rule 13-1(b)(1) under the
Exchange Act with respect to Voting Securities or (2) an underwriter who becomes
the beneficial owner of more than 20% of the then outstanding Voting Securities
pursuant to a firm commitment underwriting agreement with the Company; or

                        (B) the individuals who, as of the effective date of the
Plan, constitute the members of the Board together with those directors who are
first elected subsequent to such date and whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least a majority of the members of the Board then still in office who were
either directors as of the effective date of the Plan or whose election or
nomination for election was previously so approved (the "Continuing Directors"),
cease for any reason to constitute at least a majority of the members of the
Board; or

                        (C) the consummation of a merger, consolidation,
recapitalization or reorganization of the Company, reverse spilt of any class of
Voting Securities, or in an acquisition of securities or assets by the Company,
other than (1) any such transaction which would result in at least 75% of the
total voting power represented by the voting securities of the surviving entity
outstanding immediately after such transaction being beneficially owned by at
least 75% of the holders of outstanding Voting Securities immediately prior to
the transaction, with the voting power of each such continuing holder relative
to other such continuing holders not substantially altered in the transaction,
or (2) any such transaction which would result in a Related Party beneficially
owning more than 50% of the voting securities of the surviving entity
outstanding immediately after such transaction; or

                        (D) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets other than
(1) any such transaction which would result in a Related Party owning or
acquiring more than 50 percent of the assets owned by the Company immediately
prior to the transaction, or (2) a sale or disposition immediately after which
such assets will be owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of the common
stock of the Company immediately prior to such sale or disposition.

                        (E) any other event occurs which the Board determines,
in its discretion, would materially alter the structure of the Company or its
ownership.

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<PAGE>

                  (ii) "Change in Control Price" means, with respect to a Share,
the higher of (A) the highest Fair Market Value of the Shares at any time during
the 60 calendar days preceding and the 60 days following the Change in Control;
or (B) the highest price paid per Share in a transaction which either (1)
results in a Change in Control or (2) would be consummated but for another
transaction which results in a Change in Control and, if it were consummated,
would result in a Change in Control. With respect to clause (B) in the preceding
sentence, the "price paid" will be equal to the sum of (1) the face amount of
any portion of the consideration consisting of cash or cash equivalents and (2)
the Fair Market Value of any portion of the consideration consisting or real or
personal property other than cash or cash equivalents, as established by an
independent appraiser selected by the Board.

                  (iii) "Related Party" means (A) a Subsidiary of the Company;
or (B) an employee or group of employees of the Company or any majority-owned
Subsidiary of the Company; or (C) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any majority-owned
Subsidiary of the Company; or (D) an entity owned directly or indirectly by the
stockholders of the Company in substantially the same proportion as their
ownership of Voting Securities.

                  (iv) "Voting Securities or Security" means any securities of
the Company which carry the right to vote generally in the election of
directors.

      SECTION 10. AMENDMENTS TO AND TERMINATION OF 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, alteration, suspension,
discontinuation or termination shall be subject to approval of the Company's
stockholders not later than the annual meeting next following such Board action
if stockholder approval is required by any federal or state law or regulation or
the rules of the Nasdaq Stock Market or on any national securities exchange,
stock market or automated quotation system on which the Shares are then listed,
traded or quoted, or if the Board in its discretion determines that obtaining
such stockholder approval is for any reason advisable; provided, however, that,
without the consent of the Participant, no amendment, alteration, suspension,
discontinuation or termination of the Plan may materially and adversely affect
the rights of such Participant under any Award theretofore granted to him. The
Board may waive any conditions or rights under, amend any terms of, or amend,
alter, suspend, discontinue or terminate, any Award theretofore granted,
prospectively or retrospectively; provided, however, that, without the consent
of the Participant, no amendment, alteration, suspension, discontinuation or
termination of any Award may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him.

      SECTION 11. GENERAL PROVISIONS.

            (a) Compliance with Legal and Other Requirements. The Company may,
to the extent deemed necessary or advisable by the Board, postpone the issuance
or delivery of Shares or payment of other benefits under any Award until
completion of such registration or qualification of such Shares or other
required action under any federal or state law, rule or regulation, listing or
other required action with respect to the Nasdaq Stock Market or any national
securities exchange, automated quotation system or any other stock exchange or
stock market upon which the Shares or other securities of the Company are listed
or quoted, or compliance with any other obligation of the Company, as 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 Shares or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements, or other obligations. The
foregoing notwithstanding, in connection with a Change in Control, the Company
shall take or cause to be taken no action, and shall undertake or permit to
arise no legal or contractual obligation, that results or would result in any
postponement of the issuance or delivery of Stock or payment of benefits under
any Award or the imposition of any other conditions on such issuance, delivery
or payment, to the extent that such postponement of other condition would
represent a greater burden on a Participant than existed on the 90th day
preceding the Change in Control.

            (b) Transferability. No Award granted under the Plan, nor any other
rights acquired by a Participant under the Plan, shall be assignable or
transferable by a Participant, other than by a will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined
under the Code or Title I of the Board of Retirement Income Security Act of
1974, and each such Award or right shall be exercisable during the Participant's
lifetime only by the Participant or, if admissible under applicable law, by the
Participant's guardian or legal representative or a transferee receiving such
Award pursuant to a QDRO; provided, however, that the Board may, in its sole
discretion, authorize all or a portion of an Award to be transferable by the
Participant, but only to (i) any immediate family members of the Participant,
(ii) any trust or trusts for the exclusive benefit of such immediate family
members, or (iii) a partnership or limited liability company in which such
immediate family members are the only partners or members, provided that (A)

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<PAGE>

there may be no consideration for any such transfer, other than an interest in a
transferee's partnership, limited liability company or other similar entity, (B)
the Award Agreement related to the Award must expressly provide for such
transferability in a manner consistent with this section 11(b), (C) the Board,
in granting an Award, may impose additional restrictions on transfer or prohibit
such transfer entirely, (D) following any transfer, any such Award shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of the Plan, any
reference to a Participant shall be deemed to refer to the transferee, (E) in
the event of a transferee's death, an Award may be exercised by the personal
representative of the transferee's estate or, if no personal representative has
been appointed, by the successor or successors in interest determined under the
transferee's will or under the applicable laws of descent and distribution.
Following any such transfer, any transferee shall continue to be subject to the
same terms and conditions as were applicable immediately prior to transfer,
provided for purposes of Section 11(b) hereof, the term "Participant" shall be
deemed to refer to the transferee, and any event of termination of employment of
the Participant as set forth in the Award Agreement or in this Plan shall
continue to be applied with respect to the original Participant, following which
the Award shall be exercisable by the transferee only to the extent, and for the
period specified by, the Award Agreements.

            (c) No Rights to Awards; No Stockholder Rights. Nothing in the Plan
shall be construed as giving any Participant, Eligible Person or other Person
any right to claim to be granted any Award under the Plan, or to be treated
uniformly with other Participants and Eligible Persons. No Award shall confer on
any Participant any of the rights of a stockholder of the Company unless and
until Shares are in fact issued to such Participant in connection with the terms
of such Award. Notwithstanding the foregoing, in connection with each grant of
Restricted Stock hereunder, the applicable Award shall specify if and to what
extent the Participant shall not be entitled to the rights of a stockholder in
respect of such Restricted Stock.

            (d) Withholding. The Company or any Subsidiary is authorized to
withhold from any Award granted or any payment due under the Plan, including
from a distribution of Shares, amounts of withholding and other taxes due with
respect to an Award, its exercise or any payment thereunder, and to take such
other action as the Committee may deem necessary or advisable to enable the
Company and Participants to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Awards. This authority shall
include authority to withhold or receive Shares, Awards or other property and to
make cash payments in respect thereof in satisfaction of such tax obligations.

            (e) No Right to Employment. Nothing contained in the Plan or any
Award Agreement shall confer, and no grant of an Award shall be construed as,
(i) conferring, upon any Participant or any Eligible Person, any right to
continue in the employ or service of the Company or any Subsidiary or (ii)
interfering in any way with the right of the Company or any Subsidiary to (A)
terminate any Participant's or Eligible Person's employment or service at any
time or (B) increase or decrease the compensation of any Participant or Eligible
Person from the rate in existence at the time of granting of an Award, except as
may be expressly provided in any Award Agreement or other compensation
arrangement.

            (f) 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 Participant 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 unsecured
creditor of the Company; provided, however, that the Board may authorize the
creation of trusts or make other arrangements to meet the Company's obligations
under the Plan to deliver cash, Shares or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Board otherwise determines.

            (g) No Limit on Other Compensatory Arrangements Nothing contained in
the Plan shall prevent the Company or any Subsidiary from adopting or continuing
in effect other or additional compensation arrangements (which may include,
without limitation, employment agreements with executives and arrangements which
relate to Awards under the Plan), and such arrangements may be either generally
applicable only in specific cases.

            (h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Board shall determine whether
cash, other Awards or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.

            (i) Governing Law. The validity, interpretation, construction and
effect of the Plan, any rules and regulations relating to the Plan and any Award
Agreement shall be governed by the laws of the State of Delaware (without regard
to provisions governing conflicts of laws) and applicable federal law.

                                       13

<PAGE>

            (j) Severability.

                  (i) If any provision of the Plan or any Award is or becomes or
is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to
any Person or Award, or would disqualify the Plan or any Award under any law
deemed amended to conform to applicable laws or, if it cannot be construed or
deemed amended without, in the determination of the Board, materially altering
the intent of the Plan, it shall be deleted and the remainder of the Plan shall
remain in full force and effect; provided, however, that, unless otherwise
determined by the Board, the provision shall not be construed or deemed amended
or deleted with respect to any Participant whose rights and obligations under
the Plan are not subject to the law of such jurisdiction or the law deemed
applicable by the Board.

                  (ii) If any of the terms or provisions of the Plan conflict
with the requirements of applicable law or applicable rules and regulations
thereunder, including the requirements of Section 162(m) of the Code, Rule 16b-3
and/or Section 422A of the Code, then such terms or provisions shall be deemed
inoperative to the extent necessary to avoid the conflict with applicable law,
or applicable rules and regulations, without invalidating the remaining
provisions hereof. With respect to ISOs, if the Plan does not contain any
provision required to be included herein under Section 422A of the Code, such
provisions shall be deemed to be incorporated herein with the same force and
effect as if such provision had been set out at length herein; provided,
further, that to the extent any Option which is intended to qualify as an ISO
cannot so qualify, such Option, to that extent, shall be deemed to be a
Nonqualified Stock Option for all purposes of the Plan.

            (k) Rule 16b-3 Compliance. With respect to persons subject to
Section 16 of the Exchange Act, transactions under the Plan are intended to
comply with all applicable terms and conditions of Rule 16b-3 and any successor
provisions. To the extent that any provision of the Plan or action by the Board
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Board.

            (l) Headings. Headings are given to the sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.

            (m) Award Agreements. Each Award hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto. Such
terms may include, but are not limited to, the effect on such Award of the
death, retirement or other termination of employment of a Participant and the
effect, if any, of a change in control of the Company.

            (n) Indemnification. Each person who is or shall have been a member
of the Committee, if any, or of the Board shall be indemnified and held harmless
by the Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit or proceeding to which he may be made a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him in settlement
thereof, with the Company's approval, or paid by him in satisfaction of any
judgment in any such action, suit or proceeding against him, provided he shall
give the Company an opportunity, at its own expense, to handle and defend the
same before he undertakes to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation or By-laws, by
contract, as a matter of law, or otherwise.

            (o) Construction. For purposes of the Plan, the following rules of
construction shall apply: (i) the word "or" is disjunctive but not necessarily
exclusive; (ii) words in the singular include the plural; words in the plural
include the singular; and words in the neuter gender include the masculine and
feminine genders; and (iii) words in the masculine or feminine gender include
the other and neuter genders.

      SECTION 12. EFFECTIVE DATE AND TERMINATION.

            (a) The Plan shall become effective as of June 12, 1998, the date
the Plan was adopted and approved by the stockholders of the Company. Any Awards
granted under the Plan prior to such approval of stockholders shall be effective
when made (unless otherwise specified by the Board at the time of grant) but
shall be conditioned upon and subject to such approval of the Plan by
stockholders.

                                       14

<PAGE>

            (b) Awards may not be granted under the Plan after June 12, 2008.
Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board to
amend, alter, adjust, suspend, discontinue or terminate any such Award or to
waive any conditions or rights under any such Award shall, continue after June
12, 2008.

                                       15EX-10(GG)

 

Exhibit 10(gg)

EMPLOYMENT AGREEMENT

	 	 	 
	Pioneer-Standard Electronics

	 	Position: EVP, Corp Development 

and Investor Relations

Start Date: June 30, 2003

End Date: March 31, 2004

	 	 	 
	Employee Name:

Address:

	 	Martin F. Ellis

8 Webb Ave.

Old Greenwich, CT 06870

You are a valuable member Pioneer-Standard employee, and we expect you to make
a significant contribution to Pioneer-Standard’s success. As a result,
Pioneer-Standard wishes to employ you during the coming year under the terms of
this agreement.

	1.	 	Employment Period. You will be employed by Pioneer-Standard for the
period beginning with the Start Date set forth above and ending with the
End Date set forth above (the “Employment Period”). From and after the
End Date, this agreement and the Employment Period will continue from
month to month and may only be terminated by you or Pioneer-Standard
giving the other at least thirty days’ prior written notice. The end of
the Employment Period does not necessarily mean the end of your
employment. However, if your employment continues beyond the end of the
Employment Period, you will be employed at will, subject to the provisions
of Paragraphs 7, 8 and 9 of this agreement, and the terms in
Pioneer-Standard’s Employee Manual.
	 
	2.	 	Position. You shall initially be employed in the position set forth
above, with the duties and responsibilities customarily associated with
that position. From time to time, Pioneer-Standard may determine that it
is in Pioneer-Standard’s best interest to add to, subtract from, or
otherwise change your duties and responsibilities, or change or eliminate
your title.
	 
	3.	 	Best Efforts. You shall devote all of your business time and attention
to your duties as an employee of Pioneer-Standard. You shall use your
best efforts, energies, and skills to advance the business of
Pioneer-Standard, to further and improve its relations with suppliers,
customers and others, and to keep available to Pioneer-Standard the
services of its employees. You shall perform your duties in compliance
with all laws and Pioneer-Standard’s ethical standards.
	 
	4.	 	Compensation. Your compensation will be pursuant to Pioneer-Standard’s
standard programs in effect from time to time. Pioneer-Standard reserves
the right, however, in its sole discretion, to impose salary reduction,
and/or other cost reduction programs which may reduce your targeted cash
compensation (provided that any such program is not discriminatory and
treats you the same as other Pioneer-Standard employees holding similar
positions). You shall be eligible to participate in any and all employee
benefit plans made available from time to time to Pioneer-Standard
employees generally.

 

 

	5.	 	Termination.
	 

	A.	 	Termination for Cause and Voluntary Termination. If your
employment terminates prior to the End Date, and such termination is
for any of the following reasons: (a) your death, disability, or
legal incompetence; (b) the issuance by Pioneer-Standard of a notice
terminating your employment “for cause” (which, for these purposes,
means breach of any term of this agreement or any other duty to
Pioneer-Standard, dishonesty, fraud, or failure to abide by the
published ethical standards, conflict of interest, or other policies
of Pioneer-Standard, but does not mean simply a failure to attain
financial targets); or (c) you voluntarily resign your employment,
then your salary will end on the day your employment terminates.
	 
	B.	 	Termination Without Cause. If your employment is terminated
by Pioneer-Standard for any reason other than those identified in
paragraph 5.A., above, then you will be paid a severance (“Severance
Payments”) equal to the greater of (1) continuation of regular
base and target incentive salary (if applicable) through the End
Date, which will be at the rate applicable to you at the time your
employment terminated; or (2) the severance package which you would
otherwise have received, based on years of service, under
Pioneer-Standard’s applicable severance policy or programs, subject
to the provisions of paragraph 8.B., below. The period of time for
which Severance Payments are made to you is referred to as the
“Severance Period.” In case of termination without cause, you will
be eligible to continue to participate in applicable medical and
dental coverage program(s) available to Pioneer-Standard employees
for the duration of the Severance Period.
	 
	C.	 	Change of Position. If Pioneer-Standard changes your
position such that your responsibilities or compensation are
substantially lessened, or if you are required to relocate to a
facility more than 50 miles away from your current location
(referred to collectively as a “Change of Position”), then you may,
within 30 days of such Change of Position, give Pioneer-Standard
written notice that you are terminating your employment for this
reason. Such termination for Change of Position will be deemed a
termination by Pioneer without cause for purposes of this Agreement.
	 

	6.	 	Confidential Information. During the course of your employment, you will
learn various Pioneer-Standard proprietary or confidential information
(including the identity of customers and employees; marketing information
and strategies; sales training techniques and programs, acquisition and
divestiture opportunities and discussions; and data processing and
management information systems, programs, and practices). You shall use
such information only in connection with the performance of your duties to
Pioneer-Standard and agree not to copy, disclose, or otherwise use such
information or contest its confidential or proprietary nature. You agree
to return any and all written documents containing such information to
Pioneer-Standard upon termination of your employment.
	 
	7.	 	No Hiring. During the Employment Period and for 12 months thereafter,
you agree not to employ or retain, have any other person or firm employ or
retain, or otherwise

 

 

	 	 	participate in the employment or retention of any
person who was an employee or consultant of Pioneer-Standard at any time
during the 12 months preceding the end of the Employment Period.
	 
	8.	 	Non-Competition.
	 

	A.	 	In the event that (i) Pioneer-Standard terminates your
employment for cause or (ii) you voluntarily terminate your
employment with Pioneer-Standard prior to the end of the Employment
Period for any reason other than Change of Position, you agree that
for a period of 12 months after such termination you will not be
employed by, own, manage, operate, or control, or participate,
directly or indirectly, in the ownership, management, operation, or
control of, or be connected with (whether as a director, officer,
employee, partner, consultant, or otherwise), any business which
competes with the business of Pioneer-Standard, including but not
limited to the distribution of electronic parts, components, or
systems (the “Non-compete Obligation.”)
	 
	B.	 	If Pioneer-Standard terminates your employment prior to the
End Date for any reason other than for cause (or if you terminate
your employment for reasons of Change of Position), then the above
Non-Compete Obligation will apply to you for the balance of the
Employment Period (i.e., until the End Date), unless Pioneer agrees
in writing to release you from the Non-Compete Obligation. In
addition, Pioneer-Standard may, at its option, extend the
Non-Compete Obligation beyond the End Date, for an additional period
which will end, at the latest, 12 months after the date of your
termination. This additional period (beginning on the End Date and
continuing for the duration of the Non-Compete Obligation) is
referred to as the “Extended Non-Compete Period.” If
Pioneer-Standard elects to extend your Non-Compete Obligation beyond
the End Date, Pioneer-Standard will pay your regular base and target
incentive salary (if applicable), in accordance with regular payroll
practices (the “Non-competition Payments”), during the Extended
Non-Compete Period.
	 
	 	 	If the Severance Period applicable to you under Paragraph 5, above,
extends beyond the End Date, then any Non-Competition Payments made
to you will be in lieu of Severance Payments during the Extended
Non-Compete Period. All decisions as to (i) whether to extend your
Non-compete Agreement beyond the End Date (and therefore, whether
to make Non-competition Payments to you); and (ii) the duration of
any such Extended Non-Compete Period, shall be within the sole
discretion of Pioneer-Standard, and will be communicated to you at
the time of termination. The Non-competition Payments described in
this subparagraph apply only to termination of your employment by
Pioneer for reasons other than for cause, or if you terminate your
employment for reasons of Change of Position.
	 
	C.	 	It is understood and acknowledged that any Non-compete
Obligation arising under Paragraph 8 shall be in addition to any
other obligations on your part under this Agreement, including but
not limited to the confidentiality and no-hiring provisions of
Paragraphs 6 and 7 above.

 

 

	9.	 	Specific Performance and Injunctive Relief. You acknowledge that
Pioneer-Standard will be irreparably damaged if the provisions of this
agreement are not specifically enforced, that monetary damages will not
provide an adequate remedy to Pioneer-Standard, and that Pioneer-Standard
is entitled to an injunction (preliminary, temporary, or final)
restraining any violation of this agreement (without any bond or other
security being required), or any other appropriate decree of specific
performance. Such remedies are not exclusive and shall be in addition to
any other remedy which Pioneer-Standard may have.
	 
	10.	 	Severability and Reformation. The provisions of Paragraphs 6 through 10
of this agreement constitute independent and separable covenants which
shall survive termination or expiration of the Employment Period and any
Extended Period. Any paragraph, phrase, or other provision of this
agreement that is determined by a court of competent jurisdiction to be
overly broad in scope, duration, or area of applicability or in conflict
with any applicable statute or rule shall be deemed, if possible, to be
omitted from this agreement. The invalidity of any portion hereof shall
not affect the validity of the remaining portions.
	 
	11.	 	General. This agreement constitutes our full understanding relating to
your employment with Pioneer-Standard. It is governed by and is to be
construed and enforced in accordance with the internal laws of the State
of Ohio, without giving effect to principles of conflicts of law. In the
event of a conflict between the terms hereof and the provisions of
Pioneer-Standard’s Employee Handbook, the terms hereof shall control;
otherwise, the provisions of the Employee Handbook shall remain applicable
to your employment relationship. This agreement may not be superseded,
amended, or modified except in a writing signed by both parties.
	 
		 	In witness whereof the parties have executed this agreement
this 30th day of June, 2003.

	 	 	 
	 	 	
Pioneer-Standard Electronics,Inc.
	/s/ Martin F. Ellis

Martin F. Ellis	 	By: /s/ Arthur Rhein

Arthur Rhein

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