Document:

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                                                                    EXHIBIT 10.1

                               AMENDMENT NO. 7 TO

                      AMENDED AND RESTATED CREDIT AGREEMENT

         THIS AMENDMENT NO. 7 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment Agreement") is made and entered into as of this 24th day of August,
2001, by and between APPLICA INCORPORATED, f/k/a Windmere-Durable Holdings,
Inc., a Florida corporation (the "Borrower"), BANK OF AMERICA, N.A., as Agent
(the "Agent") and as a lender, and the other lenders party hereto (together with
the Agent, the "Lenders"). Unless the context requires otherwise, all
capitalized terms used herein without definition shall have the respective
meanings assigned thereto in the Credit Agreement (as defined below).

                              W I T N E S S E T H:

         WHEREAS, the Lenders and the Borrower have entered into that certain
Amended and Restated Credit Agreement dated as of August 7, 1998 (as heretofore
and hereby amended, and as further amended, supplemented or restated from time
to time, the "Credit Agreement"); and

         WHEREAS, the Borrower has requested that the Lenders agree to amend
certain provisions of the Credit Agreement and the Loan Documents; and

         WHEREAS, the Lenders are willing to agree to the amendments to the
Credit Agreement as more fully set forth herein; and

         NOW, THEREFORE, in consideration of the premises, the terms, covenants
and conditions hereinafter appearing, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound, the parties hereto agree as follows:

         1. AMENDMENT TO CREDIT AGREEMENT.

         (a) The definition of "Hedging Obligation" in Section 1.2 of the Credit
Agreement is amended by deleting the following new language at the end thereof:

         For purposes of any computation hereunder, each Hedging Obligation
         shall be valued at the Hedge Value thereof.

         (b) The definition of "Indebtedness" in Section 1.2 of the Credit
Agreement is amended by inserting immediately prior to the words "all Hedging
Obligations" in the tenth line thereof the words "the Hedge Value of".

         (c) Section 10.9 of the Credit Agreement is hereby deleted and the
following new Section 10.9 is inserted in replacement thereof.

                  10.9 HEDGING OBLIGATIONS. Incur or permit to exist any Hedging
         Obligations or enter into any agreements, arrangements, devices or
         instruments relating to Hedging Obligations, except for Hedging
         Obligations with an aggregate notional amount of less than $400,000,000
         entered into in the ordinary course of business which are not for
         speculative or investment purposes.

         2. REPRESENTATIONS, WARRANTIES AND COVENANTS.

         (a) By its execution and delivery hereof, the Borrower certifies that:

                  (i) all of the representations and warranties made by the
         Borrower in the Credit Agreement and in each of the other Loan
         Documents are true and correct as of the date hereof as if

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         each of said representations and warranties were set out in full herein
         and made as of the date of execution and delivery hereof, except that
         all representations and warranties that refer to the financial
         statements of the Borrower shall be deemed to refer to the financial
         statements of the Borrower most recently delivered in accordance with
         SECTION 9.1 of the Credit Agreement; and

                  (ii) no event has occurred and no condition exists which, upon
         the consummation of the transaction contemplated hereby, will
         constitute a Default or an Event of Default on the part of the Borrower
         under the Credit Agreement or any other Loan Document either
         immediately or with the lapse of time or the giving of notice, or both.

         (b) The Borrower further covenants and agrees that the representations
and warranties contained in the Credit Agreement and the other Loan Documents,
as hereby reaffirmed, and the representations and warranties made herein shall
survive the execution and delivery of this Amendment Agreement.

         3. EXPENSES. The Borrower agrees to reimburse the Agent for all costs
and out-of-pocket expenses, including, without limitation, attorneys' fees and
disbursements, incurred in connection with the negotiation, preparation,
execution and delivery of this Amendment Agreement.

         4. ENTIRE AGREEMENT. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, condition, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and none of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that, except
as set forth in this Amendment Agreement or otherwise expressly stated, no
representations, warranties or commitments, express or implied, have been made
by any party. None of the terms or conditions of this Amendment Agreement may be
changed, modified, waived or canceled orally or otherwise, except by writing,
signed by all the parties hereto, specifying such change, modification, waiver
or cancellation of such terms or conditions, or of any preceding or succeeding
breach thereof.

         5. FULL FORCE AND EFFECT OF AGREEMENT. Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all of the other
Loan Documents are hereby confirmed and ratified in all respects and shall
remain in full force and effect according to their respective terms.

         6. GOVERNING LAW. This Amendment Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the state of New
York.

         7. ENFORCEABILITY. Should any one or more of the provisions of this
Amendment Agreement be determined to be illegal or unenforceable as to one or
more of the parties hereto, all other provisions nevertheless shall remain
effective and binding on the parties hereto.

         8. COUNTERPARTS. This Amendment 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.

                            [Signature pages follow.]

                                       2
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         IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders signatory
hereto have caused this Amendment Agreement to be duly executed under seal by
their duly authorized officers, all as of the day and year first above written.

                                       BORROWER:

                                       Applica Incorporated, Formerly Known as
                                       Windmere-durable  Holdings, Inc., as

                                       Borrower

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       AGENT:

                                       BANK OF AMERICA, N.A., as Agent

                                       By: /s/ Kathryn W. Robinson
                                           -------------------------------------
                                       Name:   Kathryn W. Robinson
                                       Title:  Managing Director

                                       LENDERS:

                                       BANK OF AMERICA, N.A.

                                       By: /s/ Kathryn W. Robinson
                                           -------------------------------------
                                       Name:   Kathryn W. Robinson
                                       Title:  Managing Director

                                       NEW ALLIANCE GLOBAL

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       3
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                                       ALLIANCE CAPITAL MANAGEMENT
                                       L.P., as Manager on behalf of ALLIANCE
                                       CAPITAL FUNDING, L.L.C.

                                       By:      ALLIANCE CAPITAL
                                                MANAGEMENT CORPORATION,
                                                General Partner of Alliance
                                                Capital Management L.P.

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       ARES LEVERAGED INVESTMENT FUND, L.P.

                                                By:      ARES Management, L.P.
                                                Its:     General Partner

                                       By: /s/ Patricia M. Navis
                                           -------------------------------------
                                       Name:   Patricia M. Navis
                                       Title:  Vice President

                                       ARES LEVERAGED INVESTMENT FUND II, L.P.

                                                By:  ARES Management II, L.P.
                                                Its: General Partner

                                       By: /s/ Patricia M. Navis
                                           -------------------------------------
                                       Name:   Patricia M. Navis
                                       Title:  Vice President
'

                                      ARES III CLO LTD.

                                                By:  ARES CLO Management, LLC
                                                Its: General Partner

                                       By: /s/ Patricia M. Navis
                                           -------------------------------------
                                       Name:   Patricia M. Navis
                                       Title:  Vice President

                                       ARES IV CLO LTD.

                                                By:  ARES CLO Management IV, LP
                                                Its: Investment Manager

                                                By:  ARES CLO GP IV, LLC
                                                Its: Managing Member

                                       By: /s/ Patricia M. Navis
                                           -------------------------------------
                                       Name:   Patricia M. Navis
                                       Title:  Vice President

                                       4
<PAGE>

                                       BALANCED HIGH-YIELD FUND II LTD

                                              By: BHF (USA) Capital Corporation,
                                                  acting through its New York
                                                  Branch, as attorney-in-fact

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       BHF (USA) CAPITAL CORPORATION

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       BANKATLANTIC

                                       By: /s/ Jeffrey Bilus
                                           -------------------------------------
                                       Name:   Jeffrey Bilus
                                       Title:  Senior Vice President

                                       BANK AUSTRIA CREDITANSTALT
                                       CORPORATE FINANCE, INC.

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       BANK LEUMI LE-ISRAEL B.M.

                                       By: /s/ Joseph F. Realini
                                           -------------------------------------
                                       Name:   Joseph F. Realini
                                       Title:  Vice President

                                       5
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                                       BARCLAYS BANK PLC

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       CITIZENS BANK OF MASSACHUSETTS
                                       (as successor to US TRUST)

                                       By: /s/ Daniel G. Eastman
                                           -------------------------------------
                                       Name:   Daniel G. Eastman
                                       Title:  Senior Vice President

                                       DRESDNER BANK LATEINAMERIKA AG,
                                       Miami Agency

                                       By: /s/ Frank Huthnance
                                           -------------------------------------
                                       Name:   Frank Huthnance
                                       Title:  Vice President

                                       By: /s/ Carlos Lamourtte
                                           -------------------------------------
                                       Name:   Carlos Lamourtte
                                       Title:  Assistant Vice President

                                       ERSTE BANK NEW YORK

                                       By: /s/ Paul Judicke
                                           -------------------------------------
                                       Name:   Paul Judicke
                                       Title:  Vice President

                                       By: /s/ John Runnion
                                           -------------------------------------
                                       Name:   John Runnion
                                       Title:  Managing Director

                                       FLEET NATIONAL BANK (successor by
                                         merger to Fleet Bank, N.A.)

                                       By: /s/ Thomas J. Levy
                                           -------------------------------------
                                       Name:   Thomas J. Levy
                                       Title:  Vice President

                                       FLEET BUSINESS CREDIT CORPORATION

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       6
<PAGE>

                                       HARCH CLO I, LTD.

                                       By: /s/ Michael E. Lewitt
                                           -------------------------------------
                                       Name:   Michael E. Lewitt
                                       Title:  Authorized Signatory

                                       INDOSUEZ CAPITAL FUNDING III,
                                       LIMITED

                                       By: INDOSUEZ CAPITAL,
                                           as Portfolio Advisor

                                       By: /s/ Melissa Marano
                                           -------------------------------------
                                       Name:   Melissa Marano
                                       Title:  Vice President

                                       INTERNATIONAL BANK OF MIAMI

                                       By: /s/ Caridad Errazquin
                                           -------------------------------------
                                       Name:   Caridad Errazquin
                                       Title:  Vice President

                                       THE MITSUBISHI TRUST AND BANKING
                                       CORPORATION

                                       By: /s/ Tosmihiro Hayashi
                                           -------------------------------------
                                       Name:   Tosmihiro Hayashi
                                       Title:  Senior Vice President

                                       MONUMENT CAPITAL

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       NATIONAL BANK OF CANADA

                                       By: /s/ Jean Page
                                           -------------------------------------
                                       Name:   Jean Page
                                       Title:  Vice President

                                       By: /s/ Stephen J. Jeziorowski
                                           -------------------------------------
                                       Name:   Stephen J. Jeziorowski
                                       Title:  Assistant Vice President

                                       7
<PAGE>

                                       NATIONAL CITY BANK

                                       By: /s/ Peter W. Richer
                                           -------------------------------------
                                       Name:   Peter W. Richer
                                       Title:  Vice President

                                       SCOTIABANC INC.

                                       By: /s/ W. J. Brown
                                           -------------------------------------
                                       Name:   W. J. Brown
                                       Title:  Managing Director

                                       SUNTRUST BANK

                                       By: /s/ David G. Jones
                                           -------------------------------------
                                       Name:   David G. Jones
                                       Title:  Managing Director

                                       BAVARIA TRR

                                       By:
                                           -------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                              ----------------------------------

                                       8
<PAGE>

THE UNDERSIGNED GUARANTORS HEREBY ACKNOWLEDGE AND CONSENT TO THE CONSENT AND
AMENDMENT NO. 7 TO THE AMENDED AND RESTATED CREDIT AGREEMENT AND REAFFIRM THEIR
OBLIGATIONS UNDER THE FACILITY GUARANTY THIS 24TH DAY OF AUGUST, 2001.

                                       APPLICA CONSUMER PRODUCTS, INC. f/k/a
                                       Windmere Corporation

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       WINDMERE HOLDINGS CORPORATION

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       BAY BOOKS & TAPES, INC.

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       HP DELAWARE, INC.

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       HP AMERICAS, INC.

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       HPG LLC

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       9
<PAGE>

                                       HP INTELLECTUAL CORP

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       WD DELAWARE, INC.

                                       By: /s/ Adam Kaplan
                                           -------------------------------------
                                       Name:   Adam Kaplan
                                       Title:  Treasurer

                                       10Exhibit 10.1

                        MICROCHIP TECHNOLOGY INCORPORATED

                        2001 EMPLOYEE STOCK PURCHASE PLAN

     The following constitute the provisions of the 2001 Employee Stock Purchase
Plan of Microchip Technology Incorporated.

     1. PURPOSE.  The purpose of the Plan is to provide employees of the Company
and one or more of its Corporate  Affiliates an opportunity  to purchase  Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an  "Employee  Stock  Purchase  Plan"
under Section 423 of the Code. The provisions of the Plan, accordingly, shall be
construed   so  as  to  extend  and  limit   participation   in  a  uniform  and
nondiscriminatory basis consistent with the requirements of Section 423.

     2. DEFINITIONS.

          (a)  "ADMINISTRATOR"  shall mean the Committee designated by the Board
to administer the Plan pursuant to Section 14.

          (b)  "BOARD" shall mean the Board of Directors of the Company.

          (c)  "CHANGE  OF  CONTROL"  shall  mean the  occurrence  of any of the
following events:

               (i)  a merger or other  reorganization  in which the Company will
not be the surviving corporation (other than a reorganization effected primarily
to change the State in which the Company is incorporated); or

               (ii) the  consummation  of the sale or disposition by the Company
of all or substantially all of the Company's assets; or

               (iii) a reverse  merger  in which the  Company  is the  surviving
corporation  but in  which  more  than  fifty  percent  (50%)  of the  Company's
outstanding  voting stock is transferred  to a person or persons  different from
those who held the stock immediately prior to such merger.

          (d)  "CODE" shall mean the Internal Revenue Code of 1986, as amended.

          (e)  "COMMITTEE" means a committee of the Board appointed by the Board
in accordance with Section 14 hereof.

          (f)  "COMMON  STOCK" shall mean the common  stock of the Company,  par
value $0.001.

          (g)  "COMPANY"  shall  mean  Microchip  Technology   Incorporated,   a
Delaware corporation.
<PAGE>
          (h)  "COMPENSATION" shall mean the following items paid to an Eligible
Employee by the Company  and/ or one or more  Corporate  Affiliates  during such
individual's  period of participation in the Plan: (i) regular base salary,  and
(ii)  any  pre-tax  contributions  made by the  Eligible  Employees  to any Code
Section  401(k)  plan,  any Code Section 125 Plan,  any  unfunded  non-qualified
deferred compensation plan described in Sections 201(2),  301(a)(3) or 401(a)(1)
of ERISA, and (iii) all overtime payments, bonuses, commissions,  profit-sharing
distributions  and other  incentive type  payments.  There shall be excluded any
contributions  (except  401(k)  and  125  contributions)  made  on the  Eligible
Employee's behalf by the Company or Corporate Affiliate.

          (i)  "CORPORATE  AFFILIATE" shall mean any parent or subsidiary of the
Company (as defined in Section  424 of the Code)  which is  incorporated  in the
United States, including any parent or subsidiary corporation which becomes such
after the Effective Date.

          (j)  "EFFECTIVE DATE" shall mean March 1, 2002.

          (k)  "ELIGIBLE EMPLOYEE" shall mean any individual who is a common law
employee of any  Participating  Company and whose customary  employment with the
Participating  Company  is at  least 20 hours  per week and more  than  five (5)
months  in  any  calendar  year.  For  purposes  of  the  Plan,  the  employment
relationship  shall be treated as continuing  intact while the  individual is on
sick leave or other leave of absence  approved by the Company.  Where the period
of leave  exceeds  90 days and the  individual's  right to  reemployment  is not
guaranteed  either by statute or in writing signed by a duly authorized  officer
of the Company,  the employment  relationship shall be deemed to have terminated
on the 91st day of such leave.

          (l)  "ENTRY  DATE" shall mean the first  Trading  Day of any  Offering
Period. An Entry Date occurs on the first Trading Day in March or September.

          (m)  "ERISA"  shall mean the Employee  Retirement  Income  Security of
1974, as amended.

          (n)  "EXERCISE  DATE"  shall mean the first  Trading  Day of March and
September.

          (o)  "FAIR MARKET  VALUE" shall mean the closing  sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such exchange
or system on the date of  determination,  as reported in THE WALL STREET JOURNAL
or such other  source as the Board deems  reliable;  provided, however,  that if
there is no closing sales price (or closing bid price,  if applicable)  for such
date, then the closing sales price (or closing bid price, if applicable) for the
next day for which such quotation exists.

          (p)  "OFFERING  PERIODS"  shall mean a period of time during  which an
option  granted  pursuant  to the  Plan  may be  exercised.  The  Plan  shall be
implemented by a series of Offering Periods ("Series of Offering Periods"). Each
Series of Offering  Periods shall contain four (4) Offering  Periods.  The first
Offering  Period in the Series  shall  commence  on the first  Trading Day on or
after March 1, 2002, and shall end on the first Trading Day on or after March 1,
2004 (the "Last Day of the Series").  The second  Offering  Period in the Series
shall commence on the next following  Entry Date,  shall last  approximately  18
months and shall end on the Last Day of the Series. The third Offering Period in
the  Series  shall  commence  on the  next  following  Entry  Date,  shall  last
approximately 12 months and shall end on the Last Day of the Series.  The fourth
Offering  Period in the Series shall commence on the next following  Entry Date,

                                       2
<PAGE>
shall  last  approximately  six (6)  months and shall end on the Last Day of the
Series.  A new Series of Offering  Periods shall commence on the Last Day of the
Series.  The duration and timing of Offering  Periods may be changed pursuant to
Section 19 of this Plan.

          (q)  "PARTICIPATING   COMPANY"   shall   mean  the  Company  and  such
Corporate  Affiliates  as may be  designated  from  time to time by the Board to
extend the benefits of the Plan to their Eligible Employees.

          (r)  "PLAN" shall mean this Employee Stock Purchase Plan.

          (s)  "PURCHASE  PERIOD"  shall  mean the  approximately  six (6) month
period  commencing on one Exercise Date and ending with the next Exercise  Date,
except that the first Purchase  Period of any Offering  Period shall commence on
the first Entry Date and end with the next Exercise Date.

          (t)  "PURCHASE  PRICE"  shall mean 85% of the Fair  Market  Value of a
share of Common  Stock on the Entry Date or on the Exercise  Date,  whichever is
lower;  provided, however,  that  the  Purchase  Price  may be  adjusted  by the
Administrator pursuant to Section 20.

          (u)  "TRADING DAY" shall mean a day on which national stock  exchanges
and the Nasdaq System are open for trading.

     3.   ELIGIBILITY.

          (a)  GENERALLY.  Any Eligible  Employee on a given Entry Date shall be
eligible to participate in the Plan.

          (b)  LIMITATIONS.   Any   provisions  of  the  Plan  to  the  contrary
notwithstanding,  no Eligible Employee shall be granted an option under the Plan
(i) to the extent that,  immediately after the grant, such Eligible Employee (or
any other  person  whose stock would be  attributed  to such  Eligible  Employee
pursuant to Section  424(d) of the Code) would own capital  stock of the Company
and/or hold  outstanding  options to purchase such stock possessing five percent
(5%) or more of the total  combined  voting power or value of all classes of the
capital  stock of the Company or of any  Subsidiary,  or (ii) to the extent that
his or her rights to purchase  stock under all employee  stock purchase plans of
the  Company and its  subsidiaries  accrues at a rate which  exceeds  $25,000.00
worth of stock  (determined  at the fair market  value of the shares at the time
such  option  is  granted)  for each  calendar  year in  which  such  option  is
outstanding at any time.

     4.   OFFERING  PERIODS.  The Plan  shall  be  implemented  by a  series  of
Offering Periods ("Series of Offering Periods"). Each Series of Offering Periods
shall contain four (4) Offering Periods. The first Offering Period in the Series
shall commence on the first Trading Day on or after March 1, 2002, and shall end
on the  first  Trading  Day on or after  March 1,  2004  (the  "Last  Day of the
Series").  The second  Offering  Period in the Series shall commence on the next
following Entry Date,  shall last  approximately  18 months and shall end on the
Last Day of the Series.  The third Offering  Period in the Series shall commence
on the next following Entry Date,  shall last  approximately 12 months and shall
end on the Last Day of the  Series.  The  fourth  Offering  Period in the Series
shall commence on the next following Entry Date,  shall last  approximately  six
(6) months and shall end on the Last Day of the Series. A new Series of Offering

                                       3
<PAGE>
Periods shall commence on the Last Day of the Series. The duration and timing of
Offering Periods may be changed pursuant to Section 19 of this Plan.

     5.   PARTICIPATION.  An Eligible  Employee may become a participant  in the
Plan by completing a subscription  agreement  authorizing  payroll deductions in
the form of EXHIBIT A to this Plan and filing it with the  Company's  stock plan
administrator,  on a date  determined by such  administrator,  which shall be no
later than five (5) Trading Days prior to the applicable Entry Date.

     6.   PAYROLL DEDUCTIONS.

          (a)  At  the  time  a  participant   files  his  or  her  subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during  the  Offering  Period  in any  multiple  of  one-percent  (1%),  but not
exceeding  ten-percent (10%) of the Compensation which he or she receives during
each  Purchase  Period;  provided,  however,  that  should a payday  occur on an
Exercise Date, a participant shall have the payroll  deductions made on such day
applied to his or her account under the new Offering Period or Purchase  Period,
as the case may be. A  participant's  subscription  agreement  shall  remain  in
effect for successive  Offering Periods unless terminated as provided in Section
10 hereof.

          (b)  Payroll  deductions for a participant shall commence on the first
payday following the Entry Date and shall end on the last payday in the Offering
Period to which such  authorization is applicable,  unless sooner  terminated by
the  participant as provided in Section 10 hereof.  All payroll  deductions made
for a  participant  shall be credited  to his or her account  under the Plan and
shall be withheld in whole  percentages  only.  A  participant  may not make any
additional payments into such account.

          (c)  A participant  may discontinue  his or her  participation  in the
Plan as provided in Section 10 hereof,  or may decrease  (but not  increase) the
rate of his or her payroll  deductions  during the Offering Period by completing
or filing with the Company a new subscription  agreement authorizing a change in
payroll  deduction rate. No more than one (1) such reduction shall be allowed in
any Purchase  Period.  A  participant  may only  increase the rate of his or her
payroll  deductions  beginning  with the next  Offering  Period  which  lasts 24
months.  The  change  in rate  shall be  effective  as soon as  administratively
practicable.

          (d)  Notwithstanding the foregoing,  to the extent necessary to comply
with Section  423(b)(8) of the Code and Section  3(b)  hereof,  a  participant's
payroll  deductions  may be  decreased to zero percent (0%) at any time during a
Purchase  Period.  Payroll  deductions  shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first Purchase
Period  which  is  scheduled  to end  in the  following  calendar  year,  unless
terminated by the participant as provided in Section 10 hereof.

          (e)  At the time the option is  exercised,  in whole or in part, or at
the time some or all of the  Company's  Common  Stock  issued  under the Plan is
disposed of, the  participant  must make  adequate  provision  for the Company's
federal, state, or other tax withholding  obligations,  if any, which arise upon
the exercise of the option or the  disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the  participant's
compensation the amount necessary for the Company to meet applicable withholding

                                       4
<PAGE>
obligations, including any withholding required to make available to the Company
any tax  deductions or benefits  attributable  to sale or early  disposition  of
Common Stock by the Eligible Employee.

     7.   GRANT OF  OPTION.  On the Entry  Date of each  Offering  Period,  each
Eligible  Employee  participating  in such  Offering  Period shall be granted an
option to purchase on each  Exercise  Date during such  Offering  Period (at the
applicable  Purchase  Price) up to a number of  shares of the  Company's  Common
Stock  determined  by  dividing  such  Eligible  Employee's  payroll  deductions
accumulated  prior to such  Exercise  Date  and  retained  in the  Participant's
account as of the Exercise Date by the applicable Purchase Price;  provided that
in no event shall an  Eligible  Employee be  permitted  to purchase  during each
Purchase Period more than 5,000 shares of the Company's Common Stock (subject to
any adjustment  pursuant to Section 19), and provided further that such purchase
shall be subject to the limitations set forth in Sections 3(b) and 6 hereof. The
Eligible  Employee may accept the grant of such option by turning in a completed
Subscription  Agreement  (attached  hereto  as  EXHIBIT  A) to  the  stock  plan
administrator,  on a date  determined by such  administrator,  which shall be no
later  than  five (5)  Trading  Days  prior to an  applicable  Entry  Date.  The
Administrator  may, for future Offering  Periods,  increase or decrease,  in its
absolute discretion,  the maximum number of shares of the Company's Common Stock
an Eligible  Employee may purchase  during each Purchase Period of such Offering
Period.  Exercise  of the option  shall  occur as  provided in Section 8 hereof,
unless the participant has withdrawn  pursuant to Section 10 hereof.  The option
shall expire on the last day of the Offering Period.

     8.   EXERCISE OF OPTION.

          (a)  Unless a  participant  withdraws  from the  Plan as  provided  in
Section  10  hereof,  his or her  option  for the  purchase  of shares  shall be
exercised  automatically  on the Exercise  Date,  and the maximum number of full
shares  subject  to  option  shall  be  purchased  for such  participant  at the
applicable  Purchase Price with the accumulated payroll deductions in his or her
account.  No  fractional  shares  shall be  purchased;  any  payroll  deductions
accumulated  in a  participant's  account which are not sufficient to purchase a
full share  shall be retained in the  participant's  account for the  subsequent
Purchase  Period or  Offering  Period,  subject  to  earlier  withdrawal  by the
participant  as  provided  in Section 10 hereof.  Any other funds left over in a
participant's  account  after  the  Exercise  Date  shall  be  returned  to  the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.

          (b)  If the  Administrator  determines that, on a given Exercise Date,
the number of shares  with  respect to which  options  are to be  exercised  may
exceed (i) the number of shares of Common  Stock  that were  available  for sale
under the Plan on the Entry Date of the applicable  Offering Period, or (ii) the
number of shares  available for sale under the Plan on such Exercise  Date,  the
Administrator may in its sole discretion (x) provide that the Company shall make
a pro rata  allocation  of the shares of Common Stock  available for purchase on
such Entry Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable  and as it shall determine in its sole discretion to be equitable
among all  participants  exercising  options to  purchase  Common  Stock on such
Exercise Date, and continue all Offering Periods then in effect,  or (y) provide
that the Company shall make a pro rata  allocation  of the shares  available for
purchase on such Entry Date or Exercise  Date,  as  applicable,  in as uniform a
manner as shall be practicable  and as it shall determine in its sole discretion

                                       5
<PAGE>
to be equitable  among all  participants  exercising  options to purchase Common
Stock on such Exercise Date,  and terminate any or all Offering  Periods then in
effect  pursuant to Section 20 hereof.  The Company may make pro rata allocation
of the shares  available  on the Entry Date of any  applicable  Offering  Period
pursuant  to  the  preceding  sentence,  notwithstanding  any  authorization  of
additional  shares for  issuance  under the Plan by the  Company's  shareholders
subsequent to such Entry Date.

     9.   DELIVERY.  As soon as reasonably  practicable after each Exercise Date
on which a purchase of shares occurs,  the Company shall arrange the delivery to
each  participant  the shares  purchased upon exercise of his or her option in a
form determined by the Administrator.

     10.  WITHDRAWAL.

          (a)  At any time prior to the last five (5) Trading Days of a Purchase
Period, a participant may withdraw from the Plan by giving written notice to the
Company in the form of EXHIBIT B to this Plan.  The  participant  shall elect to
either have (i) all of the participant's  payroll deductions  credited to his or
her  account  used to  purchase  shares  at the next  Exercise  Date or (ii) all
payroll  deductions  credited to his or her account  refunded.  In neither event
will any further payroll  deductions for the purchase of shares be made for such
Offering  Period.  If a  participant  withdraws  from an  Offering  Period,  the
participant  may not re-enroll in the Plan until the next Offering  Period which
lasts 24 months,  and payroll  deductions  shall not resume at the  beginning of
such  Offering  Period  unless the  participant  delivers  to the  Company a new
subscription agreement in a manner provided for in Section 5.

          (b)  A participant's withdrawal from an Offering Period shall not have
any effect upon his or her  eligibility to participate in any similar plan which
may hereafter be adopted by the Company.

     11.  TERMINATION OF EMPLOYMENT.  In the event a participant ceases to be an
Eligible Employee of the Company or any  Participating  Company (other than as a
result of death or Permanent  Disability),  any payroll  deductions  credited to
such  participant's  account  during  the  Offering  Period  but not yet used to
purchase  shares under the Plan shall be returned to such  participant  and such
participant's  option  shall  be  automatically   terminated.  In  the  event  a
participant ceases to be an Employee of the Company or any Participating Company
as a result of death or Permanent Disability, then such participant (or personal
representative of the estate of the deceased  participant) may elect at any time
prior to the last five (5)  Trading  Days of a  Purchase  Period  in which  such
termination occurs, to (i) have all of such participant's payroll deductions for
such Purchase  Period  refunded to the Participant or (ii) have all such payroll
deductions  used to purchase the  Company's  common  stock on the Exercise  Date
following such termination.

     12.  INTEREST.  No interest  shall  accrue on the payroll  deductions  of a
participant in the Plan.

     13.  STOCK.

          (a)  Subject  to  adjustment  upon  changes in  capitalization  of the
Company as provided in Section 19 hereof,  the number of shares of the Company's
Common  Stock  which  shall be made  available  for sale under the Plan shall be
1,200,000  shares  plus  any  remaining  unissued  shares  available  as of  the

                                       6
<PAGE>
Effective Date under the Company's  previous ESPP;  provided, however,  that the
shares under the  Company's  previous  ESPP shall not be available  for issuance
under the Plan to the extent that such reservation  would, in the opinion of the
Company's independent auditors,  result in a compensation expense to the Company
under either EITF 97-12 or FIN 44 and; provided, further, that in no event shall
the total number of shares available under the Plan exceed 1,300,000.

          (b)  Until the  shares are issued  (as  evidenced  by the  appropriate
entry on the books of the Company or of a duly authorized  transfer agent of the
Company), a participant shall only have the rights of an unsecured creditor with
respect to such shares,  and no right to vote or receive  dividends or any other
rights as a stockholder shall exist with respect to such shares.

          (c)  Shares to be delivered to a  participant  under the Plan shall be
held in a brokerage account in street name.

     14.  ADMINISTRATION.  The Administrator shall administer the Plan and shall
have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine  eligibility  and to adjudicate all disputed
claims filed under the Plan. Every finding,  decision and determination  made by
the  Administrator  shall,  to the full  extent  permitted  by law, be final and
binding upon all parties.

     15.  DESIGNATION OF BENEFICIARY.

          (a)  A participant may file a written designation of a beneficiary who
is to receive any payroll  deductions,  if any, from the  participant's  account
under  the  Plan in the  event  of such  participant's  death  subsequent  to an
Exercise  Date on which the option is  exercised  but prior to  delivery to such
participant of such payroll  deductions.  In addition,  a participant may file a
written  designation of a beneficiary  who is to receive any payroll  deductions
from the participant's account under the Plan in the event of such participant's
death  prior to  exercise of the  option.  If a  participant  is married and the
designated  beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.

          (b)  Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary  validly designated under the Plan who is living at
the time of such  participant's  death,  the Company  shall deliver such payroll
deductions to the executor or administrator of the estate of the participant, or
if no such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such payroll deductions to
the spouse or to any one or more dependents or relatives of the participant,  or
if no spouse,  dependent or relative is known to the Company, then to such other
person as the Company may designate.

          (c)  All beneficiary  designations shall be in such form and manner as
the Administrator may designate from time to time.

     16.  TRANSFERABILITY.    Neither   payroll   deductions   credited   to   a
participant's account nor any rights with regard to the exercise of an option or
to  receive  shares  under the Plan may be  assigned,  transferred,  pledged  or
otherwise  disposed of in any way (other  than by will,  the laws of descent and
distribution or as provided in Section 15 hereof) by the  participant.  Any such
attempt at assignment,  transfer,  pledge or other  disposition shall be without

                                       7
<PAGE>
effect,  except  that the  Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

     17.  USE OF FUNDS. All payroll  deductions  received or held by the Company
under the Plan may be used by the Company  for any  corporate  purpose,  and the
Company  shall not be  obligated to segregate  such  payroll  deductions.  Until
shares are  issued,  participants  shall  only have the  rights of an  unsecured
creditor.

     18.  REPORTS.  Individual accounts shall be maintained for each participant
in the Plan.  Statements  of account  shall be given to  participating  Eligible
Employees at least  annually,  which  statements  shall set forth the amounts of
payroll  deductions,  the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

     19.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,  DISSOLUTION, LIQUIDATION,
MERGER OR CHANGE OF CONTROL.

          (a)  CHANGES IN CAPITALIZATION.  Subject to any required action by the
shareholders  of the  Company,  the  maximum  number of shares of the  Company's
Common Stock which shall be made  available for sale under the Plan, the maximum
number of shares each participant may purchase each Purchase Period (pursuant to
Section  7), as well as the  price per share and the  number of shares of Common
Stock  covered by each  option  under the Plan which has not yet been  exercised
shall be proportionately  adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock  dividend,  combination or  reclassification  of the Common Stock,  or any
other change in the number of shares of Common Stock effected without receipt of
consideration  by  the  Company;  provided,  however,  that  conversion  of  any
convertible securities of the Company shall not be deemed to have been "effected
without  receipt  of  consideration."  Such  adjustment  shall  be  made  by the
Administrator,  whose determination in that respect shall be final,  binding and
conclusive.  Except as expressly  provided herein, no issuance by the Company of
shares of stock of any class, or securities  convertible into shares of stock of
any class,  shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

          (b)  CHANGE IN  CONTROL.  In the event of a Change  of  Control,  each
outstanding  option shall be assumed or an equivalent option  substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation. In
the event that the successor corporation refuses to assume or substitute for the
option,  any Purchase  Periods then in progress  shall be shortened by setting a
New Exercise Date and any Offering Periods then in progress shall end on the New
Exercise  Date.  The New Exercise Date shall be before the date of the Company's
proposed Change of Control.  The Administrator  shall notify each participant in
writing,  at least 10 business  days prior to the New  Exercise  Date,  that the
Exercise Date for the participant's  option has been changed to the New Exercise
Date and that the participant's  option shall be exercised  automatically on the
New Exercise Date,  unless prior to such date the participant has withdrawn from
the Offering Period as provided in Section 10 hereof.

                                       8
<PAGE>
     20.  AMENDMENT OR TERMINATION.

          (a)  The Administrator may at any time and for any reason terminate or
amend the Plan.  Except as otherwise  provided in the Plan, no such  termination
can affect options previously  granted,  provided that an Offering Period may be
terminated  by the  Administrator  on any  Exercise  Date  if the  Administrator
determines  that the  termination  of the Offering  Period or the Plan is in the
best  interests  of the  Company  and its  shareholders.  Except as  provided in
Section 19 and this Section 20 hereof,  no amendment  may make any change in any
option   theretofore   granted  which  adversely   affects  the  rights  of  any
participant.  To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain  shareholder  approval in such a manner
and to such a degree as required.

          (b)  Without  shareholder  consent and  without  regard to whether any
participant  rights may be considered  to have been  "adversely  affected,"  the
Administrator  shall be  entitled  to change  the  Offering  Periods,  limit the
frequency  and/or  number of changes in the amount  withheld  during an Offering
Period,  establish  the  exchange  ratio  applicable  to amounts  withheld  in a
currency other than U.S.  dollars,  permit payroll  withholding in excess of the
amount  designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections,  establish
reasonable  waiting and  adjustment  periods  and/or  accounting  and  crediting
procedures  to ensure that amounts  applied  toward the purchase of Common Stock
for  each  participant  properly  correspond  with  amounts  withheld  from  the
participant's  Compensation,  and establish such other limitations or procedures
as the  Administrator  determines  in its sole  discretion  advisable  which are
consistent with the Plan.

          (c)  In the  event  the  Administrator  determines  that  the  ongoing
operation  of  the  Plan  may  result  in   unfavorable   financial   accounting
consequences,  the Board may, in its discretion and, to the extent  necessary or
desirable,  modify  or amend the Plan to reduce  or  eliminate  such  accounting
consequence including, but not limited to:

               (i)  increasing  the  Purchase  Price  for  any  Offering  Period
including  an  Offering  Period  underway  at the time of the change in Purchase
Price;

               (ii) shortening any Offering  Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time of the
Board action; and

               (iii) allocating shares.

Such modifications or amendments shall not require  stockholder  approval or the
consent of any Plan participants.

     21.  NOTICES.  All notices or other  communications by a participant to the
Company under or in  connection  with the Plan shall be deemed to have been duly
given when  received  in the form and  manner  specified  by the  Company at the
location, or by the person, designated by the Company for the receipt thereof.

                                       9
<PAGE>
     22.  CONDITIONS  UPON  ISSUANCE OF SHARES.  Shares shall not be issued with
respect to an option  unless the  exercise of such option and the  issuance  and
delivery of such  shares  pursuant  thereto  shall  comply  with all  applicable
provisions  of law,  domestic or foreign,  including,  without  limitation,  the
Securities  Act of 1933,  as amended,  the  Securities  Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder,  and the requirements
of any stock  exchange  upon which the  shares may then be listed,  and shall be
further  subject to the approval of counsel for the Company with respect to such
compliance.

     As a condition  to the  exercise of an option,  the Company may require the
person  exercising  such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present  intention  to sell or  distribute  such  shares  if, in the  opinion of
counsel  for  the  Company,  such a  representation  is  required  by any of the
aforementioned applicable provisions of law.

     23.  TERM OF PLAN.  The Plan shall  become  effective  upon the  earlier to
occur  of its  adoption  by the  Board  of  Directors  or  its  approval  by the
shareholders of the Company.  It shall continue in effect until terminated under
Section 20 hereof.

     24.  AUTOMATIC  TRANSFER  TO LOW  PRICE  OFFERING  PERIOD.  To  the  extent
permitted by any applicable  laws,  regulations,  or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair  Market  Value of the  Common  Stock on the Entry Date of
such Offering  Period,  then all  participants  in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their  option on such  Exercise  Date and  automatically  re-enrolled  in the
immediately following Offering Period.

                                       10

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